Document:

Exhibit

10.3

 

Friedli Corporate Finance

 

 

September 12, 2002

 

Mr. Kamran Amjadi

Chief Executive Officer

E-centives, Inc.

6901 Rockledge Drive, Suite 700

Bethesda, MD 

20817

 

 

 

RE: 

E-centives, Inc.

 

Dear Mr. Amjadi:

 

Please be advised that my organization,

Friedli Corporate Finance, has committed, if required, to provide E-centives

with a capital infusion of up to USD $20M for continued operations and future

business expansion purposes in both sales and marketing and M&A

initiatives.

 

Please feel free to contact me with any

questions or comments related to this matter.

 

 

 

Kind regards,

 

/s/ Peter Friedli

Peter Friedli

 

 

 

 

 

 

 

 

 

 

 

 

Friedli

Corporate Finance, Freigutstrasse 5, 8002 Zurich, Switzerland

Phone:

+41 1 283 29 00 Fax: + 41 1 283 29 01Exhibit 10.1

 

AMENDMENT

TO AFFINITY CARD AGREEMENT

 

THIS

AMENDMENT TO AFFINITY CARD AGREMENT (this “Amendment”) is dated as of September

23, 2002, among COLUMBUS BANK AND TRUST COMPANY (“CB&T”), COMPUCREDIT

CORPORATION, a Georgia corporation (“COMPUCREDIT”) and COMPUCREDIT ACQUISITION

CORPORATION, a Nevada corporation (“CAC”).

 

RECITALS

WHEREAS, CB&T, CompuCredit and CAC are parties to

that certain Affinity Card Agreement dated as of January 6, 1997 (as amended

prior to the date hereof, the “Agreement”);

 

WHEREAS,

CB&T, CompuCredit and CAC wish to amend the Agreement to extend the term

thereof and to make certain other changes, all as hereinafter set forth;

 

NOW,

THEREFORE, for and in consideration of the above premises and other good and

valuable consideration, the receipt and sufficiency of which hereby is

acknowledged by the parties hereto, the parties hereto covenant and agree as

follows:

 

Section 1.       Amendments to Agreement.  The Agreement is hereby amended as follows:

 

Section 1.1.  Section 1.1 of the Agreement is hereby

amended by the addition of the following definitions:

 

“Pledge and Security Agreement” shall mean the

Security and Pledge Agreement, dated as of the date hereof, between CompuCredit

and CB&T.

 

Section 1.2.  Section 3.3 of the Agreement is hereby

amended by deleting the third sentence thereof in its entirety.

 

Section 1.3.  Article 8.1(a) of the Agreement is hereby

amended to read as follows:

 

“This Agreement shall continue in full force and

effect until March 31, 2006 unless otherwise terminated as provided in Section

8.1(b) or (c) herein.  This Agreement

shall be extended for renewal terms of two (2) years each  (“Renewal Term”), unless one party notifies

the other party of its intent to terminate this Agreement at least 180 days

prior to the end of the term hereof or any Renewal Term.  The Termination of this Agreement shall not

terminate, affect or impair any rights, obligations or liabilities of either

party hereto that may accrue prior to such termination or that, under the terms

of this Agreement, continue after the termination.”

 

Section 1.4.  Section 8.1(b)(i)(A) shall be amended by

adding the following subparagraph (4):

 

 

(4)          an “Event of Default”

under the Pledge and Security Agreement shall have occurred, or CompuCredit

shall fail to comply with its obligation under Section 4.02(c) of the Pledge

and Security Agreement.

 

Section

8.1(b)(i)(A) shall be further amended by amending the paragraph immediately

following the numbered subparagraphs to read as follows:

 

“Notwithstanding the foregoing, except in the case of

an Event of Default described in clauses (1) or (4) above, notice of

termination  may not be sent until the

party seeking to terminate has followed the provisions of Section 8.1(f) hereof.”

 

Section 2.  Effect of Amendment. 

Except as set forth expressly hereinabove, all terms of the Agreement

shall be and remain in full force and effect, and shall constitute the

respective legal, valid, binding and enforceable obligations of the parties

thereto.

 

Section 3.  Counterparts.  This

Amendment may be executed in any number of counterparts and by different

parties hereto in separate counterparts, each of which when so executed and

delivered shall be deemed to be an original and all of which counterparts,

taken together, shall constitute but one and the same instrument.

 

Section 4.  Section References. 

Section titles and references used in this Amendment shall be without

substantive meaning or content of any kind whatsoever and are not a part of the

agreements among the parties hereto evidenced hereby.

 

Section 5.  Governing Law. 

This Amendment shall be governed by and construed and interpreted in

accordance with the laws of Georgia.

 

2

 

IN WITNESS WHEREOF, each of the parties hereto has

caused this Amendment to be duly executed, under seal, by its duly authorized

officer as of the day and year first above written.

 

	

   

  	

  COLUMBUS BANK &

  TRUST COMPANY

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

  Title:

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  COMPUCREDIT CORPORATION

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

  Title:

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  COMPUCREDIT ACQUISITION

  CORPORATION

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

  Title:

  	

   

  	

   

  
								

 

3Exhibit

10.2

 

PLEDGE

AND SECURITY AGREEMENT, dated as of September 23, 2002, by

and between COMPUCREDIT CORPORATION, a Georgia Corporation (“CompuCredit”

or “Pledgor”)

and COLUMBUS BANK AND TRUST COMPANY, a state chartered bank organized under the

laws of the State of Georgia (“CB&T” or “Secured Party”).

 

W I T N E S S E T

H:

 

WHEREAS, CB&T and CompuCredit are party to the

Receivables Purchase Agreement, dated as of October 20, 2000 and the

Receivables Purchase Agreement, dated as of July 14, 2000 (together, as the

same shall have been amended to the date hereof, the “CompuCredit Purchase

Agreement”) and the Affinity Card Agreement, dated as of January 6, 1997 (as

the same shall have been amended to the date hereof, the “Affinity Agreement”),

among CB&T, CompuCredit and CompuCredit Acquisition Corporation; and

 

WHEREAS, CB&T and CompuCredit desire to amend the

Affinity Agreement.

 

NOW, THEREFORE, in consideration of the amendment of

the Affinity Agreement and the extension of the term thereof and other good and

valuable consideration, the receipt and sufficiency of which hereby is

acknowledged by the parties hereto, it is hereby agreed by and between CB&T

and CompuCredit as follows:

 

ARTICLE I

 

DEFINITIONS

 

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

document or made or delivered pursuant hereto, and not otherwise defined herein

or therein, shall have the meaning ascribed thereto in the Affinity Agreement

or the CompuCredit Purchase Agreement; in addition, the following words and

phases shall have the following meanings:

 

“Affinity Agreement” shall mean the Affinity

Card Agreement, dated as of January 6, 1997 between CB&T, CompuCredit

and CompuCredit Acquisition Corporation, as amended to the date hereof and as

such agreement may be amended from time to time hereafter.

