Exhibit

10.4




 




RECEIVABLES PURCHASE AND SECURITY AGREEMENT, dated as

of September 23, 2002, by and between CFC II LLC, a Nevada limited

liability company (“LLC II”) and COLUMBUS BANK AND

TRUST COMPANY, a state chartered bank organized under the laws of the State of

Georgia (“Columbus

Bank”).




 




W I T N E S S E T

H:




 




WHEREAS, Columbus Bank and CompuCredit Corporation, a

Georgia corporation (“CompuCredit”) are party to the Receivables Purchase

Agreement, dated as of October 20, 2000 (as the same shall have been amended to

the date hereof, the “CompuCredit Purchase Agreement”);




 




WHEREAS, LLC II desires to purchase certain

Receivables (hereunder defined) arising under certain credit card accounts of

Columbus Bank following the termination of the CompuCredit Purchase Agreement,

as more fully provided herein; and




 




WHEREAS, Columbus Bank desires to sell and assign

certain Receivables to LLC II following termination of the CompuCredit Purchase

Agreement, as more fully provided herein.




 




NOW, THEREFORE, it is hereby agreed by and between

Columbus Bank and LLC II as follows:




 




ARTICLE I




 




DEFINITIONS




 




Section 1.01    Definitions.  All capitalized terms used herein or in any

certificate or document, or Conveyance Paper made or delivered pursuant hereto,

and not otherwise defined herein or therein, shall have the meaning ascribed

thereto in the Affinity Agreement, the CompuCredit Purchase Agreement (as

hereinafter defined) or the Transfer and Servicing Agreement; in addition, the

following words and phases shall have the following meanings:




 




“Affinity Agreement”  shall mean the Affinity Card Agreement, dated as of

January 6, 1997 between Columbus Bank, CompuCredit and CompuCredit

Acquisition Corporation, as amended to the date hereof and as such agreement

may be amended from time to time hereafter.




 




“Agreement” 

shall mean this Receivables Purchase and Security Agreement and all

amendments hereof and supplements hereto.




 




“Bank Lien” 

shall mean any security interest, mortgage, deed of trust, pledge,

hypothecation, assignment, deposit arrangement, equity interest, encumbrance,

lien (statutory or other), preference, participation interest, priority or

other security agreement or preferential arrangement of any kind or nature

whatsoever, including any conditional sale or other title retention agreement,

any financing lease having substantially the same economic effect as any of the

foregoing and the filing of any financing statement under the UCC or comparable

law of any jurisdiction to evidence any of the foregoing; provided, however,

that any lien or liens on 




 





























 




receivables maintained

pursuant to the Indenture, the CompuCredit Purchase Agreement, the CFC Purchase

Agreement or the Transfer and Servicing Agreement shall not constitute a Bank

Lien on the Residual Interests.




 




“Bankruptcy Event”  shall mean:




 




(i)                       LLC II

shall commence any case, proceeding or other action (A) under any existing

or future law of any jurisdiction, domestic or foreign, relating to bankruptcy,

insolvency, reorganization, relief of debtors or the like, seeking to have an

order for relief entered with respect to it, or seeking to adjudicate it

bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,

winding-up, liquidation, dissolution, composition or other relief with respect

to it or its respective debts, or (B) seeking appointment of a receiver,

trustee, custodian or other similar official for it or for all or substantially

all of its assets, or LLC II shall make a general assignment for the benefit of

its respective creditors; or




 




(ii)                    the commencement

against LLC II of any case, proceeding or other action of a nature referred to

in clause (i) above which (A) results in the entry of an order for

relief or any such adjudication or appointment, and (B) remains undismissed,

undischarged or unbonded for a period of sixty (60)  days; or




 




(iii)                 the commencement

against LLC II of any case, proceeding or other action seeking issuance of a

warrant of attachment, execution, distraint or similar process against all or

substantially all of its assets which results in the entry of an order for any

such relief which shall not have been vacated, discharged, stayed, satisfied or

bonded pending appeal within sixty (60) days from the entry thereof; or




 




(iv)                LLC II shall

consent to any of the acts set forth in clause (i), (ii) or (iii) above of this

definition of “Bankruptcy Event”; or




 




(v)                   LLC II shall be

unable to, or shall admit in writing its inability to, pay its debts generally

as they become due; or




 




(vi)                LLC II shall not

be solvent.




 




“Business Day” shall mean any day other than

(a) a Saturday or Sunday or (b) any other day on which national banking

associations or state banking institutions in New York, New York, Atlanta,

Georgia, Columbus, Georgia or any other city in which the principal executive

offices of Columbus Bank or LLC II are located, are authorized or obligated by

law, executive order or governmental decree to be closed.




 




“CFC” shall shall mean CompuCredit Funding

Corp. II, a Nevada corporation.




 




“CFC Purchase Agreement” shall mean the

Receivables Purchase Agreement, dated as of October 20, 2000, between CFC and

CompuCredit, as amended.




 




 




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“Collateral” shall have the meaning set forth

in Section 6.01.




 




“Columbus Account” shall mean each VISA® or

MasterCard®(1) account established pursuant to a Credit Card Agreement between

Columbus Bank and any Person, which account is originated pursuant to the

Affinity Agreement and is identified by the bank identification numbers

specified on Schedule A to the CompuCredit Purchase Agreement, as

such Schedule A may be amended from time to time.




 




“Columbus Bank” shall have the meaning set

forth in the Recitals hereto.




 




“CompuCredit Purchase Agreement” shall mean the

Receivables Purchase Agreement between Columbus Bank and CompuCredit, dated as

of October 20, 2000.




 




“CompuCredit” shall have the meaning set forth

in the Recitals hereto.




 




“Conveyance” shall have the meaning set forth

in the subsection 2.01(a).




 




“Conveyance Papers” shall have the meaning set

forth in subsection 4.01(a)(ii).




 




“Custodial Agent” shall have the meaning set

forth in the Pledge and Security Agreement.




 




“Eligible Collateral” shall have the meaning

set forth in Section 6.06(b).




 




“Event of Default” shall mean:




 




(i)                                          a

Bankruptcy Event shall have occurred;




 




(ii)                                       subject

to Sections 3.01(c) and (d), LLC II shall fail to pay when due all or any part

of the Purchase Price, which failure is not cured within 2 Business Days;




 




(iii)                                    an Event of Default

shall have occurred under the Pledge and Security Agreement; or




 




(iv)                                   Columbus

Bank shall fail to have a valid and perfected security interest in the

Collateral which failure is not cured within 15 days following receipt by LLC

II of notice thereof and a request to cure; or




 




(v)                                      Except

as permitted herein, a Bank Lien shall have been created with respect to the

Collateral which Bank Lien is not released within 15 days following receipt by

LLC II of notice thereof and a request to cure.




 




“Excess Interest Residuals” shall mean Residual

Interests that either (i) do not have a principal component, (ii) have a

nominal principal component (not including principal only components), or (iii)

are entitled, prior to the commencement of any amortization period, to 




 






















(1)  VISA® or MasterCard® are

registered trademark of VISA USA, and MasterCard International Incorporated,

respectively.




 




3





























 




receive predominantly

interest collections in respect of the Receivables subject to the lien of the

Indenture.




 




“Indenture” shall mean the Master Indenture

among the Issuer, The Bank of New York, as Indenture Trustee, and CompuCredit,

as Servicer, dated as of December 28, 2000, as supplemented by indenture

supplements applicable to any Series that may be issued from time to time.




