Document:

EXHIBIT 10.1

 

AMENDED AND RESTATED AFFINITY
CARD AGREEMENT AND

ACCOUNTS OWNERSHIP AND
ADMINISTRATION

AGREEMENT

 

Dated as of December 5,
2005

 

by and among

COLUMBUS BANK AND TRUST COMPANY

as Accounts Owner,

 

COMPUCREDIT CORPORATION

as Servicer and as a Receivables
Purchaser in certain respects

and

 

COMPUCREDIT ACQUISITION
CORPORATION

as a Receivables Purchaser in
certain respects

 

and, solely for purposes of 

Section 15.02(c), Section 15.02(e), Section 15.02(g) and Section 15.02(h)

SYNOVUS FINANCIAL CORP.

 

 

This AMENDED
AND RESTATED AFFINITY CARD PROGRAM AGREEMENT AND ACCOUNTS OWNERSHIP AND
ADMINISTRATION AGREEMENT (this “Agreement”) dated as of December 5,
2005 (the “Effective Date”), is by and among COLUMBUS BANK AND TRUST COMPANY, a
state-chartered bank organized under the laws of Georgia (“Accounts Owner”),
COMPUCREDIT CORPORATION, a Georgia corporation (“CCRT”), as a
receivables purchaser and as servicer and COMPUCREDIT ACQUISITION CORPORATION,
a Nevada corporation (“CAC” and together with CCRT, the “Receivables
Purchaser”).  As used herein, “Party”
shall mean Accounts Owner, CCRT or CAC, as applicable, and “Parties”
shall mean Accounts Owner, CCRT, and CAC.  Synovus Financial Corp. is a party hereto solely for purposes of Section 15.02(c),
Section 15.02(e), Section 15.02(g) and Section 15.02(h).

 

W I T N E
S S E T H:

 

WHEREAS,
pursuant to an Affinity Card Agreement dated as of January 6, 1997, as
amended through the date hereof (the “Original Affinity Agreement”), the
Parties established a relationship whereby Accounts Owner issued certain credit
cards to customers.

 

WHEREAS,
pursuant to a Facilities Management Agreement dated as of August 1, 1998,
as amended through the date hereof (the “Original Facilities Agreement”),
the Accounts Owner and CCRT established certain terms for the servicing of the
credit card accounts covered by the Original Affinity Agreement.

 

WHEREAS, the
Parties desire to amend and restate in its entirety the Original Affinity
Agreement pursuant to the terms hereof, whereby, among other things, Accounts
Owner shall own the Accounts, issue credit cards related to the Accounts, and
perform certain services relating thereto, and CCRT and CAC shall own certain
rights with respect to the Accounts and Receivables and shall have certain obligations
with respect thereto.

 

WHEREAS, the
Parties desire to terminate the Original Facilities Agreement.

 

NOW,
THEREFORE, in consideration of the foregoing, the covenants made by the Parties
herein, and for which good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Accounts Owner, CCRT and CAC
hereby agree as follows:

 

2

 

ARTICLE I

DEFINITIONS

 

Section 1.01.                                                     Definitions.

 

“Accounts” shall mean Acquired Accounts and Originated Accounts.

 

“Accounts
Owner” shall have the meaning set forth in the Preamble.

 

“Accounts
Owner Compliance Officer” shall have the meaning set forth in Section 3.11.

 

“Affiliate”
shall mean, with respect to any Person, any other Person that directly or
indirectly controls, is controlled by or is under common control with such
Person.  For the purposes of this
definition, “control” shall mean the power to direct the management and
policies of a Person, directly or indirectly, whether through the ownership of
voting securities, by contract or otherwise; and the terms “common control” and
“controlled” have meanings correlative to the foregoing.

 

“Affinity
Amendments” shall have the meaning set forth in Section 2.01.

 

“Aggregate
Retained Amount” shall mean an aggregate amount of one million dollars
($1,000,000.00) in principal amount of Acquired Account Receivables and
Originated Account Receivables.

 

“Agreement”
shall have the meaning set forth in the Preamble, as the same may be amended,
amended and restated, supplemented or otherwise modified from time to time in
accordance with the terms hereof.

 

“Acquired
Account” shall mean an account acquired by Accounts Owner pursuant to a
written purchase agreement entered into by Accounts Owner and incorporated into
the Program, any and all documents, Books and Records pertaining thereto.

 

“Acquired
Account Receivables” shall mean the net outstanding book principal balances
of purchases and cash advances made on the Acquired Accounts, together with all
other amounts payable by Cardholders on the Acquired Accounts, including fees
and finance charges.

 

“Aspire
Card” shall mean a Visa Credit Card bearing the name or logo “Aspire” on
the front thereof.

 

“Bankruptcy
Event” shall have the meaning set forth in Section 13.01(b).

 

“Benefits”
shall mean those benefits provided to Cardholders pursuant to a Benefits
Agreement.

 

“Benefits
Agreement” shall mean and include (i) all agreements with Cardholders
to provide benefits or enhancements to the Accounts or Credit Cards, where such
Benefits are provided by third-party vendors, excluding Visa, who provide
benefits and services through

 

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direct
arrangement with Accounts Owner or CCRT in connection with the Accounts,
including providers of credit insurance, purchase protection insurance, travel
accident insurance or credit card registration services, (ii) all
agreements, contracts and arrangements between Accounts Owner or its Affiliates
and a Cardholder to offer any debt waiver, suspension or cancellation product
to a Cardholder, including, any credit protection program, and (iii) any
other benefits whatsoever and by whomever offered to Cardholders or prospective
Cardholders (other than the credit feature of the Credit Card itself).

 

“Books and
Records” shall mean the following books and records in the
possession or under the control of a Party, to the extent relating to the
Accounts: applications for
Accounts, periodic statements, credit and collection files, file maintenance data,
credit agreements, disclosure
statements, credit information files, credit card slips, receipts and  correspondence, whether in documentary form
or on microfilm, microfiche, magnetic tape, computer disk or other form whether
segregated by Cardholder identity or by document or record type and any other records necessary to evidence
ownership, service, administer or enforce the Accounts.  Books and Records shall not include a Party’s
general corporate financial and other records, income tax returns or other
corporate records not specifically relating to the Accounts or which relate to
the Accounts and other accounts with respect to which information relating to
the Accounts cannot reasonably be extracted.

 

“Business
Continuity and Recovery Standards” shall have the meaning set forth in Exhibit E.

 

“Business
Day” shall mean a day that Accounts Owner is open for business and
excluding Saturdays, Sundays and legal holidays.

 

“CC Names”
has the meaning given to it in Section 4.13(a).

 

“Cardholder”
shall mean an individual in whose name an Account is established.

 

“Cardholder
Agreement” shall mean an agreement between Accounts Owner and a Cardholder
for the extension of credit in connection with an Account.

 

“Cardholder
List” shall mean any list (whether in written or other form) containing the
names, addresses and/or telephone numbers of Cardholders that exists by reason
of those persons being Cardholders.

 

“CB&T
Marks” shall have the meaning set forth in Section 9.01.

 

“CCRT Marks”
shall have the meaning set forth in Section 9.03(a).

 

“Cessation
Date” shall have the meaning set forth in Section 4.12(a).

 

“Compliance
Counsel” shall have the meaning set forth in Section 3.12.

 

“Compliance
Plan” shall mean the Compliance Plan for the Program as set forth in Exhibit B.

 

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“CompuCredit
Compliance Officer” shall have the meaning set forth in Section 3.11.

 

“CompuCredit
Marks” shall have the meaning set forth in Section 9.02(a).

 

“Confidential
Information” shall have the meaning set forth in Section 10.01(a).

 

“Consultation”
shall have the meaning set forth in Section 3.08(b).

 

“Core
Portfolio” shall have the meaning set forth in Section 3.16(a).

 

“Covered
Loss” shall have the meaning set forth in Section 15.01(b).

 

“Credit
Card” shall mean each Aspire Card and all other credit cards issued to a
Cardholder pursuant to a Cardholder Agreement.

 

“Credit
Criteria” shall have the meaning set forth in Section 3.01.

 

“Debt
Waiver Program” shall mean the debt cancellation, debt suspension, debt
waiver or similar terms offered to Cardholder in accordance with Section 3.16
of this Agreement.

 

“Deposit”
shall have the meaning set forth in Section 6.01.

 

“Disclosing
Party” shall have the meaning set forth in Section 10.02.

 

“Effective Date”
has the meaning set forth in the Preamble.

 

“Event of
Default” shall have the meaning set forth in Section 13.01.

 

“Force
Majeure Event” shall mean an event beyond the reasonable control of a Party
including acts of God, fire, explosion, public utility failure, accident,
floods, embargoes, epidemics, war, nuclear disaster or riot.

 

“GLBA”
shall mean Title V of the Gramm-Leach-Bliley Financial Modernization Act of
1999 (15 U.S.C. 6801 et seq.) as it
may be amended from time to time, and regulations thereunder.

 

“Governmental
Authority” shall mean (i) any federal, state or local governmental or
regulatory authority (including the Office of the Comptroller of the Currency)
and (ii) any agency, court, tribunal, commission or other regulatory
entity, and any entity exercising executive, legislative, judicial, regulatory
or administrative functions of or pertaining to government asserting
jurisdiction over any Party or the activities of any Party undertaken with
respect to the Program.

 

“Indemnified
Accounts Owner Parties” shall have the meaning set forth in Section 15.01(b).

 

“Indemnified
Party” shall have the meaning set forth in Section 15.04(a).

 

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“Indemnifying
Party” shall have the meaning set forth in Section 15.04(a).

 

“Information
Security Officer” shall have the meaning set forth in Section 11.01(b).

 

“Initial
Term” shall have the meaning set forth in Section 14.01(b).

 

“Intellectual
Property” shall mean all copy, trademarks, copyrights and any protectable
item, in any format or medium (including television and radio), used to promote
or identify the Accounts materials to Cardholders.

 

“JAMS”
shall have the meaning set forth in Section 4.07(d).

 

“Knowledge”
shall mean, with respect to each Party, what is actually known or should
reasonably have been known in the ordinary course of the activities, without
independent investigation, by the officers of such Party, as applicable, with a
title of Senior Vice President or above.

 

“Letter of
Credit” shall have the meaning set forth in Section 6.02.

 

“Losses”
shall mean all out of pocket costs, damages, losses, fines, penalties,
judgments, settlement, and expenses whatsoever, including (i) outside
attorney’s fees and disbursements and court costs reasonably incurred by the
Indemnified Party; and (ii) costs (including reasonable expenses and
reasonable value of time spent) attributable to the necessity that any officer
or employee (other than in-house attorneys) of any Indemnified Party spend more
than twenty five percent (25%) of his or her normal business hours over a
period of two (2) months, in connection with any judicial, administrative,
legislative, or other proceeding.

 

“MasterCard”
shall mean MasterCard International Incorporated.

 

“Manual”
shall have the meaning set forth in the Compliance Plan. 

 

“Materials”
shall have the meaning set forth in the Compliance Plan.

 

“NPP Names”
has the meaning given to it in Section 4.13(a).

 

“Net Final
Judgment” shall have the meaning set forth in Section 15.02(c).

 

“Net Final
Settlement” shall have the meaning set forth in Section 15.02(c).

 

“Non-Program
Product” shall have the meaning set forth in Section 4.13(a).