 

“Agreement” shall mean this Pledge and Security

Agreement and all amendments hereof and supplements hereto.

 

“Bank Lien” shall have the meanings set forth

in the Standby Receivables Purchase Agreement.

 

“Bankruptcy Event” shall mean:

 

(i)                                     CompuCredit

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

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

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

order for relief entered with respect

 

 

to it, or seeking

to adjudicate it bankrupt or insolvent, or seeking reorganization, arrangement,

adjustment, winding-up, liquidation, dissolution, composition or other relief

with respect to it or its respective debts, or (B) seeking appointment of

a receiver, trustee, custodian or other similar official for it or for all or

substantially all of its assets, or CompuCredit shall make a general assignment

for the benefit of its respective creditors; or

 

(ii)                                  the

commencement against CompuCredit of any case, proceeding or other action of a

nature referred to in clause (i) above which (A) results in the entry

of an order for relief or any such adjudication or appointment, and (B) remains

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

or

 

(iii)                               the

commencement against CompuCredit of any case, proceeding or other action

seeking issuance of a warrant of attachment, execution, distraint or similar

process against all or substantially all of its assets which results in the

entry of an order for any such relief which shall not have been vacated,

discharged, stayed, satisfied or bonded pending appeal within sixty (60) days

from the entry thereof; or

 

(iv)                              CompuCredit

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

of this definition of “Bankruptcy Event”; or

 

(v)                                 CompuCredit

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

generally as they become due; or

 

(vi)                              CompuCredit

shall not be solvent.

 

 “Business

Day” shall mean any day other than (a) a Saturday or Sunday or (b) any

other day on which national banking associations or state banking institutions

in New York, New York, Atlanta, Georgia, Columbus, Georgia or any other city in

which the principal executive offices of CB&T or CompuCredit are located,

are authorized or obligated by law, executive order or governmental decree to

be closed.

 

 “CFC I”

shall shall mean CompuCredit Funding Corp., a Nevada corporation.

 

“CFC II” shall mean CompuCredit Funding Corp.

II, a Nevada corporation.

 

“CFC Purchase Agreement” shall have the meaning

assigned thereto in the Standby Receivables Purchase Agreement.

 

“Collateral” shall have the meaning set forth

in Section 2.01.

 

 “CompuCredit

Purchase Agreement” shall have the meaning set forth in the recitals

hereto.

 

“Custodial Agent” shall mean Bank of America,

N.A.

 

2

 

“Event of Default” shall mean:

 

(i)    a Bankruptcy Event shall

have occurred;

 

(ii)   an Event of Default under

Section 8.1(b)(i)(A)(1) of the Affinity Agreement;

 

(iii)  an Event of Default shall

have occurred under the Standby Receivables Purchase Agreement; or

 

(iv)  Columbus Bank shall fail to

have a valid and perfected security interest in the Collateral which failure is

not cured within 15 days following receipt by LLC II of notice thereof and a

request to cure; or

 

(v)   Except as permitted herein,

a Bank Lien shall have been created with respect to the Collateral which Bank

Lien is not released within 15 days following receipt by LLC II of notice

thereof and a request to cure.

 

“Funding Exposure Amount” shall mean (i) the

principal amount of CB&T’s projected originations of Receivables as

determined in accordance with Exhibit A, and thereafter such greater or lesser

amount as may be determined from time to time in accordance with Exhibit A,

minus (ii) the amount of any Qualifying Letter of Credit issued in favor of

CB&T pursuant to the Affinity Agreement or pursuant to the terms hereof or

the Standby Receivables Purchase Agreement; provided, however,

that the Funding Exposure Amount shall not be reduced by the amount of such

Qualifying Letter of Credit until 90 days (or such other time period as shall

be specified in Section 547 of the bankruptcy code, as amended after the date

hereof, or any successor provision thereto) shall have elapsed following

issuance of such Qualifying Letter of Credit.

 

“Issuer” shall mean, together, the CompuCredit

Credit Card Master Note Business Trust CompuCredit Credit Card Master Note

Business Trust, a Nevada business trust, and the CompuCredit Card Master Note

Business Trust II, a Nevada business trust.

 

 “Lien”

shall have the meaning set forth in the Standby Receivables Purchase

Agreements; provided, however, that any lien or liens on receivables maintained

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

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

on the Residual Interests.

 

“Minimum Residual

Valuation” shall mean, as of any date of determination, (i) an aggregate

Residual Valuation of $150,000,000, and (ii) with respect to the Pledged

Residual Interests, a Residual Valuation of 130% of the Funding Exposure Amount

(calculated without regard to the proviso contained in the definition thereof).

 

“Pledged Residual Interests” shall mean the

Residual Interests identified in Schedule A to the Standby Receivables Purchase

Agreement, as such schedule may be revised from time to time and all rights

appurtenant thereto under the Indenture.

 

“Pledged Stock” shall mean the stock described

in Schedule A hereto.

 

3

 

“Proceeds” shall have the meaning set forth in

Section 2.01.

 

“Qualifying Letter of Credit” shall mean a

letter of credit in favor of CB&T issued by a financial institution with a

long-term debt rating from Standard & Poor’s of “A”, “A2” from Moody’s

Investors Service or the equivalent rating from another nationally recognized

statistical rating organization .  The

Qualifying Letter of Credit shall be substantially in the form attached as

Exhibit B.

 

“Residual Interests” shall mean interests in,

or secured by, the assets of the respective Issuers (including, without

limitation, notes issued pursuant to the Indenture and rights of each Issuer

under the applicable Indenture and the applicable Transfer and Servicing

Agreement to receive distributions thereunder), which interests are owned,

beneficially and of record, by CompuCredit or Affiliates of CompuCredit.

 

“Residual Valuation” shall mean, as of any date

of determination, the value of the Residual Interests owned by CFC, CFC II and

the Subsidiary LLCs, net of the fair value

of the cost to service the receivables portfolios underlying such Residual

Interests in excess of the the servicing income projected to be received

therefor, in each case determined in accordance with GAAP and reported

by CompuCredit pursuant to Section 4.02(a).

 

“Secured Obligations” shall have the meaning

set forth in Section 2.02 hereof.

 

 “Shareholder

Agreement” shall mean the Shareholder Agreement, dated as of the date

hereof, between CompuCredit and CB&T, substantially in the form attached

hereto as Exhibit D.