 




“Indenture Supplement” shall mean a supplement

to the Indenture, executed and delivered in connection with the original

issuance of a series of notes authorized under the Indenture, including all

amendments thereof and supplements thereto.




 




“Indenture Trustee” shall mean The Bank of New

York in its capacity as indenture trustee under the Indenture, or its successor

in interest, or any successor indenture trustee appointed as provided in the

Indenture.




 




“Instrument” shall have the meaning as provided

in the UCC.




 




“Interchange” shall mean interchange fees

payable to Columbus Bank, in its capacity as credit card issuer, through VISA

or MasterCard, as applicable, in connection with cardholder charges for goods

or services with respect to the Columbus Accounts.




 




“Issuer” shall mean the CompuCredit Card Master

Note Business Trust II, a Nevada business card trust, created by the Trust

Agreement.




 




“Letter of Credit” shall have the meaning set

forth in the Affinity Agreement.




 




“Letter of Instruction” shall mean a letter executed

by LLC II directing the Indenture Trustee to remit amounts otherwise

distributable in respect of the Pledged Residual Interests pursuant to the

Indenture to Columbus Bank, which letter is deliverable by LLC II to Columbus

Bank pursuant to Section 5.02 hereof.




 




“Lien” shall mean any lien on the Pledged

Residual Interests or the Collateral (as defined in the Pledge and Security

Agreement) which is senior to the lien of Columbus Bank; provided, however,

that any lien or liens on receivables maintained pursuant to the Indenture, the

CompuCredit Purchase Agreement, the CFC Purchase Agreement or the Transfer and

Servicing Agreement shall not constitute a Lien on the Residual Interests.




 




“Obligor” shall mean, with respect to each

Columbus Account, each person that would be treated as an “Obligor” in

accordance with the definition for such term in the Transfer and Servicing

Agreement.




 




“Pledge and Security Agreement” shall mean the

Pledge and Security Agreement, dated as of September 23, 2002, between CompuCredit

and Columbus Bank, as the same shall be amended.




 




“Pledged Residual Interests” shall mean the

Residual Interests identified in Schedule A hereto, as such schedule may be

revised from time to time, and all rights appurtenant thereto.




 




4





























 




“Proceeds” shall have the meaning as provided

in the UCC.




 




“Program” shall mean the affinity credit card

program conducted pursuant to the terms of the Affinity Agreement.




 




“Purchase Term” shall mean, with respect to

each state, the Standard Account Closure Period or the Extended Account Closure

Period, as applicable, in each case as such terms are defined in Exhibit A to

the Pledge and Security Agreement.




 




“Purchased Assets” shall have the meaning set

forth in subsection 2.01(a).




 




“Receivables” shall mean all amounts payable by

Obligors on any Columbus Account, which receivables (i) existed as of the

Termination Date and were not previously acquired by CompuCredit, or (ii) are

originated during the Purchase Term and are not purchased by CompuCredit

pursuant to the CompuCredit Purchase Agreement.




 




“Recoveries” shall have the meaning set forth

in the Transfer and Servicing Agreement.




 




“Residual Interests” shall have the meaning

ascribed thereto in the Pledge and Security Agreement.




 




“Residual Valuation” shall have the meaning

assigned thereto in the Pledge and Security Agreement.




 




“Retained Interest” shall have the meaning set

forth in the CompuCredit Purchase Agreement.




 




“Servicer” shall mean the Servicer from time to

time under the Transfer and Servicing Agreement.




 




“Termination Date” shall mean the date as of

which the CompuCredit Purchase Agreement is terminated in accordance therewith.




 




“Transfer and Servicing Agreement” shall mean

the Transfer and Servicing Agreement, dated as of October 20, 2000, among

CompuCredit, as Servicer, CFC, as Transferor, the Issuer and the Indenture

Trustee, and all amendments and supplements thereto.




 




“Trust Agreement” shall mean the CompuCredit

Credit Card Master Note Business Trust II Trust Agreement, dated as of

October 20, 2000, between CFC and Wilmington Trust FSB, as the same may be

amended, modified or otherwise supplemented from time to time.




 




 “UCC”

shall mean the Uniform Commercial Code as in effect on the date hereof in the

State of New York, as amended from time to time, and any successor statute; provided

that if by reason of mandatory provision of law, the perfection or the effect

of perfection or non-perfection of the security interest in the Collateral is

governed by the Uniform Commercial Code of another jurisdiction or a similar or

equivalent legislation as enacted in a relevant foreign jurisdiction, “UCC”

means the Uniform Commercial Code or such legislation as in effect in such

other




 




5





























 




jurisdiction for purposes

of the provision hereof relating to such perfection or effect of perfection or

non-perfection.




 




Section 1.02    Other

Definitional Provisions.




 




(a)    All terms defined in this

Agreement shall have the defined meanings when used in any certificate, other

document, or Conveyance Paper made or delivered pursuant hereto unless

otherwise defined therein.




 




(b)    The words “hereof,”

“herein” and “hereunder” and words of similar import when used in

this Agreement or any Conveyance Paper shall refer to this Agreement as a whole

and not to any particular provision of this Agreement, and Section, Subsection,

Schedule and Exhibit references contained in this Agreement are references to

Sections, Subsections, Schedules and Exhibits in or to this Agreement unless

otherwise specified.




 




[END OF ARTICLE I]




 




6





























ARTICLE II




 




PURCHASE AND CONVEYANCE OF RECEIVABLES




 




Section 2.01    Purchase.




 




(a)    By execution of this

Agreement, LLC II does hereby agree to purchase on and after the Termination

Date from Columbus Bank, and Columbus Bank does hereby agree to sell, transfer,

assign, set over and otherwise convey on and after the Termination Date, to LLC

II (collectively, the “Conveyance”), without recourse except

as provided herein, all of Columbus Bank’s right, title and interest in, to and

under (i) the Receivables and all monies due and or to become due and all

amounts received with respect thereto and all proceeds (including, without

limitation, “proceeds” as defined in the UCC) thereof and (ii) the right

to receive Interchange and Recoveries with respect to such Receivables (other

than with respect to the Retained Interest therein) (all of the foregoing being

referred to herein as the “Purchased Assets”).




 




(b)    In connection with such

Conveyance, Columbus Bank agrees (i) to cooperate with LLC II, and LLC II

agrees to record and file upon the occurrence of the Termination Date, at its

own expense, any financing statements (and continuation statements with respect

to such financing statements when applicable) with respect to the Receivables

and the other Purchased Assets, meeting the requirements of applicable state

law in such manner and in such jurisdictions as are necessary to perfect, and

maintain perfection of, the Conveyance of such Purchased Assets from Columbus

Bank to LLC II and (ii) that such financing statements shall name Columbus

Bank, as seller, and LLC II, as purchaser, of the Receivables and the other

Purchased Assets; and upon filing LLC II agrees to deliver a file-stamped copy

of such financing statements or other evidence of such filings to Columbus Bank

as soon as is practicable after filing.




 




(c)    [Reserved]




 




(d)    The parties hereto intend

that the conveyance of Columbus Bank’s right, title and interest in and to the

Receivables and the other Purchased Assets purchased hereunder shall constitute

a sale, conveying good title free and clear of any liens, claims, encumbrances

or rights of others from Columbus Bank to LLC II and that the Receivables and

the other Purchased Assets shall not be part of Columbus Bank’s estate in the

event of the insolvency of Columbus Bank or a conservatorship, receivership or

similar event with respect to Columbus Bank. 

