**EXHIBIT 10.2**

 

**EXECUTION COPY**

 

 

**CSGQTRUST,**

 

Issuer

** **

**CITIBANK, N.A.,**

 

Note Administrator

 

and

** **

**U.S. BANK NATIONAL ASSOCIATION**

 

Indenture Trustee

 

**SERIES 2002-1 INDENTURE SUPPLEMENT, TERM NOTES**

 

Dated as of June 25, 2002

 

 

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**TABLE OFCONTENTS**

 
| ARTICLE  I     | Creation of the  Series 2002-1 Notes                                                      |
|----------------|-------------------------------------------------------------------------------------------|
| Section 1.01.  |                                                                                      | Designation |
| ARTICLE  II    | Definitions                                                                               |
| Section 2.01.  |                                                                                      | Definitions |
| ARTICLE III    | Servicing Fee                                                                             |
| Section 3.01.  |                                                                                      | Servicing  Compensation |
| ARTICLE  IV    | Rights  of Series 2002-1 Noteholders  and  Allocation and Application of Collections |
| Section  4.01. |                                                                                      | Collections  and Allocations |
| Section  4.02. |                                                                                      | Determination  of Monthly Interest |
| Section  4.03. |                                                                                      | Daily  Application of Collections |
| Section 4.04.  |                                                                                      | Required  Coverage Amount |
| Section  4.05. |                                                                                      | Application  of Available Finance Charge Collections and Available Principal Collections |
| Section  4.06. |                                                                                      | Defaulted  Amounts; Investor Charge-Offs |
| Section  4.07. |                                                                                      | [Reserved] |
| Section  4.08. |                                                                                      | Shared  Principal Collections |
| Section 4.09.  |                                                                                      | Determination of  LIBOR |
| ARTICLE  V     | Delivery  of Series 2002-1 Notes; Distributions; Reports to Series 2002-1 Noteholders     |
| Section  5.01. |                                                                                      | Delivery  and Payment for the Series 2002-1 Notes |
| Section 5.02.  |                                                                                      | Distributions |
| Section  5.03. |                                                                                      | Reports  and Statements to Series 2002-1 Noteholders |
| ARTICLE  VI    | Series 2002-1  Redemption Events; Voting                                                  |
| Section  6.01. |                                                                                      | Series  2002-1 Redemption Events |
| ARTICLE VII    | Redemption  of Series 2002-1 Notes; Final Distributions; Series Termination               |
| Section  7.01. |                                                                                      | Clean-up  Call; Redemption Event Issuance; Redemption upon Auction; Final Distributions |
| Section 7.02.  |                                                                                      | Series Termination |
| ARTICLE VIII   | Miscellaneous Provisions                                                                  |
| Section 8.01.  |                                                                                      | Ratification of  Indenture |
| Section 8.03.  |                                                                                      | Governing Law |
| Section  8.04. |                                                                                      | Private  Placement of Series 2002-1 Notes; Form of Delivery of Series 2002-1 Notes |
| Section 8.05.  |                                                                                      | Successors and  Assigns |
| Section  8.06. |                                                                                      | Transfer  of the Class B Notes and O/C Certificate |
|           |                                                                                      |   |

 

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| EXHIBITS      |                             |
|---------------|----------------------------------|
|          |                             |
| EXHIBIT A-1FL | FORM OF CLASS A-1FL NOTE         |
|          |                             |
| EXHIBIT A-1FX | FORM OF CLASS A-1FX NOTE         |
|          |                             |
| EXHIBIT A-2FL | FORM OF CLASS A-2FL NOTE         |
|          |                             |
| EXHIBIT A-2FX | FORM OF CLASS A-2FX NOTE         |
|          |                             |
| EXHIBIT A-3FL | FORM OF CLASS A-3FL NOTE         |
|          |                             |
| EXHIBIT A-3FX | FORM OF CLASS A-3FX NOTE         |
|          |                             |
| EXHIBIT A-4FL | FORM OF CLASS A-4FL NOTE         |
|          |                             |
| EXHIBIT A-4FX | FORM OF CLASS A-4FX NOTE         |
|          |                             |
| EXHIBIT B     | FORM OF CLASS B NOTE             |
|          |                             |
| EXHIBIT C     | FORM OF O/C CERTIFICATE          |
|          |                             |
| EXHIBIT D     | FORM OF STATEMENT TO NOTEHOLDERS |

 

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An extra section break has been inserted above this paragraph. Do notdelete this section break if you plan to add text after the Table of Contents/Authorities.  Deleting this break will cause Table ofContents/Authorities headers and footers to appear on any pages following theTable of Contents/Authorities.

 

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SERIES 2002-1 INDENTURE SUPPLEMENT, dated as of June25, 2002 (this “**Indenture Supplement**”), between CSGQTrust, a business trust organized and existing under the laws of the State ofDelaware (herein, the “**Issuer**” or the “**Trust**”), U.S. BankNational Association, a national banking association, not in its individualcapacity, but solely as indenture trustee (herein, together with its successorsin the trusts thereunder as provided in the Indenture referred to below, the “**IndentureTrustee**”) under the Indenture, dated as of June 25, 2002 (asamended from time to time, the “**Indenture**”) between the Issuer and theIndenture Trustee (the Indenture, together with this Indenture Supplement, the“**Agreement**”)and Citibank, N.A., a national association, as note administrator (herein,together with its successors in the trusts hereunder, called the “**NoteAdministrator**”).

 

Pursuant to Section 2.11 of the Indenture, theTransferor may direct the Issuer to issue one or more Series of Notes.  The Principal Terms of this Series are setforth in this Indenture Supplement to the Indenture.

 

ARTICLE I

 

Creation of the Series 2002-1 Notes

 

Section 1.01.                                  Designation

 

(a)   There is hereby created and designated aSeries of Notes to be issued pursuant to the Agreement to be known as “CSGQTrust, Series 2002-1 Notes” or the “Series 2002-1 Notes.”  The Series 2002-1 Notes shall be issued inthe following classes:  Class A-1FLSeries 2002-1 Floating Rate Asset Backed Notes, Class A-1FX Series 2002-1 FixedRate Asset Backed Notes, Class A-2FL Series 2002-1 Floating Rate Asset BackedNotes, Class A-2FX Series 2002-1 Fixed Rate Asset Backed Notes, Class A-3FLSeries 2002-1 Floating Rate Asset Backed Notes, Class A-3FXSeries 2002-1 FixedRate Asset Backed Notes, Class A-4FL Series 2002-1 Floating Rate Asset BackedNotes, Class A-4FX Series 2002-1 Fixed Rate Asset Backed Notes and Class BSeries 2002-1 Floating Rate Asset Backed Notes.  The Series 2002-1 Notes shall be due and payable on the FinalMaturity Date.  The O/C Certificate willalso be issued pursuant to the Agreement as part of Series 2002-1 and will beentitled to receive the amounts specified hereunder.  The Issuer’s Grant to the Indenture Trustee for the benefit ofholders of the Series 2002-1 Notes of its rights, title and interest in, to andunder the Collateral set forth in the Indenture shall also be made for thebenefit of the O/C Holder and shall secure the O/C Holder’s rights to receivepayments as specified herein and the Issuer hereby confirms that such Grant isalso made for the benefit of the O/C Holder and hereby grants to the IndentureTrustee a security interest in the Collateral for the benefit of theNoteholders and the O/C Holder.

 

(b)   Series 2002-1 shall be a Principal SharingSeries.  Series 2002-1 shall not besubordinated to any other Series.

 

(c)   The O/C Invested Amount shall be deemed a SeriesEnhancement under the Agreement.  TheO/C Holder shall be deemed to be a Series Enhancer for purposes of the noticeand applicable consent provisions under the Agreement.

 

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(d)   Standard & Poor’s and Moody’s shall bethe Rating Agencies for the Series 2002-1 Notes.

 

[END OF ARTICLE I]

 

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ARTICLE II

 

Definitions

 

Section 2.01.          Definitions

 

(a)   Whenever used in this Indenture Supplement,the following words and phrases shall have the following meanings, and thedefinitions of such terms are applicable to the singular as well as the pluralforms of such terms and the masculine as well as the feminine and neutergenders of such terms.

 

“Allocable Finance Charge Collections” shallmean an amount equal to, with respect to any Monthly Period, the product of(i) the Floating Allocation Percentage for such Monthly Period and(ii) Collections of Finance Charge Receivables for such Monthly Period.

 

“Allocable Principal Collections” shall mean anamount equal to, with respect to any Monthly Period (a) during theReinvestment Period and the Special Reinvestment Period, the product of(i) the Floating Allocation Percentage for such Monthly Period and (ii)Collections of Principal Receivables for such Monthly Period, and(b) during the Scheduled Amortization Period, a Partial ReinvestmentPeriod or a Rapid Amortization Period, the product of (i) the FixedAllocation Percentage and (ii) Collections of Principal Receivables forsuch Monthly Period.

 

“Available Finance Charge Collections” shallmean with respect to any Monthly Period an amount equal to the sum of (a)Allocable Finance Charge Collections for such Monthly Period *plus*(b) Reallocated Principal Collections for such Monthly Period.

 

“Available Principal Collections” shall mean,with respect to any Monthly Period, an amount equal to the sum of (a) theAllocable Principal Collections for such Monthly Period, (b) any SharedPrincipal Collections with respect to other Series that are allocated to Series2002-1 in accordance with Section 8.05 of the Indenture and Section 4.08hereof and (c) any other amounts which pursuant to Section 4.05 hereof areto be treated as Available Principal Collections with respect to the relatedDistribution Date.

 

“Class A Invested Amount” shall mean the sum ofthe Class A-1 Invested Amount, the Class A-2 Invested Amount, the Class A-3Invested Amount and the Class A-4 Invested Amount.

 

“Class A Investor Charge-Offs” shall mean, withrespect to any Distribution Date, the sum of the aggregate amounts by whicheach of the Class A-1 Invested Amount, the Class A-2 Invested Amount, the ClassA-3 Invested Amount and the Class A-4 Invested Amount have been reduced on allprior Distribution Dates as the result of Investor Charge-Offs pursuant toSection 4.06 hereof.

 

“Class A Investor Default Amount” shall mean,with respect to any Monthly Period, the product of (a) the Investor DefaultAmount for such Monthly Period and (b) a fraction, the numerator of which isthe Class A Invested Amount and the denominator of which is the Invested Amounton the day of determination.

 

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“Class A Notes” shall mean the Class A-1 Notes,the Class A-2 Notes, the Class A-3 Notes and the Class A-4 Notes.

 

“Class A-1FL Additional Interest” shall havethe meaning specified in subsection 4.02(a).

 

“Class A-1FX Additional Interest” shall havethe meaning specified in subsection 4.02(a).

 

“Class A-1FL Cumulative Monthly Interest” shallmean, with respect to a Distribution Date, an amount equal to Class A-1FLMonthly Interest for such Distribution Date *plus*Class A-1FL Monthly Interestpreviously due but not distributed to Class A-1FL Noteholders on a priorDistribution Date, *plus* the amount of any Class A-1FLAdditional Interest for such Distribution Date, *plus* the amount of any ClassA-1FL Additional Interest previously due but not distributed to Class A-1FLNoteholders on a prior Distribution Date.

 

“Class A-1FX Cumulative Monthly Interest” shallmean, with respect to a Distribution Date, an amount equal to Class A-1FXMonthly Interest for such Distribution Date *plus*Class A-1FX Monthly Interestpreviously due but not distributed to Class A-1FX Noteholders on a priorDistribution Date, *plus* the amount of any Class A-1FX AdditionalInterest for such Distribution Date, *plus* the amount of any Class A-1FXAdditional Interest previously due but not distributed to Class A-1FXNoteholders on a prior Distribution Date.

 

“Class A-1FL Cumulative Subordinated Interest”shall mean, with respect to a Distribution Date, an amount equal to interest onthe Class A-1FL Principal Balance due but not otherwise distributed to theClass A-1FL Noteholders on such Distribution Date or any prior DistributionDate pursuant to Section 4.05(a)(iii), at a rate *per annum*equal to the ClassA-1FL Note Interest Rate (on the same day count basis as the Class A-1FLMonthly Interest) *plus*interest on any shortfalls with respect to such amountsat the Class A-1FL Note Interest Rate.

 

“Class A-1FX Cumulative Subordinated Interest”shall mean, with respect to a Distribution Date, an amount equal to interest onthe Class A-1FX Principal Balance due but not otherwise distributed to theClass A-1FX Noteholders on such Distribution Date or any prior DistributionDate pursuant to Section 4.05(a)(iii), at a rate *per annum*equal to the ClassA-1FX Note Interest Rate (on the same day count basis as the Class A-1FXMonthly Interest) *plus*interest on any shortfalls with respect to such amountsat the Class A-1FX Note Interest Rate.

 

“Class A-1FL Initial Invested Amount” shallmean $183,744,000.

 

“Class A-1FX Initial Invested Amount” shallmean $31,758,000.

 

“Class A-1FL Interest Shortfall” shall have themeaning specified in subsection 4.02(a).

 

“Class A-1FX Interest Shortfall” shall have themeaning specified in subsection 4.02(a).

 

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“Class A-1 Initial Invested Amount” shall meanthe sum of the Class A-1FL Initial Invested Amount and the Class A-1FX InitialInvested Amount.

 

“Class A-1FL Invested Amount” shall mean, withrespect to any date an amount equal to the product of (a) the Class A-1Invested Amount on such date and (b) a fraction the numerator of which is theClass A-1FL Initial Invested Amount and the denominator of which is the sum ofthe Class A-1FL Initial Invested Amount and the Class A-1FX Initial InvestedAmount.

 

“Class A-1FX Invested Amount” shall mean, withrespect to any date an amount equal to the product of (a) the Class A-1Invested Amount on such date and (b) a fraction the numerator of which is theClass A-1FX Initial Invested Amount and the denominator of which is the sum ofthe Class A-1FL Initial Invested Amount and the Class A-1FX Initial InvestedAmount.