 

“Standby Receivables Purchase Agreement” shall

mean (i) the Receivables Purchase and Security Agreement between CB&T and

CFC, LLC, and (ii) the Receivables Purchase and Security Agreement between

CB&T and CFC II, LLC; together, the “Standby Receivables Purchase

Agreements”.

 

“Subsidiary LLC”shall mean each of CFC, LLC and

CFC II, LLC; together the “Subsidiary LLCs”.

 

“Substitution Amount” shall mean (i) with

respect to a Qualifying Letter of Credit issued in favor of CB&T in

connection with a Lien created on Pledged Residual Interests by the Subsidiary

LLCs, the greater of (x) 30% of the gross loan proceeds secured by such Lien,

and (y) $10,000,000 (ten million dollars), (ii) with respect to a Qualifying

Letter of Credit issued in favor of CB&T in connection with a Lien on the

Collateral, 10% of the gross loan proceeds secured by such Lien(s), and (iii)

with respect to a Qualified Letter of Credit issued in favor of CB&T in

connection with a Lien or Liens created on (a) the Pledged Residual Interests

by the Subsidiary LLCs and (b) the Collateral, the greater of (x) 35% of the

gross loan proceeds secured by such Lien(s), and (y) $10,000,000 (ten million

dollars).

 

“Transaction Documents” shall mean (i) the

Affinity Agreement, (ii) this Agreement, (iii) the Standby Receivables Purchase

Agreements, (iv) the Shareholder Agreement and (v) the Servicing Agreement.

 

4

 

 “UCC”

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

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

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

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

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

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

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

other jurisdiction for purposes of the provision hereof relating to such

perfection or effect of perfection or non-perfection.

 

“Valuation Date” shall have the meaning set

forth in Section 4.02(a) hereof.

 

Section 1.02   Other Definitional Provisions.

 

(a)     All terms defined in this Agreement shall

have the defined meanings when used in any certificate or other document made

or delivered pursuant hereto unless otherwise defined therein.

 

(b)    The words “hereof,” “herein”

and “hereunder” and words of similar import when used in this Agreement

shall refer to this Agreement as a whole and not to any particular provision of

this Agreement, and Section, Subsection, Schedule and Exhibit references

contained in this Agreement are references to Sections, Subsections, Schedules

and Exhibits in or to this Agreement unless otherwise specified.

 

[END OF ARTICLE I]

 

5

 

ARTICLE II

 

SECURITY INTEREST

 

Section 2.01   Security Interest.

 

Grant of Security

Interest.  To secure

the obligations of CompuCredit and the Subsidiary LLCs to CB&T in respect

of the Funding Exposure Amount and for so long as the Funding Exposure Amount

is a positive amount, Pledgor hereby pledges and assigns to Secured Party, and

hereby grants to Secured Party a security interest in, all of Pledgor’s right,

title, and interest in and to the Pledged Stock, together with whatever is

receivable or received when any of the Pledged Stock or proceeds thereof or

dividends paid thereon are sold, collected, exchanged or otherwise disposed of,

whether such disposition is voluntary or involuntary (collectively, the “Collateral”),

including without limitation, (a) all rights to payment, including

returned premiums, with respect to any insurance relating to any of the

foregoing, (b) all rights to payment with respect to any cause of action

affecting or relating to any of the foregoing, and (c) all stock rights,

rights to subscribe, stock splits, liquidating dividends, cash dividends,

dividends paid in stock, new securities or other property of any kind which

Pledgor is or may hereafter be entitled to receive on account of any securities

pledged hereunder, including without limitation, stock received by Pledgor due

to stock splits or dividends paid in stock or sums paid upon or in respect of

any securities pledged hereunder upon the liquidation or dissolution of the

issuer thereof (collectively, “Proceeds”); provided, however,

unless and until an Event of Default has occurred and is continuing Pledgor has

the right to receive and retain for its own use any dividends and interest on

the Pledged Stock.

 

Section 2.02   Obligations Secured.  This Agreement secures, and the Collateral

is collateral security for, the obligations of CompuCredit and the Subsidiary

LLCs to CB&T in respect of the Funding Exposure Amount (the “Secured

Obligations”).  The pledge

and security interest granted hereunder shall terminate effective upon the

reduction of the Funding Exposure Amount to zero.

 

(a)    Delivery of Pledged Stock.  All certificates or instruments representing

or evidencing the Pledged Stock shall be delivered to the Custodial Agent and

held on behalf of Secured Party on the date hereof simultaneously with the

execution and delivery of this Agreement pursuant hereto and shall be in

suitable form for transfer by delivery or, as applicable, shall be accompanied

by Pledgor’s endorsement, where necessary, or duly executed instruments of

transfer or assignment (including stock powers) in blank, all in form and

substance satisfactory to Secured Party.

 

(b)    Powers of Secured Party.  Pledgor appoints Secured Party its true

attorney in fact to perform any of the following powers, which are coupled with

an interest, are irrevocable until termination of this Agreement and upon the

occurrence and continuation of an Event of Default may be exercised from time

to time by Secured Party’s officers and employees, or any of them:  (a) to perform any obligation of Pledgor

hereunder in Pledgor’s name or otherwise; (b) to notify any person

obligated on any security, instrument or other document subject to this

Agreement of Secured Party’s rights hereunder; (c) to collect by legal

proceedings or otherwise all dividends,

 

6

 

interest, principal or other sums now or hereafter

payable upon or on account of the Collateral or Proceeds; (d) to make any

compromise or settlement Secured Party deems desirable or proper in respect of

the Collateral and Proceeds; (e) to insure, process and preserve the

Collateral and Proceeds; (f) to exercise all rights, powers and remedies

which Pledgor would have, but for this Agreement, with respect to all Collateral

and Proceeds subject hereto; and (g) to do all acts and things and execute

all documents in the name of Pledgor or otherwise, deemed by Secured Party as

necessary, proper and convenient in connection with the preservation,

perfection or enforcement of its rights hereunder.  To effect the purposes of this Agreement, upon the occurrence and

continuation of an Event of Default or otherwise upon instructions of Pledgor,

Secured Party may cause any Collateral and/or Proceeds to be transferred to the

name of Secured Party’s nominee.  If an

Event of Default has occurred and is continuing, any or all Collateral and/or

Proceeds consisting of securities may be registered, without notice, in the

name of Secured Party’s nominee, and thereafter Secured Party’s nominee may

exercise, without notice, all voting and corporate rights at any meeting of the

shareholders of the issuer thereof, any and all rights of conversion, exchange

or subscription, or any other rights, privileges or options pertaining to such

Collateral and/or Proceeds, all as if it were the absolute owner thereof.  The foregoing shall include, without

limitation, the right of Secured Party’s nominee to exchange, at its

discretion, any and all Collateral and/or Proceeds upon the merger,

consolidation, reorganization, recapitalization or other readjustment of the

issuer thereof, or upon the exercise by the issuer thereof or Secured Party of

any right, privilege or option pertaining to any shares of the Collateral

and/or Proceeds, and in connection therewith, the right to deposit and deliver

any and all of the Collateral and/or Proceeds with any committee, depository,

transfer agent, registrar or other designated agency upon such terms and

conditions as Secured Party may determine. 