It is the intention of the parties hereto that the arrangements with

respect to the Receivables and the other Purchased Assets shall constitute a

purchase and sale of such Receivables and the other Purchased Assets and not a

loan.  In the event, however, that it

were to be determined that the transactions evidenced hereby constitute a loan

and not a purchase and sale, this Agreement shall constitute a security

agreement under applicable law, and Columbus Bank hereby grants to LLC II a

first priority security interest in all of Columbus Bank’s right, title and

interest, whether now owned or hereafter acquired, in, to and under the

Receivables and the other Purchased Assets.




 




(e)    With respect to the

foregoing and the grant of the security interest in the Purchased Assets,

Columbus Bank hereby authorizes LLC II at any time and from time to time 




 




7





























 




to file one or more financing or continuation

statements, and amendments thereto, relative to all or any part of the

Purchased Assets without the signature of Columbus Bank where permitted by law.




 




8





























 




ARTICLE III




 




CONSIDERATION AND PAYMENT




Section 3.01    Purchase Price.




 




(a)    The purchase price for the

Conveyance with respect to the Receivables and the other Purchased Assets which

come into existence on or after the Termination Date shall be payable daily, on

the Business Day next succeeding the Business Day on which the notice deliverable

by Columbus Bank pursuant to subsection (b) hereof is received by LLC II.  For purposes hereof, the purchase price for

the Receivables (the “Purchase Price”) shall be equal to 100% of the principal

balance of such Receivables.




 




(b)    No later than 1:00 p.m.

(eastern time) on each Business Day, Columbus Bank shall notify by facsimile

transmission the Chief Financial Officer or such officer’s designee at LLC II

of the Purchase Price payable due or owed by LLC II.  Payments due for any day shall be made by wire transfer no later

than 4:00 p.m. (eastern time) on the Business Day next succeeding the date of

such notice, unless Columbus Bank is late in notifying LLC II of the Purchase

Price 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 Business Day following LLC II’s receipt of

notice from Columbus Bank.




 




(c)    In the event LLC II has

reason to dispute the accuracy of the Purchase Price reported by Columbus Bank

for any day, LLC II shall promptly so notify Columbus Bank, but such notice

shall not affect LLC II’s obligation for timely payment of the Purchase Price

as notified by Columbus Bank to LLC II. 

In the event it is determined that LLC II was correct in disputing the

accuracy of the Purchase Price for a given day, Columbus Bank shall promptly

remit (but in any event within 5 Business Days of such determination) to LLC II

the greater of (i) the amount due LLC II with interest thereon computed at the

rate of 3 percentage points above the Columbus Bank “prime rate” in effect on

the date said sum was first due, or (ii) $100. 

If LLC II shall fail for any reason to remit to Columbus Bank the

Purchase Price due for any given day, then LLC II shall promptly remit to

Columbus Bank the amount due Columbus Bank with interest thereon from the date

such sum was due until the date the Purchase Price is paid computed at the rate

of 3  percentage points above the

Columbus Bank “prime rate” in effect on the date said sum was first due.




 




(d)    If LLC II fails on any

given day to pay the Purchase Price indicated by Columbus Bank, as provided

hereunder, even in the event LLC II disputes such amount, and such failure is

not cured within 2 Business Days from the date LLC II receives notification of

nonpayment, Columbus Bank may (but need not and without waiver of its rights),

in addition to any other rights and remedies it may have, upon notice to LLC II

sell to any third party any interest in the Receivables that LLC II failed to

purchase.




 




(e)    The sale of Receivables

contemplated herein shall occur upon settlement therefor by or on behalf of LLC

II and no additional documents shall be required by the parties to 




 




9





























 




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.




 




[END OF ARTICLE

III]




 




10





























 




ARTICLE IV




 




REPRESENTATIONS AND WARRANTIES




 




Section 4.01    Representations

and Warranties of Columbus Bank Relating to Columbus Bank.




 




(a)    Representations and

Warranties of Columbus Bank Relating to Columbus Bank.  Columbus Bank hereby represents and warrants

to, and agrees with, LLC II as of the date hereof and as of the Termination

Date that:




 




(i)    Organization.  Columbus Bank is a bank duly organized,

validly existing and in good standing under the laws of the State of Georgia.




 




(ii)    Capacity; Authority;

Validity.  Columbus Bank 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 any other document or

instrument delivered pursuant hereto (such other documents or instruments,

collectively, the “Conveyance Papers”) and the

consummation by Columbus Bank of the transactions contemplated hereby and by

the Conveyance Papers have been duly authorized by all necessary corporate

action on the part of Columbus Bank, and this Agreement has been duly executed

and delivered by Columbus Bank and constitutes the valid and binding obligation

of Columbus Bank 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).




 




(iii)    Compliance.  All aspects of the Program, all terms of the

Columbus Accounts and the Cardholder Agreements, and all Solicitation Materials

and other related 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.




 




(iv)    Conflicts; Defaults.  Neither the execution and delivery of this

Agreement or the Conveyance Papers by Columbus Bank nor the consummation of the

transactions contemplated by this Agreement and the Conveyance Papers by

Columbus Bank will (A) 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 Columbus Bank is a party or by

which Columbus Bank is bound, (B) violate the articles of incorporation or

by-laws, or any other equivalent organizational document, of Columbus Bank,

(C) result in the creation of any lien, charge or encumbrance upon any of

the Columbus Accounts or the Receivables or the other Purchased Assets (except

pursuant to the terms hereof), or (D) require the consent or approval of

any other party to any contract, instrument or commitment to which Columbus

Bank is a party or by which it is bound. 

Columbus Bank is not subject to any agreement with any regulatory 




 




11





























 




authority which

would prevent the consummation by Columbus Bank of the transactions

contemplated by this Agreement.




 




(v)    Litigation.  At the date of this Agreement, there is not

pending any claim, litigation, proceeding, arbitration, investigation or

material controversy before any governmental authority to which Columbus Bank

is a party, which adversely affects any of its assets or the ability of

Columbus Bank to consummate the transactions contemplated hereby, and, to the

best of Columbus Bank’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.




 




(vi)    No Consent; Etc.  At the date of this Agreement, no consent of

any person (including without limitation any stockholder or creditor of

Columbus Bank) 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 LLC II and other than the filing of financing statements in

connection with the transfer of the Receivables) in connection with the

execution or delivery of this Agreement or the Conveyance Papers by Columbus

Bank, the validity of this Agreement or the Conveyance Papers with respect to Columbus

Bank, the enforceability of this Agreement or the Conveyance Papers against

Columbus Bank, the validity of the security interest granted by Columbus Bank

hereunder, the consummation by Columbus Bank of the transactions contemplated

hereby or by the Conveyance Papers, or the performance by Columbus Bank of its

obligations hereunder and under the Conveyance Papers.




 




(vii)    FDIC Insurance.  Columbus Bank is, and at all times during

the term hereof will remain, a member of the Federal Deposit Insurance

Corporation.




 




(b)    Notice of Breach.  Upon discovery by either Columbus Bank or

LLC II of a breach of any of the foregoing representations and warranties, the

party discovering such breach shall give written notice to the other party

within three Business Days following such discovery.




 




Section 4.02    Representations

and Warranties of Columbus Bank Relating to the Agreement and the Receivables.




