**Exhibit10.4**

 

RECEIVABLES PURCHASE AND SECURITY AGREEMENT, dated asof September 23, 2002, by and between CFC II LLC, a Nevada limitedliability company (**“LLC II”**) and COLUMBUS BANK ANDTRUST COMPANY, a state chartered bank organized under the laws of the State ofGeorgia (**“ColumbusBank”**).

 

W I T N E S S E TH:

 

WHEREAS, Columbus Bank and CompuCredit Corporation, aGeorgia corporation (“CompuCredit”) are party to the Receivables PurchaseAgreement, dated as of October 20, 2000 (as the same shall have been amended tothe date hereof, the “CompuCredit Purchase Agreement”);

 

WHEREAS, LLC II desires to purchase certainReceivables (hereunder defined) arising under certain credit card accounts ofColumbus Bank following the termination of the CompuCredit Purchase Agreement,as more fully provided herein; and

 

WHEREAS, Columbus Bank desires to sell and assigncertain Receivables to LLC II following termination of the CompuCredit PurchaseAgreement, as more fully provided herein.

 

NOW, THEREFORE, it is hereby agreed by and betweenColumbus Bank and LLC II as follows:

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# ARTICLE I

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# DEFINITIONS

 

## Section 1.01    Definitions.  All capitalized terms used herein or in anycertificate or document, or Conveyance Paper made or delivered pursuant hereto,and not otherwise defined herein or therein, shall have the meaning ascribedthereto in the Affinity Agreement, the CompuCredit Purchase Agreement (ashereinafter defined) or the Transfer and Servicing Agreement; in addition, thefollowing words and phases shall have the following meanings:

 

“Affinity Agreement”  shall mean the Affinity Card Agreement, dated as ofJanuary 6, 1997 between Columbus Bank, CompuCredit and CompuCreditAcquisition Corporation, as amended to the date hereof and as such agreementmay be amended from time to time hereafter.

 

“Agreement” shall mean this Receivables Purchase and Security Agreement and allamendments hereof and supplements hereto.

 

“Bank Lien” shall mean any security interest, mortgage, deed of trust, pledge,hypothecation, assignment, deposit arrangement, equity interest, encumbrance,lien (statutory or other), preference, participation interest, priority orother security agreement or preferential arrangement of any kind or naturewhatsoever, including any conditional sale or other title retention agreement,any financing lease having substantially the same economic effect as any of theforegoing and the filing of any financing statement under the UCC or comparablelaw of any jurisdiction to evidence any of the foregoing; provided, however,that any lien or liens on 

 

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receivables maintainedpursuant to the Indenture, the CompuCredit Purchase Agreement, the CFC PurchaseAgreement or the Transfer and Servicing Agreement shall not constitute a BankLien on the Residual Interests.

 

“Bankruptcy Event”  shall mean:

 

(i)                       LLC IIshall commence any case, proceeding or other action (A) under any existingor future law of any jurisdiction, domestic or foreign, relating to bankruptcy,insolvency, reorganization, relief of debtors or the like, seeking to have anorder for relief entered with respect to it, or seeking to adjudicate itbankrupt or insolvent, or seeking reorganization, arrangement, adjustment,winding-up, liquidation, dissolution, composition or other relief with respectto it or its respective debts, or (B) seeking appointment of a receiver,trustee, custodian or other similar official for it or for all or substantiallyall of its assets, or LLC II shall make a general assignment for the benefit ofits respective creditors; or

 

(ii)                    the commencementagainst LLC II of any case, proceeding or other action of a nature referred toin clause (i) above which (A) results in the entry of an order forrelief or any such adjudication or appointment, and (B) remains undismissed,undischarged or unbonded for a period of sixty (60)****days; or

 

(iii)                 the commencementagainst LLC II of any case, proceeding or other action seeking issuance of awarrant of attachment, execution, distraint or similar process against all orsubstantially all of its assets which results in the entry of an order for anysuch relief which shall not have been vacated, discharged, stayed, satisfied orbonded pending appeal within sixty (60) days from the entry thereof; or

 

(iv)                LLC II shallconsent to any of the acts set forth in clause (i), (ii) or (iii) above of thisdefinition of “Bankruptcy Event”; or

 

(v)                   LLC II shall beunable to, or shall admit in writing its inability to, pay its debts generallyas they become due; or

 

(vi)                LLC II shall notbe solvent.

 

“Business Day” shall mean any day other than(a) a Saturday or Sunday or (b) any other day on which national bankingassociations or state banking institutions in New York, New York, Atlanta,Georgia, Columbus, Georgia or any other city in which the principal executiveoffices of Columbus Bank or LLC II are located, are authorized or obligated bylaw, executive order or governmental decree to be closed.

 

“CFC” shall shall mean CompuCredit FundingCorp. II, a Nevada corporation.

 

“CFC Purchase Agreement” shall mean theReceivables Purchase Agreement, dated as of October 20, 2000, between CFC andCompuCredit, as amended.

 

 

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“Collateral” shall have the meaning set forthin Section 6.01.

 

“Columbus Account” shall mean each VISA® orMasterCard®(1) account established pursuant to a Credit Card Agreement betweenColumbus Bank and any Person, which account is originated pursuant to theAffinity Agreement and is identified by the bank identification numbersspecified on Schedule A to the CompuCredit Purchase Agreement, assuch Schedule A may be amended from time to time.

 

“Columbus Bank” shall have the meaning setforth in the Recitals hereto.

 

“CompuCredit Purchase Agreement” shall mean theReceivables Purchase Agreement between Columbus Bank and CompuCredit, dated asof October 20, 2000.

 

“CompuCredit” shall have the meaning set forthin the Recitals hereto.

 

“Conveyance” shall have the meaning set forthin the subsection 2.01(a).

 

“Conveyance Papers” shall have the meaning setforth in subsection 4.01(a)(ii).

 

“Custodial Agent” shall have the meaning setforth in the Pledge and Security Agreement.

 

“Eligible Collateral” shall have the meaningset forth in Section 6.06(b).

 

“Event of Default” shall mean:

 

(i)                                          aBankruptcy Event shall have occurred;

 

(ii)                                       subjectto Sections 3.01(c) and (d), LLC II shall fail to pay when due all or any partof the Purchase Price, which failure is not cured within 2 Business Days;

 

(iii)                                    an Event of Defaultshall have occurred under the Pledge and Security Agreement; or

 

(iv)                                   ColumbusBank shall fail to have a valid and perfected security interest in theCollateral which failure is not cured within 15 days following receipt by LLCII of notice thereof and a request to cure; or

 

(v)                                      Exceptas permitted herein, a Bank Lien shall have been created with respect to theCollateral which Bank Lien is not released within 15 days following receipt byLLC II of notice thereof and a request to cure.

 

“Excess Interest Residuals” shall mean ResidualInterests that either (i) do not have a principal component, (ii) have anominal principal component (not including principal only components), or (iii)are entitled, prior to the commencement of any amortization period, to 

 

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(1)  VISA® or MasterCard® areregistered trademark of VISA USA, and MasterCard International Incorporated,respectively.

 

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receive predominantlyinterest collections in respect of the Receivables subject to the lien of theIndenture.

 

“Indenture” shall mean the Master Indentureamong the Issuer, The Bank of New York, as Indenture Trustee, and CompuCredit,as Servicer, dated as of December 28, 2000, as supplemented by indenturesupplements applicable to any Series that may be issued from time to time.

 

“Indenture Supplement” shall mean a supplementto the Indenture, executed and delivered in connection with the originalissuance of a series of notes authorized under the Indenture, including allamendments thereof and supplements thereto.