 

“Class A-1 Invested Amount” shall mean, on anydate of determination, an amount equal to (a) the Class A-1 Initial InvestedAmount; *minus*(b) the aggregate amount of principal payments made with respect to the ClassA-1 Notes prior to such date; *minus* (c) the amount by which the ClassA-1 Invested Amount has been reduced on or prior to such date due to InvestorCharge-Offs that have not been absorbed by a subordinate class of Notes pursuantto Section 4.06(f); *plus* (d) the amount by which the Class A-1Invested Amount has been increased on all prior Distribution Dates due toreimbursements of Investor Charge-Offs pursuant to Section 4.06(g); and *plus*(e) the amount by which the Class A-1 Invested Amount has been increased by theapplication of Series Post Payment Adjustment Amounts (if such amount is positive)on all prior Distribution Dates pursuant to Section 4.06(g); *provided,however,* that the Class A-1 Invested Amount shall not be reducedbelow zero nor shall it be increased above the Class A-1 Principal Balance.

 

“Class A-1FL Monthly Interest” shall have themeaning specified in subsection 4.02(a).

 

“Class A-1FX Monthly Interest” shall have themeaning specified in subsection 4.02(a).

 

“Class A-1FL Note Interest Rate” shall mean aper annum rate of 0.75% in excess of LIBOR as determined on the related LIBORDetermination Date with respect to each Interest Period.

 

“Class A-1FX Note Interest Rate” shall mean aper annum rate of 4.096% with respect to each Interest Period.

 

“Class A-1 Noteholder” shall mean the Person inwhose name a Class A-1 Note is registered in the Note Register.

 

“Class A-1 Notes” shall mean the Class A-1FLNotes and the Class A-1FX Notes.

 

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“Class A-1FL Notes” shall mean any one of theClass A-1FL Notes executed by the Issuer and authenticated by or on behalf ofthe Indenture Trustee, substantially in the form of Exhibit A-1FL.

 

“Class A-1FX Notes” shall mean any one of theClass A-1FX Notes executed by the Issuer and authenticated by or on behalf ofthe Indenture Trustee, substantially in the form of Exhibit A-1FX.

 

“Class A-1FL Principal Balance” shall mean, onany date of determination, an amount equal to (a) the Class A-1FL InitialInvested Amount, *minus* (b) the aggregate amount of principal payments made tothe Class A-1FL Noteholders on or prior to such date.

 

“Class A-1FX Principal Balance” shall mean, onany date of determination, an amount equal to (a) the Class A-1FX InitialInvested Amount, *minus* (b) the aggregate amount of principal payments made tothe Class A-1FL Noteholders on or prior to such date.

 

“Class A-2FL Additional Interest” shall havethe meaning specified in subsection 4.02(b).

 

“Class A-2FX Additional Interest” shall havethe meaning specified in subsection 4.02(b).

 

“Class A-2FL Cumulative Monthly Interest” shallmean, with respect to a Distribution Date, an amount equal to Class A-2FLMonthly Interest for such Distribution Date *plus*Class A-2FL Monthly Interestpreviously due but not distributed to Class A-2FL Noteholders on a priorDistribution Date, *plus* the amount of any Class A-2FLAdditional Interest for such Distribution Date, *plus* the amount of any ClassA-2FL Additional Interest previously due but not distributed to Class A-2FLNoteholders on a prior Distribution Date.

 

“Class A-2FX Cumulative Monthly Interest” shallmean, with respect to a Distribution Date, an amount equal to Class A-2FXMonthly Interest for such Distribution Date *plus*Class A-2FX Monthly Interestpreviously due but not distributed to Class A-2FX Noteholders on a priorDistribution Date, *plus* the amount of any Class A-2FXAdditional Interest for such Distribution Date, *plus* the amount of any ClassA-2FX Additional Interest previously due but not distributed to Class A-2FXNoteholders on a prior Distribution Date.

 

“Class A-2FL Cumulative Subordinated Interest”shall mean, with respect to a Distribution Date, an amount equal to interest onthe Class A-2FL Principal Balance due but not otherwise distributed to theClass A-2FL Noteholders on such Distribution Date or any prior DistributionDate pursuant to Section 4.05(a)(iv), at a rate *per annum*equal to the ClassA-2FL Note Interest Rate (on the same day count basis as the Class A-2FLMonthly Interest) *plus*interest on any shortfalls with respect to such amountsat the Class A-2FL Note Interest Rate.

 

“Class A-2FX Cumulative Subordinated Interest”shall mean, with respect to a Distribution Date, an amount equal to interest onthe Class A-2FX Principal Balance due but not otherwise distributed to theClass A-2FX Noteholders on such Distribution Date or any prior DistributionDate pursuant to Section 4.05(a)(iv), at a rate *per annum*equal to the ClassA-2FX

 

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Note Interest Rate (on the same day count basis as the Class A-2FXMonthly Interest) *plus*interest on any shortfalls with respect to such amountsat the Class A-2FX Note Interest Rate.

 

“Class A-2 Initial Invested Amount” shall meanthe sum of the Class A-2FL Initial Invested Amount and the Class A-2FX InitialInvested Amount.

 

“Class A-2FL Initial Invested Amount” shallmean $129,693,500.

 

“Class A-2FX Initial Invested Amount” shallmean $58,101,000.

 

“Class A-2FL Interest Shortfall” shall have themeaning specified in subsection 4.02(b).

 

“Class A-2FX Interest Shortfall” shall have themeaning specified in subsection 4.02(b).

 

“Class A-2FL Invested Amount” shall mean, withrespect to any date an amount equal to the product of (a) the Class A-2Invested Amount on such date and (b) a fraction the numerator of which is theClass A-2FL Initial Invested Amount and the denominator of which is the sum ofthe Class A-2FL Initial Invested Amount and the Class A-2FX Initial InvestedAmount.

 

“Class A-2FX Invested Amount” shall mean, withrespect to any date an amount equal to the product of (a) the Class A-2Invested Amount on such date and (b) a fraction the numerator of which is theClass A-2FX Initial Invested Amount and the denominator of which is the sum ofthe Class A-2FL Initial Invested Amount and the Class A-2FX Initial InvestedAmount.

 

“Class A-2 Invested Amount” shall mean, on anydate of determination, an amount equal to (a) the Class A-2 Initial InvestedAmount; *minus*(b) the aggregate amount of principal payments made with respect to the ClassA-2 Notes prior to such date; *minus*(c) the amount by which the ClassA-2 Invested Amount has been reduced on or prior to such date due to InvestorCharge-Offs that have not been absorbed by a subordinate class of Notes pursuantto Section 4.06(e); *plus* (d) the amount by which the Class A-2Invested Amount has been increased on all prior Distribution Dates due toreimbursements of Investor Charge-Offs pursuant to Section 4.06(g); and *plus*(e) the amount by which the Class A-2 Invested Amount has been increased by theapplication of Series Post Payment Adjustment Amounts (if such amount ispositive) on all prior Distribution Dates pursuant to Section 4.06(g); *provided,however,* that the Class A-2Invested Amount shall not be reduced below zero nor shall it be increased abovethe Class A-2 Principal Balance

 

“Class A-2FL Monthly Interest” shall have themeaning specified in subsection 4.02(b).

 

“Class A-2FX Monthly Interest” shall have themeaning specified in subsection 4.02(b).

 

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“Class A-2FL Note Interest Rate” shall mean aper annum rate of 1.35% in excess of LIBOR as determined on the related LIBORDetermination Date with respect to each Interest Period.

 

“Class A-2FX Note Interest Rate” shall mean aper annum rate of 4.685% with respect to each Interest Period.

 

“Class A-2 Noteholder” shall mean the Person inwhose name a Class A-2 Note is registered in the Note Register.

 

“Class A-2 Notes” shall mean the Class A-2FLNotes and the Class A-2FX Notes.

 

“Class A-2FL Notes” shall mean any one of theClass A-2FL Notes executed by the Issuer and authenticated by or on behalf ofthe Indenture Trustee, substantially in the form of Exhibit A-2FL.

 

“Class A-2FX Notes” shall mean any one of theClass A-2FX Notes executed by the Issuer and authenticated by or on behalf ofthe Indenture Trustee, substantially in the form of Exhibit A-2FX.

 

“Class A-2FL Principal Balance” shall mean, onany date of determination, an amount equal to (a) the Class A-2FL InitialInvested Amount, *minus* (b) the aggregate amount of principal payments made tothe Class A-2FL Noteholders on or prior to such date.

 

“Class A-2FX Principal Balance” shall mean, onany date of determination, an amount equal to (a) the Class A-2FX InitialInvested Amount, *minus* (b) the aggregate amount of principal payments made tothe Class A-2FX Noteholders on or prior to such date.

 

“Class A-3FL Additional Interest” shall havethe meaning specified in subsection 4.02(c).

 

“Class A-3FX Additional Interest” shall havethe meaning specified in subsection 4.02(c).

 

“Class A-3FL Cumulative Monthly Interest” shallmean, with respect to a Distribution Date, an amount equal to Class A-3FLMonthly Interest for such Distribution Date *plus*Class A-3FL Monthly Interestpreviously due but not distributed to Class A-3FL Noteholders on a priorDistribution Date, *plus* the amount of any Class A-3FLAdditional Interest for such Distribution Date, *plus* the amount of any ClassA-3FL Additional Interest previously due but not distributed to Class A-3FLNoteholders on a prior Distribution Date.

 

“Class A-3FX Cumulative Monthly Interest” shallmean, with respect to a Distribution Date, an amount equal to Class A-3FXMonthly Interest for such Distribution Date *plus*Class A-3FX Monthly Interestpreviously due but not distributed to Class A-3FX Noteholders on a priorDistribution Date, *plus* the amount of any Class A-3FXAdditional Interest for such Distribution Date, *plus* the amount of any ClassA-3FX Additional Interest previously due but not distributed to Class A-3FXNoteholders on a prior Distribution Date.

 

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“Class A-3FL Cumulative Subordinated Interest”shall mean, with respect to a Distribution Date, an amount equal to interest onthe Class A-3FL Principal Balance due but not otherwise distributed to theClass A-3FL Noteholders on such Distribution Date or any prior DistributionDate pursuant to Section 4.05(a)(v), at a rate *per annum*equal to the ClassA-3FL Note Interest Rate (on the same day count basis as the Class A-3FL MonthlyInterest) *plus*interest on any shortfalls with respect to such amounts at the ClassA-3FL Note Interest Rate.

 

“Class A-3FX Cumulative Subordinated Interest”shall mean, with respect to a Distribution Date, an amount equal to interest onthe Class A-3FX Principal Balance due but not otherwise distributed to theClass A-3FX Noteholders on such Distribution Date or any prior DistributionDate pursuant to Section 4.05(a)(v), at a rate *per annum*equal to the ClassA-3FX Note Interest Rate (on the same day count basis as the Class A-3FXMonthly Interest) *plus*interest on any shortfalls with respect to such amountsat the Class A-3FX Note Interest Rate.

 

“Class A-3 Initial Invested Amount” shall meanthe sum of the Class A-3FL Initial Invested Amount and the Class A-3FX InitialInvested Amount.

 

“Class A-3FL Initial Invested Amount” shallmean $57,732,700.

 

“Class A-3FX Initial Invested Amount” shallmean $53,097,000.

 

“Class A-3FL Interest Shortfall” shall have themeaning specified in subsection 4.02(c).

 

“Class A-3FX Interest Shortfall” shall have themeaning specified in subsection 4.02(c).

 

“Class A-3FL Invested Amount” shall mean, withrespect to any date an amount equal to the product of (a) the Class A-3Invested Amount on such date and (b) a fraction the numerator of which is theClass A-3FL Initial Invested Amount and the denominator of which is the sum ofthe Class A-3FL Initial Invested Amount and the Class A-3FX Initial InvestedAmount.

 

“Class A-3FX Invested Amount” shall mean, withrespect to any date an amount equal to the product of (a) the Class A-3Invested Amount on such date and (b) a fraction the numerator of which is theClass A-3FX Initial Invested Amount and the denominator of which is the sum ofthe Class A-3FL Initial Invested Amount and the Class A-3FX Initial InvestedAmount.

 

“Class A-3 Invested Amount” shall mean, on anydate of determination, an amount equal to (a) the Class A-3 Initial InvestedAmount; *minus*(b) the aggregate amount of principal payments made with respect to the ClassA-3 Notes prior to such date; *minus*(c) the amount by which the ClassA-3 Invested Amount has been reduced on or prior to such date due to InvestorCharge-Offs that have not been absorbed by a subordinate class of Notes pursuantto Section 4.06(d); *plus* (d) the amount by which the Class A-3Invested Amount has been increased on all prior Distribution Dates due toreimbursements of Investor Charge-Offs pursuant to Section 4.06(g); and *plus*(e) the amount by which the Class A-3 Invested Amount has been increased by theapplication of Series Post Payment Adjustment Amounts (if such amount is

 

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positive) on all prior Distribution Dates pursuant to Section 4.06(g); *provided,however,* that the Class A-3Invested Amount shall not be reduced below zero nor shall it be increased abovethe Class A-3 Principal Balance.

 

“Class A-3FL Monthly Interest” shall have themeaning specified in subsection 4.02(c).

 

“Class A-3FX Monthly Interest” shall have themeaning specified in subsection 4.02(c).

 

“Class A-3FL Note Interest Rate” shall mean aper annum rate of 3.00% in excess of LIBOR as determined on the related LIBORDetermination Date with respect to each Interest Period.

 

“Class A-3FX Note Interest Rate” shall mean aper annum rate of 6.298% with respect to each Interest Period.

 

“Class A-3 Noteholder” shall mean the Person inwhose name a Class A-3 Note is registered in the Note Register.

 

“Class A-3 Notes” shall mean the Class A-3FLNotes and the Class A-3FX Notes.

 

“Class A-3FL Notes” shall mean any one of theClass A-3FL Notes executed by the Issuer and authenticated by or on behalf ofthe Indenture Trustee, substantially in the form of Exhibit A-3FL.

 

“Class A-3FX Notes” shall mean any one of theClass A-3FX Notes executed by the Issuer and authenticated by or on behalf ofthe Indenture Trustee, substantially in the form of Exhibit A-3FX.

 

“Class A-3FL Principal Balance” shall mean, onany date of determination, an amount equal to (a) the Class A-3FL InitialInvested Amount, *minus* (b) the aggregate amount of principal payments made tothe Class A-3FL Noteholders on or prior to such date.

 

“Class A-3FX Principal Balance” shall mean, onany date of determination, an amount equal to (a) the Class A-3FX InitialInvested Amount, *minus* (b) the aggregate amount of principal payments made tothe Class A-3FL Noteholders on or prior to such date.