 




(a)    Representations and

Warranties.  Columbus Bank hereby

represents and warrants to LLC II as of the date hereof and as of the

Termination Date that:




 




(i)    this Agreement and any

Conveyance Paper each constitutes a legal, valid and binding obligation of

Columbus Bank enforceable against Columbus Bank in accordance with its terms,

except as such enforceability may be limited by applicable conservatorship,

receivership, insolvency, reorganization, moratorium or other similar laws

affecting creditors’ rights generally and state banking corporations in

particular from time to time in effect or general principles of equity;




 




(ii)    each Receivable and the

other Purchased Assets have been conveyed to LLC II free and clear of any Bank

Lien arising through or under Columbus Bank on such




 




12





























 




Purchased Assets

and each Receivable is free and clear of any Bank Lien arising through or under

Columbus Bank;




 




(iii)    all authorizations,

consents, orders or approvals of or registrations or declarations with any

Governmental Authority required to be obtained, effected or given by Columbus

Bank in connection with the conveyance of Receivables (except the Retained

Interest) and the other Purchased Assets to LLC II have been duly obtained,

effected or given and are in full force and effect; and




 




(iv)    upon payment of the Purchase

Price by LLC II, the transfer of the Receivables to LLC II pursuant hereto

shall constitute a valid sale, transfer and assignment to LLC II of all right,

title and interest of Columbus Bank in the Receivables and the proceeds thereof

and the Interchange payable pursuant to this Agreement and the Recoveries

payable pursuant to this Agreement or, if this Agreement does not constitute a

sale of such property, it constitutes a grant of a first priority perfected

“security interest” (as defined in the UCC) in such property to LLC II, which,

in the case of existing Receivables and the proceeds thereof and said

Interchange, is enforceable upon execution and delivery of this Agreement and

which will be enforceable with respect to such Receivables hereafter created

and the proceeds thereof upon such creation. 

Upon the filing of the financing statements and, in the case of

Receivables hereafter created and the proceeds thereof, upon the creation

thereof, LLC II shall have a first priority perfected security or ownership

interest in such property and proceeds.




 




(b)    Notice of Breach.  Upon discovery by either Columbus Bank or

LLC II of a breach of any of the representations and warranties set forth in

this Section 4.02, the party discovering such breach shall given written notice

to the other party within three Business Days following such discovery; provided

that the failure to give notice within three Business Days does not preclude

subsequent notice.




 




Section 4.03    Representations

and Warranties of LLC II.




 




(a)    Representations and

Warranties of LLC II.  As of the

date hereof and as of the Termination Date, LLC II hereby represents and

warrants to, and agrees with, Columbus Bank that:




 




(i)    Organization.  LLC II is a limited liability company duly

organized, validly existing and in good standing under the laws of the State of

Nevada.  Schedule 4.03(a) sets forth an

accurate and complete list identifying the following: (A) the LLC II’s name as

it appears in official filings in the state of its organization; (B) the type

of entity of the LLC II; (C) the organizational identification number issued by

the LLC II’s state of organization or a statement that no such number has been

issued; and (D) the LLC II’s state of organization.  The LLC II has only one state of organization.




 




(ii)    Capacity; Authority;

Validity.  LLC II 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 LLC II

of the transactions contemplated hereby and by the Conveyance Papers have been

duly




 




13





























 




and validly

authorized by all necessary action on the part of LLC II, and this Agreement

has been duly executed and delivered by LLC II and constitutes the valid and

binding obligation of LLC II 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).




 




(iii)    Conflicts; Defaults.  Neither the execution and delivery of this

Agreement or the Conveyance Papers by LLC II nor the consummation of the

transactions contemplated by this Agreement and the Conveyance Papers by LLC

II, 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 LLC II is a party or by which it is bound,

(ii) violate the certificate of organization or limited liability company

agreement, or other equivalent organizational documents of LLC II, (iii)

require any consent or approval under any judgment, order, writ, decree, permit

or license to which LLC II is a party or by which it is bound, or (iv) require

the consent or approval of any other party to any contract, instrument or

commitment to which LLC II is a party or by which it is bound.  LLC II is not subject to any agreement with

any regulatory authority which would prevent the consummation by LLC II of the

transactions contemplated by this Agreement.




 




(iv)    Litigation.  There is no claim, or any litigation,

proceeding, arbitration, investigation or controversy pending, to which LLC II

is a party and by which it is bound, which adversely affects LLC II’s ability

to consummate the transactions contemplated hereby and, to the best of LLC II’s

knowledge, no facts exist which would provide a basis for any such claim,

litigation, proceeding, arbitration, investigation or controversy.




 




(v)    No Consent, Etc.  No consent of any person (including without

limitation any stockholder or creditor of LLC II) 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 Columbus Bank

and other than the filing of financing statements in connection with the

transfer of the Purchased Assets and a grant of a security interest in the

Collateral) in connection with the execution or delivery of this Agreement or

the Conveyance Papers by LLC II, the validity or enforceability of this

Agreement or the Conveyance Papers against LLC II, the validity of the security

interest granted by LLC II hereunder, the consummation of the transactions

contemplated hereby or by the Conveyance Papers, or the performance by LLC II

of its obligations hereunder and under the Conveyance Papers.




 




(b)    Notice of Breach.  Upon discovery by LLC II or Columbus Bank of

a breach of any of the foregoing representations and warranties, the party

discovering such breach shall give prompt written notice to the other party.




 




[END OF ARTICLE

IV]




 




14





























 




ARTICLE V




 




COVENANTS




 




Section 5.01    Covenants of

Columbus Bank.




 




(a)    Covenants of Columbus

Bank.  Columbus Bank hereby

covenants and agrees with LLC II as follows:




 




(i)    Receivables Not To Be

Evidenced by Promissory Notes. 

Except in connection with its enforcement or collection of a Columbus

Account, Columbus Bank will take no action to cause any Receivable to be

evidenced by any instrument (as defined in the UCC).




 




(ii)    Delivery of Collections

or Recoveries.  In the event that

Columbus Bank receives collections of Receivables or Recoveries following

purchase of such Receivables by LLC II pursuant hereto, Columbus Bank agrees to

pay to LLC II such collections of Receivables and Recoveries as soon as

practicable after receipt thereof.




 




(iii)    Notice of Bank Liens.  Columbus Bank shall notify LLC II promptly

after becoming aware of any Bank Lien on any Receivable other than the

conveyances hereunder, under the CompuCredit Purchase Agreement, the Transfer

and Servicing Agreement, the CFC Purchase Agreement and the Indenture.




 




(iv)    Documentation of

Transfer.  Columbus Bank shall

undertake to cooperate with LLC II in filing, and LLC II shall file the

documents (at the expense of LLC II) which would be necessary to perfect and

maintain the transfer of the security interest in and to the Purchased Assets.




 




(v)    Official Records.  Columbus Bank shall maintain this Agreement

as a part of its official records.




 




Section 5.02    Covenants of

LLC II.  LLC II hereby covenants and

agrees with Columbus Bank as follows:




 




(a)    Except as otherwise

provided in this subsection (a), until an Event of Default has occurred

and is continuing, LLC II shall continue to collect, at its own expense, all

amounts due or to become due LLC II in respect of the Collateral.  In connection with such collections,

provided no Event of Default shall have occurred and be continuing, LLC II may

take such action as LLC II may deem necessary or advisable to enforce rights to

receive payments in respect of the Collateral.