All of the foregoing rights, privileges or options may be exercised

without liability on the part of Secured Party’s nominee except to account for

property actually received by Secured Party. 

Secured Party shall have no duty to exercise any of the foregoing, or

any other rights, privileges or options with respect to the Collateral or

Proceeds and shall not be responsible for any failure to do so or delay in so

doing.

 

7

 

ARTICLE III

 

REPRESENTATIONS AND WARRANTIES

 

Section 3.01   Representations and Warranties.  Pledgor represents and warrants to Secured

Party that (a) Pledgor is the owner and, prior to the delivery of the

Pledged Stock to Secured Party, has possession or control of the Collateral and

Proceeds; (b) Pledgor has the right (and has obtained any necessary

consents) to pledge the Collateral and Proceeds; (c) all Collateral and

Proceeds are free from liens and adverse claims, of any kind or character,

except the lien created hereby; and (d) all statements and representations

and warranties of the Pledgor contained herein are true and complete in all

material respects.

 

[END OF ARTICLE

III]

 

8

 

ARTICLE IV

 

COVENANTS

 

Section 4.01   Covenants of Pledgor.

 

(a)    Pledgor agrees (i) to pay and perform

all Secured Obligations when due; (ii) to permit Secured Party to exercise

its powers; and (iii) to execute and deliver such documents as Secured

Party reasonably deems necessary to create, perfect and continue the security

interests contemplated hereby.

 

(b)    Until the pledge and security interest

granted hereunder terminates in accordance with Section 2.02, Pledgor agrees,

with regard to the Collateral and Proceeds, unless Secured Party agrees

otherwise in writing in its sole discretion, (i) except as permitted

pursuant to Section 4.03 hereof, not to permit any Bank Lien on the Collateral

or Proceeds, except in favor of Secured Party; (ii) other than as

permitted pursuant to Section 4.03 hereof, not to sell, hypothecate or

otherwise dispose of, nor permit the transfer by operation of law of, any of

the Collateral or Proceeds or any interest therein, including, without

limitation, pursuant to any hedging, factoring, collars, straddles, swaps or

other derivative instruments in respect of the Pledged Stock; (iii) to

keep, in accordance with generally accepted accounting principles, complete and

accurate records regarding all Collateral and Proceeds, and to permit Secured

Party to inspect the same and make copies thereof at any reasonable time with reasonable

notice; (iv) to provide any service and do any other acts which may be

necessary to keep all Collateral and Proceeds free and clear of all defenses,

rights of offset and counterclaims; and (v) if the Collateral or Proceeds

consists of securities and so long as no Event of Default exists, to vote said

securities and to give consents, waivers and ratifications with respect

thereto, provided that no vote shall be cast or consent, waiver or ratification

given or action taken which would impair Secured Party’s interests in the

Collateral and Proceeds or be inconsistent with or violate any provisions of

this Agreement.

 

(c)    Pledgor agrees to pay, prior to delinquency,

all taxes, charges, liens and assessments against the Collateral and Proceeds

arising from the Pledgor’s ownership of the Collateral and Proceeds, and upon

the failure of Pledgor to do so, Secured Party at its option may pay any of

them and shall in its reasonable discretion determine the legality or validity

thereof and the amount necessary to discharge the same.  Any such payments made by Secured Party

shall be obligations of Pledgor to Secured Party, due and payable immediately

upon demand, together with interest at the rate of 3 percentage points above

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

and shall be secured by the Collateral and Proceeds, subject to all terms and

conditions of this Agreement.

 

Section 4.02   Minimum Residual Valuation; Officer’s

Certificate.

 

(a)   CompuCredit shall deliver to CB&T an Officer’s

Certificate on the 20th day of each month (or if such day is not a Business

Day, the next succeeding Business Day) in substantially the form attached

hereto as Exhibit C to the effect that as of the last day of the immediately

preceding calendar month (the “Valuation Date”) the aggregate Residual

Valuation

 

9

 

of the Residual Interests as a whole and the aggregate

Residual Valuation of the Pledged Residual Interests are in each case greater

than or equal to the Minimum Residual Valuation with respect thereto.

 

(b)   In addition to the Officer’s Certificate

deliverable pursuant to the preceding subsection (a), CompuCredit shall deliver

to CB&T within five Business Days of receipt of CB&T’s request therefor

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

C.  Any such request submitted by

CB&T shall identify with reasonable specificity the circumstance or

circumstances that give rise to CB&T belief that there may have occurred a

material decrease in the Residual Valuation.

 

(c)   If as of any Valuation Date the Residual

Valuation does not equal or exceed the Minimum Residual Valuation, or if for

any other reason CompuCredit is unable to deliver to CB&T the Officer’s

Certificate required pursuant to either of the preceding subsections (a) and

(b), CompuCredit shall have 15 calendar days from the date such Officer’s

Certificate was deliverable, in the case of an Officer’s Certificate

deliverable pursuant to subsection (a), or 15 calendar days from the date of

receipt of CB&T’s request therefor, in the case of an Officer’s Certificate

deliverable pursuant to subsection (b) (or, in either case, if such 15th

calendar day is not a Business Day, the next succeeding Business Day) to (A) obtain

a Qualifying Letter of Credit in favor of CB&T in an amount equal to the

Funding Exposure Amount, but without regard to the proviso contained in the

definition thereof, determined as of such Valuation Date, or (B) deliver to

CB&T an Officer’s Certificate substantially in the form attached hereto as

Exhibit C to the effect that the aggregate Residual Valuation of the Residual

Interests as a whole and the aggregate Residual Valuation of the Pledged

Residual Interests are, as of the date of such Officer’s Certificate, in each

case greater than or equal to the Minimum Residual Valuation with respect

thereto.

 

Section 4.03   Liens.

 

(a)    Until the pledge and security interest

granted hereunder terminates in accordance with Section 2.02, and except as

otherwise permitted in this Section 4.03, CompuCredit shall not permit there to

exist any Bank Lien on the Pledged Residual Interests.