 

“Class A-4FL Additional Interest” shall havethe meaning specified in subsection 4.02(d).

 

“Class A-4FX Additional Interest” shall havethe meaning specified in subsection 4.02(d).

 

“Class A-4FL Cumulative Monthly Interest” shallmean, with respect to a Distribution Date, an amount equal to Class A-4FLMonthly Interest for such Distribution Date *plus*Class A-4FL Monthly Interest previouslydue but not distributed to Class A-4FL Noteholders on a prior DistributionDate, *plus*the amount of any Class A-4FL Additional

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Interest for such Distribution Date, *plus* the amount of any ClassA-4FL Additional Interest previously due but not distributed to Class A-4FLNoteholders on a prior Distribution Date.

 

“Class A-4FX Cumulative Monthly Interest” shallmean, with respect to a Distribution Date, an amount equal to Class A-4FXMonthly Interest for such Distribution Date *plus*Class A-4FX Monthly Interestpreviously due but not distributed to Class A-4FX Noteholders on a priorDistribution Date, *plus* the amount of any Class A-4FXAdditional Interest for such Distribution Date, *plus* the amount of any ClassA-4FX Additional Interest previously due but not distributed to Class A-4FXNoteholders on a prior Distribution Date.

 

“Class A-4FL Cumulative Subordinated Interest”shall mean, with respect to a Distribution Date, an amount equal to interest onthe Class A-4FL Principal Balance due but not otherwise distributed to theClass A-4FL Noteholders on such Distribution Date or any prior DistributionDate pursuant to Section 4.05(a)(vi), at a rate *per annum*equal to the ClassA-4FL Note Interest Rate (on the same day count basis as the Class A-4FLMonthly Interest) *plus*interest on any shortfalls with respect to such amountsat the Class A-4FL Note Interest Rate.

 

“Class A-4FX Cumulative Subordinated Interest”shall mean, with respect to a Distribution Date, an amount equal to interest onthe Class A-4FX Principal Balance due but not otherwise distributed to theClass A-4FX Noteholders on such Distribution Date or any prior DistributionDate pursuant to Section 4.05(a)(vi), at a rate *per annum*equal to the ClassA-4FX Note Interest Rate (on the same day count basis as the Class A-4FXMonthly Interest) *plus*interest on any shortfalls with respect to such amountsat the Class A-4FX Note Interest Rate.

 

“Class A-4 Initial Invested Amount” shall meanthe sum of the Class A-4FL Initial Invested Amount and the Class A-4FX InitialInvested Amount.

 

“Class A-4FL Initial Invested Amount” shallmean $96,553,500.

 

“Class A-4FX Initial Invested Amount” shallmean $14,276,000.

 

“Class A-4FL Interest Shortfall” shall have themeaning specified in subsection 4.02(d).

 

“Class A-4FX Interest Shortfall” shall have themeaning specified in subsection 4.02(d).

 

“Class A-4FL Invested Amount” shall mean withrespect to any date an amount equal to the product of (a) the Class A-4 InvestedAmount on such date and (b) a fraction the numerator of which is the ClassA-4FL Initial Invested Amount and the denominator of which is the sum of theClass A-4FL Initial Invested Amount and the Class A-4FX Initial InvestedAmount.

 

“Class A-4FX Invested Amount” shall mean withrespect to any date an amount equal to the product of (a) the Class A-4Invested Amount on such date and (b) a fraction the numerator of which is theClass A-4FX Initial Invested Amount and the denominator of which is the sum ofthe Class A-4FL Initial Invested Amount and the Class A-4FX Initial InvestedAmount.

 

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“Class A-4 Invested Amount” shall mean, on anydate of determination, an amount equal to (a) the Class A-4 Initial InvestedAmount; *minus*(b) the aggregate amount of principal payments made with respect to the ClassA-4 Notes prior to such date; *minus*(c) the amount by which the ClassA-4 Invested Amount has been reduced on or prior to such date due to InvestorCharge-Offs that have not been absorbed by a subordinate class of Notes pursuantto Section 4.06(c); and *plus* (d) the amount by which the Class A-4Invested Amount has been increased on all prior Distribution Dates due toreimbursements of Investor Charge-Offs pursuant to Section 4.06(g); and *plus*(e) the amount by which the Class A-4 Invested Amount has been increased by theapplication of Series Post Payment Adjustment Amounts (if such amount ispositive) on all prior Distribution Dates pursuant to Section 4.06(g); *provided,however,*that the Class A-4 Invested Amount shall not be reducedbelow zero nor shall it be increased above the Class A-4 Principal Balance.

 

“Class A-4FL Monthly Interest” shall have themeaning specified in subsection 4.02(d).

 

“Class A-4FX Monthly Interest” shall have themeaning specified in subsection 4.02(d).

 

“Class A-4FL Note Interest Rate” shall mean aper annum rate of 5.50% in excess of LIBOR as determined on the related LIBORDetermination Date with respect to each Interest Period.

 

“Class A-4FX Note Interest Rate” shall mean aper annum rate of 8.721% with respect to each Interest Period.

 

“Class A-4 Noteholder” shall mean the Person inwhose name a Class A-4 Note is registered in the Note Register.

 

“Class A-4 Notes” shall mean the Class A-4FLNotes and the Class A-4FX Notes.

 

“Class A-4FL Notes” shall mean any one of theClass A-4FL Notes executed by the Issuer and authenticated by or on behalf ofthe Indenture Trustee, substantially in the form of Exhibit A-4FL.

 

“Class A-4FX Notes” shall mean any one of theClass A-4FX Notes executed by the Issuer and authenticated by or on behalf ofthe Indenture Trustee, substantially in the form of Exhibit A-4FX.

 

“Class A-4FL Principal Balance” shall mean, onany date of determination, an amount equal to (a) the Class A-4FL InitialInvested Amount, *minus* (b) the aggregate amount of principal payments made tothe Class A-4FL Noteholders on or prior to such date.

 

“Class A-4FX Principal Balance” shall mean, onany date of determination, an amount equal to (a) the Class A-4FX InitialInvested Amount, *minus* (b) the aggregate amount of principal payments made tothe Class A-4FX Noteholders on or prior to such date.

 

“Class B Initial Invested Amount” shall mean$89,279,000.

 

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“Class B Invested Amount” shall mean, on anydate of determination, an amount equal to (a) the Class B Initial InvestedAmount; *minus*(b) the aggregate amount of principal payments made with respect to the Class BNotes prior to such date; *minus*(c) the amount by which the Class BInvested Amount has been reduced on or prior to such date due to InvestorCharge-Offs that have not been absorbed by the O/C Invested Amount pursuant toSection 4.06(b); *plus* (d) the amount by which the Class B Invested Amount hasbeen increased on all prior Distribution Dates due to reimbursements ofInvestor Charge-Offs pursuant to Section 4.06(g); and *plus* (e) the amount by whichthe Class B Invested Amount has been increased by the application of SeriesPost Payment Adjustment Amounts (if such amount is positive) on all priorDistribution Dates pursuant to Section 4.06(g); *provided, however,*that theClass B Invested Amount shall not be reduced below zero nor shall it beincreased above the Class B Principal Balance.

 

“Class B Investor Charge-Offs” shall mean, withrespect to any Distribution Date, the aggregate amount by which the Class BInvested Amount has been reduced on all prior Distribution Dates as the resultof Investor Charge-Offs pursuant to Section 4.06 hereof.

 

“Class B Investor Default Amount” shall mean,with respect to any Monthly Period, the product of (a) the Investor DefaultAmount for such Monthly Period and (b) a fraction, the numerator of which isthe Class B Invested Amount and the denominator of which is the Invested Amounton the day of determination.

 

“Class B Monthly Interest” shall have themeaning specified in subsection 4.02(e).

 

 

“Class B Note Interest Rate” shall mean a perannum rate of 10.0% in excess of LIBOR as determined on the related LIBORDetermination Date with respect to each Interest Period; *provided* that the Class BNote Interest Rate shall not exceed the Class B Note Interest Rate Cap.

 

“Class B Note Interest Rate Cap” shall mean15.0% for the first 12 Distribution Dates, 16.0% for the 13th through 24thDistribution Dates, 17.0% for the next 25th through 36th Distribution Dates and18.0% for all remaining Distribution Dates.

 

“Class B Noteholder” shall mean the Person inwhose name a Class B Note is registered in the Note Register.

 

“Class B Notes” shall mean any one of the ClassB Notes executed by the Issuer and authenticated by or on behalf of theIndenture Trustee, substantially in the form of Exhibit B.

 

“Class B Principal Balance” shall mean, on anydate of determination, an amount equal to (a) the Class B Initial InvestedAmount, *minus*(b) the aggregate amount of principal payments made to the Class B Noteholderson or prior to such date.

 

“Clean-up Call” shall have the meaningspecified in Section 7.01(a).

 

“Closing Date” shall mean June 25, 2002.

 

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“Discounted Recoveries“ shall mean any proceedsreceived by the Issuer from (i) the repurchase of Receivables at a discount bythe Accounts Owner from the Transferor pursuant to the terms of the ReceivablesPurchase Agreement and (ii) the repurchase of Receivables at a discount byProvidian under the terms of the Receivables Purchase Agreement which are thesubject of a credit provided to the related cardholder in connection with theClass Action Settlement (as such term is defined in the Receivables PurchaseAgreement).

 

“Distribution Date” shall mean July 17, 2002and the seventeenth day of each calendar month thereafter, or if suchseventeenth day is not a Business Day, the next succeeding Business Day.

 

“Estimated Required Coverage Amount” shall meanwith respect to any date in a Monthly Period the sum of (i) Monthly Interestdue on the Distribution Date relating to such Monthly Period, calculated usingLIBOR on the most recent LIBOR Determination Date, (ii) the Program Expensesdue to be paid on the Distribution Date relating to such Monthly Period and(iii) the estimated Monthly Servicing Fee due on the Distribution Date relatingto such Monthly Period, assuming for the purposes of calculating the estimatedMonthly Servicing Fee that the amount of Principal Receivables and FinanceCharge Receivables on the last day of the related Monthly Period is the greaterof the amount of Principal Receivables and Finance Charge Receivables on thefirst day of such Monthly Period and the date of calculation.

 

“Excess Program Expenses” shall mean theproduct of (i) any indemnity obligation of the Issuer to the Indenture Trustee,the Note Administrator, the Owner Trustee, the Certificate Administrator or theCertificate Trustee in any one-year period beginning on the Closing Date and oneach anniversary thereof in excess of $72,500 in the aggregate and (ii) afraction, the numerator of which is the Invested Amount as of the last day ofthe immediately preceding Monthly Period (or with respect to the first MonthlyPeriod, the initial Invested Amount) and the denominator of which is theInvested Amount for Series 2002-1 and for Series 2002-A.

 

“Final Maturity Date” shall mean the DistributionDate occurring in June 2012.

 

“Fixed Allocation Percentage” shall mean anamount equal to, with respect to any Monthly Period during a Rapid AmortizationPeriod, Partial Reinvestment Period or the Scheduled Amortization Period, thepercentage equivalent of a fraction, the numerator of which is the InvestedAmount as of close of business on the last day of either the ReinvestmentPeriod or the Special Reinvestment Period, whichever precedes such period, andthe denominator of which is the greater of (a) the aggregate amount ofPrincipal Receivables and Finance Charge Receivables as of the close ofbusiness on the last day of the prior Monthly Period (or with respect to thefirst Monthly Period, the aggregate amount of Principal Receivables and FinanceCharge Receivables as of the Closing Date) and (b) the sum of thenumerators used to calculate the allocation percentages with respect toCollections of Principal Receivables for all outstanding Series on the date ofdetermination.

 

“Floating Allocation Percentage” shall mean anamount equal to, with respect to any Monthly Period, the percentage equivalentof a fraction, the numerator of which is the Invested Amount as of the last dayof the immediately preceding Monthly Period (or with respect

 

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to the first Monthly Period, the Initial Invested Amount) and thedenominator of which is the greater of (a) the aggregate amount of PrincipalReceivables and Finance Charge Receivables as of the last day of the priorMonthly Period (or with respect to the first Monthly Period, the aggregateamount of Principal Receivables and Finance Charge Receivables as of theClosing Date) and (b) the sum of the numerators used to calculate the FloatingAllocation Percentage for all Series.

 

“Initial Invested Amount” shall mean the sum ofthe Class A-1 Initial Invested Amount, the Class A-2 Initial Invested Amount,the Class A-3 Initial Invested Amount, the Class A-4 Initial Invested Amountthe Class B Initial Invested Amount and the O/C Initial Invested Amount.

 

“Insolvency Event” shall mean with respect toany party, such party’s consent to the appointment of a conservator or receiveror liquidator in any insolvency, readjustment of debt, marshaling of assets andliabilities or similar proceedings of or relating to such party or of orrelating to all or substantially all of its property, or a decree or order of acourt or agency or supervisory authority having jurisdiction in the premisesfor the appointment of a conservator or receiver or liquidator in anyinsolvency, readjustment of debt, marshaling of assets and liabilities orsimilar proceedings, or for the winding-up or liquidation of its affairs, shallhave been entered against such party; or such party’s admission in writing ofits inability to pay its debts generally as they become due, filing a petitionto take advantage of any applicable insolvency or reorganization statute, ormaking any assignment for the benefit of its creditors.

 

“Interest Period” shall mean, with respect toany Distribution Date, the period from and including the Distribution Dateimmediately preceding such Distribution Date (or, in the case of the firstDistribution Date, from and including the Closing Date) to but excluding suchDistribution Date.

 

“Invested Amount” shall mean the sum of theClass A-1 Invested Amount, the Class A-2 Invested Amount, the Class A-3Invested Amount, the Class A-4 Invested Amount, the Class B Invested Amount andthe O/C Invested Amount.

 

“Investor Charge-Offs” shall have the meaningspecified in Section 4.06.

 

“Investor Default Amount” shall mean, withrespect to any Monthly Period, an amount equal to the product of (a) theDefaulted Amount for such Monthly Period and (b) the Floating AllocationPercentage for such Monthly Period.

 

“LIBOR” shall have the meaning specified inSection 4.09.

 

“LIBOR Determination Date” shall mean (i) June21, 2002 for the first Interest Period and (ii) the second London Business Dayprior to the commencement of the second and each subsequent Interest Period.