 

“Indenture Trustee” shall mean The Bank of NewYork in its capacity as indenture trustee under the Indenture, or its successorin interest, or any successor indenture trustee appointed as provided in theIndenture.

 

“Instrument” shall have the meaning as providedin the UCC.

 

“Interchange” shall mean interchange feespayable to Columbus Bank, in its capacity as credit card issuer, through VISAor MasterCard, as applicable, in connection with cardholder charges for goodsor services with respect to the Columbus Accounts.

 

“Issuer” shall mean the CompuCredit Card MasterNote Business Trust II, a Nevada business card trust, created by the TrustAgreement.

 

“Letter of Credit” shall have the meaning setforth in the Affinity Agreement.

 

“Letter of Instruction” shall mean a letter executedby LLC II directing the Indenture Trustee to remit amounts otherwisedistributable in respect of the Pledged Residual Interests pursuant to theIndenture to Columbus Bank, which letter is deliverable by LLC II to ColumbusBank pursuant to Section 5.02 hereof.

 

“Lien” shall mean any lien on the PledgedResidual Interests or the Collateral (as defined in the Pledge and SecurityAgreement) which is senior to the lien of Columbus Bank; provided, however,that any lien or liens on receivables maintained pursuant to the Indenture, theCompuCredit Purchase Agreement, the CFC Purchase Agreement or the Transfer andServicing Agreement shall not constitute a Lien on the Residual Interests.

 

“Obligor” shall mean, with respect to eachColumbus Account, each person that would be treated as an “Obligor” inaccordance with the definition for such term in the Transfer and ServicingAgreement.

 

“Pledge and Security Agreement” shall mean thePledge and Security Agreement, dated as of September 23, 2002, between CompuCreditand Columbus Bank, as the same shall be amended.

 

“Pledged Residual Interests” shall mean theResidual Interests identified in Schedule A hereto, as such schedule may berevised from time to time, and all rights appurtenant thereto.

 

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“Proceeds” shall have the meaning as providedin the UCC.

 

“Program” shall mean the affinity credit cardprogram conducted pursuant to the terms of the Affinity Agreement.

 

“Purchase Term” shall mean, with respect toeach state, the Standard Account Closure Period or the Extended Account ClosurePeriod, as applicable, in each case as such terms are defined in Exhibit A tothe Pledge and Security Agreement.

 

“Purchased Assets” shall have the meaning setforth in subsection 2.01(a).

 

“Receivables” shall mean all amounts payable byObligors on any Columbus Account, which receivables (i) existed as of theTermination Date and were not previously acquired by CompuCredit, or (ii) areoriginated during the Purchase Term and are not purchased by CompuCreditpursuant to the CompuCredit Purchase Agreement.

 

“Recoveries” shall have the meaning set forthin the Transfer and Servicing Agreement.

 

“Residual Interests” shall have the meaningascribed thereto in the Pledge and Security Agreement.

 

“Residual Valuation” shall have the meaningassigned thereto in the Pledge and Security Agreement.

 

“Retained Interest” shall have the meaning setforth in the CompuCredit Purchase Agreement.

 

“Servicer” shall mean the Servicer from time totime under the Transfer and Servicing Agreement.

 

“Termination Date” shall mean the date as ofwhich the CompuCredit Purchase Agreement is terminated in accordance therewith.

 

“Transfer and Servicing Agreement” shall meanthe Transfer and Servicing Agreement, dated as of October 20, 2000, amongCompuCredit, as Servicer, CFC, as Transferor, the Issuer and the IndentureTrustee, and all amendments and supplements thereto.

 

“Trust Agreement” shall mean the CompuCreditCredit Card Master Note Business Trust II Trust Agreement, dated as ofOctober 20, 2000, between CFC and Wilmington Trust FSB, as the same may beamended, modified or otherwise supplemented from time to time.

 

 “UCC”shall mean the Uniform Commercial Code as in effect on the date hereof in theState of New York, as amended from time to time, and any successor statute; providedthat if by reason of mandatory provision of law, the perfection or the effectof perfection or non-perfection of the security interest in the Collateral isgoverned by the Uniform Commercial Code of another jurisdiction or a similar orequivalent legislation as enacted in a relevant foreign jurisdiction, “UCC”means the Uniform Commercial Code or such legislation as in effect in suchother

 

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jurisdiction for purposesof the provision hereof relating to such perfection or effect of perfection ornon-perfection.

##  

## Section 1.02    OtherDefinitional Provisions.

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### (a)    All terms defined in thisAgreement shall have the defined meanings when used in any certificate, otherdocument, or Conveyance Paper made or delivered pursuant hereto unlessotherwise defined therein.

###  

### (b)    The words “hereof,”“herein” and “hereunder” and words of similar import when used inthis Agreement or any Conveyance Paper shall refer to this Agreement as a wholeand not to any particular provision of this Agreement, and Section, Subsection,Schedule and Exhibit references contained in this Agreement are references toSections, Subsections, Schedules and Exhibits in or to this Agreement unlessotherwise specified.

 

[END OF ARTICLE I]

#  

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ARTICLE II

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# PURCHASE AND CONVEYANCE OF RECEIVABLES

 

## Section 2.01    Purchase.

###  

### (a)    By execution of thisAgreement, LLC II does hereby agree to purchase on and after the TerminationDate from Columbus Bank, and Columbus Bank does hereby agree to sell, transfer,assign, set over and otherwise convey on and after the Termination Date, to LLCII (collectively, the “**Conveyance**”), without recourse exceptas provided herein, all of Columbus Bank’s right, title and interest in, to andunder (i) the Receivables and all monies due and or to become due and allamounts received with respect thereto and all proceeds (including, withoutlimitation, “proceeds” as defined in the UCC) thereof and (ii) the rightto receive Interchange and Recoveries with respect to such Receivables (otherthan with respect to the Retained Interest therein) (all of the foregoing beingreferred to herein as the “**Purchased Assets**”).

###  

### (b)    In connection with suchConveyance, Columbus Bank agrees (i) to cooperate with LLC II, and LLC IIagrees to record and file upon the occurrence of the Termination Date, at itsown expense, any financing statements (and continuation statements with respectto such financing statements when applicable) with respect to the Receivablesand the other Purchased Assets, meeting the requirements of applicable statelaw in such manner and in such jurisdictions as are necessary to perfect, andmaintain perfection of, the Conveyance of such Purchased Assets from ColumbusBank to LLC II and (ii) that such financing statements shall name ColumbusBank, as seller, and LLC II, as purchaser, of the Receivables and the otherPurchased Assets; and upon filing LLC II agrees to deliver a file-stamped copyof such financing statements or other evidence of such filings to Columbus Bankas soon as is practicable after filing.

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### (c)    [Reserved]

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### (d)    The parties hereto intendthat the conveyance of Columbus Bank’s right, title and interest in and to theReceivables and the other Purchased Assets purchased hereunder shall constitutea sale, conveying good title free and clear of any liens, claims, encumbrancesor rights of others from Columbus Bank to LLC II and that the Receivables andthe other Purchased Assets shall not be part of Columbus Bank’s estate in theevent of the insolvency of Columbus Bank or a conservatorship, receivership orsimilar event with respect to Columbus Bank. It is the intention of the parties hereto that the arrangements withrespect to the Receivables and the other Purchased Assets shall constitute apurchase and sale of such Receivables and the other Purchased Assets and not aloan.  In the event, however, that itwere to be determined that the transactions evidenced hereby constitute a loanand not a purchase and sale, this Agreement shall constitute a securityagreement under applicable law, and Columbus Bank hereby grants to LLC II afirst priority security interest in all of Columbus Bank’s right, title andinterest, whether now owned or hereafter acquired, in, to and under theReceivables and the other Purchased Assets.