 

“Non-Program
Prohibition” shall have the meaning set forth in Section 4.13(a).

 

“Non-Program
Violation Date” shall have the meaning set forth in Section 4.13(b)(ii).

 

“Non-Program
Violation Notice” shall have the meaning set forth in Section 4.13(b)(ii).

 

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“Operating
Rules” shall mean the by-laws, rules and regulations of Visa, MasterCard, and any other credit card association or credit
card sponsoring entity whose credit cards are included in the Program.

 

“Originated
Account” shall mean an account opened by Accounts Owner pursuant to which
one or more Credit Cards may be issued to a Cardholder and any and all
documents, Books and Records pertaining thereto, as identified by BIN and bank
number on Exhibit K.

 

“Originated
Account Receivables” shall mean the net outstanding book principal balances
of purchases and cash advances made on the Originated Accounts, together with
all other amounts payable by Cardholders on the Originated Accounts, including
fees and finance charges.

 

“Past Due
Amounts” shall have the meaning set forth in Section 13.01(c).

 

“Performance
Default” shall have the meaning set forth in Section 13.01(a).

 

“Person”
shall mean any legal person, including any individual, corporation, limited
liability company, partnership, joint venture, association, joint-stock
company, trust, unincorporated organization, governmental entity or other
entity of any nature.

 

“Pledge and
Security Agreement” shall mean that certain Pledge and Security Agreement
entered into between CCRT and Accounts Owner dated as of September 23,
2002 and all amendments thereof and supplements thereto.

 

“Pledge
Default” shall have the meaning set forth in Section 13.01(d).

 

“Prime Rate”
means the base rate on corporate loans at large U.S. money center commercial
banks as such rate is reported under “prime rate” in The Wall
Street Journal from time to time.

 

“Program”
shall mean the affinity credit card program conducted pursuant to the terms
hereof.

 

“Purchase
Price” shall have the meaning set forth in Section 5.01(a).

 

“Receivables”
shall mean the Acquired Account Receivables or Originated Account Receivables,
as applicable.

 

“Receivables
Purchase Payment Default” shall have the meaning set forth in Section 13.01(c).

 

“Receivables
Purchaser” shall mean for Originated Accounts, CCRT and for Acquired
Accounts, CAC.

 

“Receiving
Party” shall have the meaning set forth in Section 10.02.

 

“Regulatory
Criticism” shall have the meaning set forth in Section 3.08(a).

 

7

 

“Related
Agreements” shall mean each of (a) the Related Securitization
Agreements; and (b) the agreements identified in Section 2.03.

 

“Related
Securitization Agreements” shall mean the securitization agreements and
related agreements identified in Exhibit A.

 

“Remediation
Level” shall have the meaning set forth in Exhibit D.

 

“Removed Service”
shall have the meaning set forth in Section 4.12(a).

 

“Renewal
Term” shall have the meaning set forth in Section 14.01(c).

 

“Requirements
of Law” shall mean, with respect to any Person, any law, treaty, rule or
regulation, regulatory guidance binding on such Person or determination of (or
agreement with) an arbitrator or Governmental Authority (including usury laws,
the Federal Truth in Lending Act, Regulation B and Regulation Z of the Board of
Governors of the Federal Reserve System, the Equal Credit Opportunity Act, the
GLBA, the Federal Fair Debt Collection Practices Act, the USA Patriot Act, the
Bank Secrecy Act and other laws or regulations related to anti-money laundering
compliance and state laws, rules and
regulations relating to consumer protection, installment sales, telemarketing,
unfair and deceptive trade practices and collections), in each case binding on
that Person, its property or its agents.

 

“Resolution
Period” shall have the meaning set forth in Section 4.07(b). 

 

“RRC”
shall have the meaning set forth in Section 4.07(d).

 

“Service
Level Standards” shall have the meaning set forth in Section 4.05(a).

 

“Service
Provider” shall have the meaning set forth in the Compliance Plan.

 

“Service
Team” shall have the meaning set forth in Section 4.05(b).

 

“Settlement
Amount” shall mean the amount due corresponding to credit card receivables
for any given time period that is owed by Accounts Owner with respect to the
Accounts to Visa, MasterCard, the Federal Reserve (solely for convenience checks)
or any applicable card association or credit card sponsoring entity.

 

“Solicitation
Materials” shall have the meaning set forth in the Compliance Plan.

 

“State Tax”
shall have the meaning set forth in Section 6.09.

 

“Synovus”
shall mean Synovus Financial Corp., the ultimate corporate parent of Accounts
Owner.

 

“Synovus
Share” shall have the meaning set forth in Section 15.02(c).

 

“Term”
shall have the meaning set forth in Section 14.01(a).

 

“Termination
Level” shall have the meaning set forth in Exhibit D.

 

8

 

“Termination
Notice” shall have the meaning set forth in Section 14.01(c).

 

“Third
Party Claim” shall have the meaning set forth in Section 15.04(a).

 

“Third
Party Provider” shall have the meaning set forth in Section 4.12(a).

 

“Transfer
Right” shall have the meaning set forth in Section 3.17.

 

“Visa”
shall mean Visa U.S.A., Inc.

 

“Wind Down
Period” shall have the meaning set forth in Section 14.05(a).

 

Section 1.02.                                                     Rules of
Construction.  As used herein:

 

(a)                                  Unless otherwise
indicated herein, with respect to any reference made in this Agreement to a Section (or
Article, Subsection, Paragraph, Subparagraph or Clause), Exhibit or
Schedule, such reference shall be to a Section (or Article, Subsection, Paragraph,
Subparagraph or Clause) of, or an Exhibit or Schedule to, this
Agreement.

 

(b)                                 All Exhibits and
Schedules attached hereto are hereby incorporated by reference into, and made a
part of, this Agreement.

 

(c)                                  The table of contents
and any Article, Section, Subsection, Paragraph or Subparagraph headings
contained in this Agreement and the Preamble at the beginning of this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement (other than with respect to any defined terms
contained in the Preamble).

 

(d)                                 Any reference made in
this Agreement to a statute or statutory provision shall mean such statute or
statutory provision as it has been amended through the date as of which the
particular portion of the Agreement is to take effect, or to any successor
statute or statutory provision relating to the same subject as the statutory
provision so referred to in this Agreement, and to any then-applicable rules or
regulations promulgated thereunder.

 

(e)                                  Whenever the words “include,”
“includes” or “including” are used in this Agreement, they shall be deemed, as
the context indicates, to be followed by the words “but (is/are) not limited
to.”

 

(f)                                    The words “herein,”
“hereof,” “hereunder” and words of like import shall refer to this Agreement as
a whole (including its Schedules and Exhibits), unless the context clearly
indicates to the contrary (for example, that a particular Section, Schedule or
Exhibit is the intended reference).

 

(g)                                 Words used herein,
regardless of the number and gender specifically used, shall be deemed and
construed to include any other number, singular or plural, and any other
gender, masculine, feminine or neuter, as the context indicates is appropriate.

 

9

 

(h)                                 Any reference made in
this Agreement to “written” shall include a writing in either written or
electronic form.

 

(i)                                     Where specific
language is used to clarify or illustrate by example a general statement
contained herein, such specific language shall not be deemed to modify, limit
or restrict the construction of the general statement which is being clarified
or illustrated.

 

(j)                                     The construction
of this Agreement shall not take into consideration the Party who drafted or
whose representative drafted any portion of this Agreement, and no canon of
construction shall be applied that resolves ambiguities against the drafter of
a document.

 

[END OF ARTICLE I]

 

10

 

ARTICLE II

RESTATEMENT OF ORIGINAL AFFINITY AGREEMENT

AND CONTINUATION OF

RELATED SECURITIZATION AGREEMENTS

 

Section 2.01.                                                     Restated
Affinity Agreement.  The Parties
intend for this Agreement to amend and restate in its entirety the Original
Affinity Agreement and all amendments thereto (including any side letters or
other written understandings that may exist) that relate to the Original
Affinity Agreement executed prior to the date hereof (collectively, the “Affinity
Amendments”).  The Parties recognize
and acknowledge that, except as stated in Section 2.02, all
Affinity Amendments shall be deemed null and void and of no legal effect, and
no Party shall be entitled to rely on any such document to affect any of their
respective duties, rights and obligations as set forth herein.

 

Section 2.02.                                                     Termination
of Original Facilities Agreement. 
The Parties recognize and acknowledge that the Original Facilities
Agreement is hereby terminated.

 

Section 2.03.                                                     Certain
Agreements not Affected.  The Parties
recognize and acknowledge that the following agreements shall not be considered
an Affinity Amendment and shall not be affected by this Agreement:

 

(a)                                  the Pledge and
Security Agreement; and

 

(b)                                 that certain
Remittance Processing Service, Depository and Settlement Facility Agreement dated
October 13, 2002 by and among Synovus Financial Corp., Columbus Bank and
Trust Company and CompuCredit Corporation.

 

Section 2.04.                                                     Related
Securitization Agreement.  The
Parties recognize and acknowledge that certain of the Accounts and the
Receivables arising therefrom are subject to securitization pursuant to the
Related Securitization Agreements. 
Nothing contained herein shall be deemed to amend, restate, or otherwise
modify any of the Related Securitization Agreements as identified on Exhibit A.  The Parties acknowledge and agree that CCRT
has assumed under this Agreement certain indemnity obligations of Accounts
Owner set forth in the Related Securitization Agreements and that CCRT shall
remain liable to Accounts Owners for such indemnity obligations notwithstanding
any provision contained in the Related Securitization Agreements to the
contrary.

 

Section 2.05.                                                     No
Separate Accounts.  CCRT and CAC
represent and warrant that there is no separate tracking with respect to
Accounts acquired pursuant to (a) that certain Amendment of Affinity Card
Agreement dated as of March 26, 1998 covering the purchase of certain
accounts from MountainWest Financial Corporation and NationsBank of Delaware,
N.A. and (b) that certain Amendment of Affinity Card Agreement and
Facilities Management Agreement dated as of November 11, 1998 covering the
purchase of certain accounts from Greenwood Trust Company.

 

[END OF ARTICLE II]

 

11

 

ARTICLE III

ACCOUNTS OWNER RIGHTS & OBLIGATIONS

 

Section 3.01.                                                     Issuance
of Cards; Maintenance of Accounts.

 

Accounts Owner
shall cause to be issued Credit Cards to each applicant for a Credit Card who
qualifies for such type of Credit Card under the underwriting and credit
criteria (the “Credit Criteria”) established by Accounts Owner in
consultation with CCRT and set forth in Exhibit C.  Accounts Owner shall extend credit with
respect to said Credit Cards, and CCRT shall not be considered a creditor on
any Account for any purpose whatsoever. 
Subject to the Operating Rules and the terms of the license to the
CB&T Marks granted in Section 9.01, each Credit Card shall have
the name, logo, and/or trademark of Aspire Card or any other trademark approved
by Accounts Owner on the front thereof and shall
be of a design approved by Accounts Owner, CCRT, and Visa, MasterCard, or any
other credit card association or credit card sponsoring entity whose credit
cards are included in the Program, as applicable.

 

Section 3.02.                                                     Cardholder
Approval.

 

(a)                                  Applications.  Accounts Owner shall require that each person
who desires to become a Cardholder complete a written application or apply for
a Credit Card in response to a telemarketing solicitation.