 

“London Business Day” shall mean any BusinessDay on which dealings in deposits in United States dollars are transacted inthe London interbank market.

 

“Monthly Servicing Fee” shall have the meaningspecified in Section 3.01.

 

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“Notes” shall mean the Class A-1 Notes, theClass A-2 Notes, the Class A-3 Notes, the Class A-4 Notes and the Class BNotes.

 

“O/C Certificate” shall mean the certificateissued by the Issuer representing the right to receive all amounts distributedhereunder in respect of the O/C Invested Amount,  substantially in the form of Exhibit C.

 

“O/C Holder” shall mean the holder of the O/CCertificate.

 

“O/C Initial Invested Amount” shall mean$517,207,554.

 

“O/C Invested Amount” shall mean, on any dateof determination, an amount equal to (a) the O/C Initial Invested Amount; *minus*(b) the aggregate amount of payments with respect to the O/C Invested Amount onor prior to such date; *minus*(c) the amount by which the O/CInvested Amount has been reduced on or prior to such date due to InvestorCharge-Offs pursuant to Section 4.06(a); *plus* (d) the amount by which the O/CInvested Amount has been increased on all prior Distribution Dates due toreimbursements of Investor Charge-Offs pursuant to Section 4.06(g); and *plus*(e) the amount by which the O/C Invested Amount has been increased by theapplication of Series Post Payment Adjustment Amounts (if such amount ispositive) on all prior Distribution Dates pursuant to Section 4.06(g); *provided*that the O/C Invested Amount shall not be reduced below zero.

 

“O/C Investor Charge-Offs” shall mean, withrespect to any Distribution Date, the aggregate amount by which the O/CInvested Amount has been reduced on all prior Distribution Dates as the resultof Investor Charge-Offs pursuant to Section 4.06 hereof.

 

“O/C Investor Default Amount” shall mean, withrespect to any Monthly Period, the product of (a) the Investor Default Amountfor such Monthly Period and (b) a fraction, the numerator of which is the O/CInvested Amount and the denominator of which is the Invested Amount on the dayof determination.

 

“O/C Principal Percentage” shall mean an amountequal to, with respect to any date, the percentage equivalent of a fraction,the numerator of which is (a) the product of the aggregate amount of PrincipalReceivables on such date and the Floating Allocation Percentage as of such date*minus*(b) the sum of the Class A Invested Amount and the Class B Invested Amount asof such date and the denominator of which is the product of the aggregateamount of Principal Receivables on such date and the Floating AllocationPercentage as of such date.

 

“O/C Reduction Amount” shall have the meaningset forth in Section 7.01(c).

 

“Partial Reinvestment Period” shall mean (if aRedemption Event or the commencement of the Scheduled Amortization Period hasnot occurred earlier) the period, if any, beginning on the first day of theMonthly Period in which the O/C Principal Percentage (after application of allcollections on the Distribution Date on which it is calculated) is below 26.75%and at least 22.0% and ending on the earlier of (a) the close of businesson the last day of the Monthly Period immediately preceding the DistributionDate on which the O/C Principal Percentage is at least 26.75% and has been atleast 26.75% for each of the two Distribution Dates immediately preceding suchDistribution Date, in which case a Special Reinvestment Period or

 

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the Reinvestment Period, as applicable, would resume, (b) thecommencement of a Rapid Amortization Period and (c) the commencement of theScheduled Amortization Period.

 

“Pre-Adjustment Invested Amount” shall mean oneach Distribution Date (a) the Invested Amount as of the end of the priorMonthly Period minus (b) the amount by which the Investor Default Amountexceeds the amount of Available Finance Charge Collections allocated to fundsuch amount on such Distribution Date minus (c) the amount of ReallocatedPrincipal Collections on such Distribution Date minus (d) the amount ofprincipal paid to reduce the Invested Amount on such Distribution Date plus (e)the amount of prior Investor Charge-Offs to be reimbursed on such DistributionDate.

 

“Pre-Adjustment Transferor Amount” shall meanon each Distribution Date the Transferor Amount as of the end of the priorMonthly Period minus all Defaulted Amounts and Collections allocated to theTransferor Amount on the related Determination Date.

 

“Principal Balance” shall mean when used withrespect to any class of Notes, the initial Invested Amount of such class ofNotes *minus*the aggregate amount of principal payments made with respect to such class ofNotes.  When used with respect to theNotes in the aggregate, the sum of the Class A-1 Principal Balance, the ClassA-2 Principal Balance, the Class A-3 Principal Balance, the Class A-4 PrincipalBalance and the Class B Principal Balance.

 

“Program Expenses” shall mean the product of(i) a fraction, the numerator of which is the Invested Amount as of the lastday of the immediately preceding Monthly Period (or with respect to the firstMonthly Period, the initial Invested Amount) and the denominator of which isthe Invested Amount for Series 2002-1 and Series 2002-A and (ii) the fees andexpenses of the Indenture Trustee, the Note Administrator, the Owner Trustee,the Certificate Administrator and the Certificate Trustee as specified in eachof the related fee agreements with each such party, and any indemnityobligation of the Issuer to each such party, *provided* that such indemnityobligation shall not exceed in the aggregate $72,500 in any one-year periodbeginning on the Closing Date and on each anniversary thereof.

 

“Rapid Amortization Period” shall mean theperiod commencing at the close of business on the Business Day immediatelypreceding the day on which a Redemption Event is deemed to have occurred, andending on the first to occur of (i) the payment in full of the PrincipalBalance of the Notes and the reduction of the O/C Invested Amount to zero and(ii) the Final Maturity Date.

 

“Reallocated Principal Collections” shall mean,with respect to any Distribution Date, the amount of Available PrincipalCollections applied by the Indenture Trustee pursuant to Section 4.05(b)(i).

 

“Redemption Amount” shall mean with respect toany day, the Principal Balance and any accrued and unpaid interest due on theNotes *plus*any amounts due and unpaid with respect to Program Expenses *plus*any accrued and unpaid Monthly Servicing Fee (after giving effect asappropriate to any deposits and distributions otherwise to be made on such dayif such day is a Distribution Date).

 

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“Redemption Event” shall mean, with respect toSeries 2002-1, a Trust Redemption Event or a Series 2002-1 Redemption Event.

 

“Redemption Event Issuance” shall have themeaning specified in Section 7.01(b).

 

“Redemption upon Auction” shall have themeaning specified in Section 7.01(c).

 

“Reinvestment Period” shall mean the periodbeginning on the Closing Date and ending on the earlier of (a) the closeof business on the day immediately preceding the day the Scheduled AmortizationPeriod commences or (b) the close of business on the day immediatelypreceding the day a Rapid Amortization Period, a Special Reinvestment Period,or a Partial Reinvestment Period commences; *provided, however*, that prior to thecommencement of the Scheduled Amortization Period or a Rapid AmortizationPeriod, a Special Reinvestment Period or a Partial Reinvestment Period may endand the Reinvestment Period may resume on a Distribution Date after the O/CPrincipal Percentage has been at least 29.0% and the Subordinated PrincipalPercentage has been at least 25.0% for three consecutive Distribution Datessince the commencement of the Special Reinvestment Period or PartialReinvestment Period.

 

“Required Coverage Amount” shall have themeaning specified in Section 4.04.

 

“Scheduled Amortization Date” shall mean June1, 2005.

 

“Scheduled Amortization Period” shall mean,unless a Redemption Event with respect to Series 2002-1 shall have occurredprior thereto, the period commencing on the Scheduled Amortization Date andending upon the first to occur of (x) the commencement of the RapidAmortization Period, (y) the payment in full of the Principal Balance ofthe Notes and the reduction of the O/C Invested Amount to zero and (z) theFinal Maturity Date.

 

“Series 2002-1” shall mean the Series the termsof which are specified in this Indenture Supplement.

 

“Series 2002-1 Notes” shall have the meaningset forth in Section 1.01(a).

 

“Series Post Payment Adjustment Amount” shallmean an amount equal to the product of (i) (a) the Pre-Adjustment InvestedAmount relating to Series 2002-1 divided by (b) the Pre-AdjustmentInvested Amounts for all outstanding Series and (ii) the Trust Post PaymentAdjustment Amount.

 

“Series Redemption Event” shall have themeaning specified in Section 6.01.

 

“Servicing Fee Rate” shall mean 5.00% perannum.

 

“Shared Principal Collections” shall meanShared Principal Collections as defined and described in Section 8.05 of theIndenture; and amounts to be treated as Shared Principal Collections under thisIndenture Supplement are described in Section 4.05(b)(v).

 

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“Special Reinvestment Period” shall mean (if aRedemption Event or the commencement of the Scheduled Amortization Period hasnot occurred earlier) the period, if any, beginning on the first day of theMonthly Period in which either (a) the O/C Principal Percentage is below 29.0%and at least 26.75% or (b) the Subordinated Principal Percentage (afterapplication of all collections on the Distribution Date on which it iscalculated) is less than 25.0% and ending on the earliest of (a) the closeof business on the last day of the Monthly Period immediately preceding theDistribution Date on which (i) the O/C Principal Percentage is at least 29.0%and has been at least 29.0% for each of the two Distribution Dates immediatelypreceding such Distribution Date and (ii) the Subordinated Principal Percentageis at least 25.0% and has been at least 25.0% for each of the two DistributionDates immediately preceding such Distribution Date, in which case theReinvestment Period would resume, (b) the commencement of a PartialReinvestment Period, (c) the commencement of a Rapid Amortization Period and(d) the commencement of the Scheduled Amortization Period.

 

“Special VFN Allocation” shall have the meaningset forth in Indenture Supplement relating to the Variable Funding Notes.

 

“Statement to Noteholders” shall have themeaning specified in Section 5.03.

 

“Subordinated Principal Percentage” shall meanan amount equal to, with respect to any date, the percentage equivalent of afraction, the numerator of which is (a) the product of the aggregate amount ofPrincipal Receivables on such date and the Floating Allocation Percentage *minus*(b) the Class A Invested Amount and the denominator of which is the aggregateamount of Principal Receivables as of the Cut-Off Date.

 

“Telerate Page 3750“ shall mean the displaypage currently so designated on the Moneyline Telerate Service (or any otherpage as may replace that page on that service for the purpose of displayingcomparable rates or prices).

 

“Transfer” shall have the meaning set forth inSection 8.06.

 

“Transferor Amount Reduction Amount” shall meanthe amount required to reduce the Transferor Amount to zero.

 

“Trust Post Payment Adjustment Amount” shallmean on each Distribution Date an amount (which may be positive or negative)equal to (i) the aggregate balance of Principal Receivables and Finance ChargeReceivables as of the end of the prior Monthly Period *minus* (ii) the sum of (x)the Pre-Adjustment Invested Amounts for all Series and (y) the Pre-AdjustmentTransferor Amount.

 

“Variable Funding Notes” shall mean theIssuer’s Series 2002-A Variable Funding Notes.

 

“VFN Reduction Amount” shall mean an amountequal to the outstanding Principal Balance (as such term is defined in therelated Indenture Supplement) of the Variable Funding Notes or such lesseramount agreed to by the holders of the Variable Funding Notes.

 

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(b)   Each capitalized term defined herein shallrelate to the Series 2002-1 Notes and no other Series of Notes issued by theTrust, unless the context otherwise requires. All capitalized terms used herein and not otherwise defined herein havethe meanings ascribed to them in the Indenture or the Transfer and ServicingAgreement.  In the event that any termor provision contained herein shall conflict with or be inconsistent with anyterm or provision contained in the Indenture or the Transfer and ServicingAgreement, the terms and provisions of this Indenture Supplement shall govern.

 

(c)   The words “hereof,” “herein,” “hereunder” andwords of similar import when used in this Indenture Supplement shall refer tothis Indenture Supplement as a whole and not to any particular provision ofthis Indenture Supplement; references to any Article, subsection, Section orExhibit are references to Articles, subsections, Sections and Exhibits in or tothis Indenture Supplement unless otherwise specified; and the term “including”means “including without limitation.”

 

[END OF ARTICLE II]

 

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ARTICLE III

 

Servicing Fee

 

Section 3.01.          ServicingCompensation.  Theshare of the Servicing Fee allocable to the Invested Amount with respect to anyDistribution Date (the “**Monthly Servicing Fee**”) shall be equalto one-twelfth (or, with respect to the first Distribution Date, 5/360) of theproduct of (a) the Servicing Fee Rate, (b) the Floating AllocationPercentage and (c)(i) the sum of (A) the amount of Principal Receivables andFinance Charge Receivables on the first day of the Monthly Period precedingsuch Distribution Date (or, with respect to the first Distribution Date, theClosing Date) and (B) the amount of Principal Receivables and Finance ChargeReceivables on the last day of the Monthly Period preceding such DistributionDate divided by (ii) two.

 

[END OF ARTICLE III]

 

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ARTICLE IVRights of Series 2002-1Noteholders and Allocation and Application of Collections

 

Section 4.01.          Collectionsand Allocations.

 

(a)   Allocations.  Prior to the close of business on each Deposit Date, Collectionsof Finance Charge Receivables, Principal Receivables and Defaulted Receivablesallocated to Series 2002-1 pursuant to Article VIII of the Indenture shall beallocated as set forth in this Article.

 

(b)   Allocations to the Series 2002-1Noteholders.  The Servicer shallallocate to Series 2002-1 on each Deposit Date the following amounts as setforth below:

 

(i)  Allocationsof Finance Charge Collections.  TheServicer shall allocate to Series 2002-1 and retain in the Collection Accountfor application as provided herein in an amount equal to the product of (A) theFloating Allocation Percentage and (B) the aggregate amount of Collections ofFinance Charge Receivables received by the Servicer and deposited to theCollection Account with respect to such Deposit Date.

 

(ii)  Allocationsof Principal Collections.  TheServicer shall allocate collections of Principal Receivables to Series 2002–1as provided herein in an amount equal to the product of (A) during theReinvestment Period or the Special Reinvestment Period, the Floating AllocationPercentage and during the Partial Reinvestment Period, Scheduled AmortizationPeriod or  Rapid AmortizationPeriod,  the Fixed Allocation Percentageand (B) the aggregate amount of Collections of Principal Receivablesreceived by the Servicer and deposited to the Collection Account with respectto such Deposit Date.

 

Section 4.02.          Determinationof Monthly Interest.