 




(b)    LLC II shall deliver to the

Custodial Agent contemporaneously with execution and delivery of this Agreement

(i) the certificates, if any, evidencing the Pledged Residual Interests,

together with instruments of transfer, endorsed in blank, sufficient to permit

Columbus Bank, upon completion of the endorsements thereof, to cause the

transfer on the books and records of the Indenture Trustee of the Pledged

Residual Interests.  At any time after

an 




 




15





























 




Event of Default has occurred and is continuing,

Columbus Bank shall have the right to submit such instruments of transfer to

the Indenture Trustee and cause the issuance of certificates evidencing the

Pledged Residual Interests registered in the name of Columbus Bank or its

designee and to submit the Letter of Instruction to the Indenture Trustee.




 




(c)    After delivery to LLC II by

Columbus Bank of a notice that an Event of Default has occurred and is

continuing:  (i) all amounts and

proceeds (including Instruments) received by LLC II in respect of the

Collateral shall be received in trust for the benefit of Columbus Bank

hereunder, shall be segregated from other funds of LLC II, and shall be

forthwith paid over to Columbus Bank in the same form as so received (with any

necessary endorsements) to be held as cash collateral and applied as provided

by this Agreement; and (ii) LLC II shall not adjust, settle or compromise the

amount or payment of any of the Receivables, or release wholly or partly any

account debtor or obligor thereof, or allow any credit or discount thereon.




 




(d)     Other than as permitted

pursuant to Sections 6.06, 6.07 or 6.08, LLC II shall not without the prior

written consent of Columbus Bank, sell, assign (by operation of law or

otherwise), transfer or otherwise dispose of all or any part of the Collateral.




 




(e)    LLC II agrees that, from

time to time at its own cost and expense, it will promptly execute and deliver

and will cause to be executed and delivered all further instruments, assignments,

notices, agreements and documents, including, without limitation, financing and

continuation statements, and will take all further action and will cause all

further action to be taken, that may be necessary or desirable, or that

Columbus Bank may reasonably request, in order to perfect and protect any

security interest granted or purported to be granted hereby and the priority

thereof or to enable Columbus Bank to exercise and enforce its rights and

remedies hereunder with respect to any Collateral.  Without limiting the generality of the foregoing LLC II will:




 




(i)    if any Collateral shall be

evidenced by a promissory note or other instrument or negotiable document,

deliver and pledge to the Custodial Agent such promissory note, instrument or

negotiable document duly endorsed and accompanied by duly executed instruments

of transfer or assignment, all in form and substance reasonably satisfactory to

Columbus Bank;




 




(ii)    execute and file, record

or register such financing or continuation statements, or amendments thereto,

and such other instruments, assignments or notices, as may be necessary or

desirable, or as Columbus Bank may reasonably request, in order to perfect and

protect the security interests and other rights granted or purported to be granted

to Columbus Bank;




 




(iii)    furnish to Columbus Bank,

from time to time, (A) statements and schedules further identifying and

describing the Collateral; and (B) all monthly servicing reports and any

restatements or revisions thereto delivered to noteholders pursuant to the

applicable Indenture Supplement.




 




16





























 




(iv)    at Columbus Bank’s written

request, appear in and defend any action or proceeding that may affect LLC II’s

right, title and interest in or to, or Columbus Bank’s security interest in,

the Collateral.




 




(f)    With respect to the

foregoing and the grant of the security interest hereunder, LLC II hereby

authorizes Columbus Bank at any time and from time to time to file one or more

financing or continuation statements, and amendments thereto, relative to all

or any part of the Collateral without the signature of LLC II where permitted

by law.




 




(g)    Other than as permitted

pursuant to Sections 6.06, 6.07 or 6.08, LLC II acknowledges that it is not

authorized to file any financing statement or amendment or termination

statement relating to the Collateral with respect to any financing statement

relating to the Collateral without the prior written consent of Columbus Bank,

subject to LLC II’s rights under Articles 1 and 9 of the UCC.




 




(h)    During the term of this

Agreement, LLC II shall observe the applicable legal requirements for its

recognition as a legal entity separate and apart from CompuCredit and from its

Affiliates, including as follows:




 




(i)                       LLC

II shall maintain business records and books of account separate from

CompuCredit and from those of its Affiliates;




 




(ii)                    except

as otherwise provided in this Agreement, LLC II shall not commingle its assets

and funds with those of its Affiliates;




 




(iii)                 LLC II shall at all times hold itself

out to the public under its own name as a legal entity separate and distinct

from its Affiliates; and




 




(iv)                LLC

II is not and shall not be involved in the day-to-day or other management of

any of its Affiliates;




 




(v)                   LLC

II shall maintain records and books of account and shall not commingle such

records and books of account with the records and books of account of any

Person; and




 




(vi)                LLC

II shall act solely in its own name and through duly authorized agents in the

conduct of its business, and shall conduct its business so as not to mislead

others as to the identity of the entity with which they are concerned.




 




(i)    at all times, except in the

case of a temporary vacancy, which shall promptly be filled, the Managing

Member of LLC II shall have at least one director who qualifies as an

“Independent Director” as such term is defined in the articles of incorporation

of the Managing Member.




 




Section 5.03    Columbus Bank

Appointed Attorney-in-Fact.




 




From and after the occurrence and during the

continuation of an Event of Default, LLC II hereby irrevocably appoints

Columbus Bank as LLC II’s true and lawful attorney-in-fact, with 




 




17





























 




full authority and power

in the place and stead of LLC II and in the name of LLC II, Columbus Bank or

otherwise, from time to time in Columbus Bank’s discretion to take any

appropriate action and to execute any instrument that Columbus Bank may deem

necessary or advisable to accomplish the purposes of this Agreement with

respect to the Collateral (but Columbus Bank shall not be obligated to and

shall have no liability to LLC II or any third party for failure so to do)

including, without limitation:




 




(a)    to ask, demand, collect,

enforce, sue for, recover, compromise, receive, and give acquittance and

receipts for moneys due and to become due under or in respect of any of the

Collateral;




 




(b)    to receive, endorse, and

collect any checks, drafts or other instruments, documents, and chattel paper

in connection with clause (a) above;




 




(c)    to file any claims or take

any action or institute any proceedings (or to settle, adjust or compromise any

such proceeding) that Columbus Bank may deem necessary or desirable for the

collection of any of the Collateral or otherwise to enforce the rights of LLC

II with respect to any of the Collateral;




 




(d)    to perform the affirmative

obligations of LLC II hereunder;




 




(e)    to execute and deliver for

and on behalf of LLC II any and all instruments, documents, agreements, and

other writings necessary or advisable for the exercise on behalf of LLC II of

any rights, benefits or options created or existing under or pursuant to the

Collateral; and




 




(f)    to execute endorsements,

assignments, or other instruments of conveyance and transfer relating to the

Collateral.




 




LLC II hereby

acknowledges, consents and agrees that the power of attorney granted pursuant

to this Section 5.03 is irrevocable and coupled with an interest.




 




Section

5.04    Columbus Bank May Perform.




 




If LLC II fails to

perform in any material respect any agreement contained herein, Columbus Bank

may itself (but shall not be obliged to) perform, or cause performance of, such

agreement, provided that Columbus Bank shall in any event first have given

LLC II written notice of its intent to do the same and LLC II shall not have,

within 30 days of such notice (or such shorter period as Columbus Bank may

reasonably determine is necessary in order to preserve the benefits of this

Agreement with respect to any material portion of the Collateral), paid such

claim or obtained to Columbus Bank’s satisfaction the release of the claim or

Lien to which such notice relates.  LLC

II agrees to reimburse Columbus Bank upon demand for any reasonable

out-of-pocket, third-party costs and expenses, including, without limitation,

reasonable attorneys’ fees, Columbus Bank incurs while acting as

attorney-in-fact hereunder, all of which costs and expenses are included in the

obligations secured hereby.