 

(b)    CompuCredit may permit the Subsidiary LLCs

to create Liens on the Pledged Residual Interests provided the following

conditions have been satisfied prior to or contemporaneous with creation of

such Lien: (i) the applicable Subsidiary LLC or CompuCredit shall have obtained

a Qualifying Letter of Credit in favor of CB&T in an amount equal to the

Substitution Amount; and (ii) CompuCredit shall have provided to CB&T not

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

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

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

substantially the form attached hereto as Exhibit C.

 

(c)    CompuCredit may create Liens on the

Collateral provided the following conditions have been satisfied prior to or

contemporaneous with the creation of such Lien:

 

(i)    CompuCredit

shall have obtained a Qualifying Letter of Credit in favor of CB&T in an

amount equal to the Substitution Amount; and

 

10

 

(ii)   CompuCredit

shall have provided to CB&T not less than 10 Business Days prior to the

creation of any Lien on the Collateral or any portion thereof an Officer’s

Certificate with respect to the Residual Valuation, which Officer’s Certificate

shall be in substantially the form attached hereto as Exhibit C.

 

CB&T shall, if requested by CompuCredit in connection

with a Lien granted by CompuCredit in accordance with this agreement, enter

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

intercreditor agreement shall contain usual and customary provisions regarding

the rights and obligations of the senior and junior lienholders.

 

(d)    CompuCredit shall not create Bank Liens on

the Collateral that would be junior to CB&T’s lien, and shall not permit a

Subsidiary LLC to create Bank Liens on the Pledged Residual Interests that

would be junior to CB&T’s lien, unless CompuCredit or such Subsidiary LLC,

shall have obtained the prior written consent of CB&T; provided, however,

that if (i) the aggregate Residual Valuation of the Residual Interests is equal

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

secured by such junior lien or liens on the Pledged Residual Interests and/or

the Collateral are not less than $5 million, then CB&T’s prior written

consent shall not be required. CompuCredit shall cause the grantee of the

security interest therein to enter into an intercreditor agreement with

CB&T, which intercreditor agreement shall contain usual and customary

provisions regarding the rights and obligations of the senior and junior

lienholders.

 

(e)    Upon receipt of (i) a written request from

CompuCredit for release of the Collateral and (ii) an Officer’s Certificate

substantially in the form attached as Exhibit E, CB&T shall (i) direct the

Custodial Agent to release and reassign all Pledged Stock and Pledged Residual

Interests, (ii) remit to CompuCredit any cash or other stock, instruments,

documents or property which it has held as collateral for the Secured

Obligations, and (iii) execute any documents or instruments of release

terminating its rights under this Agreement, the Shareholder Agreement and the

Standby Receivables Purchase Agreement.

 

[END OF ARTICLE

IV]

 

11

 

ARTICLE V

 

REMEDIES

 

Section 5.01   Remedies.  Upon the occurrence of any Event of Default, Secured Party shall

have the right to declare immediately due and payable all or any of the Secured

Obligations.  Secured Party shall have

all other rights, powers, privileges and remedies granted to a secured party

upon default under the UCC or otherwise provided by law and the right to

contact all persons obligated to Pledgor on any Collateral or Proceeds and to

instruct such persons to deliver all Collateral and/or Proceeds directly to

Secured Party.  All rights, powers,

privileges and remedies of Secured Party shall be cumulative.  No delay, failure or discontinuance of

Secured Party in exercising any right, power, privilege or remedy hereunder

shall affect or operate as a waiver of such right, power, privilege or remedy;

nor shall any single or partial exercise of any such right, power, privilege or

remedy preclude, waive or otherwise affect any other or further exercise

thereof or the exercise of any other right, power, privilege or remedy.  Any waiver, permit, consent or approval of

any kind by Secured Party of any default hereunder, or any such waiver of any

provisions or conditions hereof, must be in writing and shall be effective only

to the extent set forth in writing. 

Upon the occurrence and during the continuance of a Event of Default,

Secured Party may appropriate the Collateral and apply all Proceeds toward

repayment of the Secured Obligations. 

For any Collateral or Proceeds consisting of securities, Secured Party

shall have no obligation to delay a sale of any portion thereof for the period

of time necessary to permit the issuer thereof to register such securities for

public sale under any applicable state or Federal law, even if the issuer

thereof would agree to do so.

 

Section 5.02   Disposition of Collateral and Proceeds.  Upon the transfer of all or any part of the

Secured Obligations, Secured Party may transfer all or any part of the

Collateral or Proceeds and shall be fully discharged thereafter from all

liability and responsibility with respect to any of the foregoing so

transferred, and the transferee shall be vested with all rights and powers of

Secured Party hereunder with respect to any of the foregoing so transferred;

but with respect to any Collateral or Proceeds not so transferred, Secured

Party shall retain all rights, powers, privileges and remedies herein

given.  Any proceeds of any disposition

of any of the Collateral or Proceeds, or any part thereof, may be applied by

Secured Party to the payment of expenses incurred by Secured Party in

connection with the foregoing, including reasonable attorneys’ fees, and the

balance of such proceeds may be applied by Secured Party toward the payment of

the Secured Obligations in such order of application as Secured Party may from

time to time elect.

 

12

 

ARTICLE VI

 

MISCELLANEOUS PROVISIONS

 

Section 6.01   Amendment.  This Agreement and the rights and obligations of the parties

hereunder and thereunder may not be changed orally, but only by an instrument

in writing signed by CB&T and CompuCredit in accordance with this

Section 6.01.

 

Section 6.02   Governing Law.

 

(a)     THIS AGREEMENT SHALL BE CONSTRUED IN

ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS

CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE

PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

 

(b)    ANY LEGAL ACTION OR PROCEEDING WITH RESPECT

TO THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT MAY BE BROUGHT IN ANY STATE

OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE, COUNTY AND CITY OF NEW

YORK, MUSCOGEE COUNTY, GEORGIA, THE CITY OF COLUMBUS, GEORGIA, DEKALB COUNTY,

GEORGIA OR THE CITY OF ATLANTA, GEORGIA. 

BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH PARTY HERETO HEREBY

IRREVOCABLY CONSENTS TO AND ACCEPTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY,

GENERALLY AND UNCONDITIONALLY THE NON-EXCLUSIVE JURISDICTION OF SUCH

COURTS.  EACH PARTY HERETO HEREBY

FURTHER IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING

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

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

JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT.