 

(b)                                 Acceptance.  The Parties agree that an applicant shall be
approved for a Credit Card only if the applicant meets the applicable Credit
Criteria.  In the event that an applicant
for a Credit Card does not meet the Credit Criteria, such applicant shall be so
notified in accordance with applicable
Requirements of Law and Operating Rules.

 

Section 3.03.                                                     Establishment of Accounts.  Upon
approval of an application, an Account shall be established for
the applicant.  Each approved applicant
may receive one or more Credit Cards and may automatically receive a renewal
card at each scheduled Credit Card renewal date, if such Cardholder continues
to meet the Credit Criteria.  Each
Cardholder shall receive a Cardholder Agreement and disclosure statement and
such other notices or documents related to such Cardholder’s Credit Card Account
as are required from time to time, in the determination of Accounts Owner,
under applicable Requirements of Law and Operating Rules.  The Cardholder Agreement and disclosure
statement and other documents shall provide, as appropriate, that they are
governed by Georgia law and federal law.

 

Section 3.04.                                                     Account
Terms and Credit Criteria.

 

(a)                                  Cardholder
Agreements.  The terms and conditions
for the Credit Cards applicable to the Accounts are set forth in the Cardholder
Agreement.  Changes to the terms and
conditions shall be made in accordance with the provisions of the Compliance
Plan; provided, however, that nothing contained in this Section 3.04
shall limit Accounts Owner’s right to effect any changes to the terms and
conditions of the Accounts in response to any Regulatory Criticism pursuant to Section 3.08.

 

(b)                                 Credit Criteria
Changes.  Prior to implementing or
affecting any material changes to the Credit Criteria, CCRT shall develop the
terms and conditions and proposed

 

12

 

underwriting criteria and submit such
proposed changes to Accounts Owner for approval pursuant to the terms of the
Compliance Plan.

 

Section 3.05.                                                     Right
to Approve all Materials.  Accounts
Owner shall approve all Materials pursuant to the terms of the Compliance Plan
prior to the use of any such Materials. 
CCRT shall provide copies of all Materials, procedures and matters
referred to Section 4.02 to Accounts Owner for its review and
approval as soon as practical, but no less than twenty (20) Business Days
prior to their first intended use. 
Accounts Owner shall respond by approving, or giving specific reasons
for disapproval, within ten (10) Business Days of receipt and shall not
unreasonably withhold or delay its approval. 
None of the Materials, procedures and matters referred to in Section 4.02
may be distributed or otherwise used by CCRT (a) before CCRT receives
Accounts Owner’s prior written approval or (b) after any previously given
approval is withdrawn by Accounts Owner by notice in writing to CCRT.  Accounts Owner may withhold its approval, or
withdraw an approval previously given, of any of such Materials, procedures or
matters only to the extent Accounts Owner, after consultation with its
Compliance Counsel, has legitimate concern with regard to compliance thereof
with any applicable Requirements of Law or Operating Rules, or in the event
Accounts Owner determines that they have the potential to subject Accounts
Owner to Regulatory Criticism, public criticism, ridicule or controversy or to
otherwise damage Accounts Owner’s reputation. 
Notwithstanding the foregoing, Accounts Owner’s right to withdraw an
approval previously given shall only be exercised:  (x) if the Materials are not in
compliance with, or are deemed invalid by, any Governmental Authority’s final
enactment, rulemaking, ruling or determination, and then only to the extent of
such noncompliance or invalidity; or (y) pursuant to the provisions of Section 3.08; or (z) if CCRT fails in any material respect to obtain
the prior approval of Accounts Owner as required by this Agreement and the
Compliance Plan, and then only to the extent of such failure.  In all other cases where Accounts Owner seeks
to withdraw such approval, Accounts Owner and CCRT shall meet in good faith to
resolve any Party’s legitimate concern and revise the Materials accordingly.

 

Section 3.06.                                                     Credit
Card Association Membership.  At all
times during the Term, Accounts Owner shall use its best efforts to maintain
its membership in Visa and MasterCard and any other credit card association or
credit card sponsoring entity whose credit cards are included in the
Program.  Accounts Owner shall be
responsible for making all reports to Visa, MasterCard and any other credit
card association or credit card sponsoring entity whose credit cards are
included in the Program which may be required by its membership therein.  Accounts Owner shall comply with the
Operating Rules in connection with the Program.  However, if Accounts Owner loses its
membership in Visa, MasterCard or any other credit card association or credit
card sponsoring entity whose credit cards are included in the Program, CCRT or
CAC may terminate this Agreement without any termination fee.

 

Section 3.07.                                                     Ownership
of Account Relations.  During the
Term, Accounts Owner shall not, directly or indirectly, transfer, sell or
disclose to any other Person any Cardholder List, and shall not, directly or
indirectly, solicit Cardholders by using a Cardholder List, in whole or in
part, for any other credit card, or for any other purpose, without the prior
written consent of CCRT or CAC.  The
limitation in this Section 3.07 shall not prohibit any transfer,
sale or disclosure of the name, address or telephone number of, or any
solicitation of, any person of

 

13

 

whose existence Accounts Owner has or obtains
knowledge otherwise than by reason of Accounts Owner’s participation in this
Agreement.

 

Section 3.08.                                                     Regulatory
Criticism.

 

(a)                                  Receipt of
Criticism.  In the event that either
Accounts Owner or Synovus receive criticism in a report of examination or in a
related document or specific oral communication from, or is subject to formal
or informal supervisory action by, or enters into an agreement with the Federal
Deposit Insurance Corporation, the Board of Governors of the Federal Reserve
System, the Federal Trade Commission or another Governmental Authority with
respect to any matter whatsoever relating to (including omissions therefrom)
the Service Level Standards, the Credit Cards, or the Accounts (any such event
a “Regulatory Criticism”), Accounts Owner shall promptly advise CCRT in
writing of the Regulatory Criticism received and shall promptly share with CCRT
relevant portions of any written documentation, or for oral communications,
provide a detailed summary in writing, received from the relevant Governmental
Authority, to the extent not specifically prohibited by applicable Requirements
of Law or Operating Rules, for the full and fair assessment and understanding
of such Regulatory Criticism.

 

(b)                                 Consultation;
Accounts Owner Corrective Action.  Subject to the provisions in Section 3.08(c) below,
Accounts Owner and CCRT shall in good faith confer for a reasonable period of
time given then-existing circumstances regarding such Regulatory Criticism,
which period, in the absence of any time constraints imposed or occasioned by
the relevant Governmental Authority, shall in no event be no longer than thirty
(30) days after CCRT receives notice as provided herein (the “Consultation”).  In the Consultation, Accounts Owner and CCRT
shall cooperate and use their respective best efforts to reach agreement to
add, delete, or revise their appropriate agreements to promptly rectify,
resolve, or address the matter(s) subject to the Regulatory Criticism.  Accounts Owner shall cooperate with CCRT to
seek any clarifications regarding such Regulatory Criticism and/or guidance
respecting proposed solutions as may be deemed necessary or desirable.  In the event that Accounts Owner and CCRT
fail to reach full and complete agreement, within the time herein provided,
upon the manner in which to legally, completely, and timely rectify, resolve or
address the Regulatory Criticism, Accounts Owner may immediately then exercise
those rights and remedies set forth in Section 3.08(c).

 

(c)                                  Time Constraints;
CCRT Termination Right.  The length
of time for the Consultation provided in Section 3.08(b) shall
be, in all respects, subject to and governed by any time constraints imposed
directly or indirectly by the relevant Governmental Authority.  In the event that the Governmental Authority
has imposed or occasioned, directly or indirectly, such time constraints that
require Accounts Owner to take immediate corrective action or which otherwise
make the occurrence of the Consultation or an agreement resulting therefrom
impracticable, then, subject to the notice provisions of Section 3.08(a) when
such notice is not impracticable in light of the Regulatory Criticism, Accounts
Owner may unilaterally add, delete, revise and amend any term or provision with
respect to any matter whatsoever relating to (including omissions thereon) the
Service Level Standards, the Credit Cards, or the Accounts which Accounts Owner
in its reasonable discretion shall deem necessary to appropriately rectify the
Regulatory Criticism in a timely fashion and such action taken shall, upon
notice to CCRT and CAC, be fully binding upon CCRT and CAC prospectively from
the date of the notice;

 

14

 

provided, however,
that CCRT and CAC shall have a period of thirty (30) days following the date of
the aforesaid notice in which to terminate, without penalty, any portion of or
service provided by the pertinent agreement so altered.

 

(d)                                 Good Faith
Obligation.  In all of the foregoing
of this Section 3.08, Accounts Owner at all times shall have the
obligation to act in good faith and use reasonable judgment in exercising its
rights and remedies under this Section 3.08.

 

Section 3.09.                                                     Compliance
Plan.  It is the intent of the
Parties to cooperate fully in monitoring all aspects of the Program in
accordance with the provisions of the Compliance Plan set forth in Exhibit B,
as such Compliance Plan may be amended from time to time by mutual agreement of
the Accounts Owner and CCRT.  During the
Term, the provisions of the Compliance Plan set forth in Exhibit B
shall apply in all respects to the rights, duties and obligations of CCRT and
Accounts Owner hereunder.  In the event
of any inconsistency between the provisions contained in the body of this
Agreement and those in the Compliance Plan, the provisions contained in the
Compliance Plan shall govern.

 

Section 3.10.                                                     GLBA
Compliance.  With regard to the GLBA
and any other applicable Requirements of Law and Operating Rules which
impose obligations on Accounts Owner with respect to the privacy and security
of customer and consumer information, as such terms are defined in the GLBA
including any such obligations which impose limitations on rights otherwise afforded
CCRT or CAC in or to such consumer and customer information pursuant to this
Agreement or any other agreement, the Parties agree that any provisions of this
Agreement and any such other agreement, which conflict with any such applicable
obligations or limitations, or which fail to reflect any such applicable
obligations or limitations the reflection of which in this Agreement or any
such other agreement is mandatory under applicable Requirements of Law and
Operating Rules, shall be deemed amended to the extent necessary (but only to
the extent necessary) to eliminate any such conflict or failure.  Access to customer and consumer information
by CCRT and CAC, and use or disclosure by CCRT and CAC of customer and consumer
information to which either has access, shall be subject to all such applicable
privacy obligations and limitations. 
Costs incurred by Accounts Owner from time to time in complying with
such obligations in relation to Accounts, Cardholders and prospective
Cardholders, shall be reimbursed by CCRT upon issuance by Accounts Owner of its
invoices therefor.  Accounts Owner shall
adopt such changes, if any, as Accounts Owner in its reasonable opinion deems
advisable to the Service Level Standards and/or to any
other operating procedures applicable to services performed under this
Agreement, to modify the procedures reflected therein to conform to any such
applicable obligations or limitations, and shall promptly advise CCRT when and
as such changes, if any, are adopted.