 




18





























 




Section 5.05    Limitations on

Duties of Columbus Bank.




 




Columbus Bank

shall be obligated to perform such duties and only such duties as are

specifically set forth in this Agreement, and no implied covenants or

obligations shall be read into this Agreement against Columbus Bank.  If an Event of Default has occurred and is

continuing, Columbus Bank shall exercise the rights and powers vested in it by

this Agreement, and shall not be liable (except for its negligence, willful misconduct

or bad faith) with respect to any action taken by it, or omitted to be taken by

it, in accordance herewith.




 




Section 5.06    Reasonable Care.




 




Subject to the provisions of Section 9-207 of the UCC,

it is understood and agreed between the parties hereto that Columbus Bank’s

duty with respect to the custody, safekeeping, and physical preservation of the

Collateral in its possession should be to deal with it in the same manner as

Columbus Bank deals with similar property for its own account; provided,

however, that Columbus Bank shall not be required to make any

presentment, demand, or protest, or give any notice, and need not take any

action to preserve any rights against any other Person with respect to the

Collateral.




 




[END OF ARTICLE V]




 




19





























 




ARTICLE VI




 




SECURITY




Section

6.01    Grant of Security.




 




As collateral security for the prompt, full and

complete payment and performance when due of its obligations hereunder and for

so long as the Funding Exposure Amount is greater than zero, LLC II hereby

assigns and pledges to Columbus Bank, and hereby grants to Columbus Bank a

security interest in, all of LLC II’s right, title and interest in and to the

following property, whether now owned or existing or hereafter existing,

arising or acquired, and wherever located (the “Collateral”):




 




(a)    the Pledged Residual

Interests; and




 




(b)    all products and Proceeds

of and from any and all of the foregoing Collateral, all proceeds which

constitute property of the types described in clause (a) above and, to the

extent not otherwise included, all proceeds and payments under insurance

(whether or not LLC II is the loss payee thereof), including return premiums

with respect thereto, or any indemnity, warranty, or guaranty payable by reason

of loss or damage to or otherwise with respect to any of the foregoing

Collateral.




 




Section 6.02    Continuing

Security Interest.




 




(a)    For so long as the Funding

Exposure Amount is greater than zero, this Agreement shall create a continuing

security interest in the Collateral and shall:




 




(i)    remain in full force and

effect until the payment and performance in full of all the obligations of LLC

II hereunder;




 




(ii)    be binding upon LLC II and

its successors, transferees and assigns; and




 




(iii)    inure, together with the

rights and remedies of Columbus Bank, to the benefit of Columbus Bank and its

successors and assigns.




 




(b)    Upon reduction of the

Funding Exposure Amount to zero, the security interest granted herein shall

terminate and all rights to the Collateral shall revert to LLC II.  Upon any such termination, Columbus Bank

will, at LLC II’s sole expense, promptly execute and deliver to LLC II such

instruments and documents necessary and as LLC II shall reasonably request to

evidence such termination.




 




Section

6.03    LLC II Remains Liable.




 




Anything herein to the contrary notwithstanding:




 




(a)    LLC II shall remain liable

under the contracts and agreements to which it is a party related to or

included in the Collateral to the extent set forth therein and shall perform

all 




 




20





























 




of its duties and obligations under such contracts and

agreements to the same extent as if this Agreement had not been executed;




 




(b)    the exercise by Columbus

Bank of any of its rights and remedies hereunder shall not release LLC II from

any of its duties or obligations under any such contracts or agreements related

to or included in the Collateral; and




 




(c)    Columbus Bank shall not

have any obligation or liability under any such contracts or agreements related

to or included in the Collateral by reason of this Agreement, and Columbus Bank

shall not be obligated (i) to perform or fulfill any of the obligations or

duties of LLC II thereunder, (ii) to take any action to collect or

present, file and/or enforce any claim for payment assigned hereunder, or

(iii) to make any inquiry as to the nature or sufficiency of any payment

LLC II may be entitled to receive thereunder.




 




Section 6.04    Representations

and Warranties of LLC II Regarding Collateral.  LLC II hereby represents and warrants to Columbus Bank as of the

date hereof and as of the Termination Date as follows:




 




(a)    LLC II owns, and has rights

and the power to transfer, each item of Collateral upon which it purports to

grant a lien hereunder, free and clear of any and all Liens, except for the

security interest created by this Agreement. 

Except as otherwise permitted under Sections 6.06, 6.07 or 6.08, no

effective agreement, financing statement, assignment, Bank Lien or other

instrument similar in effect covering all or any part of the Collateral is on

file or of record in any public office, except such as may have been filed in

favor of Columbus Bank relating to this Agreement.




 




(b)    This Agreement creates a

valid security interest in the Collateral securing the payment and performance

in full of the obligations of LLC II hereunder.  Upon the filing of appropriate financing statements in the

applicable filing offices in the jurisdictions listed in Schedule B

hereto, all filings, registrations and recordings necessary or appropriate to

create and perfect the first priority security interest granted by LLC II to

Columbus Bank in the Collateral will have been accomplished and will create a

perfected security interest therein prior to the rights of all other Persons

therein and subject to no other Bank Liens, except as otherwise permitted under

Sections 6.06, 6.07 or 6.08.




 




Section 6.05    Certain

Remedies.




 




If any Event of Default shall have occurred and is

continuing:




 




(a)    Columbus Bank may exercise

in respect of the Collateral, in addition to other rights available to it at

law or in equity or otherwise, all the rights and remedies of a secured party

on default under the UCC (whether or not the UCC applies to the affected

Collateral) and also may (i) require LLC II to, and LLC II hereby agrees

that it will, at its expense and upon request of Columbus Bank forthwith,

assemble all or part of the Collateral as directed by Columbus Bank and make it

available to Columbus Bank at a place to be designated by Columbus Bank that is

reasonably convenient to both parties, (ii) exercise any and all rights

and remedies of LLC II under or in connection with the Collateral, (iii)

foreclose or otherwise enforce Columbus Bank’s security interest in any manner

permitted by law or provided for in 




 