 

(a)  The amountof monthly interest distributable from the Collection Account with respect tothe Class A-1FL Notes pursuant to Section 4.05(a)(iii) on any Distribution Date(“**ClassA-1FL Monthly Interest**”) shall be an amount equal to the productof (i) a fraction, the numerator of which is the actual number of days in therelated Interest Period and the denominator of which is 360 and (ii) the ClassA-1FL Note Interest Rate in effect with respect to the related Interest Periodand (iii) the Class A-1FL Invested Amount as of the close of business on thelast day of the preceding Monthly Period (or, with respect to the initialDistribution Date, the Class A-1FL Initial Invested Amount).  The holders of the Class A-1FL Notes willalso be entitled to receive distributions in respect of interest on eachDistribution Date as provided in Section 4.05(a)(viii).

 

The amount of monthly interest distributable from theCollection Account with respect to the Class A-1FX Notes pursuant to Section4.05(a)(iii) on any Distribution Date

 

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(“**Class A-1FX Monthly Interest**”) shall be an amount equal tothe product of (i) a fraction, the numerator of which is 30 (except for thefirst Interest Period, when the numerator will be 22) and the denominator of whichis 360, (ii) the Class A-1FX Note Interest Rate in effect with respect to therelated Interest Period and (iii) the Class A-1FX Invested Amount as of theclose of business on the last day of the preceding Monthly Period (or, withrespect to the initial Distribution Date, the Class A-1FX Initial InvestedAmount).  The holders of the Class A-1FXNotes will also be entitled to receive distributions in respect of interest oneach Distribution Date as provided in Section 4.05(a)(viii).

 

On the Determination Date preceding each DistributionDate, the Servicer shall determine the excess, if any (the “**ClassA-1FL Interest Shortfall**”), of (x) the Class A-1FL MonthlyInterest for such Distribution Date *over* (y) the aggregate amount of fundsallocated and available to pay such Class A-1FL Monthly Interest on suchDistribution Date.  If the Class A-1FLInterest Shortfall with respect to any Distribution Date is greater than zero,on each subsequent Distribution Date until such Class A-1FL Interest Shortfallis fully paid, an additional amount **(“Class A-FL Additional Interest**”)equal to the product of (i) a fraction, the numerator of which is the actualnumber of days in the related Interest Period and the denominator of which is360, times (ii) the Class A-1FL Note Interest Rate in effect with respect tothe related Interest Period times (iii) such Class A-1FL Interest Shortfall (orthe portion thereof which has not been paid to the Class A-1FL Noteholders)shall be payable as provided herein with respect to the Class A-1FL Notes.  Notwithstanding anything to the contraryherein, Class A-1FL Additional Interest shall be payable or distributed to theClass A-1FL Noteholders only to the extent permitted by applicable law.

 

On the Determination Date preceding each DistributionDate, the Servicer shall determine the excess, if any (the “**ClassA-1FX Interest Shortfall**”), of (x) the Class A-1FX MonthlyInterest for such Distribution Date *over* (y) the aggregate amount of fundsallocated and available to pay such Class A-1FX Monthly Interest on suchDistribution Date.  If the Class A-1FXInterest Shortfall with respect to any Distribution Date is greater than zero,on each subsequent Distribution Date until such Class A-1FX Interest Shortfallis fully paid, an additional amount **(“Class A-1FX Additional Interest**”)equal to the product of (i) a fraction, the numerator of which is 30 and thedenominator of which is 360, times (ii) the Class A-1FX Note Interest Rate ineffect with respect to the related Interest Period times (iii) such Class A-1FXInterest Shortfall (or the portion thereof which has not been paid to the ClassA-1FX Noteholders) shall be payable as provided herein with respect to theClass A-1FX Notes.  Notwithstandinganything to the contrary herein, Class A-1FX Additional Interest shall bepayable or distributed to the Class A-1FX Noteholders only to the extentpermitted by applicable law.

 

(b)  The amountof monthly interest distributable from the Collection Account with respect tothe Class A-2FL Notes pursuant to Section 4.05(a)(iv) on any Distribution Date(“**ClassA-2FL Monthly Interest**”) shall be an amount equal to the productof (i) a fraction, the numerator of which is the actual number of days in therelated Interest Period and the denominator of which is 360 and (ii) the ClassA-2FL Note Interest Rate in effect with respect to the related Interest Periodand (iii) the Class A-2FL Invested Amount as of the close of business on thelast day of the preceding Monthly Period (or, with respect to the initialDistribution Date, the Class A-2FL Initial Invested Amount).  The holders of the Class A-2FL Notes willalso be

 

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entitled to receive distributions in respect of interest on eachDistribution Date as provided in Section 4.05(a)(ix).

 

The amount of monthly interest distributable from theCollection Account with respect to the Class A-2FX Notes pursuant to Section4.05(a)(iv) on any Distribution Date (“**Class A-2FX Monthly Interest**”) shall bean amount equal to the product of (i) a fraction, the numerator of which is 30(except for the first Interest Period, when the numerator will be 22) and thedenominator of which is 360, (ii) the Class A-2FX Note Interest Rate in effectwith respect to the related Interest Period and (iii) the Class A-2FX InvestedAmount as of the close of business on the last day of the preceding MonthlyPeriod (or, with respect to the initial Distribution Date, the Class A-2FXInitial Invested Amount).  The holdersof the Class A-2FX Notes will also be entitled to receive distributions inrespect of interest on each Distribution Date as provided in Section4.05(a)(ix).

 

On the Determination Date preceding each DistributionDate, the Servicer shall determine the excess, if any (the “**ClassA-2FL Interest Shortfall**”), of (x) the Class A-2FL MonthlyInterest for such Distribution Date *over* (y) the aggregate amount of fundsallocated and available to pay such Class A-2FL Monthly Interest on suchDistribution Date.  If the Class A-2FLInterest Shortfall with respect to any Distribution Date is greater than zero,on each subsequent Distribution Date until such Class A-2FL Interest Shortfallis fully paid, an additional amount **(“Class A-2FL Additional Interest**”)equal to the product of (i) a fraction, the numerator of which is the actualnumber of days in the related Interest Period and the denominator of which is360, times (ii) the Class A-2FL Note Interest Rate in effect with respect tothe related Interest Period times (iii) such Class A-2FL Interest Shortfall (orthe portion thereof which has not been paid to the Class A-2FL Noteholders)shall be payable as provided herein with respect to the Class A-2FL Notes.  Notwithstanding anything to the contraryherein, Class A-2FL Additional Interest shall be payable or distributed to theClass A-2FL Noteholders only to the extent permitted by applicable law.

 

On the Determination Date preceding each DistributionDate, the Servicer shall determine the excess, if any (the “**ClassA-2FX Interest Shortfall**”), of (x) the Class A-2FX MonthlyInterest for such Distribution Date *over* (y) the aggregate amount of fundsallocated and available to pay such Class A-2FX Monthly Interest on suchDistribution Date.  If the Class A-2FXInterest Shortfall with respect to any Distribution Date is greater than zero,on each subsequent Distribution Date until such Class A-2FX Interest Shortfallis fully paid, an additional amount **(“Class A-2FX Additional Interest**”)equal to the product of (i) a fraction, the numerator of which is 30 and thedenominator of which is 360, times (ii) the Class A-2FX Note Interest Rate ineffect with respect to the related Interest Period times (iii) such Class A-2FXInterest Shortfall (or the portion thereof which has not been paid to the ClassA-2FX Noteholders) shall be payable as provided herein with respect to theClass A-2FX Notes.  Notwithstandinganything to the contrary herein, Class A-2FX Additional Interest shall bepayable or distributed to the Class A-2FX Noteholders only to the extentpermitted by applicable law.

 

(c)  The amountof monthly interest distributable from the Collection Account with respect tothe Class A-3FL Notes pursuant to Section 4.05(a)(v) on any Distribution Date(“**ClassA-3FL Monthly Interest**”) shall be an amount equal to the productof (i) a fraction, the

 

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numerator of which is the actual number of days in the related InterestPeriod and the denominator of which is 360 and (ii) the Class A-3FL NoteInterest Rate in effect with respect to the related Interest Period and (iii)the Class A-3FL Invested Amount as of the close of business on the last day ofthe preceding Monthly Period (or, with respect to the initial DistributionDate, the Class A-3FL Initial Invested Amount).  The holders of the Class A-3FL Notes will also be entitled toreceive distributions in respect of interest on each Distribution Date asprovided in Section 4.05(a)(x).

 

The amount of monthly interest distributable from theCollection Account with respect to the Class A-3FX Notes pursuant to Section4.05(a)(v) on any Distribution Date (“**Class A-3FX Monthly Interest**”) shall bean amount equal to the product of (i) a fraction, the numerator of which is 30(except for the first Interest Period, when the numerator will be 22) and thedenominator of which is 360, (ii) the Class A-3FX Note Interest Rate in effectwith respect to the related Interest Period and (iii) the Class A-3FX InvestedAmount as of the close of business on the last day of the preceding Monthly Period(or, with respect to the initial Distribution Date, the Class A-3FX InitialInvested Amount).  The holders of theClass A-3FX Notes will also be entitled to receive distributions in respect ofinterest on each Distribution Date as provided in Section 4.05(a)(x).

 

On the Determination Date preceding each DistributionDate, the Servicer shall determine the excess, if any (the “**ClassA-3FL Interest Shortfall**”), of (x) the Class A-3FL MonthlyInterest for such Distribution Date *over* (y) the aggregate amount of fundsallocated and available to pay such Class A-3FL Monthly Interest on suchDistribution Date.  If the Class A-3FLInterest Shortfall with respect to any Distribution Date is greater than zero,on each subsequent Distribution Date until such Class A-3FL Interest Shortfallis fully paid, an additional amount **(“Class A-3FL Additional Interest**”)equal to the product of (i) a fraction, the numerator of which is the actualnumber of days in the related Interest Period and the denominator of which is360, times (ii) the Class A-3FL Note Interest Rate in effect with respect tothe related Interest Period times (iii) such Class A-3FL Interest Shortfall (orthe portion thereof which has not been paid to the Class A-3FL Noteholders)shall be payable as provided herein with respect to the Class A-3FL Notes.  Notwithstanding anything to the contraryherein, Class A-3FL Additional Interest shall be payable or distributed to theClass A-3FL Noteholders only to the extent permitted by applicable law.

 

On the Determination Date preceding each DistributionDate, the Servicer shall determine the excess, if any (the “**ClassA-3FX Interest Shortfall**”), of (x) the Class A-3FX MonthlyInterest for such Distribution Date *over* (y) the aggregate amount of fundsallocated and available to pay such Class A-3FX Monthly Interest on suchDistribution Date.  If the Class A-3FXInterest Shortfall with respect to any Distribution Date is greater than zero,on each subsequent Distribution Date until such Class A-3FX Interest Shortfallis fully paid, an additional amount **(“Class A-3FX Additional Interest**”)equal to the product of (i) a fraction, the numerator of which is 30 and thedenominator of which is 360, times (ii) the Class A-3FX Note Interest Rate ineffect with respect to the related Interest Period times (iii) such Class A-3FXInterest Shortfall (or the portion thereof which has not been paid to the ClassA-3FX Noteholders) shall be payable as provided herein with respect to theClass A-3FX Notes.  Notwithstandinganything to the contrary herein, Class A-3FX Additional Interest shall be

 

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payable or distributed to the Class A-3FX Noteholders only to theextent permitted by applicable law.

 

(d)  The amountof monthly interest distributable from the Collection Account with respect tothe Class A-4FL Notes pursuant to Section 4.05(a)(vi) on any Distribution Date(“**ClassA-4FL Monthly Interest**”) shall be an amount equal to the productof (i) a fraction, the numerator of which is the actual number of days in therelated Interest Period and the denominator of which is 360 and (ii) the ClassA-4FL Note Interest Rate in effect with respect to the related Interest Periodand (iii) the Class A-4FL Invested Amount as of the close of business on thelast day of the preceding Monthly Period (or, with respect to the initialDistribution Date, the Class A-4FL Initial Invested Amount).  The holders of the Class A-4FL Notes willalso be entitled to receive distributions in respect of interest on eachDistribution Date as provided in Section 4.05(a)(xi).

 

The amount of monthly interest distributable from theCollection Account with respect to the Class A-4FX Notes pursuant to Section4.05(a)(vi) on any Distribution Date (“**Class A-4FX Monthly Interest**”) shall bean amount equal to the product of (i) a fraction, the numerator of which is 30(except for the first Interest Period, when the numerator will be 22) and thedenominator of which is 360, (ii) the Class A-4FX Note Interest Rate in effectwith respect to the related Interest Period and (iii) the Class A-4FX InvestedAmount as of the close of business on the last day of the preceding MonthlyPeriod (or, with respect to the initial Distribution Date, the Class A-4FXInitial Invested Amount).  The holdersof the Class A-4FX Notes will also be entitled to receive distributions inrespect of interest on each Distribution Date as provided in Section4.05(a)(xi).

 

On the Determination Date preceding each DistributionDate, the Servicer shall determine the excess, if any (the “**ClassA-4FL Interest Shortfall**”), of (x) the Class A-4FL MonthlyInterest for such Distribution Date *over* (y) the aggregate amount of fundsallocated and available to pay such Class A-4FL Monthly Interest on suchDistribution Date.  If the Class A-4FLInterest Shortfall with respect to any Distribution Date is greater than zero,on each subsequent Distribution Date until such Class A-4FL Interest Shortfallis fully paid, an additional amount **(“Class A-4FL Additional Interest**”)equal to the product of (i) a fraction, the numerator of which is the actualnumber of days in the related Interest Period and the denominator of which is360, times (ii) the Class A-4FL Note Interest Rate in effect with respect tothe related Interest Period times (iii) such Class A-4FL Interest Shortfall (orthe portion thereof which has not been paid to the Class A-4FL Noteholders)shall be payable as provided herein with respect to the Class A-4FL Notes.  Notwithstanding anything to the contraryherein, Class A-4FL Additional Interest shall be payable or distributed to theClass A-4FL Noteholders only to the extent permitted by applicable law.