 

Section 3.11.                                                     Compliance
Officer.  A specified Accounts Owner
representative (the “Accounts Owner Compliance Officer”), whose
reasonable costs shall be borne by CCRT, shall have access to CCRT’s and any
Service Providers’ facilities, personnel and records to review and examine the
services provided to Cardholders for compliance purposes.  The Accounts Owner Compliance Officer shall
be permitted to utilize a reasonable system of routine sampling and other
review methods by which to evaluate the services as deemed appropriate by Accounts
Owner.  The results of such reviews shall
routinely be reported monthly to the Service Team for use in its evaluation of
the existing Service Level Standards. 
The Accounts Owner Compliance

 

15

 

Officer shall establish regular audit
procedures and frequencies for the services provided to Cardholders by
CCRT.  CCRT shall designate a specified
representative (the “CompuCredit Compliance Officer”) who shall be a
senior level executive of CCRT, to coordinate compliance matters with the
Accounts Owner Compliance Officer and ensure that the Accounts Owner Compliance
Officer is permitted to undertake the activities contemplated herein.  The respective Compliance Officers of
Accounts Owner and CCRT shall be identified in the Compliance Plan, and each of
Accounts Owner and CCRT shall consult with the other Party, prior to replacing
its Compliance Officer, and in good faith discuss any objection the other Party
may have to such replacement.

 

Section 3.12.                                                     Compliance
Counsel.  Accounts Owner has
exercised its discretion to obtain legal counsel (“Compliance Counsel”),
Morrison & Foerster, LLP, with expertise in the field of credit cards,
to assist Accounts Owner in reviewing, and to advise Accounts Owner with regard
to the compliance with all applicable Requirements of Law and Operating Rules,
all Materials, procedures and matters referred to in Section 4.02.  Such Compliance Counsel shall be employed
solely by Accounts Owner and retained in that capacity so long as Accounts
Owner deems advisable, shall have no client relationship with CCRT or CAC and
shall owe no duty of loyalty to CCRT. 
CCRT shall promptly reimburse Accounts Owner for fifty percent (50%) of
such counsel’s fees and disbursements for the review and advice, as provided in
this subsection, upon presentation by Accounts Owner of statements therefor.

 

Section 3.13.                                                     Non-exclusive
Arrangement.  There shall be no
restriction on a Party’s right to issue credit cards independent of the Program
and to perform credit card services on its own behalf or for other parties or
affinity groups.

 

Section 3.14.                                                     Charged-Off
Accounts.  During the Term, on the
last Business Day of each calendar month, Accounts Owner shall automatically
and without further action or consideration be deemed to, and hereby does,
transfer, set over and convey to CCRT all of its right, title and interest in
and to each Account that has been charged-off as uncollectible during such
calendar month in accordance with the policies and procedures specified in the
Credit Criteria, and, on and after each such date, CCRT shall automatically and
without further action or consideration be deemed to, and hereby does, assume
Accounts Owner’s obligations with respect to each such Account.  CCRT shall pay all transfer taxes, if any, in
connection with the conveyances contemplated by this Section 3.14.  Accounts Owner and CCRT intend that such sale
of the Accounts under this Section 3.14 is intended to be an
absolute transfer of all of Accounts Owner’s interest in, to and under such
Accounts, including for accounting purposes, providing CCRT with the full
benefits of ownership of same, and Accounts Owner and CCRT do not intend these
transactions to be, or for any purpose to be characterized as, a loan secured
by such Accounts.  If despite such
intention, a court characterizes the sale of Accounts hereunder as a loan
rather than an absolute transfer, then this Agreement shall be deemed to be,
and hereby is a security agreement, within the meaning of the Uniform Commercial
Code in effect in any relevant jurisdiction, and Accounts Owner hereby grants
to CCRT, a first priority perfected security interest in, to, and under, all of
Accounts Owner’s right, title, and interest in, to, and under, each and every
Account transferred to CCRT pursuant to this Section 3.14, whether
now existing or hereafter acquired or arising for the purpose of securing CCRT’s
rights under this Agreement.

 

16

 

Section 3.15.                                                     [Reserved]

 

Section 3.16.                                                     Debt
Waiver Program Offering.

 

(a)                                  Establishment of
Debt Waiver Program.  Accounts Owner
may, from time to time, offer to Cardholders debt cancellation, debt
suspension, debt waiver or similar contractual terms or combinations thereof
(the “Debt Waiver Program”), for a fee. 
The terms and conditions of the Debt Waiver Program to be offered
pursuant hereto and the states covered, are set forth in Exhibit I.  CCRT shall market the Debt Waiver Program
with such terms to Cardholders with mailing addresses in the states listed in Exhibit I
and in such other states approved in writing by Accounts Owner.  CCRT shall be responsible for the
administration, servicing, fulfillment and legal compliance of such Debt Waiver
Program on behalf of Accounts Owner. 
Compliance Counsel shall work in good faith with CCRT’s counsel to
determine additional states where the Debt Waiver Program may be offered.  CCRT recognizes and acknowledges that
Accounts Owner may in its reasonable commercial judgment elect not to offer a
Debt Waiver Program in every state, and nothing contained herein shall be
construed as requiring Accounts Owner to obtain regulatory approvals to offer a
Debt Waiver Program in any particular state. 
CCRT further recognizes and acknowledges that Accounts Owner’s obligation
to continue to offer a Debt Waiver Program is subject to the following
conditions:  (i) beginning September 15,
2006, and on September 15 of each subsequent year, CCRT’s counsel shall
provide to Accounts Owner for its review a statement of its belief that based
on CCRT’s research and due diligence, that taken as a whole, the pricing,
protection and other features of the Debt Waiver Program do not exceed industry
norms in any material manner adverse to a Cardholder and in support of such
representation, CCRT shall provide Accounts Owner all available information on
other debt waiver programs offered to cardholders with credit profiles believed
in good faith to be similar to those in the CCRT core portfolio (the “Core
Portfolio”); (ii) if CCRT is unable to provide to Accounts Owners the
statement and information specified in subsection (i) above, CCRT
agrees to adjust the pricing, protection and other features of the Debt Waiver
Program so that it becomes comparable taken as a whole to such other programs
offered to cardholders with credit profiles similar to Cardholders (as
reasonably determined by Accounts Owner), as soon as reasonable, but in no
event later than ninety (90) days after receiving written instructions to do
so; and (iii) CCRT shall provide information to the extent available on
the Debt Waiver Program to Accounts Owner, as Accounts Owner, in its
commercially reasonable judgment, or the Georgia Department of Banking and
Finance shall request, including monthly updates regarding the number of
Cardholders who enroll in the Debt Wavier Program, the number of Cardholders
who request benefits under the Debt Waiver Program (with appropriate detail
concerning the type of benefit requested), and the number of Cardholders who
are granted benefits under the Debt Waiver Program (tracked by type of benefit,
duration of protection and amount deferred or canceled).  In addition to the foregoing, Accounts Owner
reserves the right to request, in its commercially reasonable judgment,
additional reasonable changes to the Debt Waiver Program or cancellation of the
Debt Waiver Program at that time.

 

(b)                                 Administrator.  CCRT shall be permitted to engage the
services of a third party administrator for the Debt Waiver Program, at CCRT’s
sole cost and with the prior written approval of Accounts Owner.  CCRT shall, and shall require any third party
administrator for the Debt Waiver Program to: (i) make its Books and
Records related to the Debt Waiver Program available for examination upon
request by the Georgia Department of Banking and Finance; and

 

17

 

(ii) permit the Georgia Department of
Banking and Finance to periodically review its internal routine and controls to
ascertain that the operations are being conducted in a sound manner in keeping
with industry practices and Generally Accepted Accounting Principles.  Pursuant to Section 3.05 and Section 4.02,
CCRT shall be solely responsible for compliance of the Debt Waiver Program with
all applicable Requirements of Law and Operating Rules and all Materials
related to the Debt Waiver Program shall be subject to Accounts Owner’s prior
review and written approval in accordance with the terms of the Compliance
Plan.

 

Section 3.17.                                                     Transfer
of Accounts to a Third Party.  Accounts
Owner hereby grants to each Receivables Purchaser or its respective designee
the right (the “Transfer Right”) to require Accounts Owner at any time
on reasonable advance notice and subject to the terms of applicable Related
Securitization Agreement to convey the
applicable Accounts, Credit Cards, the right to use the Books and Records
relating to the applicable Accounts and the right to the Cardholder List to
such Receivables Purchaser or its designee as applicable, at such Receivables
Purchaser’s sole expense; provided, however, that neither
Receivables Purchaser shall be entitled to exercise such Transfer Right in the
event any Receivables Purchase Payment Default exists and is continuing.

 

Section 3.18.                                                     Credit
Card Association Compliance. 
Accounts Owner shall ensure that its services hereunder and any services
performed on its behalf comply with all applicable Operating Rules and any
other requirements imposed by any credit card association or card sponsoring
entity whose cards are included in the Program.

 

[END OF ARTICLE III]

 

18

 

ARTICLE IV

CCRT RIGHTS & OBLIGATIONS

 

Section 4.01.                                                     Solicitation
of New Accounts.  CCRT shall, at its
own expense, have the sole and exclusive right to solicit applications for
Credit Cards from individuals, corporations, partnerships and/or other entities
on behalf of Accounts Owner.  CCRT shall
bear all marketing expenses incurred in connection with the Program.  CCRT shall, at its own expense, create,
produce and mail Materials to promote the Program and solicit new Accounts for
Accounts Owner.  CCRT shall provide
copies of all Materials to Accounts Owner for its review and approval as
provided herein; provided, however, that CCRT shall not be
required to provide Accounts Owner for review and approval any non-material
changes to the Materials (such as changes to dates and telephone numbers).  The frequency and timing of such
solicitations shall be determined by CCRT in consultation with Accounts
Owner.  In CCRT’s discretion, solicitations
may be conducted by direct mail, telephone, or other means.  CCRT shall (a) prepare and include on or
with each solicitation any notices and disclosures required under applicable
Requirements of Law and Operating Rules as determined by Accounts Owner
from time to time, (b) provide such notices and disclosures to Accounts
Owner for its review and approval as provided herein, and (c) otherwise
conduct all such solicitation activities in compliance with all material
Requirements of Law and Operating Rules. 
Accounts Owner shall be identified to Cardholders as the Credit Card
issuer and the creditor for loans made on the Accounts.

 

Section 4.02.                                                     Compliance
with Applicable Requirements of Law.

 

(a)                                  CCRT Compliance.  Notwithstanding any contrary provision of
this Agreement and any Related Agreement and any other agreement to which any
of the Parties may be party, CCRT represents and warrants, and shall be solely
obligated for ensuring, that each of the following comply in all respects with
all applicable Requirements of Law and Operating Rules:

 

(i)                                     the terms and
conditions for the Credit Cards (including the interest rates, fees and
charges);

 

(ii)                                  the Cardholder
Agreement and disclosure statement, form of billing statement, and other
notices and documents related to each Cardholder’s Account;

 

(iii)                               the written application,
the telemarketing scripts and all other Materials, including any notices and
disclosures required or permitted under applicable Requirements of Law and
Operating Rules to be included thereon or therewith;

 

(iv)                              amendments to the Manual
and the activities addressed therein that are specifically requested by CCRT;

 

(v)                                 the credit and
marketing scorecards, criteria and procedures;

 

(vi)                              with regard to all
Benefits offered to Cardholders or prospective Cardholders other than the
credit feature of the Credit Card itself (A) all Solicitation
Materials, (B) the Benefits themselves, (C) all agreements, notices,
documents, procedures and any other

 

19

 

Benefit related materials pertaining thereto,
and (D) the application and implementation of each of the foregoing;

 

(vii)                           all other solicitation,
marketing, advertisement, acquisition and collection activities relating in any
way to the Credit Cards or to the Benefits, including all Internet advertising,
Websites and links (whether or not operated by CCRT) which make any reference
to the Credit Cards or to any Benefits, and all activities involving disclosure
to, or use or disclosure by, CCRT or any third party under arrangement with
CCRT, of any information relating to Accounts Owner  “consumers” or “customers” (as those terms
are defined in the GLBA); and

 

(viii)                        any services or activities
which CCRT performs itself or has performed for it by any third parties.