21





























 




this Agreement, (iv) without notice except as

specified below, sell or otherwise dispose of the Collateral or any part

thereof in one or more parcels at one or more public or private sales, at any

place or places whether or not the Collateral is present at the place of sale,

for cash, on credit, or for future delivery, and upon such other terms and in

such manner as Columbus Bank may, in compliance with any mandatory requirements

of applicable law, determine to be commercially reasonable, (v) recover

from LLC II all costs and expenses, including, without limitation, reasonable

attorneys’ fees, incurred or paid by Columbus Bank in exercising any right,

power, privilege or remedy provided by this Agreement or by law or in equity,

(vi) without notice or demand of legal process, all of which are hereby

expressly waived by LLC II, enter into property where any Collateral or books

and records relating thereto are located and take possession thereof with or

without judicial process, and (vii) prior to the disposition of the Collateral,

prepare it for disposition in any manner and to the extent Columbus Bank deems

appropriate; provided, however, that notwithstanding the

foregoing to the contrary, Columbus Bank may sell or otherwise dispose the

Collateral or any part thereof in its then condition without any preparation or

processing.  LLC II agrees that, to the

extent notice of sale shall be required by law, at least ten (10) days’ prior

written notice to LLC II of the time and place of any public sale or the time

after which any private sale is to be made shall constitute reasonable

notification thereof.  Columbus Bank

shall not be obligated to make any sale of Collateral regardless of notice of

sale having been given.  Columbus Bank

may adjourn any public or private sale from time to time by announcement at the

time and place fixed therefor, and such sale may, without further notice, be

made at the time and place to which it was so adjourned.  Upon any sale or other disposition pursuant

to this Agreement, Columbus Bank shall have the right to deliver, assign and

transfer to purchaser thereof the Collateral or any part thereof and transfer

to the purchaser thereof the Collateral or any part thereof so sold or disposed

of.  Each purchaser at any such sale or

other disposition (including Columbus Bank) shall hold the Collateral free from

any claim or right of whatever kind, including any equity or right of

redemption of LLC II and LLC II specifically waives (to the extent permitted by

law) all rights of redemption, stay or appraisal which it has or may have under

any rule of law or statute now existing or hereafter adopted.




 




(b)    All cash proceeds received

by Columbus Bank in respect of any sale of, collection from, or other

realization upon all or any part of the Collateral shall be applied to the

Obligations.  Subject to Section

9-608(a) of the UCC, if any non-cash proceeds are received in connection with

any sale of Collateral, Columbus Bank shall not apply such non-cash proceeds to

the Obligations unless and until such proceeds are converted to cash; provided,

however, that if such non-cash proceeds are not expected on the date of

receipt thereof to be converted to cash within one year after such date,

Columbus Bank shall nonetheless use commercially reasonable efforts to convert

such non-cash proceeds to cash within such one year period.  Any surplus of such cash, cash proceeds or

non-cash proceeds held by Columbus Bank after payment in full of all the

Obligations shall be paid over to LLC II or to whomsoever may be lawfully

entitled to receive such surplus pursuant to Section 9-608 of the UCC.




 




(c)    Notwithstanding anything to

the contrary herein, the parties hereto acknowledge and agree that any transfer

of the Pledged Residual Interests (including in connection with Columbus Bank’s

exercise of its rights and remedies hereunder) is subject to the terms,

provisions and conditions set forth in the Indenture, including requirements

concerning the delivery of tax opinions with respect to any such transfer and

the tax status of any transferee, 




 




22





























 




and the parties acknowledge and agree that nothing

herein waives such requirements or assures their satisfaction.




 




Section 6.06    Substitution of

Collateral.




 




(a)    LLC II may from time to

time substitute Eligible Collateral for the Collateral hereunder, subject to

satisfaction of the conditions set forth in this Section 6.06.




 




(b)    Eligible Collateral shall

consist of (i) rights of CFC to receive payments in respect of notes issued

pursuant to the Indenture, which notes shall not be subordinated to any other

notes or class of notes issued pursuant to the Indenture and beneficially owned

by the CFC or any affiliate of CFC; (ii) rights of CFC to receive distributions

under the Trust Agreement, including, without limitation, Excess Finance Charge

Collections (as defined in the Transfer and Servicing Agreement and the related

Indenture Supplement), which rights are, in each case, not subject to any Bank

Lien immediately prior to grant of a security interest therein pursuant hereto

(collectively, “Eligible Collateral”).




 




(c)    Unless Columbus Bank shall

have given its prior written consent, no substitution of Collateral pursuant to

this Section 6.06 shall result in the percentage of Excess Interest Residuals

comprising the Pledged Residual Interests to exceed the percentage of Excess

Interest Residuals comprising the Residual Interests.




 




(d)    In connection with each

substitution of Collateral pursuant to this Section 6.06 LLC II shall deliver

to Columbus Bank an Officer’s Certificate substantially in the form attached as

Exhibit C to the Pledge and Security Agreement to the effect that after giving

effect to such substitution the Residual Valuation of the Pledged Residual

Interests is greater than or equal to the amount required pursuant to clause

(ii) of the definition of Minimum Residual Valuation.




 




Section 6.07    Release of

Collateral.




 




(a)    If (i) any of the

Collateral shall be sold, transferred, or otherwise disposed of by LLC II in a

transaction not prohibited by this Agreement or (ii) LLC II shall deliver to

Columbus Bank an Officer’s Certificate substantially in the form attached as

Exhibit C to the Pledge and Security Agreement to the effect that after giving

effect to any sale, transfer or other disposition of any part of the

Collateral, the Residual Valuation of the Pledged Residual Interests is greater

than or equal to the amount required pursuant to clause (ii) of the definition

of Minimum Residual Valuation, then Columbus Bank shall, at the written request

of LLC II, promptly authorize, execute and deliver to LLC II (at the sole cost and

expense of LLC II) such instruments or documents necessary and as LLC II shall

reasonably request to release the liens created hereby on such Collateral,

including any necessary UCC amendment, termination statement or partial

termination statement.




 




(b)    Upon receipt of (i) a

written request from CompuCredit for release of the Collateral and (ii) an

Officer’s Certificate substantially in the form attached hereto as Exhibit E to

the Pledge and Security Agreement, Columbus Bank shall (i) direct the Custodial

Agent to release and reassign all Collateral and Pledged Residual Interests,

(ii) remit to LLC II any cash or other stock, instruments, documents or

property which it has held as collateral for the Secured




 




23





























 




Obligations, and (iii) execute any documents or

instruments of release terminating its rights under this Agreement and the

Pledge and Security Agreement.




 




SECTION

6.08    Liens.




 




(a)    LLC II may create Liens on

the Pledged Residual Interests provided the following conditions have been

satisfied prior to or contemporaneous with creation of such Lien: (i) LLC II or

one of its affiliates shall have obtained a Qualifying Letter of Credit (as

defined in the Pledge and Security Agreement) in favor of Columbus Bank in an

amount equal to the Substitution Amount (as defined in the Pledge and Security

Agreement); and (ii) CompuCredit shall have provided to Columbus Bank not less

than 10 Business Days prior to the creation of any Lien on the Pledged Residual

Interests or any portion thereof an Officer’s Certificate with respect to the

Residual Valuation, which Officer’s Certificate shall be in substantially the

form attached hereto as Exhibit C to the Pledge and Security Agreement.  Columbus Bank shall, if requested by LLC II

in connection with a Lien granted by LLC II in accordance with this agreement,

enter into an intercreditor agreement with the holder of such Lien, which

intercreditor agreement shall contain usual and customary provisions regarding

the rights and obligations of the senior and junior lienholders.




 




(b)    LLC II shall not create

Bank Liens on the Pledged Residual Interests that would be junior to Columbus

Bank’s lien hereunder, unless LLC II, shall have obtained the prior written

consent of Columbus Bank; provided, however, that if (i) the

aggregate Residual Valuation of the Residual Interests is equal to or greater

than $175 million, and (ii) the net proceeds of the loan or loans secured by

such junior Bank Lien or Bank Liens on the Pledged Residual Interests are not

less than $5 million, then Columbus Bank’s prior written consent shall not be

required. LLC II shall cause the grantee of the security interest therein to

enter into an intercreditor agreement with Columbus Bank, which intercreditor

agreement shall contain usual and customary provisions regarding the rights and

obligations of the senior and junior lienholders.