 

(c)     EACH PARTY HERETO HEREBY IRREVOCABLY

CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE COURTS REFERRED TO IN

SUBSECTION (b) ABOVE OF THIS SECTION 6.02 IN ANY SUCH SUIT, ACTION OR

PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL,

POSTAGE PREPAID, RETURN RECEIPT REQUESTED, TO IT AT ITS ADDRESS SET FORTH IN THIS

AGREEMENT.  EACH PARTY HERETO HEREBY

IRREVOCABLY WAIVES ANY OBJECTION TO SUCH SERVICE OF PROCESS AND FURTHER

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

PROCEEDING COMMENCED HEREUNDER OR UNDER ANY OTHER TRANSACTION DOCUMENT THAT

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

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

 

13

 

Section 6.03   Notices. 

All demands, notices and communications hereunder shall be in writing

and shall be deemed to have been duly given if personally delivered at or

mailed by certified mail, return receipt requested, to (a) in the case of

CompuCredit, 245 Perimeter Center Parkway, Suite 600, Atlanta, Georgia

30346, Attention: General Counsel (facsimile no. (770) 206-6187), and

(b) in the case of CB&T, 901 Front Avenue, Suite 202,

Columbus, Georgia 31901 or P.O. Box 120, Columbus, Georgia 31902-0120,

Attention:  President (facsimile no.

(706) 649-4808); or, as to each party, at such other address as shall be

designated by such party in a written notice to each other party.

 

Section 6.04   Severability of Provisions.  If any one or more of the covenants,

agreements, provisions or terms of this Agreement shall for any reason

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

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

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

or enforceability of the other provisions of this Agreement.

 

Section 6.05   Assignment.  Notwithstanding anything to the contrary contained herein, this

Agreement may not be assigned by the parties hereto without the prior written

consent of the non-assigning party.

 

Section 6.06   Further Assurances.  CB&T and CompuCredit agree to do and

perform, from time to time, any and all acts and to execute any and all further

instruments required or reasonably requested by the other party more fully to

effect the purposes of this Agreement, including, without limitation, the

execution of any financing statements or continuation statements or equivalent

documents relating to the Collateral for filing under the provisions of the UCC

or other law of any applicable jurisdiction and to provide prompt notification

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

jurisdiction of organization of, such party.

 

Section 6.07   No Waiver; Cumulative Remedies.  No failure to exercise and no delay in

exercising, on the part of CB&T or CompuCredit, any right, remedy, power or

privilege hereunder, shall operate as a waiver thereof; nor shall any single or

partial exercise of any right, remedy, power or privilege hereunder preclude any

other or further exercise thereof or the exercise of any other right, remedy,

power or privilege.  The rights,

remedies, powers and privileges herein provided are cumulative and not

exhaustive of any rights, remedies, powers and privileges provided by law.

 

Section 6.08   Counterparts.  This Agreement may be executed in two or

more counterparts (and by different parties on separate counterparts), each of

which shall be an original, but all of which together shall constitute one and

the same instrument.

 

Section 6.09   Binding; Third-Party Beneficiaries.  This Agreement will inure to the benefit of

and be binding upon the parties hereto and their respective successors and

permitted assigns.

 

Section 6.10   Headings.  The headings are for purposes of reference only and shall not

otherwise affect the meaning or interpretation of any provision hereof.

 

14

 

Section 6.11   Schedules and Exhibits.  The schedules and exhibits attached hereto

and referred to herein shall constitute a part of this Agreement and are

incorporated into this Agreement for all purposes.

 

[END OF ARTICLE

VII]

 

15

 

IN WITNESS WHEREOF, each

of the parties hereto has caused this Agreement to be duly executed by its duly

authorized officer as of the day and year first above written.

 

	

   

  	

  COLUMBUS BANK &

  TRUST COMPANY

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

  Title:

  	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  COMPUCREDIT CORPORATION

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

  Title:

  	

   

  	

   

  
							

 

16

 

Schedule A

 

PLEDGED STOCK

 

Share

Certificate No. 3 representing 490 shares of CompuCredit Funding Corp. common

stock owned by CompuCredit Corporation

 

Share

Certificate No. 2 representing 490 shares of CompuCredit Funding Corp. II

common stock owned by CompuCredit Corporation

 

I

 

EXHIBIT A

 

CALCULATION OF

GROSS FUNDING EXPOSURE AMOUNT

 

The

following is the method for calculating the amount described in clause (i) of

the definition of Funding Exposure Amount (the amount determined pursuant to

this Exhibit, the “Gross Funding Exposure Amount”).

 

VARIABLES

 

“S”                          Average Daily

Settlement Amount:  The average

daily principal amount of receivables generated (“Average Daily Originations”)

in Accounts that are subject to the Affinity Agreement (as amended) over the

preceding two quarters.  The Average

Daily Settlement Amount initially is $3 million.

 

“DNon-Reg.”              Standard Account Closure Period

– Non-Regulatory States:  The

applicable standard logistical period for the preparation and mailing of

notices (15 days; “Logistical Period”) following the last date (“Purchase

Termination Date”) on which receivables are purchased pursuant to the

CompuCredit Purchase Agreement during which period CB&T projects it will

continue to fund purchases and cash advances under the accounts in those states

that do not require advance notice of the closure of accounts to new purchase

and cash advance transactions (“Non-Regulatory States”; currently, all states

except CA).

 

“DReg.”                    Extended Account Closure Period

– Regulatory States:  The number of

days following the Purchase Termination Date that CB&T projects it will

continue to fund purchases and advances under the accounts in those states that

impose cardholder notice obligations or other substantive restrictions that

require advance notice of account closure to new transactions (“Regulatory

States”).  Initially, California is the

only state in which accounts are maintained that requires an advance notice

period.  That period is 30 days

plus a ten day logistical period for a total Extended Account Closure Period

for California residents of 40 days.

 

“PNon-Reg.”               Percentage of Accounts

Maintained in Non-Regulatory States: 

The percentage of accounts, determined on the basis of the Average Daily

Principal Balance over the preceding two calendar quarters of Accounts that are

open in Non-Regulatory States as of the date of the calculation of the Funding

Exposure Amount.  This percentage

initially is 89.24%. CompuCredit will provide to CB&T the calculation of

this percentage on each Adjustment Date.

 

“PReg.”                     Percentage of Accounts

Maintained in Regulatory States: 

The percentage of accounts, determined on the basis of Average Daily

Principal Balance over the

 

A-1

 

preceding two calendar

quarters of Accounts that are open in Regulatory States as of the date of the

calculation of the Funding Exposure Amount. 

This percentage initially is 10.76%. 

CompuCredit will provide to CB&T the calculation of this percentage

on each Adjustment Date.

 

The Gross Funding

Exposure Amount is the sum of (i) the product of (x) the Average Daily

Settlement Amount, (y) the Standard Account Closure Period, and (z) the

decimal equivalent of the percentage of accounts maintained in Non-Regulatory

States, and (ii) the sum of the product(s) (calculated separately for each

Regulatory State) of (x) the Average Daily Settlement Amount, (y) the

applicable Extended Account Closure Period for the Regulatory State, and (z)

the decimal equivalent of the percentage of accounts maintained in the

Regulatory State.