 

(b)                                 Survival of
Obligations.  The provisions of this Section 4.02
shall survive any expiration or termination of this Agreement and any other
agreement to which any of the Parties may be party.

 

Section 4.03.                                                     Compliance
Plan.  CCRT shall comply in all
material respects with all applicable provisions of the Compliance Plan as set
forth in Exhibit B.

 

Section 4.04.                                                     Settlement
and Status Reports.  CCRT shall
provide or cause to be provided to Accounts Owner the various reports detailed
in the Compliance Plan.  CCRT shall also
furnish to Accounts Owner all such additional information concerning Accounts
established and administered under the Program as Accounts Owner may reasonably
request.

 

Section 4.05.                                                     Service
Level Standards.

 

(a)                                  Service Level
Standards.  Accounts Owner and CCRT
have developed the procedures set forth herein and in the attached Service
Level Standards Matrix (the “Service Level Standards”) set forth in Exhibit D,
to ensure that the delivery of services by CCRT and/or its Affiliates and/or
any Service Provider are in compliance with all applicable Requirements of Law
and Operating Rules and at a level of quality consistent with that
generally available within the financial services industry to Cardholders.  These procedures supplement those found in
the Manual.  The Parties shall comply
with and follow the procedures set forth in the Service Level Standards and the
Manual.  In the event of any inconsistency
between the Manual and the Service Level Standards, the specific terms of these
Service Level Standards shall govern.

 

(b)                                 Changes to Service
Level Standards.  Accounts Owner and
CCRT agree that a group of four (4) individuals, two (2) from
Accounts Owner and two (2) from CCRT (collectively, the “Service Team”)
shall review the Service Level Standards each calendar quarter.  Members of the Service Team also may
designate representatives from their respective areas to participate in the
reviews.  During each review, the Service
Team shall evaluate the existing Service Level Standards and determine whether
to recommend changes or additions.  If
the Service Team recommends a change or an addition to the Service Level
Standards, such proposal shall be provided to Accounts Owner and CCRT for evaluation
and written approval to begin testing the change or addition.  Any approved testing shall continue for at
least sixty (60) days.  If the Service
Team finds the testing to be satisfactory, it shall recommend to Accounts

 

20

 

Owner and CCRT that the change or addition
become a new Service Level Standard for the purposes hereof.  No new Service Level Standard shall become
effective until all testing is complete and both Accounts Owner and CCRT agree
in writing that such Service Level Standard shall go into effect.

 

(c)                                  Notice of
Non-Conformance.  CCRT shall
communicate all incidences of non-conformance with the Service Level Standards
to the Service Team at the time of the occurrence of the incident or as soon as
it is made aware of the incident.

 

(d)                                 Monthly Service
Level Standards Reports.  CCRT shall
generate those monthly servicing reports currently in use by CCRT applicable to
the Service Level Standards and provide such reports to the Service Team on the
tenth (10th) calendar day of each month, or, if such date falls on a day that
is not a Business Day in any particular month, then CCRT shall forward the
Service Level Standards report to the Service Team on the following Business
Day.  Where no such reports are currently
in use by CCRT relative to any given Service Level Standard, CCRT shall produce
a report on the same indicating whether CCRT failed the Remediation Level or
the Termination Level and if reasonably feasible, the level of performance.

 

Section 4.06.                                                     Customer
Experience.  CCRT and Accounts Owner
shall perform routine surveys of randomly selected Cardholders according to a
script previously developed by CCRT and reviewed by Accounts Owner that shall
include, questions that shall assist the Service Team in determining if
Cardholders can register disputes or complaints in accordance with Requirements
of Law and Operating Rules.  The Service
Team shall review the results of such surveys and recommend any changes or
additions to servicing procedures based on such review.

 

Section 4.07.                                                     Action
Plan and Dispute Resolution.

 

(a)                                  Formal Action Plan.  In the event that an individual Service Level
Standard indicator fails to exceed the Remediation Level two (2) consecutive
calendar months, the following shall occur:

 

(i)                                     Accounts Owner may
request a written remedial plan from CCRT that shall include the specific steps
and deliverables proposed to remedy the failure, accompanied by a detailed
implementation timeline.  CCRT agrees to
supply such action plan to Accounts Owner for its approval within ten (10) Business
Days of Accounts Owner’s request; and

 

(ii)                                  CCRT shall implement
such action plan (at its sole expense) as soon as reasonably possible after
receiving approval of the action plan from Accounts Owner, and provide Accounts
Owner with periodic updates, according to the plan duration and components, of
its progress in meeting the milestones and providing the deliverables to
correct the failure; provided, however, that in the event a
resolution or agreement to establish a remedial plan or resolution is not
reached, or if an approved remedial plan has not been implemented within the
lesser of one hundred and ten percent (110%) or ten (10) Business Days of
the time therein provided, the outstanding issues giving rise to the request
for such plan or the delay in implementation of such plan shall be submitted to
senior level executives of Accounts Owner and CCRT for a definitive resolution
taking into account the compliance issues and performance involved within five (5) Business
Days after Accounts Owner notifies CCRT that the proposed

 

21

 

action is not approved.  For CCRT, that senior level executive shall
be its Chief Operations Officer.  For
Accounts Owner, that senior level executive shall be James R. Farrar or such
other senior level executive as designated by Accounts Owner.  The senior level executives shall have five (5) Business
Days to agree upon an action plan.

 

(b)                                 Resolution Period.  In the event that the senior level executives
are unable to reach agreement or resolution within the time periods afforded in
Section 4.07(a) (the “Resolution Period”), CCRT shall
pay to Accounts Owner the following graduated and cumulative compliance fees
for each day after expiration of the Resolution Period until the earlier
of:  (i) Accounts Owner and CCRT
reach an agreement, (ii) the elapse of forty five (45) days, or (iii) the
delivery of written notice by either Accounts Owner or CCRT and to the other
Party that the notifying Party elects to pursue expedited arbitration pursuant
to Section 4.07(d) below:

 

	
  Business
  Days After

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Expiration of  Resolution Period:

  	
   

  	
  1-15

  	
   

  	
  16-30

  	
   

  	
  31-45

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Compliance Fee Per Day:

  	
   

  	
  $

  	
  250

  	
   

  	
  $

  	
  500

  	
   

  	
  $

  	
  1,000

  	
   

  
											

 

Example:  If agreement were reached upon the thirty
first (31st) day following expiration of the Resolution Period, CCRT’s
liability for compliance fees hereunder would aggregate (15 x $250) + (15 x
$500) + (1 x $1,000) = $12,250.

 

(c)                                  Compliance Fee
Payment.  Any compliance fees shall
become due and immediately payable at the end of each day.

 

(d)                                 Arbitration.  In the event agreement or remediation is not
reached by the end of the Resolution Period, Accounts Owner and CCRT shall
proceed to expedited binding arbitration as provided in this Section 4.07(d).  The arbitration shall be conducted by
Resolution Resources Corporation (“RRC”) in the Atlanta, Georgia office
or Judicial Arbitration and Mediation Services, Inc. (“JAMS”) in
the Atlanta, Georgia office if RRC ceases to maintain any Georgia office.  The expedited arbitration shall be conducted
as follows, and the arbitration administration shall be conducted pursuant
hereto, with the arbitrator authorized to conduct such arbitration pursuant
hereto.  The sole, neutral arbitrator
shall have, as reasonably determined by the arbitration administrator, at least
ten (10) years’ experience in the private practice of banking regulatory
or compliance law on behalf of financial institutions and be a member in good
standing of the bar of at least one (1) of the fifty (50) states in
the United States.  Upon the selection of
the arbitrator, the Accounts Owner and CCRT shall submit briefs within two (2) weeks,
and a hearing shall be held within three (3) weeks of such
selection.  The final decision, determination
and award shall be rendered within ten (10) days after the conclusion of
the hearing.

 

(e)                                  Remedies
Cumulative.  The indemnity, cost
allocation and termination provisions of this Agreement shall, by their terms,
apply to any continuing failure by CCRT or its Affiliates and/or any Service
Provider to adhere to the applicable Servicing Level Standards set forth herein
or in the Manual.

 

22

 

Section 4.08.                                                     Website
Linkage Approval.  CCRT shall not
grant permission to any Website used to advertise or service the Accounts to be
linked to or linked from any other Website without the prior written approval
of Accounts Owner or pursuant to a mutually agreed upon approval process for
granting such Website linkage.  In the
event that CCRT has Knowledge that another entity whose Website contains
objectionable content (including hate or pornographic messages) has linked to a
Website that advertises or services the Accounts, CCRT shall use commercially
reasonable efforts to, as soon as practicable, remove, or cause to be removed,
such link.  Without limiting the
generality of the foregoing, CCRT shall take all reasonable steps as may be
necessary to ensure that Internet advertising shall be displayed only on
Websites containing material that is not of a sexual, hateful, illegal,
discriminatory or offensive nature.

 

Section 4.09.                                                     CCRT
Business Plans.  Except to the extent
prohibited by Requirements of Law and any confidentiality agreement with a
third party, CCRT shall, to the extent practicable, provide Accounts Owner
reasonable advance written notice of any entrance into new lines of business or
any material change or expansion of existing lines of business.  Within 30 days of the Effective Date, CCRT
shall provide Accounts Owner with a complete listing all Non-Program Products
and services offered by CCRT.  CCRT shall
provide Account Owner with any additions, deletions or other changes to such
listing within thirty (30) days of the end of each calendar quarter.

 

Section 4.10.                                                     Business
Continuity and Recovery Standards. 
CCRT shall maintain the Business Continuity and Recovery Standards as
set forth in Exhibit E.  For
situations classified as a site disaster, including tornado, flood, or
earthquake, or any other Force Majeure Event, CCRT shall implement its disaster
recovery plan, as approved by the Service Team. 
For a period of forty eight (48) hours, unless an extension of such time
is determined in the reasonable judgment of the Service Team to be justified,
Service Level Standards affected by system failures as a result of the disaster
shall not apply to any calculation of performance.  After such period has expired, the Service
Level Standards shall become active again.

 

Section 4.11.                                                     Inspections.  CCRT shall make available its facilities,
personnel and records for examination or audit (a) when requested by
Governmental Authorities with jurisdiction over Accounts Owner (including the
Federal Deposit Insurance Corporation and the Georgia Commissioner of Banking) (b) when
required by any applicable card association or credit card sponsoring entity in accordance with its Operating Rules or (c) as
contemplated in Section 3.11. 
CCRT shall ensure that, with respect to any activity performed by a
Service Provider pursuant to the terms hereof, Accounts Owner shall have the
right to access the facilities, personnel and records of such Service Provider
for purposes of any inspection covered by this Section 4.11.

 

Section 4.12.                                                     Removal
of Services.