 




24





























 




ARTICLE VII




 




MISCELLANEOUS PROVISIONS




 




Section 7.01    Amendment.  This Agreement and any Conveyance Papers and

the rights and obligations of the parties hereunder and thereunder may not be

changed orally, but only by an instrument in writing signed by Columbus Bank

and LLC II in accordance with this Section 7.01.




 




Section 7.02    Governing Law.




 




(a)    THIS AGREEMENT SHALL BE

CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT

REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND

REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH

LAWS.




 




(b)    ANY LEGAL ACTION OR

PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT MAY

BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE

STATE, COUNTY AND CITY OF NEW YORK, MUSCOGEE COUNTY, GEORGIA, THE CITY OF

COLUMBUS, GEORGIA, DEKALB COUNTY, GEORGIA OR THE CITY OF ATLANTA, GEORGIA.  BY EXECUTION AND DELIVERY OF THIS AGREEMENT,

EACH PARTY HERETO HEREBY IRREVOCABLY CONSENTS TO AND ACCEPTS, FOR ITSELF AND IN

RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY THE NON-EXCLUSIVE

JURISDICTION OF SUCH COURTS.  EACH PARTY

HERETO HEREBY FURTHER IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION

TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS,  WHICH IT MAY NOW OR

HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION

IN RESPECT OF THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT.




 




(c)    EACH PARTY HERETO HEREBY

IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE COURTS

REFERRED TO IN SUBSECTION (b) ABOVE OF THIS SECTION 7.02 IN ANY SUCH SUIT,

ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR

CERTIFIED MAIL, RETURN RECEIPT REQUESTED, POSTAGE PREPAID, TO IT AT ITS ADDRESS

SET FORTH IN THIS AGREEMENT.  EACH PARTY

HERETO HEREBY IRREVOCABLY WAIVES ANY OBJECTION TO SUCH SERVICE OF PROCESS AND

FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUIT, ACTION

OR PROCEEDING COMMENCED HEREUNDER OR UNDER ANY OTHER TRANSACTION DOCUMENT THAT

SERVICE OF PROCESS WAS IN ANY WAY INVALID OR INEFFECTIVE.  NOTHING HEREIN SHALL AFFECT THE RIGHT OF A

PARTY TO SERVE PROCESS ON THE OTHER PARTY IN ANY OTHER MANNER PERMITTED BY LAW.




 




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Section 7.03    Notices.  All demands, notices and communications

hereunder shall be in writing and shall be deemed to have been duly given if

personally delivered at or mailed by certified mail, return receipt requested,

to (a) in the case of LLC II, 101 Convention Center Drive, Suite 850-14C,

Las Vegas, NV 89109, Attention: President (facsimile no.

(702) 598-3651), with a copy to CompuCredit Corporation, 245 Perimeter Center

Parkway, Suite 600, Altanta, GA 30346, Attention: General Counsel (facsimile

no. (770) 206-6187) and (b) in the case of Columbus Bank, 901 Front

Avenue, Suite 202, Columbus, Georgia 31901 or P.O. Box 120, Columbus,

Georgia 31902-0120, Attention: 

President (facsimile no. (706) 649-4808); or, as to each party, at such

other address as shall be designated by such party in a written notice to each

other party.




 




Section 7.04    Severability of

Provisions.  If any one or more of

the covenants, agreements, provisions or terms of this Agreement shall for any

reason whatsoever be held invalid, then such covenants, agreements, provisions,

or terms shall be deemed severable from the remaining covenants, agreements,

provisions, and terms of this Agreement and shall in no way affect the validity

or enforceability of the other provisions of this Agreement.




 




Section 7.05    Assignment.  Notwithstanding anything to the contrary

contained herein, this Agreement may not be assigned by the parties hereto

without the prior written consent of the non-assigning party.




 




Section 7.06    Further

Assurances.  Columbus Bank and LLC

II agree to do and perform, from time to time, any and all acts and to execute

any and all further instruments required or reasonably requested by the other

party more fully to effect the purposes of this Agreement and the Conveyance

Papers, including, without limitation, the authorization and execution of any

financing statements or continuation statements or equivalent documents

relating to the Receivables for filing under the provisions of the UCC or other

law of any applicable jurisdiction and to provide prompt notification to the

other party of any change of the principal executive office of, or the

jurisdiction of organization of, such party.




 




Section 7.07    No Waiver;

Cumulative Remedies.  No failure to

exercise and no delay in exercising, on the part of Columbus Bank or LLC II,

any right, remedy, power or privilege hereunder, shall operate as a waiver

thereof; nor shall any single or partial exercise of any right, remedy, power

or privilege hereunder preclude any other or further exercise thereof or the exercise

of any other right, remedy, power or privilege.  The rights, remedies, powers and privileges herein provided are

cumulative and not exhaustive of any rights, remedies, powers and privileges

provided by law.




 




Section 7.08    Counterparts.  This Agreement and all Conveyance Papers may

be executed in two or more counterparts (and by different parties on separate

counterparts), each of which shall be an original, but all of which together

shall constitute one and the same instrument.




 




Section 7.09    Binding;

Third-Party Beneficiaries.  This

Agreement and the Conveyance Papers will inure to the benefit of and be binding

upon the parties hereto and their respective successors and permitted assigns.




 




26





























 




Section 7.10    Merger and

Integration.  Except as specifically

stated otherwise herein, this Agreement, as supplemented by the Conveyance

Papers, sets forth the entire understanding of the parties relating to the

subject matter hereof, and all prior understandings, written or oral, are

superseded by the this Agreement and the Conveyance Papers.  This Agreement and the Conveyance Papers may

not be modified, amended, waived or supplemented except as provided herein.




 




Section 7.11    Headings.  The headings are for purposes of reference

only and shall not otherwise affect the meaning or interpretation of any

provision hereof.




 




Section 7.12    Schedules and

Exhibits.  The schedules and

exhibits attached hereto and referred to herein shall constitute a part of this

Agreement and are incorporated into this Agreement for all purposes.




 




Section 7.13    Survival of

Representations and Warranties.  All

representations, warranties and agreements contained in this Agreement, shall

remain operative and in full force and effect and shall survive conveyance of

the Receivables by Columbus Bank to LLC II.




 




[END OF ARTICLE

VII]




 




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IN WITNESS WHEREOF, each of the parties hereto has

caused this Agreement to be duly executed by its duly authorized officer as of

the day and year first above written.




 




	

   


  	

  COLUMBUS BANK &

  TRUST COMPANY


  
	

   


  	

   


  
	

   


  	

   


  
	

   


  	

  By:


  	

   


  
	

   


  	

  Title:


  	

   


  
	

   


  	

   


  
	

   


  	

  CFC II, LLC


  
	

   


  	

   


  
	

   


  	

   


  
	

   


  	

  By:


  	

   


  
	

   


  	

  Title:


  	

   


  
				





 




28





























 




Schedule

4.03(a)




 




Official

Name:  CFC II, LLC


Type of Entity:  Limited Liability

Company


Organizational Identification Number: 

27-0030584


State of Organization:  Nevada




 





























 




Schedule

A




 




RESIDUAL INTERESTS




 




CompuCredit

Credit Card Master Note Trust II Series 2001-II-One Class B Floating Rate Asset

Backed Variable Funding Note in the principal sum of Thirty-Six Million Nine

Hundred Thirty-Seven Thousand Five Hundred Dollars ($36,937,500) payable to CFC

II, LLC




 





























 




SCHEDULE B




 




JURISDICTIONS




 




Nevada