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### (e)    With respect to theforegoing and the grant of the security interest in the Purchased Assets,Columbus Bank hereby authorizes LLC II at any time and from time to time 

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### to file one or more financing or continuationstatements, and amendments thereto, relative to all or any part of thePurchased Assets without the signature of Columbus Bank where permitted by law.

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# ARTICLE III

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# CONSIDERATION AND PAYMENT

## Section 3.01    Purchase Price.

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### (a)    The purchase price for theConveyance with respect to the Receivables and the other Purchased Assets whichcome into existence on or after the Termination Date shall be payable daily, onthe Business Day next succeeding the Business Day on which the notice deliverableby Columbus Bank pursuant to subsection (b) hereof is received by LLC II.  For purposes hereof, the purchase price forthe Receivables (the “Purchase Price”) shall be equal to 100% of the principalbalance of such Receivables.

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### (b)    No later than 1:00 p.m.(eastern time) on each Business Day, Columbus Bank shall notify by facsimiletransmission the Chief Financial Officer or such officer’s designee at LLC IIof the Purchase Price payable due or owed by LLC II.  Payments due for any day shall be made by wire transfer no laterthan 4:00 p.m. (eastern time) on the Business Day next succeeding the date ofsuch notice, unless Columbus Bank is late in notifying LLC II of the PurchasePrice due for any day, in which case the appropriate party shall use allreasonable efforts to send the wire transfer within the time period set forthabove or as soon thereafter as possible, but in any event no later than 5:00p.m. (eastern time) of the next Business Day following LLC II’s receipt ofnotice from Columbus Bank.

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### (c)    In the event LLC II hasreason to dispute the accuracy of the Purchase Price reported by Columbus Bankfor any day, LLC II shall promptly so notify Columbus Bank, but such noticeshall not affect LLC II’s obligation for timely payment of the Purchase Priceas notified by Columbus Bank to LLC II. In the event it is determined that LLC II was correct in disputing theaccuracy of the Purchase Price for a given day, Columbus Bank shall promptlyremit (but in any event within 5 Business Days of such determination) to LLC IIthe greater of (i) the amount due LLC II with interest thereon computed at therate of 3 percentage points above the Columbus Bank “prime rate” in effect onthe date said sum was first due, or (ii) $100. If LLC II shall fail for any reason to remit to Columbus Bank thePurchase Price due for any given day, then LLC II shall promptly remit toColumbus Bank the amount due Columbus Bank with interest thereon from the datesuch sum was due until the date the Purchase Price is paid computed at the rateof 3  percentage points above theColumbus Bank “prime rate” in effect on the date said sum was first due.

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### (d)    If LLC II fails on anygiven day to pay the Purchase Price indicated by Columbus Bank, as providedhereunder, even in the event LLC II disputes such amount, and such failure isnot cured within 2 Business Days from the date LLC II receives notification ofnonpayment, Columbus Bank may (but need not and without waiver of its rights),in addition to any other rights and remedies it may have, upon notice to LLC IIsell to any third party any interest in the Receivables that LLC II failed topurchase.

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### (e)    The sale of Receivablescontemplated herein shall occur upon settlement therefor by or on behalf of LLCII and no additional documents shall be required by the parties to 

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### effect any such sale. Notwithstanding the foregoing, if, in the reasonable judgment of eitherparty in connection with any such purchase and sale, any additional instrument,document, or certificate is required to further evidence such purchase andsale, the other party shall execute and deliver any such document.

 

[END OF ARTICLEIII]

 

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# ARTICLE IV

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# REPRESENTATIONS AND WARRANTIES

 

## Section 4.01    Representationsand Warranties of Columbus Bank Relating to Columbus Bank.

 

### (a)    Representations andWarranties of Columbus Bank Relating to Columbus Bank.  Columbus Bank hereby represents and warrantsto, and agrees with, LLC II as of the date hereof and as of the TerminationDate that:

 

#### (i)    Organization.  Columbus Bank is a bank duly organized,validly existing and in good standing under the laws of the State of Georgia.

 

#### (ii)    Capacity; Authority;Validity.  Columbus Bank has allnecessary corporate power and authority to enter into this Agreement and toperform all of the obligations to be performed by it under this Agreement.  This Agreement and any other document orinstrument delivered pursuant hereto (such other documents or instruments,collectively, the “**Conveyance Papers**”) and theconsummation by Columbus Bank of the transactions contemplated hereby and bythe Conveyance Papers have been duly authorized by all necessary corporateaction on the part of Columbus Bank, and this Agreement has been duly executedand delivered by Columbus Bank and constitutes the valid and binding obligationof Columbus Bank and is enforceable in accordance with its terms (except assuch enforceability may be limited by equitable limitations on the availabilityof equitable remedies and by bankruptcy and other laws affecting the rights ofcreditors generally).

####  

#### (iii)    Compliance.  All aspects of the Program, all terms of theColumbus Accounts and the Cardholder Agreements, and all Solicitation Materialsand other related documents, materials and agreements supplied or communicatedin any form to Cardholders, prospective Cardholders or others in connectionwith the Program comply and will comply in all material respects withapplicable law and regulations.

####  

#### (iv)    Conflicts; Defaults.  Neither the execution and delivery of thisAgreement or the Conveyance Papers by Columbus Bank nor the consummation of thetransactions contemplated by this Agreement and the Conveyance Papers byColumbus Bank will (A) conflict with, result in the breach of, constitutea default under, or accelerate the performance required by, the terms of anycontract, instrument or commitment to which Columbus Bank is a party or bywhich Columbus Bank is bound, (B) violate the articles of incorporation orby-laws, or any other equivalent organizational document, of Columbus Bank,(C) result in the creation of any lien, charge or encumbrance upon any ofthe Columbus Accounts or the Receivables or the other Purchased Assets (exceptpursuant to the terms hereof), or (D) require the consent or approval ofany other party to any contract, instrument or commitment to which ColumbusBank is a party or by which it is bound. Columbus Bank is not subject to any agreement with any regulatory 

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#### authority whichwould prevent the consummation by Columbus Bank of the transactionscontemplated by this Agreement.

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#### (v)    Litigation.  At the date of this Agreement, there is notpending any claim, litigation, proceeding, arbitration, investigation ormaterial controversy before any governmental authority to which Columbus Bankis a party, which adversely affects any of its assets or the ability ofColumbus Bank to consummate the transactions contemplated hereby, and, to thebest of Columbus Bank’s knowledge, no such claim, litigation, proceeding,arbitration, investigation or controversy has been threatened or iscontemplated and no facts exist which would provide a basis for any such claim,litigation, proceeding, arbitration, investigation or controversy.

####  

#### (vi)    No Consent; Etc.  At the date of this Agreement, no consent ofany person (including without limitation any stockholder or creditor ofColumbus Bank) and no consent, license, permit or approval or authorization orexemption by notice or report to, or registration, filing or declaration with,any governmental authority is required (other than those previously obtainedand delivered to LLC II and other than the filing of financing statements inconnection with the transfer of the Receivables) in connection with theexecution or delivery of this Agreement or the Conveyance Papers by ColumbusBank, the validity of this Agreement or the Conveyance Papers with respect to ColumbusBank, the enforceability of this Agreement or the Conveyance Papers againstColumbus Bank, the validity of the security interest granted by Columbus Bankhereunder, the consummation by Columbus Bank of the transactions contemplatedhereby or by the Conveyance Papers, or the performance by Columbus Bank of itsobligations hereunder and under the Conveyance Papers.