 

(a)                                  Removed Service.  For any Service Level Standard that is not
implemented within the time provided herein, or for which the applicable
Service Level Standard indicator subsequently fails to exceed the Termination
Level (as defined in the Exhibit D) for two (2) consecutive
calendar months, Accounts Owner shall have the right to require that CCRT or
the applicable Service Provider cease performing the services resulting in such
Service Level

 

23

 

Standard failure (for any such service required
to be removed, the “Removed Service”) in such time as Accounts Owner in
its reasonable discretion (and, subject to then-existing exigencies, with
reasonable regard to allowance of adequate time to enable the Service Team to
formulate a recommendation as below provided) deems practicable (“Cessation
Date”).  Subject only to the
conditions herein provided, Accounts Owner in its sole discretion shall select
a third party provider to whom to transfer the Removed Service (“Third Party
Provider”).  In the event of
concurrent Service Level Standards failures giving rise to a right of cessation
hereunder, Accounts Owner, in its reasonable discretion, may select the same or
different Third Party Providers for the corresponding Removed Service(s).

 

(b)                                 Transition of
Services.  The transition of the
Removed Service shall take place in an orderly and smooth transition, with
input from the Service Team whenever practicable, and CCRT and Accounts Owner
shall fully cooperate and use their respective best efforts to transfer the
Removed Service to the Third Party Provider(s) without disruption to services
provided to Cardholders.  Subject to the
Cessation Date, the Service Team shall endeavor to meet and identify those
other providers capable of providing a Removed Service at levels set forth in
the pertinent Service Level Standard(s) and to make a timely good faith
recommendation thereon to Accounts Owner prior to the Cessation Date.  In the event the Service Team makes a recommendation
prior to the Cessation Date, Accounts Owner shall follow the Service Team’s
recommendation for a substitute Third Party Provider(s) unless Accounts Owner
articulates to the Service Team reasonable grounds to do otherwise.  Subject to the Cessation Date, to the extent
that the Service Team is unable to agree upon a provider of the Removed
Service, senior level executives of Accounts Owner and CCRT shall meet in good
faith and identify suitable providers for the Removed Service.  All costs and expenses of performing the
Removed Service shall be borne by CCRT. 
In no event, however, shall Accounts Owner require, without the consent
of CCRT, that any Removed Service be performed by any Person in which Accounts
Owner or Synovus has any material direct or indirect ownership interest.

 

Section 4.13.                                                     Non-Program
Prohibitions.

 

(a)                                  General
Prohibition.  Except and unless
expressly and previously approved in writing by Accounts Owner, CCRT and CAC
shall at all times during the Term, fully, strictly, completely and totally
segregate, in any and all respects whatsoever, the Program from the products
and services related to any other business line of CCRT and CAC, of any
Affiliate of CCRT and CAC, and of any third party (any such other business
line, product or service a “Non-Program Product”).  Without limiting the generality of the
foregoing, CCRT and CAC shall ensure that:

 

(i)                                     there is no
marketing, solicitation, advertising, description, promotion or other
communication of any kind whatsoever, with or without using the “Aspire” brand
name, any other Program brand name or mark, or the CB&T Marks, stating,
implying or otherwise suggesting, directly or indirectly, any link, tie,
association, incentive, credit, discount, or cooperation of any kind or nature
whatsoever between the Program and any Non-Program Product;

 

24

 

(ii)                                  there is no consumer
financial link, tie, association, incentive, credit, discount, or cooperation
of any kind or nature whatsoever between the terms, offerings or pricing of the
Program and any Non-Program Product;

 

(iii)                               there is no marketing,
solicitation, advertising, promotion or other communication of any kind
whatsoever, using or placing the “Aspire” brand name, any other Program brand
name or mark, or the CB&T Marks with the name or marks of any Non-Program
Product;

 

(iv)                              there is no display,
placement or other use of any Solicitation Materials at any place of business
open to the general public of CCRT or any of its Affiliates or any third party
which sells or offers any Non-Program Product, including any payday loan or
automobile loan;

 

(v)                                 there is no
communication of any kind whatsoever by CCRT or its Affiliates or any third
party engaged by CCRT or its Affiliates counseling or otherwise encouraging
consumers or potential customers of any Non-Program Product to use the Program
to fund, secure, repay or otherwise satisfy any indebtedness incurred pursuant
to any Non-Program Product, including any payday loan or automobile loan
programs;

 

(vi)                              there is no incentive of
any kind whatsoever to any employees or agents of CCRT or its Affiliates or any
third party engaged by CCRT or its Affiliates in the sales or servicing of any
Non-Program Product to refer or sell the products or services offered pursuant
to the Program;

 

(vii)                           there is no inclusion of any
Non-Program Product information or materials in any marketing, solicitation,
advertising, or other communications related to the Program and there is no
inclusion of any Program product information or materials in any marketing,
solicitation, advertising, or other communications related to any Non-Program
product;

 

(viii)                        there is no use of any
information obtained from Accounts Owner or otherwise in connection with the
Program for marketing, soliciting, advertising, or otherwise promoting any Non-Program
Products;

 

(ix)                                there is no link, tie,
association, incentive, credit, discount, or cooperation or other financial
incentive provided to any Non-Program Product tied to any Credit Card or any
Benefits offered under the Program;

 

(x)                                   there is no formal
or informal plan, scheme or undertaking to migrate any customers or potential
customer of a Non-Program Product to the Program or any Cardholders to any
Non-Program Product,

 

(xi)                                there is no use or
sharing of any Program Cardholder List or Program customer information in
connection with any Non-Program Product and there is no use  or sharing of any Non-Program Product
customer information in connection with any product or service offered pursuant
to the Program; and

 

25

 

(xii)                             there is no other
marketing, solicitation, advertising or promotional activities of any kind or
nature between the Program and any Non-Program Product.

 

The prohibitions covered by this Section 4.13(a) are,
collectively, “Non-Program Prohibitions.”  For purposes of this Agreement, Non-Program
Prohibitions shall not include:

 

(A)                              any marketing by CCRT and
its Affiliates of Program products and services offered or undertaken pursuant
to the terms of this Agreement;

 

(B)                                any incidental
marketing of Credit Cards to Non-Program Product customers or solictees (“NPP
Names”) occurring when the NPP Names are part of marketing lists derived
from generally available data (such as credit bureau reporting data), provided
that (1) the Credit Card marketing is not specifically targeted to the NPP
Names; (2) the NPP Names satisfy the Credit Criteria; and (3) the
data used for such marketing were not acquired in connection with Non-Program
Product marketing;

 

(C)                                any incidental
marketing of Non-Program Products to Cardholders, authorized users of Accounts
or Credit Card solictees (“CC Names”) occurring when the CC Names are
part of marketing lists derived from generally available data (such as credit
bureau reporting data), provided that (1) the Non-Program Products are not
specifically targeted to CC Names; and (2) the data used for such
marketing were not acquired in connection with Program marketing; and

 

(D)                               the use of the same
Service Provider to provide services for Program and Non-Program Products and
the receipt of any volume discounts by CCRT or its Affiliates from such Service
Provider.

 

(b)                                 Notice Requirements.

 

(i)                                     CCRT and CAC shall
each ensure that it informs its director of compliance, Compliance Officer,
staff attorneys, and the director of each business unit of the Non-Program
Prohibitions, and shall take those actions reasonably expected to prevent the
occurrence of any Non-Program Prohibition. 
CCRT and CAC shall each adopt appropriate policies and procedures to
require any of its director of compliance, Compliance Officer, staff attorneys,
and the director of each business unit to inform the CompuCredit Compliance
Officer (or in the absence or unavailability of the CompuCredit Compliance
Officer, to inform CCRT’s General Counsel), upon discovering or learning of any
event that is, or is reasonably likely to result in, a Non-Program Prohibition.

 

(ii)                                  Upon CCRT or CAC
becoming aware of any violation of any Non-Program Prohibition, CCRT or CAC
shall promptly, but in no event later than five (5) Business Days of
becoming aware of any such violation of a Non-Program Prohibition, send a
written notice (“Non-Program Violation Notice”) to Accounts Owner
informing Accounts Owner of such violation. 
Any Non-Program Violation Notice shall include the date the violation
occurred and the specific information available to Accounts Owner at the time
with respect to such violation.  For
purposes of determining when CCRT or CAC became aware of any violation of any
Non-Program Prohibition, the date upon which any such violation becomes known
to any of its compliance staff, staff attorneys, or any manager with the title
of vice president or above

 

26

 

shall be deemed the date CCRT or CAC has
knowledge of any such violation (any such date, the “Non-Program Violation
Date”).

 

(c)                                  Liquidated Damages
for Violation of Non-Program Prohibitions. 
In the event of a violation of any Non-Program Prohibition, in addition
to any other rights and remedies set forth herein or otherwise available,
Accounts Owner shall have the following rights and remedies and CCRT and CAC,
as applicable, shall have the following obligations:

 

(i)                                     With respect to
the first occurrence of any violation of any Non-Program Prohibition, CCRT
shall immediately pay Accounts Owner as liquidated damages the amount of one
hundred thousand dollars ($100,000.00). 
In addition, CCRT and CAC shall, within a period of two (2) Business
Days from the Non-Program Violation Date with respect to such violation, either
(1) have cured such violation, if such violation is capable of being cured
within such time period, to the satisfaction of Accounts Owner or (2) if
such violation is not capable of being cured within such time period, have
initiated all necessary actions to cure or correct such violation and prevent
the reoccurrence of such violation and any other violation of a Non-Program
Prohibition, to the satisfaction of Accounts Owner, as soon as practicable
using all commercially reasonable efforts.

 

(ii)                                  In the event of any
subsequent occurrence of a violation of any Non-Program Prohibition, CCRT shall
immediately pay Accounts Owner as liquidated damages the amount of two hundred
fifty thousand dollars ($250,000.00).  In
addition, CCRT and CAC shall, within a period of two (2) Business Days
from the Non-Program Violation Date with respect to such subsequent violation,
either (1) have cured such violation, if such violation is capable of
being cured within such time period, to the satisfaction of Accounts Owner or (2) if
such violation is not capable of being cured within such time period, have
initiated all necessary actions to cure or correct such violation and prevent
the reoccurrence of such violation and any other violation of a Non-Program
Prohibition, to the satisfaction of Accounts Owner, as soon as practicable
using commercially reasonable efforts.

 

(iii)                               In the event CCRT or CAC
fails to take the corrective action set forth in clauses (i) or (ii) above
within the time periods specified therein, CCRT shall immediately pay Accounts
Owner as liquidated damages, in addition to any liquidated damages that may be
due under clauses (i) and (ii) above, the additional amount of two
hundred fifty thousand dollars ($250,000.00).

 

(iv)                              In the event CCRT or CAC
fails to provide Accounts Owner with a Non-Program Violation Notice within the
time period specified in Section 4.13(b)(ii), CCRT shall
immediately pay Accounts Owner as liquidated damages, in addition to any
liquidated damages that may be due under clauses (i) and (ii) and (iii) above,
the additional amount of two hundred fifty thousand dollars ($250,000.00).

 

(v)                                 For the purpose of
calculating any amounts due pursuant to this Section 4.13(c), an
occurrence of any violation of a Non-Program Prohibition shall mean a separate
product, service or offering, in the aggregate, that is offered as part of a
single promotional campaign, such that by way of illustration only, a
solicitation by CCRT’s Affiliate

 

27

 

of a Non-Program Product to 10,000 Aspire
cardholders shall be considered a single occurrence if it occurs as part of a
single promotional campaign.