 

On the Determination Date preceding each DistributionDate, the Servicer shall determine the excess, if any (the “**Class A-4FXInterest Shortfall**”), of (x) the Class A-4FX Monthly Interestfor such Distribution Date *over* (y) the aggregate amount of fundsallocated and available to pay such Class A-4FX Monthly Interest on suchDistribution Date.  If the Class A-4FXInterest Shortfall with respect to any Distribution Date is greater than zero,on each subsequent Distribution Date until such Class A-4FX Interest Shortfallis fully paid, an additional amount **(“Class A-4FX Additional Interest**”)equal to the product of (i) a fraction,

 

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the numerator of which is 30 and the denominator of which is 360, times(ii) the Class A-4FX Note Interest Rate in effect with respect to the relatedInterest Period times (iii) such Class A-4FX Interest Shortfall (or the portionthereof which has not been paid to the Class A-4FX Noteholders) shall bepayable as provided herein with respect to the Class A-4FX Notes.  Notwithstanding anything to the contrary herein,Class A-4FX Additional Interest shall be payable or distributed to the ClassA-4FX Noteholders only to the extent permitted by applicable law.

 

(e) The amount of monthly interest distributable fromthe Collection Account with respect to the Class B Notes pursuant to Section4.05(a)(xiii) on any Distribution Date (“**Class B Monthly Interest**”) shall be anamount equal to the product of (i) a fraction, the numerator of which is theactual number of days in the related Interest Period and the denominator ofwhich is 360, (ii) the Class B Note Interest Rate in effect with respect to therelated Interest Period and (iii) the Class B Invested Amount as of the closeof business on the last day of the preceding Monthly Period (or, with respectto the initial Distribution Date, the Class B Initial Invested Amount).

 

Section 4.03.          DailyApplication of Collections.  The Servicer shall with respect to each Business Day in a MonthlyPeriod during the Reinvestment Period, Special Reinvestment Period and PartialReinvestment Period distribute Allocable Principal Collections and AllocableFinance Charge Collections on deposit in the Collection Account on suchBusiness Day as follows:

 

(i)  to theTransferor, an amount equal to the product of (1) the Floating AllocationPercentage and (2) the sum of (A) the amount of all newly created PrincipalReceivables, other than Non-Conforming Terms Change Receivables, which arerequired to be funded on such Business Day *plus* (B) the amount of all PrincipalReceivables created on a prior Business Day during such Monthly Period whichwere not funded for any reason other than that such Principal Receivables wereNon-Conforming Terms Change Receivables; and

 

(ii)  to theholder of the Variable Funding Notes, an amount equal to the product of (a) theFloating Allocation Percentage and (b) the aggregate amount of Increase Amounts(as such term is defined in the Indenture Supplement relating to the VariableFunding Notes) that were funded during such Monthly Period and have not beenpreviously reimbursed pursuant to this Section 4.03(ii) or Section 4.03(ii) ofthe Indenture Supplement relating to the Variable Funding Notes during suchMonthly Period;

* *

*provided,however,* that (i) daily releases of Collections of PrincipalReceivables and Finance Charge Receivables under this Section 4.03 will bepermitted on or after the 15th day of any Monthly Period only if theServicer determines that on any day on or after the 15th day of suchMonthly Period, the Note Administrator, on behalf of the Indenture Trustee, hason deposit in the Collection Account Collections of Finance Charge Receivablesand Principal Receivables in an amount sufficient to pay the percentagespecified in Schedule I hereto for such day of the Estimated Required CoverageAmount due on the related Distribution Date and (ii) daily releases ofCollections of Finance Charge Receivables under this Section 4.03 will bepermitted on or after the 10th day of any Monthly Period only if theServicer determines that on any day on or after the 10th day of suchMonthly Period, the Note Administrator, on behalf of the Indenture

 

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Trustee, has on deposit Collections of Finance ChargeReceivables and Principal Receivables in an amount sufficient to pay 100% ofthe Estimated Required Coverage Amount due on the related Distribution Date; *providedfurther* that notwithstanding any provision to the contrary herein,during each Monthly Period during the Partial Reinvestment Period, theaggregate daily releases of Collections of Principal Receivables and FinanceCharge Receivables under this Section 4.03 shall not exceed 0.5% of theInvested Amount on the last day of the prior Monthly Period and providedfurther that no amounts will distributed to the Transferor under this Section4.03 if after giving effect thereto the Transferor Amount  would be less than zero.

 

Section 4.04.          RequiredCoverage Amount. With respect to each Distribution Date, the Note Administrator shalldetermine, based on the information provided to it by the Servicer no later thanthe Determination Date, the amount (the “**Required CoverageAmount**”), if any, by which (x) the sum of the ProgramExpenses, Monthly Servicing Fee, Class A-1FL Monthly Interest, Class A-1FXMonthly Interest, Class A-2FL Monthly Interest, Class A-2FX Monthly Interest,Class A-3FL Monthly Interest, Class A-3FX Monthly Interest, Class A-4FL MonthlyInterest, Class A-4FX Monthly Interest and Class B Monthly Interest for suchDistribution Date exceeds (y) the Allocable Finance Charge Collections forsuch Distribution Date available to pay such amounts.

 

Section 4.05.          Applicationof Available Finance Charge Collections and Available Principal Collections.  (a) The Note Administrator shall apply,based on the information provided to it by the Servicer no later than theDetermination Date, Available Finance Charge Collections with respect to eachMonthly Period in the following order or priority:

 

(i)          an amount equal to the ProgramExpenses for the related Distribution Date shall be distributed to theIndenture Trustee, Note Administrator, Certificate Administrator, andCertificate Trustee, as applicable, on the related Distribution Date;

 

(ii)         an amount equal to the MonthlyServicing Fee for the related Distribution Date *plus* the amount of anyMonthly Servicing Fee previously due but not distributed to the Servicer on aprior Distribution Date, shall be distributed to the Servicer on the relatedDistribution Date;

 

(iii)        an amount equal to Class A-1FLCumulative Monthly Interest and Class A-1FX Cumulative Monthly Interest shallbe distributed to the Note Administrator for payment on the relatedDistribution Date to the Class A-1FL Noteholders and the Class A-1FXNoteholders, respectively, *pro rata* based on the dollar amount due onthe related Distribution Date;

 

(iv)       an amount equal to Class A-2FL CumulativeMonthly Interest and Class A-2FX Cumulative Monthly Interest shall bedistributed to the Note Administrator for payment on the related DistributionDate to the Class A-2FL Noteholders and the Class A-2FX Noteholders,respectively, *pro rata* based on the dollar amount due on the relatedDistribution Date;

 

 

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(v)        an amount equal to Class A-3FLCumulative Monthly Interest and Class A-3FX Cumulative Monthly Interest shallbe distributed to the Note Administrator for payment on the relatedDistribution Date to the Class A-3FL Noteholders and the Class A-3FXNoteholders, respectively, *pro rata* based on the dollar amount due onthe related Distribution Date;

 

(vi)       an amount equal to Class A-4FL CumulativeMonthly Interest and Class A-4FX Cumulative Monthly Interest shall bedistributed to the Note Administrator for payment on the related DistributionDate to the Class A-4FL Noteholders and the Class A-4FX Noteholders, respectively,*pro rata*based on the dollar amount due on the related Distribution Date;

 

(vii)      from Available Finance Charge Collectionsother than Reallocated Principal Collections, an amount equal to the Class AInvestor Default Amount for the related Distribution Date shall be treated asAvailable Principal Collections for such Monthly Period and applied pursuant toclause (b) hereof;

 

(viii)     from Available Finance Charge Collectionsother than Reallocated Principal Collections, an amount equal to Class A-1FL CumulativeSubordinated Interest and Class A-1FX Cumulative Subordinated Interest shall bedistributed to the Note Administrator for payment on the related DistributionDate to the Class A-1FL Noteholders and the Class A-1FX Noteholders,respectively, *pro rata* based on the dollar amount due on the relatedDistribution Date;

 

(ix)        from Available Finance ChargeCollections other than Reallocated Principal Collections, an amount equal toClass A-2FL Cumulative Subordinated Interest and Class A-2FX Cumulative SubordinatedInterest shall be distributed to the Note Administrator for payment on therelated Distribution Date to the Class A-2FL Noteholders and the Class A-2FXNoteholders, respectively, *pro rata* based on the dollar amount due onthe related Distribution Date;

 

(x)         from Available Finance ChargeCollections other than Reallocated Principal Collections, an amount equal toClass A-3FL Cumulative Subordinated Interest and Class A-3FX CumulativeSubordinated Interest shall be distributed to the Note Administrator forpayment on the related Distribution Date to the Class A-3FL Noteholders and theClass A-3FX Noteholders, respectively, *pro rata* based on the dollar amount due onthe related Distribution Date;

 

(xi)        from Available Finance ChargeCollections other than Reallocated Principal Collections, an amount equal toClass A-4FL Cumulative Subordinated Interest and Class A-4FX CumulativeSubordinated Interest shall be distributed to the Note Administrator forpayment on the related Distribution Date to the Class A-4FL Noteholders and theClass A-4FX Noteholders, respectively, *pro rata* based on the dollar amount due onthe related Distribution Date;

 

(xii)       from Available Finance Charge Collectionsother than Reallocated Principal Collections, an amount equal to the Class AInvestor Charge-Offs which have

 

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not been previouslyreimbursed shall be treated as a portion of Available Principal Collections forthe related Distribution Date and shall be applied pursuant to clause (b)hereof;

 

(xiii)      an amount equal to Class B MonthlyInterest for the related Distribution Date shall be distributed to the NoteAdministrator for payment on the related Distribution Date to Class BNoteholders on the related Distribution Date;

 

(xiv)      an amount equal to the Class B InvestorDefault Amount shall be treated as Available Principal Collections for suchMonthly Period and shall be applied pursuant to clause (b) hereof;

 

(xv)       an amount equal to the Class B InvestorCharge-Offs which have not been previously reimbursed shall be treated asAvailable Principal Collections for such Monthly Period and shall be appliedpursuant to clause (b) hereof;

 

(xvi)      an amount equal to the O/C InvestorDefault Amount shall be treated as Available Principal Collections for suchMonthly Period and shall be applied pursuant to Clause (b) hereof;

 

(xvii)     an amount equal to the O/C InvestorCharge-Offs which have not been previously reimbursed shall be treated asAvailable Principal Collections for such Monthly Period and shall be appliedpursuant to clause (b) hereof; and

 

(xviii)    the balance, if any, shall be treated asAvailable Principal Collections.

 

(b)   The Note Administrator shall apply, based onthe information provided to it by the Servicer received no later than theDetermination Date, Available Principal Collections with respect to eachrelated Monthly Period in the following order of priority:

 

(i)            Subject to Section 4.03, an amountequal to the Required Coverage Amount shall be distributed on the relatedDistribution Date by the Note Administrator to fund the Required CoverageAmount, if any, in the priority set forth in subsections 4.05(a)(i) through(vi) and (xiii);

 

(ii)           during the Reinvestment Period, theSpecial Reinvestment Period and the Partial Reinvestment Period, to purchasenew Receivables from the Transferor during such Monthly Period or to pay downdraws on the Variable Funding Notes during such Monthly Period; *provided,however*, that during the Partial Reinvestment Period, the amount appliedunder this subclause (b)(ii) shall not exceed 0.5% of the aggregate amount ofthe Invested Amount with respect to such Monthly Period;

 

(iii)          (a) during the Reinvestment Period,(1) from Available Principal Collections for the related Monthly Period less anamount equal to Discounted Recoveries, principal shall be paid on the relatedDistribution Date *pro rata* to the holders of the Class A-1 Notes, the ClassA-2 Notes, the Class A-3 Notes, the Class A-4 Notes, the Class B Notes and theO/C Holder based on the Invested Amount of each as of the end of the priorMonthly Period until the Principal Balance of each such class or, with

 

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respect to the O/CHolder, the O/C Invested Amount, is paid in full and (2) from AvailablePrincipal Collections for the related Monthly Period equal to DiscountedRecoveries, principal shall be paid on the related Distribution Date *pro rata*to the holders of the Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notesand the Class A-4 Notes until the Principal Balance of each such class and thento the holders of the Class B Notes until the Class B Principal Balance is paidin full and then to the O/C Holder until the O/C Invested Amount is paid infull; (b) during the Scheduled Amortization Period, the Special ReinvestmentPeriod and the Partial Reinvestment Period, principal will be paid on therelated Distribution Date first to the holders of the Class A Notes (*pro rata*among the Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes and theClass A-4 Notes) until the Principal Balance of the Class A Notes is paid infull, then to the Class B Notes until the Principal Balance of the Class BNotes is paid in full, then to the O/C Holder, until the O/C Invested Amount ispaid in full and (c) during the Rapid Amortization Period, principal shall bepaid on the related Distribution Date to the holders of the Class A-1 Notesuntil the Principal Balance of the Class A-1 Notes is paid in full, then to theholders of the Class A-2 Notes until the Principal Balance of the Class A-2Notes is paid in full, then to the holders of the Class A-3 Notes until thePrincipal Balance of the Class A-3 Notes is paid in full, then to the holdersof the Class A-4 Notes until the Principal Balance of the Class A-4 Notes ispaid in full, then to the holders of the Class B Notes until the PrincipalBalance of the Class B Notes is paid in full and then to the O/C Holder untilthe O/C Invested Amount is paid in full;

 

(iv)          an amount equal to any Excess ProgramExpenses for such Distribution Date shall be distributed on the relatedDistribution Date to the Indenture Trustee, Note Administrator, CertificateAdministrator, and Certificate Trustee, as applicable; and

 

(v)           an amount equal to the PrincipalShortfalls for all outstanding Series shall be treated as Shared PrincipalCollections and applied in accordance with Section 8.05 of the Indenture;

 

(vi)          the balance of such AvailablePrincipal Collections shall be paid to the O/C Holder.

 

On each Distribution Date, the holders of the Class BNotes shall be entitled to receive from amounts otherwise payable to the O/CHolder on such Distribution Date an additional amount equal to Class B MonthlyInterest for such Distribution Date calculated without taking into account theClass B Note Interest Rate Cap, to the extent not paid pursuant to clause(xiii) of Section 4.05(a), and such amount shall be distributed by the NoteAdministrator for payment to the Class B Noteholders on such Distribution Date.

 

On each Distribution Date, an amount equal to theSpecial VFN Allocation will be applied to pay principal first to the holders ofthe Class A-1 Notes, then to the holders of the Class A-2 Notes and then to theholders of the Class A-3 Notes until, together with amounts paid pursuant toclause (iii) of Section 4.05(b), the Principal Balance of each such class ispaid in full, and such amount shall be distributed by the Note Administratorfor payment to the applicable holders on such Distribution Date.