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#### (vii)    FDIC Insurance.  Columbus Bank is, and at all times duringthe term hereof will remain, a member of the Federal Deposit InsuranceCorporation.

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### (b)    Notice of Breach.  Upon discovery by either Columbus Bank orLLC II of a breach of any of the foregoing representations and warranties, theparty discovering such breach shall give written notice to the other partywithin three Business Days following such discovery.

 

## Section 4.02    Representationsand Warranties of Columbus Bank Relating to the Agreement and the Receivables.

##  

### (a)    Representations andWarranties.  Columbus Bank herebyrepresents and warrants to LLC II as of the date hereof and as of theTermination Date that:

 

#### (i)    this Agreement and anyConveyance Paper each constitutes a legal, valid and binding obligation ofColumbus Bank enforceable against Columbus Bank in accordance with its terms,except as such enforceability may be limited by applicable conservatorship,receivership, insolvency, reorganization, moratorium or other similar lawsaffecting creditors’ rights generally and state banking corporations inparticular from time to time in effect or general principles of equity;

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#### (ii)    each Receivable and theother Purchased Assets have been conveyed to LLC II free and clear of any BankLien arising through or under Columbus Bank on such

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#### Purchased Assetsand each Receivable is free and clear of any Bank Lien arising through or underColumbus Bank;

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#### (iii)    all authorizations,consents, orders or approvals of or registrations or declarations with anyGovernmental Authority required to be obtained, effected or given by ColumbusBank in connection with the conveyance of Receivables (except the RetainedInterest) and the other Purchased Assets to LLC II have been duly obtained,effected or given and are in full force and effect; and

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#### (iv)    upon payment of the PurchasePrice by LLC II, the transfer of the Receivables to LLC II pursuant heretoshall constitute a valid sale, transfer and assignment to LLC II of all right,title and interest of Columbus Bank in the Receivables and the proceeds thereofand the Interchange payable pursuant to this Agreement and the Recoveriespayable pursuant to this Agreement or, if this Agreement does not constitute asale of such property, it constitutes a grant of a first priority perfected“security interest” (as defined in the UCC) in such property to LLC II, which,in the case of existing Receivables and the proceeds thereof and saidInterchange, is enforceable upon execution and delivery of this Agreement andwhich will be enforceable with respect to such Receivables hereafter createdand the proceeds thereof upon such creation. Upon the filing of the financing statements and, in the case ofReceivables hereafter created and the proceeds thereof, upon the creationthereof, LLC II shall have a first priority perfected security or ownershipinterest in such property and proceeds.

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### (b)    Notice of Breach.  Upon discovery by either Columbus Bank orLLC II of a breach of any of the representations and warranties set forth inthis Section 4.02, the party discovering such breach shall given written noticeto the other party within three Business Days following such discovery; *provided*that the failure to give notice within three Business Days does not precludesubsequent notice.

 

## Section 4.03    Representationsand Warranties of LLC II.

 

### (a)    Representations andWarranties of LLC II.  As of thedate hereof and as of the Termination Date, LLC II hereby represents andwarrants to, and agrees with, Columbus Bank that:

 

#### (i)    Organization.  LLC II is a limited liability company dulyorganized, validly existing and in good standing under the laws of the State ofNevada.  Schedule 4.03(a) sets forth anaccurate and complete list identifying the following: (A) the LLC II’s name asit appears in official filings in the state of its organization; (B) the typeof entity of the LLC II; (C) the organizational identification number issued bythe LLC II’s state of organization or a statement that no such number has beenissued; and (D) the LLC II’s state of organization.  The LLC II has only one state of organization.

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#### (ii)    Capacity; Authority;Validity.  LLC II has all necessarypower and authority to enter into this Agreement and to perform all of theobligations to be performed by it under this Agreement.  This Agreement and the consummation by LLC IIof the transactions contemplated hereby and by the Conveyance Papers have beenduly

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#### and validlyauthorized by all necessary action on the part of LLC II, and this Agreementhas been duly executed and delivered by LLC II and constitutes the valid andbinding obligation of LLC II and is enforceable in accordance with its terms(except as such enforceability may be limited by equitable limitations on theavailability of equitable remedies and by bankruptcy and other laws affectingthe rights of creditors generally).

####  

#### (iii)    Conflicts; Defaults.  Neither the execution and delivery of thisAgreement or the Conveyance Papers by LLC II nor the consummation of thetransactions contemplated by this Agreement and the Conveyance Papers by LLCII, will (i) conflict with, result in the breach of, constitute a defaultunder, or accelerate the performance provided by the terms of any contract,instrument or commitment to which LLC II is a party or by which it is bound,(ii) violate the certificate of organization or limited liability companyagreement, or other equivalent organizational documents of LLC II, (iii)require any consent or approval under any judgment, order, writ, decree, permitor license to which LLC II is a party or by which it is bound, or (iv) requirethe consent or approval of any other party to any contract, instrument orcommitment to which LLC II is a party or by which it is bound.  LLC II is not subject to any agreement withany regulatory authority which would prevent the consummation by LLC II of thetransactions contemplated by this Agreement.

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#### (iv)    Litigation.  There is no claim, or any litigation,proceeding, arbitration, investigation or controversy pending, to which LLC IIis a party and by which it is bound, which adversely affects LLC II’s abilityto consummate the transactions contemplated hereby and, to the best of LLC II’sknowledge, no facts exist which would provide a basis for any such claim,litigation, proceeding, arbitration, investigation or controversy.

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#### (v)    No Consent, Etc.  No consent of any person (including withoutlimitation any stockholder or creditor of LLC II) and no consent, license,permit or approval or authorization or exemption by notice or report to, orregistration, filing or declaration with, any governmental authority isrequired (other than those previously obtained and delivered to Columbus Bankand other than the filing of financing statements in connection with thetransfer of the Purchased Assets and a grant of a security interest in theCollateral) in connection with the execution or delivery of this Agreement orthe Conveyance Papers by LLC II, the validity or enforceability of thisAgreement or the Conveyance Papers against LLC II, the validity of the securityinterest granted by LLC II hereunder, the consummation of the transactionscontemplated hereby or by the Conveyance Papers, or the performance by LLC IIof its obligations hereunder and under the Conveyance Papers.

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### (b)    Notice of Breach.  Upon discovery by LLC II or Columbus Bank ofa breach of any of the foregoing representations and warranties, the partydiscovering such breach shall give prompt written notice to the other party.

 

[END OF ARTICLEIV]

 

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# ARTICLE V

 

# COVENANTS

 

## Section 5.01    Covenants ofColumbus Bank.

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### (a)    Covenants of ColumbusBank.  Columbus Bank herebycovenants and agrees with LLC II as follows:

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#### (i)    Receivables Not To BeEvidenced by Promissory Notes. Except in connection with its enforcement or collection of a ColumbusAccount, Columbus Bank will take no action to cause any Receivable to beevidenced by any instrument (as defined in the UCC).

####  

#### (ii)    Delivery of Collectionsor Recoveries.  In the event thatColumbus Bank receives collections of Receivables or Recoveries followingpurchase of such Receivables by LLC II pursuant hereto, Columbus Bank agrees topay to LLC II such collections of Receivables and Recoveries as soon aspracticable after receipt thereof.

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#### (iii)    Notice of Bank Liens.  Columbus Bank shall notify LLC II promptlyafter becoming aware of any Bank Lien on any Receivable other than theconveyances hereunder, under the CompuCredit Purchase Agreement, the Transferand Servicing Agreement, the CFC Purchase Agreement and the Indenture.

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#### (iv)    Documentation ofTransfer.  Columbus Bank shallundertake to cooperate with LLC II in filing, and LLC II shall file thedocuments (at the expense of LLC II) which would be necessary to perfect andmaintain the transfer of the security interest in and to the Purchased Assets.