 

(d)                                 Prohibiting New
Accounts and Offers.  In the event (i) CCRT
or CAC fails to provide Accounts Owner with a Non-Program Violation Notice
within the time period set forth in Section 4.13(b)(ii) or (ii) any
violation of the Non-Program Prohibition is not cured within a period of five (5) Business
Days from the Non-Program Violation Date or CCRT or CAC has not initiated all
necessary actions to cure or correct such violation within such time period, in
either case to the reasonable satisfaction of Accounts Owner, in addition to
the liquidated damages available under Section 4.13(c), Accounts
Owner shall be entitled, effective upon written notice to CCRT and CAC, to
refuse to permit any offers or solicitations for new Accounts to be made.

 

(e)                                  Accounts Owner
Corrective Action.  In the event any
violation of any Non-Program Prohibition is not cured within a period of five (5) Business
Days from the Non-Program Violation Date or CCRT or CAC has not initiated all
necessary actions to cure or correct such violation within such time period, in
either case to the reasonable satisfaction of Accounts Owner, in addition to
the other remedies set forth herein, Accounts Owner shall have the right,
effective upon written notice to CCRT and CAC, to take any immediate corrective
action that Accounts Owner, in its reasonable discretion, deems necessary or
appropriate to cure or correct any such violation with respect to the
Non-Program Product, and such action taken shall, upon notice to CCRT and CAC,
be fully binding upon CCRT and CAC prospectively from the date of such
notice.  CCRT shall be responsible for,
and shall reimburse Accounts Owner for, any and all costs and expenses
associated with any such corrective action, including legal fees.

 

(f)                                    Termination of
Agreement.

 

(i)                                     In the event any
violation of any Non-Program Prohibition is not cured to the reasonable
satisfaction of Accounts Owner within a period of thirty (30) days from the
date of the Non-Program Violation or if such violation is not capable of being
cured within such time period, if CCRT or CAC has not initiated all reasonably
appropriate actions to cure or correct such violation within such time period,
in either case, to the reasonable satisfaction of Accounts Owner, in addition
to the other remedies set forth herein, Accounts Owner shall have the right to
terminate this Agreement, effective immediately upon sending written notice to
CCRT and CAC.

 

(ii)                                  In the event CCRT or
CAC fails to provide Accounts Owner with a Non-Program Violation Notice within
ten (10) Business Days of the Non-Program Violation Date, in addition to
the other remedies set forth herein, Accounts Owner shall have the right to
terminate this Agreement, effective immediately upon sending written notice to
CCRT and CAC.

 

(iii)                               In the event CCRT or CAC
fails to replenish the Letter of Credit for any amount drawn pursuant to Section 4.13(h) within
the time period specified therein, in addition to the other remedies set forth
herein, Accounts Owner shall have the right to terminate this Agreement,
effective immediately upon sending written notice to CCRT and CAC.

 

28

 

(iv)                              Upon termination of this
Agreement pursuant to this Section 4.13(f), Accounts Owner shall be
entitled to rely on the protections provided by Section 4.13(e) and
refuse to permit any offers for new Accounts to be made during the Wind Down Period.

 

(v)                                 Upon termination of
this Agreement pursuant to this Section 4.13(f), each of the
Parties shall have the rights and obligations set forth in Section 14.05.

 

(g)                                 Intentional
Violations.  Notwithstanding any
other provision contained in this Section 4.13 and in addition to
any other rights and remedies set forth herein or otherwise available, if
Accounts Owner in its sole discretion reasonably determines that CCRT or CAC
has intentionally violated a Non-Program Prohibition or that such violation has
occurred due to the gross negligence or willful misconduct of CCRT or CAC,
Accounts Owner shall be entitled, effective upon written notice to CCRT and
CAC, to refuse to permit any offers or solicitations for new Accounts to be
made.

 

(h)                                 Liquidated Damages
Payment and Letter of Credit Draw. 
CCRT shall pay Accounts Owner for any liquidated damages due under this Section 4.13
and for any costs and expenses incurred by Accounts Owner reimbursable by CCRT
pursuant to Section 4.13(e) within two (2) Business Days
of a written request for payment from Accounts Owner.  In the event CCRT fails to pay such amounts
as provided herein, Accounts Owner may immediately access the Letter of Credit
for any liquidated damages due under this Section 4.13 and for any
costs and expenses incurred by Accounts Owner with respect to any corrective
action reimbursable by CCRT pursuant to Section 4.13(e).  CCRT shall be responsible for replenishing
any such amounts drawn upon within a period of three (3) Business Days and
provide Accounts Owner confirmation from the Letter of Credit bank that the
amount of the Letter of Credit has been replenished by an amount corresponding
to the amount drawn by Accounts Owner.

 

(i)                                     Acknowledgement
of Reasonableness of Liquidated Damages. 
CCRT and CAC recognize and acknowledge that the liquidated damages
provided for in this Section 4.13 are difficult or impossible to
calculate and therefore the liquidated damages set forth herein represent the
Parties’ best estimate of the damages Accounts Owner will incur as a result of
any breach by CCRT or CAC of the Non-Program Prohibitions set forth in this Section 4.13
and that payment of such liquidated damages amounts represent a reasonable
estimate of the total net detriment that Accounts Owner would suffer in the
event that CCRT or CAC breaches the Non-Program Prohibitions of this Section 4.13.  CCRT and CAC recognize and acknowledge that
any such liquidated damages amount is not intended as a forfeiture or penalty,
but is intended to constitute liquidated damages to Accounts Owner.

 

(j)                                     Remedies
Cumulative.  Nothing contained in
this Section 4.13 shall be deemed or construed or serve to limit
Account’s Owner right to any other remedies available hereunder or waive or
affect CCRT’s indemnity obligations and Accounts Owner’s rights to those
indemnity obligations under this Agreement.

 

(k)                                  Equitable Relief.  CCRT and CAC recognize and acknowledge that
Accounts Owner will suffer irreparable injury in the event of any breach of
this Section 4.13 and that therefore the remedy at law for any
breach or threatened breach of any such provision will

 

29

 

be inadequate.  Accordingly, upon a breach or threatened
breach of any such provision by CCRT, the Accounts Owner shall, in addition and
without prejudice to any other rights and remedies it may have, be entitled as
a matter of right, without proof of actual damages, to seek specific
performance of such provision and to such other injunctive or equitable relief
(without requirement of posting any bond) to enforce or prevent any violation
(whether anticipatory, continuing or future) of such provision.

 

Section 4.14.                                                     Subcontracting
and Access Rights.

 

(a)                                  Subcontracting.  CCRT shall be permitted to subcontract any
services; provided, however, that the subcontracting of material,
principal servicing functions, including the services listed on the Service
Level Standards, shall be permitted only upon prior approval of Accounts Owner
pursuant to the terms of the Compliance Plan.  At all times that CCRT is performing services,
or subcontracting such services, CCRT shall remain primarily responsible for
the Service Level Standards and compliance in all respects with all applicable
Requirements of Law and Operating Rules, without regard to whether any service
in issue is subcontracted.

 

(b)                                 Accounts Owner
Information Rights.  Upon the written
request of Accounts Owner, CCRT shall provide Accounts Owner with a list of all
Service Providers with whom CCRT has a relationship that directly relates to
the Accounts and the performance by CCRT of its material obligations under this
Agreement.  At the written request of
Accounts Owner, CCRT shall provide such reasonable additional information with
respect to any Service Provider and otherwise reasonably cooperate with
Accounts Owner as may be necessary or appropriate to allow Accounts Owner to
determine whether the manner in which such Service Provider provides services
in connection with the Accounts complies with applicable Requirements of Law
and Operating Rules and the terms of this Agreement.

 

(c)                                  Accounts Owner
Step In Rights.  Upon the occurrence
of an Event of Default, Accounts Owner shall have the right to assume all of
CCRT’s rights in any contractual arrangement with any Service Providers.  CCRT shall execute the form of authorization
set forth in Exhibit J authorizing Accounts Owner to exercise the
rights of CCRT under such agreement, including the right to terminate such
agreement.  CCRT shall be responsible for
any termination or other fees due under such agreement in the event Accounts
Owner terminates such agreement.

 

Section 4.15.                                                     Credit
Card Association Compliance.  CCRT
shall ensure that its services hereunder and any services performed by its
Service Providers comply with all applicable Operating Rules and any other
requirements imposed by any credit card association or card sponsoring entity
whose cards are included in the Program. 
CCRT shall be responsible for any fees imposed by any such credit card
association or credit card sponsoring entity and for any fines or penalties for
CCRT’s or its Service Providers’ failure to comply with the applicable
Operating Rules and any other requirements imposed by such association or
entity to the extent such fines or penalties are attributable to CCRT or its
Service Providers.

 

[END OF ARTICLE IV]

 

30

 

ARTICLE V

RECEIVABLES PURCHASER RIGHTS & OBLIGATIONS

 

Section 5.01.                                                     Receivables
Purchaser Obligations.

 

(a)                                  Purchase of
Receivables.

 

(i)                                     CCRT Purchases.  Accounts Owner does hereby sell, transfer,
assign, set over and otherwise convey to CCRT, without recourse except as
provided herein, and CCRT does hereby purchase, on a daily basis,  one
hundred percent (100%) of the Originated Account Receivables in excess of the
Aggregate Retained Amount (including all collections and payments with respect
to, and all proceeds of, such Originated Account Receivables).  For purposes of this Section 5.01(a)(i),
the “Purchase Price” shall be equal to one hundred percent (100%) of the
daily Settlement Amount related to such day’s originated Originated Account
Receivables in excess of the Aggregate Retained Amount.  Accounts Owner and CCRT intend that the
conveyance to CCRT of Accounts Owner’s right, title and interest in and to such
Originated Account Receivables shall constitute a sale and not a secured
borrowing, including for accounting purposes. 
To the extent, however, that such conveyance does not constitute a sale,
Accounts Owner hereby grants to CCRT a security interest in all of its right,
title and interest, whether now owned or hereafter acquired, in, to and under
the Originated Account Receivables and the proceeds thereof.  CCRT shall provide
Accounts Owner daily with a report setting forth the calculation of all amounts
due under this Section 5.01(a)(i).

 

(ii)                                  CAC Purchases.  Accounts Owner does hereby sell, transfer,
assign, set over and otherwise convey to CAC, without recourse except as
provided herein, and CAC does hereby purchase, on a daily basis, one
hundred percent (100%) of the Acquired Account Receivables in excess of the
Aggregate Retained Amount (including all collections and payments with respect
to, and all proceeds of, such Acquired Account Receivables).  For purposes of this Section 5.01(a)(ii),
the “Purchase Price” shall be equal to one hundred percent (100%) of the
daily Settlement Amount related to such day’s originated Acquired Account
Receivables in excess of the Aggregate Retained Amount.  Accounts Owner and CAC intend that the conveyance
to CAC of Accounts Owner’s right, title and interest in and to such Acquired
Account Receivables shall constitute a sale and not a secured borrowing,
including for accounting purposes.  To
the extent, however, that such conveyance does not constitute a sale, Accounts
Owner hereby grants to CAC a security interest in all of its right, title and
interest, whether now owned or hereafter acquired, in, to and under the
Acquired Account Receivables and the proceeds thereof.  CCRT shall provide
Accounts Owner daily with a report setting forth the calculation of all amounts
due under this Section 5.01(a)(ii).

 

(b)                                 Settlement
Procedures.