 

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Section 4.06.          DefaultedAmounts; Investor Charge-Offs.  (a) On each Determination Date, the Note Administrator shall calculate theInvestor Default Amount, if any, for the related Distribution Date.  If, on any Distribution Date, the InvestorDefault Amount for the related Monthly Period exceeds the amount of AllocableFinance Charge Collections available to be distributed pursuant to Section4.05(a)(vii), (xiv) and (xvi) with respect to such Monthly Period, the InvestedAmount shall be reduced by the amount of such excess, but not by more than theInvestor Default Amount for such Distribution Date (together with the amountsdescribed in the next sentence, an “**Investor Charge-Off**”).  Investor Charge-Offs will also include, andthe Invested Amount shall be reduced by the amount of, Reallocated PrincipalCollections and any Series Post Payment Adjustment Amount (if such amount isnegative).

 

(b)  Investor Charge-Offs will first be appliedto reduce the O/C Invested Amount. If such reduction would cause the O/CInvested Amount to be a negative number, the O/C Invested Amount will bereduced to zero and the Class B Invested Amount shall be reduced by the amountby which the O/C Invested Amount would have been reduced below zero.

 

(c)  If such reduction of the Class B InvestedAmount would cause the Class B Invested Amount to be a negative number, theClass B Invested Amount will be reduced to zero and the Class A-4 InvestedAmount shall be reduced by the amount by which the Class B Invested Amountwould have been reduced below zero.

 

(d)  If such reduction of the Class A-4 InvestedAmount would cause the Class A-4 Invested Amount to be a negative number, theClass A-4 Invested Amount will be reduced to zero and the Class A-3 InvestedAmount shall be reduced by the amount by which the Class A-4 Invested Amountwould have been reduced below zero.

 

(e)  If such reduction of the Class A-3 InvestedAmount would cause the Class A-3 Invested Amount to be a negative number, theClass A-3 Invested Amount will be reduced to zero and the Class A-2 InvestedAmount shall be reduced by the amount by which the Class A-3 Invested Amountwould have been reduced below zero.

 

(f)  If such reduction of the Class A-2 InvestedAmount would cause the Class A-2 Invested Amount to be a negative number, theClass A-2 Invested Amount will be reduced to zero and the Class A-1 InvestedAmount shall be reduced by the amount by which the Class A-2 Invested Amountwould have been reduced below zero.

 

(g)  The Invested Amount shall be increased onany Distribution Date by (i) the amount of Allocable Finance Charge Collectionswith respect to the related Monthly Period which are allocated and availablefor that purpose pursuant to Section 4.05(a)(xii), (xv) and (xvii) and (ii) bythe Series Post Payment Adjustment Amount with respect to such DistributionDate (if such amount is positive).  Suchincreases of the Invested Amount shall be applied to increase the Class A-1 InvestedAmount, Class A-2 Invested Amount, Class A-3 Invested Amount, Class A-4Invested Amount, Class B Invested Amount and O/C Invested Amount, in thatorder, in each case up to the amount of all prior Investor Charge-Offs for suchClass; *provided*that the O/C Invested Amount may be increased by the full amount of any SeriesPost Payment Adjustment Amount applied to increase the O/C Invested Amount.

 

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(h)  TheInvested Amount for each class of Class A Notes will be increased or decreased *pro rata*with respect to each of the fixed rate notes and floating rate notes of thesame class.

 

Section 4.07.          [Reserved].

 

Section 4.08.          SharedPrincipal Collections. Subject to Section 8.05 of the Indenture, Shared Principal Collectionsfor any Distribution Date will be allocated to Series 2002-1 in an amount equalto the product of (x) the aggregate amount of Shared Principal Collectionswith respect to all Principal Sharing Series for such Distribution Date and(y) a fraction, the numerator of which is the Principal Shortfall for suchDistribution Date and the denominator of which is the aggregate amount ofPrincipal Shortfalls for all the Series which are Principal Sharing Series forsuch Distribution Date.  The “**PrincipalShortfall**” for any Distribution Date will be equal to theInvested Amount after the application of all Collections other than SharedPrincipal Collections on such Distribution Date.

 

Section 4.09.          Determinationof LIBOR.

 

(a)  On eachLIBOR Determination Date, the Note Administrator shall determine LIBOR (“**LIBOR**”)on the basis of the rate for deposits in United States dollars for a one-monthperiod which appears on Telerate Page 3750 as of 11:00 a.m., London time, onsuch date.  If such rate does not appearon Telerate Page 3750, the rate for that LIBOR Determination Date shall bedetermined on the basis of the rates at which deposits in United States dollarsare offered by at least two major banks, selected by the Servicer, atapproximately 11:00 a.m., London time, on that day to prime banks in the Londoninterbank market for a one-month period. The Note Administrator shall request the principal London office of eachof such two major banks to provide a quotation of its rate.  If at least two (2) such quotations areprovided, the rate for that LIBOR Determination Date shall be the arithmeticmean of the quotations.  If fewer thantwo quotations are provided as requested, the rate for that LIBOR DeterminationDate will be the arithmetic mean of the rates quoted by major banks in New YorkCity, selected by the Servicer, at approximately 11:00 a.m., New York Citytime, on that day for loans in United States dollars to leading European banksfor a one-month period.

 

(b)           Oneach LIBOR Determination Date, the Note Administrator shall notify the Servicerof the LIBOR rate for the following Interest Period.

 

[END OF ARTICLE IV ]

 

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ARTICLE V

 

Delivery of Series 2002-1 Notes;

Distributions; Reports toSeries 2002-1 Noteholders

 

Section 5.01.         Deliveryand Payment for the Series 2002-1 Notes.

 

The Issuer shall execute and issue, and the IndentureTrustee shall authenticate, the Series 2002-1 Notes and the O/C Certificate inaccordance with Section 2.03 of the Indenture. The Note Administrator shall deliver the Series 2002-1 Notes to or uponthe order of the Issuer when so authenticated.

 

Section 5.02.          Distributions.

 

(a)  On eachDistribution Date, the Note Administrator shall distribute to the Series 2002-1Noteholders of record on the preceding Record Date (other than as provided inSection 11.02 of the Indenture), such Noteholders’ pro rata share of theamounts held by the Note Administrator that are allocated and available on suchDistribution Date to pay interest on the related class of Notes pursuant tothis Indenture Supplement.

 

(b)  On eachDistribution Date, the Note Administrator shall distribute to the Series 2002-1Noteholders of record on the preceding Record Date (other than as provided inSection 11.02 of the Indenture) or to the O/C Holder, as applicable, suchNoteholders’ or O/C Holders’ pro rata share of the amounts held by the NoteAdministrator that are allocated and available on such Distribution Date to payprincipal on the related class of Notes or the O/C Invested Amount, as applicable,pursuant to this Indenture Supplement up to a maximum amount on any such dateequal to the Class A-1 Principal Balance, the Class A-2 Principal Balance, theClass A-3 Principal Balance, the Class A-4 Principal Balance, the Class BPrincipal Balance or the O/C Invested Amount, as applicable.

 

(c)  Thedistributions to be made pursuant to this Section 5.02 are subject to theprovisions of Sections 2.06, 6.01 and 7.01 of the Transfer and ServicingAgreement, Section 11.02 of the Indenture and Section 7.01 of thisIndenture Supplement.

 

(d)  Except asprovided in Section 11.02 of the Indenture with respect to a finaldistribution, distributions to Series 2002-1 Noteholders and the O/C Holderhereunder shall be made by (i) wire transfer in immediately availablefunds and (ii) without presentation or surrender of any Series 2002-1 Noteor the O/C Certificate or the making of any notation thereon.

 

Section 5.03.          Reportsand Statements to Series 2002-1 Noteholders.

 

(a)  On eachDetermination Date, the Servicer will provide to the Note Administrator theinformation (in electronic format acceptable to the Note Administrator)necessary for the Note Administrator to prepare, based on such writteninformation, and provide to the Rating Agencies on each Distribution Date,statements, substantially in the form of **Exhibit B** hereto (each, a “**Statementto Noteholders**”), setting forth certain information relating tothe Trust and Series 2002-1.

 

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(b)  On orbefore January 31 of each calendar year, beginning with calendar year 2003, theNote Administrator shall furnish or cause to be furnished to each Person who atany time during the preceding calendar year was a Series 2002-1 Noteholder orO/C Holder, a statement prepared by the Note Administrator containing theinformation which is required to be contained in the statement to Series 2002-1Noteholders and the O/C Holder as set forth in paragraph (a) above, aggregatedfor such calendar year or the applicable portion thereof during which suchPerson was a Series 2002-1 Noteholder or O/C Holder, together with otherinformation as is required to be provided by an issuer of indebtedness underthe Code (in the case of the Series 2002-1 Noteholders) and such othercustomary information as is necessary to enable the Series 2002-1 Noteholdersor the O/C Holder to prepare their tax returns.  Such obligation of the Note Administrator shall be deemed to havebeen satisfied to the extent that substantially comparable information shall beprovided by the Servicer pursuant to any requirements of the Code as from timeto time in effect.

 

[END OF ARTICLE V]

 

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ARTICLE VI

 

Series 2002-1 RedemptionEvents; Voting

 

Section 6.01.          Series2002-1 Redemption Events.  If any one of the following events shall occur with respect toSeries 2002-1:

 

(a)  (i)  the occurrence of an Insolvency Eventrelating to the Transferor, the Servicer or Providian (with respect toProvidian, only while Providian is acting as subservicer to the Servicerpursuant to the Interim Subservicing Agreement); (ii) the Account Owner shallcease, or become unable, for any reason, to transfer  Receivables to the Transferor as provided in the ReceivablesPurchase  Agreement or the Transferorshall cease, or become unable, for any reason, to transfer Receivables to theTrust as provided in the Transfer and Servicing Agreement;  (iii) the Accounts Owner shall becomeunable, for any reason, to  transfergood title to the Receivables to the Transferor as provided in the ReceivablesPurchase Agreement; (iv) the Transferor shall become unable, for any reason, totransfer good title to the Receivables to the Trust as provided in the Transferand Servicing Agreement; or (v) the Accounts Owner shall cease to settle newlygenerated Receivables under applicable VISA and MasterCard agreements;

 

(b)  the Trustor the Transferor becomes an “investment company” within the meaning of theInvestment Company Act;

 

(c)  failure topay interest due to any of the Class A Notes or the Class B Notes within 5Business Days of the applicable Distribution Date;

 

(d)  theTransferor or the Servicer shall fail (i) to make any payment or depositrequired by the terms of the Transfer and Servicing Agreement, the Indenture orthis Indenture Supplement on or before the date occurring five Business Daysafter the date such payment or deposit is required to be made therein or hereinor (ii) to observe or perform any other covenants or agreements of theTransferor or the Servicer set forth in the Transfer and Servicing Agreement,the Indenture or this Indenture Supplement, which failure has a materialadverse effect on any class of the Series 2002-1 Noteholders and whichcontinues unremedied for a period of 60 days after the date on which writtennotice of such failure, requiring the same to be remedied, shall have beengiven to the Transferor or the Servicer, as applicable, by the IndentureTrustee, or to the Transferor or the Servicer, as applicable;

 

(e)  anyrepresentation or warranty made by the Transferor, the Issuer or the Servicerin the Transfer and Servicing Agreement shall prove to have been incorrect inany material respect when made or when delivered and continues to be incorrectin any material respect for a period of 60 days after the date on which writtennotice of such failure, requiring the same to be remedied, shall have beengiven to the Transferor, the Issuer or the Servicer, as applicable, by theIndenture Trustee, or to the Transferor, the Servicer or the Issuer, asapplicable, and the Indenture Trustee or any Holder of the Series 2002-1 Notes,and as a result of which the interests of any class of the Series 2002-1Noteholders are materially and adversely affected for such period; provided,however, that a Series 2002-1 Redemption Event pursuant to this Section6.01(e) shall not be deemed to have occurred with respect to the Transferor andthe

 

36

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Transfer and Servicing Agreement if the Accounts Owner has acceptedreassignment of the related Receivable, or all of such Receivables, ifapplicable, during such period in accordance with the provisions of theTransfer and Servicing Agreement;

 

(f)  a court ofcompetent jurisdiction shall issue a final non-appealable order to the effectthat the Indenture Trustee shall, for any reason, fail to have a valid andperfected first priority security interest in the Receivables;

 

(g)  withoutlimiting any of the foregoing, the occurrence of an Event of Default with respectto Series 2002-1 and acceleration of the maturity of the Series 2002-1 Notes inaccordance with Section 5.03 of the Indenture; or

 

(h)  the O/CPrincipal Percentage is less than 22.0%; 

 

then, in the case of any event described in subparagraph (d) or (e) ,after the applicable grace period, if any, set forth in such subparagraphs, theIndenture Trustee may, and at the direction of the Holders of Series 2002-1Notes evidencing more than 50% of the aggregate unpaid principal amount ofSeries 2002-1 Notes shall, by notice then given in writing to the Transferorand the Servicer, declare that a “Series Redemption Event” with respect toSeries 2002-1 (a “**Series 2002-1 Redemption Event**”) hasoccurred as of the date of such notice, and, in the case of any event describedin subparagraph (a), (b), (c), (f), (g) or (h) a Series 2002-1 Redemption Eventshall occur without any notice or other action on the part of the IndentureTrustee or the Series 2002-1 Noteholders immediately upon the occurrence ofsuch event.

 

Section 6.02.          Voting in Event of Default.  The requirement set forth in Section5.05(a)(iii) of the Indenture that the Indenture Trustee obtain the consent of66–2/3% of the Outstanding Amount of the Class A Notes prior toexercising the foreclosure remedy of selling Receivables shall be deemed to bemet with respect to Series 2002-1 only if the holders of 66–2/3% of theOutstanding Amount of each of the Class A-1 Notes, the Class A-2 Notes, theClass A-3 Notes and the Class A-4 Notes so consents.

 

[END OF ARTICLE VI]

 

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ARTICLE VII

 

Redemption of Series2002-1 Notes; Final Distributions; Series Termination

 

Section 7.01.          Clean-upCall; Redemption Event Issuance; Redemption upon Auction; Final Distributions.