 

The Gross Funding

Exposure Amount is determined as follows:

 

Gross Funding Exposure

Amount = (S)(DNon-Reg.)(PNon-Reg.) + (S) å(DReg.)(PReg.)

 

The Gross Funding

Exposure Amount as of the date hereof is:

 

$3,000,000 (0.8924) (15)

+ $3,000,000 (0.1076) (40) = $53,070,000

 

ADJUSTMENTS

 

Average Daily Settlement

Amount:  Beginning on

July 31, 2003 and once every six months thereafter (each such date, an

“Adjustment Date”) this amount will be adjusted; provided, however, that in the

event an additional state is designated a Regulatory State pursuant to the

following paragraph, or a state previously designated a Regulatory State is

designated a Non-Regulatory State pursuant to the following paragraph, the

Gross Funding Exposure Amount will be promptly recalculated following such

designation with any increase in Gross Funding Exposure Amount to take

effect 90 days following such designation.

 

Change In State or

Federal Law Or Association Rules:  In the event that (A) there has occurred a change in (i) state or

federal law, rule or regulation, (ii) an association rule or (iii) the policies

of federal or state regulators or cardholder associations that imposes

cardholder notice obligations or other substantive restrictions that require

that accounts remain open following notice of termination, and (B) prudent and

commercially reasonable practices in the industry dictate a change in account

closure policies with respect to the Accounts, then the calculations herein

described will in good faith be adjusted in consultation among CB&T,

CompuCredit and their respective external counsel, so as to afford a

substantially similar degree of funding exposure protection regarding said

state or federal law or association rule equal to that afforded herein.  In the event that CompuCredit and CB&T

cannot, within 5 business days of notice from one party to another of an

asserted change in policy, resolve a dispute as to whether such change in

legal, regulatory or cardholder association policy has occurred, or whether

prudent and commercially reasonable practices in the industry dictate a change

in account

 

A-2

 

closure policies with

respect to the Accounts, then such dispute shall be submitted for arbitration

to independent legal counsel with expertise in the pertinent legal and

regulatory issues, which independent legal counsel shall be acceptable to each

of the parties.  Upon expiration of the

5 day dispute resolution period described in the preceding sentence, the

parties shall have 10 business days to submit such dispute, together with their

respective supporting materials, to the designated arbitrator.

 

A-3

 

EXHIBIT B

 

FORM OF QUALIFYING LETTER OF CREDIT

 

Date:                           

 

IRREVOCABLE

STANDBY LETTER OF CREDIT

NUMBER:                                  

 

	

  Beneficiary

  	

   

  	

  Applicant

  	

   

  
	

  Columbus Bank and Trust

  Company

  	

  CompuCredit Corporation

  
	

  1125 First Avenue

  	

  245 Perimeter Center Pkwy.

  
	

  Second Floor, Uptown

  Center

  	

  Suite 600

  
	

  Columbus, Georgia 31901

  	

  Atlanta, Georgia 30346

  
	

   

  	

   

  
	

   

  	

  Amount

  	

   

  
	

   

  	

  Not Exceeding USD $

                  

  	

   

  
	

   

  	

  Not Exceeding

                             

  	

   

  
	

   

  	

  and 00/100’s US Dollars

  
	

   

  	

   

  
	

   

  	

  Expiration

  	

   

  
	

   

  	

                                              

  	

  At Our Counters

  
						

 

WE HEREBY ESTABLISH IN YOUR FAVOR

OUR IRREVOCABLE STANDBY LETTER OF CREDIT NUMBER

                       

WHICH IS AVAILABLE WITH                             

BY PAYMENT AGAINST PRESENTATION OF THE ORIGINAL OF THIS LETTER OF CREDIT AND

YOUR DRAFTS AT SIGHT DRAWN ON

                           ,

ACCOMPANIED BY THE DOCUMENTS DETAILED BELOW:

 

A PURPORTEDLY SIGNED

STATEMENT, OF AN OFFICER OF THE BENEFICIARY CERTIFYING THAT AN EVENT OF DEFAULT

HAS OCCURRED UNDER THAT CERTAIN AFFINITY CARD AGREEMENT DATED

                      

BETWEEN YOU AND COMPUCREDIT CORPORATION’S FAILURE TO PERFORM UNDER SAID

AFFINITY CARD AGREEMENT.

 

WE HEREBY AGREE WITH YOU

THAT THE DRAFT(S) DRAWN UNDER AND IN COMPLIANCE WITH THE TERMS OF THIS LETTER

OF CREDIT WILL BE DULY HONORED UPON PRESENTATION, AS SPECIFIED HEREIN.

 

THIS LETTER OF CREDIT IS

SUBJECT TO THE INTERNATIONAL STANDBY PRACTICES 1998, ICC PUBLICATION NO. 590.

 

IF YOU REQUIRE ANY ASSISTANCE OR HAVE ANY QUESTIONS

REGARDING THIS TRANSACTION, PLEASE CALL XXX-XXX-XXXX.

 

	

   

  	

   

  	

   

  	

   

  
	

  AUTHORIZED SIGNATURE

  	

  AUTHORIZED SIGNATURE

  

 

THIS DOCUMENT CONSISTS OF

1 PAGE(S)

 

B-1

 

EXHIBIT

C

 

OFFICER’S

CERTIFICATE REGARDING RESIDUAL VALUATION

 

 

I am

           [Officer Name]

                    .  As of the date hereof, I am the

        [title]

              

of CompuCredit Corporation (herein “CCRT”) and am duly authorized by CCRT and

fully qualified to make on behalf of myself and CCRT this Certificate and to

deliver same to Columbus Bank and Trust Company (“CB&T”), a federally

regulated depository institution, for its material reliance thereon.

 

As defined in the Pledge

and Security Agreement, dated as of September 23, 2002, the aggregate Residual

Valuation of the Residual Interests as a whole and the aggregate Residual

Valuation of the Residual Interests owned by the LLC Subsidiaries are in each

case greater than or equal to the Minimum Residual Valuation with respect

thereto.

 

IN WITNESS WHEREOF, I

have hereunto set my hand on and of this      day of

      , 2002.