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#### (v)    Official Records.  Columbus Bank shall maintain this Agreementas a part of its official records.

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## Section 5.02    Covenants ofLLC II.  LLC II hereby covenants andagrees with Columbus Bank as follows:

###  

### (a)    Except as otherwiseprovided in this subsection (a), until an Event of Default has occurredand is continuing, LLC II shall continue to collect, at its own expense, allamounts due or to become due LLC II in respect of the Collateral.  In connection with such collections,provided no Event of Default shall have occurred and be continuing, LLC II maytake such action as LLC II may deem necessary or advisable to enforce rights toreceive payments in respect of the Collateral.

###  

### (b)    LLC II shall deliver to theCustodial Agent contemporaneously with execution and delivery of this Agreement(i) the certificates, if any, evidencing the Pledged Residual Interests,together with instruments of transfer, endorsed in blank, sufficient to permitColumbus Bank, upon completion of the endorsements thereof, to cause thetransfer on the books and records of the Indenture Trustee of the PledgedResidual Interests.  At any time afteran 

###  

15

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### Event of Default has occurred and is continuing,Columbus Bank shall have the right to submit such instruments of transfer tothe Indenture Trustee and cause the issuance of certificates evidencing thePledged Residual Interests registered in the name of Columbus Bank or itsdesignee and to submit the Letter of Instruction to the Indenture Trustee.

###  

### (c)    After delivery to LLC II byColumbus Bank of a notice that an Event of Default has occurred and iscontinuing:  (i) all amounts andproceeds (including Instruments) received by LLC II in respect of theCollateral shall be received in trust for the benefit of Columbus Bankhereunder, shall be segregated from other funds of LLC II, and shall beforthwith paid over to Columbus Bank in the same form as so received (with anynecessary endorsements) to be held as cash collateral and applied as providedby this Agreement; and (ii) LLC II shall not adjust, settle or compromise theamount or payment of any of the Receivables, or release wholly or partly anyaccount debtor or obligor thereof, or allow any credit or discount thereon.

###  

### (d)     Other than as permittedpursuant to Sections 6.06, 6.07 or 6.08, LLC II shall not without the priorwritten consent of Columbus Bank, sell, assign (by operation of law orotherwise), transfer or otherwise dispose of all or any part of the Collateral.

###  

### (e)    LLC II agrees that, fromtime to time at its own cost and expense, it will promptly execute and deliverand will cause to be executed and delivered all further instruments, assignments,notices, agreements and documents, including, without limitation, financing andcontinuation statements, and will take all further action and will cause allfurther action to be taken, that may be necessary or desirable, or thatColumbus Bank may reasonably request, in order to perfect and protect anysecurity interest granted or purported to be granted hereby and the prioritythereof or to enable Columbus Bank to exercise and enforce its rights andremedies hereunder with respect to any Collateral.  Without limiting the generality of the foregoing LLC II will:

####  

#### (i)    if any Collateral shall beevidenced by a promissory note or other instrument or negotiable document,deliver and pledge to the Custodial Agent such promissory note, instrument ornegotiable document duly endorsed and accompanied by duly executed instrumentsof transfer or assignment, all in form and substance reasonably satisfactory toColumbus Bank;

####  

#### (ii)    execute and file, recordor register such financing or continuation statements, or amendments thereto,and such other instruments, assignments or notices, as may be necessary ordesirable, or as Columbus Bank may reasonably request, in order to perfect andprotect the security interests and other rights granted or purported to be grantedto Columbus Bank;

####  

#### (iii)    furnish to Columbus Bank,from time to time, (A) statements and schedules further identifying anddescribing the Collateral; and (B) all monthly servicing reports and anyrestatements or revisions thereto delivered to noteholders pursuant to theapplicable Indenture Supplement.

####  

16

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#### (iv)    at Columbus Bank’s writtenrequest, appear in and defend any action or proceeding that may affect LLC II’sright, title and interest in or to, or Columbus Bank’s security interest in,the Collateral.

###  

### (f)    With respect to theforegoing and the grant of the security interest hereunder, LLC II herebyauthorizes Columbus Bank at any time and from time to time to file one or morefinancing or continuation statements, and amendments thereto, relative to allor any part of the Collateral without the signature of LLC II where permittedby law.

###  

### (g)    Other than as permittedpursuant to Sections 6.06, 6.07 or 6.08, LLC II acknowledges that it is notauthorized to file any financing statement or amendment or terminationstatement relating to the Collateral with respect to any financing statementrelating to the Collateral without the prior written consent of Columbus Bank,subject to LLC II’s rights under Articles 1 and 9 of the UCC.

###  

### (h)    During the term of thisAgreement, LLC II shall observe the applicable legal requirements for itsrecognition as a legal entity separate and apart from CompuCredit and from itsAffiliates, including as follows:

####  

#### (i)                       LLCII shall maintain business records and books of account separate fromCompuCredit and from those of its Affiliates;

####  

#### (ii)                    exceptas otherwise provided in this Agreement, LLC II shall not commingle its assetsand funds with those of its Affiliates;

####  

#### (iii)                 LLC II shall at all times hold itselfout to the public under its own name as a legal entity separate and distinctfrom its Affiliates; and

####  

#### (iv)                LLCII is not and shall not be involved in the day-to-day or other management ofany of its Affiliates;

####  

#### (v)                   LLCII shall maintain records and books of account and shall not commingle suchrecords and books of account with the records and books of account of anyPerson; and

####  

#### (vi)                LLCII shall act solely in its own name and through duly authorized agents in theconduct of its business, and shall conduct its business so as not to misleadothers as to the identity of the entity with which they are concerned.

###  

### (i)    at all times, except in thecase of a temporary vacancy, which shall promptly be filled, the ManagingMember of LLC II shall have at least one director who qualifies as an“Independent Director” as such term is defined in the articles of incorporationof the Managing Member.

##  

## Section 5.03    Columbus BankAppointed Attorney-in-Fact.

 

From and after the occurrence and during thecontinuation of an Event of Default, LLC II hereby irrevocably appointsColumbus Bank as LLC II’s true and lawful attorney-in-fact, with 

 

17

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full authority and powerin the place and stead of LLC II and in the name of LLC II, Columbus Bank orotherwise, from time to time in Columbus Bank’s discretion to take anyappropriate action and to execute any instrument that Columbus Bank may deemnecessary or advisable to accomplish the purposes of this Agreement withrespect to the Collateral (but Columbus Bank shall not be obligated to andshall have no liability to LLC II or any third party for failure so to do)including, without limitation:

###  

### (a)    to ask, demand, collect,enforce, sue for, recover, compromise, receive, and give acquittance andreceipts for moneys due and to become due under or in respect of any of theCollateral;

###  

### (b)    to receive, endorse, andcollect any checks, drafts or other instruments, documents, and chattel paperin connection with clause (a) above;

###  

### (c)    to file any claims or takeany action or institute any proceedings (or to settle, adjust or compromise anysuch proceeding) that Columbus Bank may deem necessary or desirable for thecollection of any of the Collateral or otherwise to enforce the rights of LLCII with respect to any of the Collateral;

###  

### (d)    to perform the affirmativeobligations of LLC II hereunder;

###  

### (e)    to execute and deliver forand on behalf of LLC II any and all instruments, documents, agreements, andother writings necessary or advisable for the exercise on behalf of LLC II ofany rights, benefits or options created or existing under or pursuant to theCollateral; and

###  

### (f)    to execute endorsements,assignments, or other instruments of conveyance and transfer relating to theCollateral.