 

(a)  On any dayoccurring on or after the date on which the Invested Amount is reduced to 10%or less of the Initial Invested Amount and it is determined that continuedservicing would be administratively burdensome, the Servicer shall have theoption to repurchase the Series 2002-1 Notes (a “**Clean-up Call**”) at apurchase price equal to the Redemption Amount. The Servicer shall give the Note Administrator and the Indenture Trusteeat least thirty (30) days prior written notice of the date on which theServicer intends to exercise such optional redemption.

 

(b)  The Issuer shall redeem the Notes (a “**RedemptionEvent Issuance**”) at a price equal to the Redemption Amountwithin 90 days after the occurrence of a Redemption Event; *provided, that* (i) the Issuerreceives an amount at least equal to the Redemption Amount, the VFN ReductionAmount and the Transferor Amount Reduction Amount, to the extent suchTransferor Amount Reduction Amount represents Receivables funded by theTransferor other than Non-Conforming Terms Change Receivables, through theissuance of a new series of Notes within 90 days of such Redemption Event; (ii)issuance of such new series of notes complies with all relevant regulatory,legal, tax and rating agency criteria, including the New Issuance procedures inSection 2.11 of the Indenture and the criteria that the new notes would haveratings from Moody’s and Standard and Poor’s that are equal to or higher thanthe ratings on the Notes being redeemed; (iii) the relative sizes of the rated tranchesof the new notes will be the same as or as similar as possible to the relativesizes of the Class A Notes and the Class B Notes; (iv) the new series of notesprovides that the reinvestment period for such notes will be scheduled to endon the same date that the Reinvestment Period of the Series 2002-1 Notes isscheduled to end; and (v) the interest rate structure on each new class ofnotes (i.e., fixed or floating rate) will be the same as the interest ratestructure of the Class A Notes and Class B Notes.

 

(c)  The Issuer shall redeem the Notes (a “**Redemptionupon Auction**”) at a price equal to the Redemption Amount on theJuly 2005 Distribution Date if (i) no Redemption Event has occurred on or priorto such date and (ii) the Note Administrator, on behalf of the IndentureTrustee, has received sufficient proceeds from an auction of the Receivables topay the Redemption Amount, the VFN Reduction Amount, the Transferor AmountReduction Amount and an amount, as certified to in writing by the Servicer, equalto the amount retained in the capital account of CSG, LLC at the time that suchredemption is scheduled to occur (the “**O/C Reduction Amount**”).  During the 90-day period prior to the July2005 Distribution Date, the Servicer shall solicit bids for the sale of theReceivables for settlement on such Distribution Date.  The Note Administrator, on behalf of the Indenture Trustee, willdetermine which bid is the highest cash purchase offer, and if the proceeds aresufficient to pay the Redemption Amount, the VFN Reduction Amount, theTransferor Amount Reduction Amount and the O/C Reduction Amount, the applicableServicer will facilitate the sale of the applicable Receivables to the highestcash bidder. The Note Administrator will be entitled to obtain (at the expenseof the

 

38

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Issuer) and rely on the determination of an investmentbanking firm in connection with this determination. The Transferor, itsaffiliates or agents may not participate or bid in the auction. If the NoteAdministrator, on behalf of the Indenture Trustee, is not able to receivesufficient proceeds, the Receivables will not be sold, and the ScheduledAmortization Period will commence.

 

(d)  Not later than 9:00 a.m., New York Citytime, on the day on which the Notes are to be redeemed pursuant to a Clean-upCall, Redemption Event Issuance or Redemption upon Auction is to occur, theServicer shall deposit into the Collection Account in immediately availablefunds the Redemption Amount, the VFN Reduction Amount, the Transferor AmountReduction Amount and the O/C Reduction Amount, as applicable.  Following such deposit into the CollectionAccount in accordance with the foregoing, the Invested Amount for Series 2002-1shall be reduced to zero and the Indenture Trustee shall release theNoteholder’s security interest in the Receivables.  The Redemption Amount, the VFN Reduction Amount, the TransferorAmount Reduction Amount and the O/C Reduction Amount shall be distributed asset forth in subsection 7.01(e).

 

(e)  With respect to the Redemption Amount, theVFN Reduction Amount, the Transferor Amount Reduction Amount and the O/CReduction Amount deposited into the Collection Account pursuant to Section7.01(d), as applicable, the Note Administrator shall, in accordance with thewritten direction of the Servicer, not later than 9:00 a.m., New York Citytime, on the related Distribution Date, make deposits or distributions of thefollowing amounts (in each case, after giving effect to any deposits and distributionsotherwise to be made on such date) in immediately available funds:  (i) the Principal Balance and any accruedand unpaid interest on the Principal Balance of the Class A-1 Notes will bedistributed to the Note Administrator for payment to the Class A-1 Noteholders,(ii) the Principal Balance and any accrued and unpaid interest on the PrincipalBalance of the Class A-2 Notes will be distributed to the Note Administratorfor payment to the Class A-2 Noteholders, (iii) the Principal Balance and anyaccrued and unpaid interest on the Principal Balance of the Class A-3 Noteswill be distributed to the Note Administrator for payment to the Class A-3Noteholders, (iv) the Principal Balance and any accrued and unpaid interest onthe Principal Balance of the Class A-4 Notes will be distributed to the NoteAdministrator for payment to the Class A-4 Noteholders, (v) the Principal Balance and any accrued and unpaid intereston the Principal Balance of the Class B Notes will be distributed to the NoteAdministrator for payment to the Class B Noteholders; (vi) to pay any amountsdue but unpaid with respect to Program Expenses and Excess Program Expenses,(vii) to pay any amounts due but unpaid with respect to the Monthly ServicingFee; (viii) with respect to a Redemption Event Issuance or Redemption uponAuction, to pay to the holders of the Variable Funding Notes the VariableFunding Amount and to the holder of the Transferor Amount the Transferor AmountReduction Amount; (ix) with respect to a Redemption Event Issuance orRedemption upon Auction, to pay to the O/C Holder the O/C Reduction Amount, and(x) any amounts remaining in the Collection Account to be distributed to the O/C Holder.

 

Notwithstanding anythingto the contrary in this Indenture Supplement, the Indenture or the Transfer andServicing Agreement, all amounts distributed to the Note Administrator pursuantto subsection 7.01(e) for payment to the Series 2002-1 Noteholders shall bedeemed distributed in full to the Series 2002-1 Noteholders on the date onwhich such funds

 

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are distributed to the Note Administrator pursuant tothis Section 7.01 and shall be deemed to be a final distribution pursuantto Section 11.02 of the Indenture.

 

Section 7.02.          SeriesTermination.  Onthe Final Maturity Date, the right of the Series 2002-1 Noteholders to receivepayments from the Issuer will be limited solely to the right to receivepayments pursuant to Section 5.05 of the Indenture.

 

[END OF ARTICLE VII]

 

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ARTICLE VIII

 

Miscellaneous Provisions

 

Section 8.01.          Ratificationof Indenture.  Assupplemented by this Indenture Supplement, the Indenture is in all respectsratified and confirmed and the Indenture as so supplemented by this IndentureSupplement shall be read, taken and construed as one and the same instrument.

 

Section 8.02.          Counterparts.  This Indenture Supplement may be executed intwo or more counterparts, and by different parties on separate counterparts,each of which shall be an original or facsimile, but all of which shallconstitute one and the same instrument.

 

Section 8.03.          GoverningLaw.  THISINDENTURE SUPPLEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THESTATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THEOBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINEDIN ACCORDANCE WITH SUCH LAWS.

 

Section 8.04.          PrivatePlacement of Series 2002-1 Notes; Form of Delivery of Series 2002-1 Notes.

 

(a)   The Series 2002-1 Notes and the O/CCertificate have not been registered under the Securities Act or any statesecurities law.  No transfer of anySeries 2002-1 Note or the  O/CCertificate shall be made except in accordance with the terms of this IndentureSupplement  and either (i) pursuantto an effective registration under the Securities Act and applicable statesecurities or “blue sky” laws or (ii) in a transaction exempt from theregistration requirements of the Securities Act and applicable state securitiesor “blue sky” laws, to (A) a person who the transferor reasonably believesis a Qualified Institutional Buyer within the meaning thereof in Rule 144Aunder the Securities Act that is aware that the resale or other transfer isbeing made in reliance on Rule 144A, (2) a person who is anaccredited investor as defined in Rule 501(a) under the Securities Act or(3) an institution which has such knowledge and experience in financialand business matters as to be capable of evaluating the merits and risks of theinvestment therein.  The Series 2002-1Notes and the O/C Certificate shall bear legends to the effect set forth in **Exhibit A-1FLthrough Exhibit C**. None of the Transferor, the Transfer Agent and Registrar, the OwnerTrustee, the Indenture Trustee or the Note Administrator is obligated toregister the Series 2002-1 Notes or the O/C Certificate under the SecuritiesAct or any other securities or “blue sky” law or to take any other action nototherwise required under this Indenture Supplement, the Indenture or theTransfer and Servicing Agreement to permit the transfer of Series 2002-1 Notesor the O/C Certificate without registration or as described above.

 

(b)   The Series 2002-1 Notes shall be DefinitiveNotes and shall be delivered as Registered Notes as provided inSection 2.01 of the Indenture.

 

Section 8.05.          Successorsand Assigns.  ThisIndenture Supplement shall be binding upon and inure to the benefit of theparties hereto and their respective permitted

 

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successors and assigns, except that the Issuer may notassign or transfer any of its rights under this Indenture Supplement withoutthe prior written notice to each Rating Agency.

 

Section 8.06.          Transferof the Class B Notes and O/C Certificate.  Notwithstanding anything to the contrary inthis Indenture Supplement, no interest in the Class B Notes or the O/CCertificate may be directly or indirectly sold, conveyed, assigned,hypothecated, pledged, participated, exchanged or otherwise transferred (each a“**Transfer**”)except to a Person who is a “United States person” for United States federalincome tax purposes and only upon the prior delivery of a Tax Opinion to theIndenture Trustee and the Note Administrator with to respect to such Transfer,and any Transfer in violation of these requirements shall be null and void *ab initio*.

 

Section 8.07.          Limitation of Liability.  Notwithstanding any other provision hereinor elsewhere, this Indenture Supplement has been executed and delivered byWilmington Trust Company, not in its individual capacity, but solely in itscapacity as Owner Trustee of the Trust. In no event shall Wilmington Trust Company in its individual capacityhave any liability in respect of the representations, warranties, or obligationsof the Trust hereunder or under any other document, as to all of which recourseshall be had solely to the assets of the Trust, and for all purposes of thisAgreement and each other document, the Owner Trustee (as such or in itsindividual capacity) shall be subject to, and entitled to the benefits of, theterms and provisions of the Trust Agreement.

 

[END OF ARTICLE VIII]

 

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESSWHEREOF, the undersigned have caused this Indenture Supplement to be dulyexecuted and delivered by their respective duly authorized officers on the dayand year first above written.

 
|                       |   |                            | CSGQ TRUST, as Issuer                                        |
|----------------------------|--------|---------------------------------|--------------------------------------------------------------|
|                       |   |                            |                                                         |
|                       |   | By:                             | Wilmington Trust Company                                     |
|                       |   |                            | not in its individual capacity, but solely as Owner  Trustee |
|                       |   |                            |                                                         |
|                       |   |                            |                                                         |
|                       |   | By:                             |                                                         |   |
|                       |   |                            | Name:                                                        |
|                       |   |                            | Title                                                        |
|                       |   |                            |                                                         |
|                       |   |                            |                                                         |
|                       |   | U.S. BANK NATIONAL ASSOCIATION, |
|                       |   | as Indenture Trustee            |
|                       |   |                            |
|                       |   |                            |
|                       |   | By:                             |                                                         |   |
|                       |   |                            | Name:                                                        |
|                       |   |                            | Title                                                        |
|                       |   |                            |                                                         |
|                       |   |                            |                                                         |
|                       |   | CITIBANK, N.A.,                 |
|                       |   | as Note Administrator           |
|                       |   |                            |
|                       |   |                            |
|                       |   | By:                             |                                                         |   |
|                       |   |                            | Name:                                                        |
|                       |   |                            | Title                                                        |
|                       |   |                            |                                                         |
|                       |   |                            |                                                         |
| Acknowledged and Accepted: |   |                            |
|                       |   |                            |                                                         |
| COMPUCREDIT CORPORATION,   |   |                            |
| as Servicer                |   |                            |
|                       |   |                            |                                                         |
| By:                        |   |                            |                                                         |   |
|                       | Name:  |                            |                                                         |
|                       | Title: |                            |                                                         |
|                            |        |                                 |                                                              |  |  |  |

 

E-1

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| PACCT, LLC,                            |   |   |
|----------------------------------------|--------|--------|
| as Transferor                          |   |   |
|                                   |   |   |   |
| [on behalf of Providian National Bank, |   |   |
| managing member]                       |   |   |
|                                   |   |   |   |
|                                   |   |   |   |
| By:                                    |   |   |   |   |
|                                   | Name:  |   |   |
|                                   | Title: |   |   |
|                                   |   |   |   |
|                                   |   |   |   |
| CSG FUNDING, LLC,                      |   |   |
| as O/C Holder                          |   |   |
|                                   |   |   |   |
| [on behalf of CSG, LLC,                |   |   |
| managing member]                       |   |   |
|                                   |   |   |   |
|                                   |   |   |   |
| By:                                    |   |   |   |   |
|                                   | Name:  |   |   |
|                                   | Title: |   |   |

 

E-2

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**SCHEDULE I**

 

 
| **Day** |   | **Target%** |   |
|---------|--------|-------------|--------|
| 15      |   | 85.00       | %      |
| 16      |   | 86.50       | %      |
| 17      |   | 88.00       | %      |
| 18      |   | 89.50       | %      |
| 19      |   | 91.00       | %      |
| 20      |   | 92.50       | %      |
| 21      |   | 94.00       | %      |
| 22      |   | 95.50       | %      |
| 23      |   | 97.00       | %      |
| 24      |   | 98.50       | %      |
| 25      |   | 100.00      | %      |
| 26      |   | 100.00      | %      |
| 27      |   | 100.00      | %      |
| 28      |   | 100.00      | %      |
| 29      |   | 100.00      | %      |
| 30      |   | 100.00      | %      |
| 31      |   | 100.00      | %      |

 

S-1

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