 

	

   

  	

   

  	

   

  
	

   

  	

  Name:

  
	

   

  	

  Title:

  

 

C-1

 

EXHIBIT

D

 

SHAREHOLDERS

AGREEMENT

 

SHAREHOLDERS AGREEMENT,

dated as of September 23, 2002 by and between Columbus Bank and Trust Company,

a state chartered bank organized under the laws of the State of Georgia

(“CB&T”), and CompuCredit Corporation, a Georgia corporation

(“CompuCredit”) (CB&T and CompuCredit sometimes hereinafter collectively

referred to as the “Shareholders” or individually as a “Shareholder”).

 

PREAMBLE

 

WHEREAS, CompuCredit and

CB&T are entering into an Amendment to Affinity Card Agreement, dated as of

September 23, 2002 (the “Amendment”); and

 

WHEREAS, in order to

secure its obligations under the the Affinity Card Agreement, as amended,

CompuCredit has pledged 49% of the shares of common stock of each of

CompuCredit Funding Corp. and CompuCredit Funding Corp. II (each, a “Company”

and together, the “Companies”) set forth in Schedule A to the Pledge and Security

Agreement, dated as of September 23, 2002, between CompuCredit and CB&T

(the “Pledge and Security Agreement”).

 

NOW, THEREFORE, in consideration of the mutual

covenants and agreements contained herein and other good and valuable

consideration, the receipt and sufficiency of which are hereby acknowledged,

the parties hereto agree as follows:

 

ARTICLE I

 

ELECTION OF DIRECTORS

 

Section 7.01   Election of Directors.  So long as no Event of Default shall have

occurred and be continuing, CompuCredit shall have the right to exercise all

voting, consensual and other powers of ownership pertaining to the Collateral

for all purposes not inconsistent with the terms of this Agreement and the

Pledge and Security Agreement.  During

any period when both (a) an Event of Default has occurred and is continuing,

and (b) a Company is not distributing as dividends to holders of its common

stock amounts that CB&T reasonably determines to be appropriate,

CompuCredit hereby covenants and agrees to vote all shares of capital stock of

such Company presently owned or hereafter acquired by them (whether owned of

record or over which any person exercises voting control), at any time at which

stockholders of the Company will have the right to or will vote for or render

consent in writing regarding the election or removal of directors of the

Company, or an increase or decrease in the number of directors in favor of and

in order to elect as directors of such Company such persons as shall be

designated by CB&T.

 

D-1

 

ARTICLE II

 

MISCELLANEOUS

 

Section 8.01   Transfer of Stock.  CompuCredit agrees not to transfer any of

the shares of capital stock of the Companies unless the transferee (including

transferees obtaining such shares in connection with a Permitted Transfer, as

hereinafter defined) agrees in writing to be bound by the terms and conditions

of this Agreement and executes a counterpart of this Agreement, and unless

CompuCredit has complied with applicable law in connection with such transfer.

 

Section 8.02   Duration of Agreement.  The rights and obligations of each party

under this Agreement shall terminate upon the termination of the Pledge and

Security Agreement.

 

Section 8.03   Severability; Governing Law.  If any provisions of this Agreement shall be

determined to be illegal or unenforceable by any court of law, the remaining

provisions shall be severable and enforceable in accordance with their

terms.  This Agreement shall be governed

by, and construed in accordance with, the internal laws of the State of New

York.

 

Section 8.04   Costs of Enforcement.  If any action at law or in equity is

necessary to enforce or interpret the terms of this Agreement, the prevailing

party shall be entitled to reasonable attorneys’ fees, costs and necessary

disbursements in addition to any other relief to which such party may be

entitled.

 

Section 8.05   Binding Effect.  This Agreement shall be binding upon and

inure to the benefit of the parties hereto and their respective permitted

successors and assignees, legal representatives and heirs.  Nothing in this Agreement, express or

implied, is intended to confer upon any party other than the parties hereto or

their respective successors and assigns any rights, remedies, obligations, or

liabilities under or by reason of this Agreement, except as expressly provided

in this Agreement.

 

Section 8.06   Modification or Amendment.  Neither this Agreement nor any provisions

hereof can be modified, amended, changed, discharged or terminated except by an

instrument in writing, signed by each of the Shareholders.

 

Section 8.07   Counterparts.  This Agreement may be executed in one or

more counterparts, each of which shall be deemed to be an original, but all of

which taken together shall constitute one and the same instrument.

 

Section 8.08   Notices.  All notices to be given or otherwise made to any party to this

Agreement shall be deemed to be sufficient if contained in a written

instrument, delivered by hand in person, or by express overnight courier

service, or by electronic facsimile transmission (with a copy sent by first

class mail, postage prepaid), or by registered or certified mail, return

receipt requested, postage prepaid, addressed to such

 

D-2

 

party at the address set forth herein or at such other

address as may hereafter be designated in writing by the addressee to the

addressor listing all parties.

 

All such notices shall be

effective and deemed duly given when received or when attempted delivery is

refused.

 

Section 8.09   Definitions.  Capitalized terms not otherwise defined herein shall have the

meaning ascribed thereto in the Pledge and Security Agreement.

 

Section 8.10   No Other Agreements.  Each party represents that he has not

granted and is not a party to any proxy, voting trust or other agreement which

is inconsistent with or conflicts with the provisions of this Agreement, and no

party shall grant any proxy or become party to any voting trust or other

agreement which is inconsistent with or conflicts with the provisions of this

Agreement.

 

D-3

 

IN WITNESS WHEREOF, the

parties hereto have executed this agreement in counterparts as of the date

first above specified.

 

	

   

  	

  COMPUCREDIT CORPORATION

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

  Name:

  
	

   

  	

  Title:

  
	

   

  	

   

  
	

   

  	

  COLUMBUS BANK AND TRUST

  COMPANY

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

  Name:

  
	

   

  	

  Title:

  
						

 

D-4

 

EXHIBIT

E

 

OFFICER’S

CERTIFICATE REGARDING FUNDING EXPOSURE AMOUNT

 

 

I am

         [Officer Name]

                   .  As of the date hereof, I am the

          [title]

              

of CompuCredit Corporation (herein “CCRT”) and am duly authorized by CCRT and

fully qualified to make on behalf of CCRT this Certificate and to deliver same

to Columbus Bank and Trust Company (“CB&T”) for its material reliance

thereon.

 

As defined in the Pledge

and Security Agreement, dated as of September 23, 2002, the Funding Exposure

Amount as of the preceding Valuation Date is equal to or less than zero and

since the preceding Valuation Date nothing has occurred, and no circumstance

exists, that would cause me to believe that the Funding Exposure Amount as of

the date hereof is greater than zero.

 

IN WITNESS WHEREOF, I

have hereunto set my hand on and of this      day of

      , 2002.

 

	

   

  	

   

  	

   

  
	

   

  	

  Name:

  
	

   

  	

  Title:

  

 

E-1

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