 

LLC II herebyacknowledges, consents and agrees that the power of attorney granted pursuantto this Section 5.03 is irrevocable and coupled with an interest.

 

## Section5.04    Columbus Bank May Perform.

 

If LLC II fails toperform in any material respect any agreement contained herein, Columbus Bankmay itself (but shall not be obliged to) perform, or cause performance of, suchagreement, provided that Columbus Bank shall in any event first have givenLLC II written notice of its intent to do the same and LLC II shall not have,within 30 days of such notice (or such shorter period as Columbus Bank mayreasonably determine is necessary in order to preserve the benefits of thisAgreement with respect to any material portion of the Collateral), paid suchclaim or obtained to Columbus Bank’s satisfaction the release of the claim orLien to which such notice relates.  LLCII agrees to reimburse Columbus Bank upon demand for any reasonableout-of-pocket, third-party costs and expenses, including, without limitation,reasonable attorneys’ fees, Columbus Bank incurs while acting asattorney-in-fact hereunder, all of which costs and expenses are included in theobligations secured hereby.

 

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## Section 5.05    Limitations onDuties of Columbus Bank.

 

Columbus Bankshall be obligated to perform such duties and only such duties as arespecifically set forth in this Agreement, and no implied covenants orobligations shall be read into this Agreement against Columbus Bank.  If an Event of Default has occurred and iscontinuing, Columbus Bank shall exercise the rights and powers vested in it bythis Agreement, and shall not be liable (except for its negligence, willful misconductor bad faith) with respect to any action taken by it, or omitted to be taken byit, in accordance herewith.

##  

## Section 5.06    Reasonable Care.

 

Subject to the provisions of Section 9-207 of the UCC,it is understood and agreed between the parties hereto that Columbus Bank’sduty with respect to the custody, safekeeping, and physical preservation of theCollateral in its possession should be to deal with it in the same manner asColumbus Bank deals with similar property for its own account; provided,however, that Columbus Bank shall not be required to make anypresentment, demand, or protest, or give any notice, and need not take anyaction to preserve any rights against any other Person with respect to theCollateral.

###  

[END OF ARTICLE V]

#  

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# ARTICLE VI

#  

# SECURITY

## Section6.01    Grant of Security.

 

As collateral security for the prompt, full andcomplete payment and performance when due of its obligations hereunder and forso long as the Funding Exposure Amount is greater than zero, LLC II herebyassigns and pledges to Columbus Bank, and hereby grants to Columbus Bank asecurity interest in, all of LLC II’s right, title and interest in and to thefollowing property, whether now owned or existing or hereafter existing,arising or acquired, and wherever located (the “Collateral”):

###  

### (a)    the Pledged ResidualInterests; and

###  

### (b)    all products and Proceedsof and from any and all of the foregoing Collateral, all proceeds whichconstitute property of the types described in clause (a) above and, to theextent not otherwise included, all proceeds and payments under insurance(whether or not LLC II is the loss payee thereof), including return premiumswith respect thereto, or any indemnity, warranty, or guaranty payable by reasonof loss or damage to or otherwise with respect to any of the foregoingCollateral.

##  

## Section 6.02    ContinuingSecurity Interest.

###  

### (a)    For so long as the FundingExposure Amount is greater than zero, this Agreement shall create a continuingsecurity interest in the Collateral and shall:

####  

#### (i)    remain in full force andeffect until the payment and performance in full of all the obligations of LLCII hereunder;

####  

#### (ii)    be binding upon LLC II andits successors, transferees and assigns; and

####  

#### (iii)    inure, together with therights and remedies of Columbus Bank, to the benefit of Columbus Bank and itssuccessors and assigns.

###  

### (b)    Upon reduction of theFunding Exposure Amount to zero, the security interest granted herein shallterminate and all rights to the Collateral shall revert to LLC II.  Upon any such termination, Columbus Bankwill, at LLC II’s sole expense, promptly execute and deliver to LLC II suchinstruments and documents necessary and as LLC II shall reasonably request toevidence such termination.

 

## Section6.03    LLC II Remains Liable.

 

Anything herein to the contrary notwithstanding:

###  

### (a)    LLC II shall remain liableunder the contracts and agreements to which it is a party related to orincluded in the Collateral to the extent set forth therein and shall performall 

###  

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### of its duties and obligations under such contracts andagreements to the same extent as if this Agreement had not been executed;

###  

### (b)    the exercise by ColumbusBank of any of its rights and remedies hereunder shall not release LLC II fromany of its duties or obligations under any such contracts or agreements relatedto or included in the Collateral; and

###  

### (c)    Columbus Bank shall nothave any obligation or liability under any such contracts or agreements relatedto or included in the Collateral by reason of this Agreement, and Columbus Bankshall not be obligated (i) to perform or fulfill any of the obligations orduties of LLC II thereunder, (ii) to take any action to collect orpresent, file and/or enforce any claim for payment assigned hereunder, or(iii) to make any inquiry as to the nature or sufficiency of any paymentLLC II may be entitled to receive thereunder.

 

## Section 6.04    Representationsand Warranties of LLC II Regarding Collateral.  LLC II hereby represents and warrants to Columbus Bank as of thedate hereof and as of the Termination Date as follows:

 

### (a)    LLC II owns, and has rightsand the power to transfer, each item of Collateral upon which it purports togrant a lien hereunder, free and clear of any and all Liens, except for thesecurity interest created by this Agreement. Except as otherwise permitted under Sections 6.06, 6.07 or 6.08, noeffective agreement, financing statement, assignment, Bank Lien or otherinstrument similar in effect covering all or any part of the Collateral is onfile or of record in any public office, except such as may have been filed infavor of Columbus Bank relating to this Agreement.

 

### (b)    This Agreement creates avalid security interest in the Collateral securing the payment and performancein full of the obligations of LLC II hereunder.  Upon the filing of appropriate financing statements in theapplicable filing offices in the jurisdictions listed in Schedule Bhereto, all filings, registrations and recordings necessary or appropriate tocreate and perfect the first priority security interest granted by LLC II toColumbus Bank in the Collateral will have been accomplished and will create aperfected security interest therein prior to the rights of all other Personstherein and subject to no other Bank Liens, except as otherwise permitted underSections 6.06, 6.07 or 6.08.

##  

## Section 6.05    CertainRemedies.

 

If any Event of Default shall have occurred and iscontinuing:

###  

### (a)    Columbus Bank may exercisein respect of the Collateral, in addition to other rights available to it atlaw or in equity or otherwise, all the rights and remedies of a secured partyon default under the UCC (whether or not the UCC applies to the affectedCollateral) and also may (i) require LLC II to, and LLC II hereby agreesthat it will, at its expense and upon request of Columbus Bank forthwith,assemble all or part of the Collateral as directed by Columbus Bank and make itavailable to Columbus Bank at a place to be designated by Columbus Bank that isreasonably convenient to both parties, (ii) exercise any and all rightsand remedies of LLC II under or in connection with the Collateral, (iii)foreclose or otherwise enforce Columbus Bank’s security interest in any mannerpermitted by law or provided for in 

###  

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### this Agreement, (iv) without notice except asspecified below, sell or otherwise dispose of the Collateral or any partthereof in one or more parcels at one or more public or private sales, at anyplace or places whether or not the Collateral is present at the place of sale,for cash, on credit, or for future delivery, and upon such other terms and insuch manner as Columbus Bank may, in compliance with any mandatory requirementsof applicable law, determine to be commercially reasonable, (v) recoverfrom LLC II all costs and expenses, including, without limitation, reasonableattorneys’ fees, incurred or paid by Columbus Bank in exercising any right,power, privilege or remedy provided by this Agreement or by law or in equity,(vi) without notice or demand of legal process, all of which are herebyexpressly waived by LLC II, enter into property where any Collateral or booksand records relating thereto are located and take possession thereof with orwithout judicial process, and (vii) prior to the disposition of the Collateral,prepare it for disposition in any manner and to the extent Columbus Bank deemsappropriate; provided, however, that notwithstanding theforegoing to the contrary, Columbus Bank may sell or otherwise dispose theCollateral or any part thereof in its then condition without any preparation orprocessing.  LLC II agrees that, to theextent notice of sale shall be required by law, at least ten (10) days’ priorwritten notice to LLC II of the time and place of any public sale or the timeafter which any private sale is to be made shall constitute reasonablenotification thereof.  Columbus Bankshall not be obligated to make any sale of Collateral regardless of notice ofsale having been given.  Columbus Bankmay adjourn any public or private sale from time to time by announcement at thetime and place fixed therefor, and such sale may, without further notice, bemade at the time and place to which it was so adjourned.  Upon any sale or other disposition pursuantto this Agreement, Columbus Bank shall have the right to deliver, assign andtransfer to purchaser thereof the Collateral or any part thereof and transferto the purchaser thereof the Collateral or any part thereof so sold or disposedof.  Each purchaser at any such sale orother disposition (including Columbus Bank) shall hold the Collateral free fromany claim or right of whatever kind, including any equity or right ofredemption of LLC II and LLC II specifically waives (to the extent permitted bylaw) all rights of redemption, stay or appraisal which it has or may have underany rule of law or statute now existing or hereafter adopted.

###  

### (b)    All cash proceeds receivedby Columbus Bank in respect of any sale of, collection from, or otherrealization upon all or any part of the Collateral shall be applied to theObligations.  Subject to Section9-608(a) of the UCC, if any non-cash proceeds are received in connection withany sale of Collateral, Columbus Bank shall not apply such non-cash proceeds tothe Obligations unless and until such proceeds are converted to cash; provided,however, that if such non-cash proceeds are not expected on the date ofreceipt thereof to be converted to cash within one year after such date,Columbus Bank shall nonetheless use commercially reasonable efforts to convertsuch non-cash proceeds to cash within such one year period.  Any surplus of such cash, cash proceeds ornon-cash proceeds held by Columbus Bank after payment in full of all theObligations shall be paid over to LLC II or to whomsoever may be lawfullyentitled to receive such surplus pursuant to Section 9-608 of the UCC.

###  

### (c)    Notwithstanding anything tothe contrary herein, the parties hereto acknowledge and agree that any transferof the Pledged Residual Interests (including in connection with Columbus Bank’sexercise of its rights and remedies hereunder) is subject to the terms,provisions and conditions set forth in the Indenture, including requirementsconcerning the delivery of tax opinions with respect to any such transfer andthe tax status of any transferee, 

###  

22

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### and the parties acknowledge and agree that nothingherein waives such requirements or assures their satisfaction.

##  

## Section 6.06    Substitution ofCollateral.

###  

### (a)    LLC II may from time totime substitute Eligible Collateral for the Collateral hereunder, subject tosatisfaction of the conditions set forth in this Section 6.06.

###  

### (b)    Eligible Collateral shallconsist of (i) rights of CFC to receive payments in respect of notes issuedpursuant to the Indenture, which notes shall not be subordinated to any othernotes or class of notes issued pursuant to the Indenture and beneficially ownedby the CFC or any affiliate of CFC; (ii) rights of CFC to receive distributionsunder the Trust Agreement, including, without limitation, Excess Finance ChargeCollections (as defined in the Transfer and Servicing Agreement and the relatedIndenture Supplement), which rights are, in each case, not subject to any BankLien immediately prior to grant of a security interest therein pursuant hereto(collectively, “Eligible Collateral”).

###  

### (c)    Unless Columbus Bank shallhave given its prior written consent, no substitution of Collateral pursuant tothis Section 6.06 shall result in the percentage of Excess Interest Residualscomprising the Pledged Residual Interests to exceed the percentage of ExcessInterest Residuals comprising the Residual Interests.

###  

### (d)    In connection with eachsubstitution of Collateral pursuant to this Section 6.06 LLC II shall deliverto Columbus Bank an Officer’s Certificate substantially in the form attached asExhibit C to the Pledge and Security Agreement to the effect that after givingeffect to such substitution the Residual Valuation of the Pledged ResidualInterests is greater than or equal to the amount required pursuant to clause(ii) of the definition of Minimum Residual Valuation.

##  

## Section 6.07    Release ofCollateral.

###  

### (a)    If (i) any of theCollateral shall be sold, transferred, or otherwise disposed of by LLC II in atransaction not prohibited by this Agreement or (ii) LLC II shall deliver toColumbus Bank an Officer’s Certificate substantially in the form attached asExhibit C to the Pledge and Security Agreement to the effect that after givingeffect to any sale, transfer or other disposition of any part of theCollateral, the Residual Valuation of the Pledged Residual Interests is greaterthan or equal to the amount required pursuant to clause (ii) of the definitionof Minimum Residual Valuation, then Columbus Bank shall, at the written requestof LLC II, promptly authorize, execute and deliver to LLC II (at the sole cost andexpense of LLC II) such instruments or documents necessary and as LLC II shallreasonably request to release the liens created hereby on such Collateral,including any necessary UCC amendment, termination statement or partialtermination statement.

###  

### (b)    Upon receipt of (i) awritten request from CompuCredit for release of the Collateral and (ii) anOfficer’s Certificate substantially in the form attached hereto as Exhibit E tothe Pledge and Security Agreement, Columbus Bank shall (i) direct the CustodialAgent to release and reassign all Collateral and Pledged Residual Interests,(ii) remit to LLC II any cash or other stock, instruments, documents orproperty which it has held as collateral for the Secured

###  

23

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### Obligations, and (iii) execute any documents orinstruments of release terminating its rights under this Agreement and thePledge and Security Agreement.

##  

## SECTION6.08    Liens.

###  

### (a)    LLC II may create Liens onthe Pledged Residual Interests provided the following conditions have beensatisfied prior to or contemporaneous with creation of such Lien: (i) LLC II orone of its affiliates shall have obtained a Qualifying Letter of Credit (asdefined in the Pledge and Security Agreement) in favor of Columbus Bank in anamount equal to the Substitution Amount (as defined in the Pledge and SecurityAgreement); and (ii) CompuCredit shall have provided to Columbus Bank not lessthan 10 Business Days prior to the creation of any Lien on the Pledged ResidualInterests or any portion thereof an Officer’s Certificate with respect to theResidual Valuation, which Officer’s Certificate shall be in substantially theform attached hereto as Exhibit C to the Pledge and Security Agreement.  Columbus Bank shall, if requested by LLC IIin connection with a Lien granted by LLC II in accordance with this agreement,enter into an intercreditor agreement with the holder of such Lien, whichintercreditor agreement shall contain usual and customary provisions regardingthe rights and obligations of the senior and junior lienholders.

###  

### (b)    LLC II shall not createBank Liens on the Pledged Residual Interests that would be junior to ColumbusBank’s lien hereunder, unless LLC II, shall have obtained the prior writtenconsent of Columbus Bank; provided, however, that if (i) theaggregate Residual Valuation of the Residual Interests is equal to or greaterthan $175 million, and (ii) the net proceeds of the loan or loans secured bysuch junior Bank Lien or Bank Liens on the Pledged Residual Interests are notless than $5 million, then Columbus Bank’s prior written consent shall not berequired. LLC II shall cause the grantee of the security interest therein toenter into an intercreditor agreement with Columbus Bank, which intercreditoragreement shall contain usual and customary provisions regarding the rights andobligations of the senior and junior lienholders.

#  

24

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ARTICLE VII

 

# MISCELLANEOUS PROVISIONS

 

## Section 7.01    Amendment.  This Agreement and any Conveyance Papers andthe rights and obligations of the parties hereunder and thereunder may not bechanged orally, but only by an instrument in writing signed by Columbus Bankand LLC II in accordance with this Section 7.01.

 

## Section 7.02    Governing Law.

###  

### (a)    THIS AGREEMENT SHALL BECONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUTREFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS ANDREMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCHLAWS.

###  

### (b)    ANY LEGAL ACTION ORPROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT MAYBE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THESTATE, COUNTY AND CITY OF NEW YORK, MUSCOGEE COUNTY, GEORGIA, THE CITY OFCOLUMBUS, GEORGIA, DEKALB COUNTY, GEORGIA OR THE CITY OF ATLANTA, GEORGIA.  BY EXECUTION AND DELIVERY OF THIS AGREEMENT,EACH PARTY HERETO HEREBY IRREVOCABLY CONSENTS TO AND ACCEPTS, FOR ITSELF AND INRESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY THE NON-EXCLUSIVEJURISDICTION OF SUCH COURTS.  EACH PARTYHERETO HEREBY FURTHER IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTIONTO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS,WHICH IT MAY NOW ORHEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTIONIN RESPECT OF THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT.

###  

### (c)    EACH PARTY HERETO HEREBYIRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE COURTSREFERRED TO IN SUBSECTION (b) ABOVE OF THIS SECTION 7.02 IN ANY SUCH SUIT,ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED ORCERTIFIED MAIL, RETURN RECEIPT REQUESTED, POSTAGE PREPAID, TO IT AT ITS ADDRESSSET FORTH IN THIS AGREEMENT.  EACH PARTYHERETO HEREBY IRREVOCABLY WAIVES ANY OBJECTION TO SUCH SERVICE OF PROCESS ANDFURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUIT, ACTIONOR PROCEEDING COMMENCED HEREUNDER OR UNDER ANY OTHER TRANSACTION DOCUMENT THATSERVICE OF PROCESS WAS IN ANY WAY INVALID OR INEFFECTIVE.  NOTHING HEREIN SHALL AFFECT THE RIGHT OF APARTY TO SERVE PROCESS ON THE OTHER PARTY IN ANY OTHER MANNER PERMITTED BY LAW.

##  

25

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## Section 7.03    Notices.  All demands, notices and communicationshereunder shall be in writing and shall be deemed to have been duly given ifpersonally delivered at or mailed by certified mail, return receipt requested,to (a) in the case of LLC II, 101 Convention Center Drive, Suite 850-14C,Las Vegas, NV 89109*,* Attention: President (facsimile no.(702) 598-3651), with a copy to CompuCredit Corporation, 245 Perimeter CenterParkway, Suite 600, Altanta, GA 30346, Attention: General Counsel (facsimileno. (770) 206-6187) and (b) in the case of Columbus Bank, 901 FrontAvenue, Suite 202, Columbus, Georgia 31901 or P.O. Box 120, Columbus,Georgia 31902-0120, Attention: President (facsimile no. (706) 649-4808); or, as to each party, at suchother address as shall be designated by such party in a written notice to eachother party.

##  

## Section 7.04    Severability ofProvisions.  If any one or more ofthe covenants, agreements, provisions or terms of this Agreement shall for anyreason whatsoever be held invalid, then such covenants, agreements, provisions,or terms shall be deemed severable from the remaining covenants, agreements,provisions, and terms of this Agreement and shall in no way affect the validityor enforceability of the other provisions of this Agreement.

##  

## Section 7.05    Assignment.  Notwithstanding anything to the contrarycontained herein, this Agreement may not be assigned by the parties heretowithout the prior written consent of the non-assigning party.

##  

## Section 7.06    FurtherAssurances.  Columbus Bank and LLCII agree to do and perform, from time to time, any and all acts and to executeany and all further instruments required or reasonably requested by the otherparty more fully to effect the purposes of this Agreement and the ConveyancePapers, including, without limitation, the authorization and execution of anyfinancing statements or continuation statements or equivalent documentsrelating to the Receivables for filing under the provisions of the UCC or otherlaw of any applicable jurisdiction and to provide prompt notification to theother party of any change of the principal executive office of, or thejurisdiction of organization of, such party.

##  

## Section 7.07    No Waiver;Cumulative Remedies.  No failure toexercise and no delay in exercising, on the part of Columbus Bank or LLC II,any right, remedy, power or privilege hereunder, shall operate as a waiverthereof; nor shall any single or partial exercise of any right, remedy, poweror privilege hereunder preclude any other or further exercise thereof or the exerciseof any other right, remedy, power or privilege.  The rights, remedies, powers and privileges herein provided arecumulative and not exhaustive of any rights, remedies, powers and privilegesprovided by law.

##  

## Section 7.08    Counterparts.  This Agreement and all Conveyance Papers maybe executed in two or more counterparts (and by different parties on separatecounterparts), each of which shall be an original, but all of which togethershall constitute one and the same instrument.

##  

## Section 7.09    Binding;Third-Party Beneficiaries.  ThisAgreement and the Conveyance Papers will inure to the benefit of and be bindingupon the parties hereto and their respective successors and permitted assigns.

##  

26

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## Section 7.10    Merger andIntegration.  Except as specificallystated otherwise herein, this Agreement, as supplemented by the ConveyancePapers, sets forth the entire understanding of the parties relating to thesubject matter hereof, and all prior understandings, written or oral, aresuperseded by the this Agreement and the Conveyance Papers.  This Agreement and the Conveyance Papers maynot be modified, amended, waived or supplemented except as provided herein.

##  

## Section 7.11    Headings.  The headings are for purposes of referenceonly and shall not otherwise affect the meaning or interpretation of anyprovision hereof.

##  

## Section 7.12    Schedules andExhibits.  The schedules andexhibits attached hereto and referred to herein shall constitute a part of thisAgreement and are incorporated into this Agreement for all purposes.

##  

## Section 7.13    Survival ofRepresentations and Warranties.  Allrepresentations, warranties and agreements contained in this Agreement, shallremain operative and in full force and effect and shall survive conveyance ofthe Receivables by Columbus Bank to LLC II.

 

[END OF ARTICLEVII]

 

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IN WITNESS WHEREOF, each of the parties hereto hascaused this Agreement to be duly executed by its duly authorized officer as ofthe day and year first above written.

 
|   | COLUMBUS BANK &  TRUST COMPANY |
|--------|------------------------------------|
|   |                               |
|   |                               |
|   | By:                                |   |
|   | Title:                             |   |
|   |                               |
|   | CFC II, LLC                        |
|   |                               |
|   |                               |
|   | By:                                |   |
|   | Title:                             |   |
|        |                                    |  |  |

 

28

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**Schedule4.03(a)**

 

OfficialName:  CFC II, LLCType of Entity:  Limited LiabilityCompanyOrganizational Identification Number: 27-0030584State of Organization:  Nevada

 

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## **ScheduleA**

 

## RESIDUAL INTERESTS

 

CompuCreditCredit Card Master Note Trust II Series 2001-II-One Class B Floating Rate AssetBacked Variable Funding Note in the principal sum of Thirty-Six Million NineHundred Thirty-Seven Thousand Five Hundred Dollars ($36,937,500) payable to CFCII, LLC

 

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**SCHEDULE B**

 

# JURISDICTIONS

 

Nevada

 

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