 

(i)                                     Settlement for
Visa, MasterCard, the Federal Reserve (only for convenience checks) and any
applicable card association or credit card sponsoring entity shall each be
undertaken separately no later than 2:00 p.m. (Eastern time) on each
Business Day.  Accounts Owner shall
notify by facsimile transmission the Chief Financial Officer or such officer’s
designee at each Receivables Purchaser of each Settlement Amount due to or owed
by such Receivables Purchaser for transactions pursuant to Section 5.01(a) above.  Payments due

 

31

 

for any day shall be made by the appropriate
Party by wire transfer no later than 4:00 p.m. (Eastern time), unless
Accounts Owner is late in notifying the applicable Receivables Purchaser of the
Settlement Amount due for any day, in which case the appropriate Party shall
use all reasonable efforts to send the wire transfer within the time period set
forth above or as soon thereafter as possible, but in any event no later than
5:00 p.m. (Eastern time) of the next Business Day following such
Receivables Purchaser’s receipt of notice from Accounts Owner.  In the event the wire transfer of the full
Purchase Price due from such Receivables Purchaser is not received by Accounts
Owner by 3:00 p.m. (Eastern time) of the next Business Day following such
Receivables Purchaser’s receipt of notice from Accounts Owner, Accounts Owner
may immediately access the Letter of Credit for such past due amount.  The delay until 3:00 p.m. (Eastern time)
of the next Business Day shall only apply to the first day’s failure to receive
the full Purchase Price from such Receivables Purchaser due within a six (6) month
period and does not apply to any subsequent day’s failure by such Receivables
Purchaser within such six (6) month period.  For any subsequent days’ failure within such
six (6) month period, Accounts Owner shall be entitled to immediately
access the Letter of Credit for the sum of the past due amount, plus a fee of
ten thousand dollars ($10,000.00).  The
Parties acknowledge and agree that from time to time, Accounts Owner, in its
sole discretion may, but shall have no obligation to, delay exercising its
right to immediately access the Letter of Credit for any past due amount
pursuant to this Section 5.01(b)(i).  In no event shall any such delay be deemed to
be a waiver by Accounts Owner of the right to (A) immediately access the
Letter of Credit at any time prior to payment of such past amounts due, (B) to
receive payment of all such amounts when due or (C) to immediately access
amounts under the Letter of Credit for any such amounts that subsequently
become past due.

 

(ii)                                  The Party receiving
payment shall promptly notify the Party sending payment by facsimile or written
electronic transmission if any such required payment is not received when due
and shall use reasonable efforts to provide such notice to the Party sending
payment by 5:30 p.m. (Eastern time) of the due date but in no event shall
such notice be given later than 12:30 p.m. (Eastern time) of the Business
Day following said due date.

 

(c)                                  Dispute and Letter
of Credit Draw.

 

(i)                                     In the event a
Receivables Purchaser has reason to dispute the accuracy of the Settlement
Amount reported by Accounts Owner for any day, such Receivables Purchaser shall
promptly so notify Accounts Owner, but such notice shall not effect any Party’s
obligation for timely payment of the Settlement Amount as noticed by Accounts
Owner.

 

(ii)                                  In the event it is
determined that a Receivables Purchaser was correct in disputing the accuracy
of the Settlement Amount for a given day, or if Accounts Owner shall fail for
any other reason to properly remit the Settlement Amount due for any given day
to such Receivables Purchaser, Accounts Owner shall promptly remit to such
Receivables Purchaser (A) the amount due such Receivables Purchaser with
interest thereon computed at the rate of three (3) percentage points above
the Accounts Owner “Prime Rate” in effect on the date said sum was first due,
or (B) one hundred dollars ($100.00), whichever is greater.

 

(iii)                               If a Receivables
Purchaser shall fail for any reason to remit to Accounts Owner the Settlement
Amount due for any given day, then such Receivables Purchaser

 

32

 

shall promptly remit to Accounts Owner the
amount due Accounts Owner with interest thereon from the date such sum was due
until the date the Settlement Amount is paid, computed at the rate of three (3) percentage
points above the Accounts Owner Prime Rate in effect on the date said sum was
first due.  However, if a Receivables
Purchaser makes a payment under this provision and Accounts Owner uses the
Letter of Credit to satisfy the Purchase Price due from such Receivables
Purchaser then Accounts Owner shall (A) have the right to retain such
duplicate payment by such Receivables Purchaser as security for such
Receivables Purchaser’s obligations under this Agreement until receipt by
Accounts Owner of written confirmation from the Letter of Credit bank that the
amount of the Letter of Credit has been replenished by an amount corresponding
to such Receivables Purchaser’s duplicate payment, and, upon receipt of such
confirmation, Accounts Owner shall promptly remit to such Receivables Purchaser
the amount due such Receivables Purchaser and (B) if Accounts Owner’s
remittance is made more than one (1) Business Day following the receipt by
Accounts Owner of such confirmation, with (1) interest thereon computed at
the rate of three (3) percentage points above the Accounts Owner Prime
Rate in effect on the date said sum was paid in duplicate, for each full
Business Day between the receipt by Accounts Owner of such confirmation and
Accounts Owner’s remittance, or (2) one hundred dollars ($100.00),
whichever is greater.

 

(iv)                              If a Receivables
Purchaser fails on any given day to pay the Purchase Price due from such
Receivables Purchaser indicated by Accounts Owner, as provided hereunder, even
in the event such Receivables Purchaser disputes such amount, and such failure
is not cured within five (5) Business Days from the date such Receivables
Purchaser receives notification of nonpayment, Accounts Owner may (but need not
and without waiver of its rights), in addition to any other rights and remedies
it may have, upon notice to applicable Receivables Purchaser sell to any third
party any interest in the applicable Receivables that such Receivables
Purchaser failed to purchase; provided, however, that Accounts
Owner shall not sell any interest in the applicable Receivables until it shall
have utilized all funds available under the Letter of Credit to purchase the
applicable Receivables for such Receivables Purchaser’s account.

 

(d)                                 Account Ownership.  Accounts Owner shall remain the owner of all
Accounts, notwithstanding any sale of any Receivables to a Receivables
Purchaser or a third party, under this Section 5.01.  Neither Receivables Purchaser shall be deemed
to have assumed any obligations of Accounts Owner with respect to the Accounts
by virtue of any purchase of an interest in Receivables hereunder.  Except as otherwise provided herein, Accounts
Owner shall not sell any Receivables or any interest therein to any third party
without the prior written consent of the applicable Receivables Purchaser.

 

(e)                                  Additional
Documentation.  The sale of
Receivables contemplated in Section 5.01(a) shall occur upon
settlement therefor by or on behalf of the applicable Receivables Purchaser and
no additional documents shall be required by the Parties to effect any such
sale.  Notwithstanding the foregoing, if,
in the reasonable judgment of a Party, in connection with any such purchase and
sale, any additional instrument, document, or certificate is required to
further evidence such purchase and sale, the other Party shall execute and
deliver any such document.

 

(f)                                    Full Purchase
Price.  The Parties acknowledge that
notwithstanding references in this Agreement to the Settlement Amount, the
payment due for any day from a

 

33

 

Receivables Purchaser shall include the full
Purchase Price for Receivables sold to such Receivables Purchaser.  The Parties further acknowledge and agree
that any proceeds, or other collections or other accounts related to the
Receivables purchased by a Receivables Purchaser shall not be reduced by any
amounts owed by such Receivables Purchaser in respect of the Purchase Price of
Receivables sold to such Receivables Purchaser, and such proceeds shall be
deposited daily into an account or accounts as designated by such Receivables
Purchaser.

 

Section 5.02.                                                     Regulatory
Inspections.  Each Receivables
Purchaser shall make available its facilities, personnel and records for examination
or audit (a) when requested by Governmental Authorities with jurisdiction
over Accounts Owner (including the Federal Deposit Insurance Corporation and
the Georgia Commissioner of Banking) or (b) when required by any
applicable card association or credit card sponsoring entity in accordance with
its Operating Rules.

 

[END OF ARTICLE V]

 

34

 

ARTICLE VI

FINANCIAL PROVISIONS

 

Section 6.01.                                                     Deposit.  Throughout the Term, CCRT shall maintain at
Accounts Owner a non-interest bearing deposit of one million dollars
($1,000,000.00) (the “Deposit”). 
Such Deposit shall be refundable to CCRT and paid to CCRT by Accounts
Owner after termination of this Agreement, after all amounts due to Accounts
Owner pursuant to this Agreement have been paid, but in no event earlier than
thirty (30) days following termination of this Agreement.  The Deposit shall bear interest at Accounts
Owner’s Prime Rate from the date of termination of this Agreement until the
Deposit is refunded to CCRT.

 

Section 6.02.                                                     Letter
of Credit.  Commencing within thirty
(30) days of the Effective Date and thereafter during the Term, CCRT shall
maintain an irrevocable letter of credit in the amount of ten million dollars
($10,000,000.00) (such letter and any replacement or additional letters are
collectively referred to as “Letter of Credit”) in favor of Accounts
Owner with a financial institution approved by Accounts Owner to secure its
obligations under this Agreement.  The
Letter of Credit shall be substantially in the form attached as Exhibit F.  The Letter of Credit shall be irrevocable
through the termination of this Agreement and thereafter until Accounts Owner
shall no longer own any of the Accounts. 
In the event the Letter of Credit is not renewed prior to five (5) Business
Days before its expiration, Accounts Owner may draw down the entire amount of
the Letter of Credit, and hold such funds as collateral in an interest bearing
account designated by Accounts Owner (with interest at a rate equal to the
monthly LIBOR rate as published in the Wall Street Journal), and may apply such
funds to any amounts due Accounts Owner hereunder.

 

Section 6.03.                                                     Debt
Waiver Program Fee.  For the services
CCRT provides to Accounts Owner in connection with the Debt Waiver Program,
CCRT shall receive each month a debt waiver servicing and administration fee
equal to the net revenue from the Debt Waiver Program for the month minus a
bank origination percentage of two percent (2%) of net revenue from the Debt
Wavier Program for that month; provided, however, that the bank
origination percentage shall increase to four percent (4%) once reserves are
sufficient to cover the cancellation risk and Accounts Owner converts its
program to a self-insured arrangement from a contractual liability insurance
arrangement.  In no event, however, shall
such origination percentage exceed twenty thousand dollars ($20,000.00) in any
month.  CCRT shall deliver monthly
reports showing net revenues, cancellation risk revenues and other program information
in mutually agreeable format.

 

Section 6.04.                                                     Other
Fees.  Commencing on the Effective
Date, CCRT shall also pay Accounts Owner the fees set forth in Exhibit J.

 

Section 6.05.                                                     Interest
on Late Payments.  In the event CCRT
does not pay Accounts Owner the full amount of fees due under Sections 6.03
and 6.04 within forty five (45) days of the applicable date such payment
is due, CCRT shall be assessed interest charges on the outstanding amounts at
the monthly rate of one and one half percent (1.5%).

 

Section 6.06.                                                     Payments
After Termination.  Termination of
this Agreement shall not terminate CCRT’s obligation to pay Accounts Owner for
all services or other performance

 

35

 

and for all expenses incurred under or in
connection with this Agreement, whether performed or incurred before or after
such termination.

 

Section 6.07.                                                     Non-Credit
Revenue on Accounts.

 

(a)                                  Benefits.  CCRT shall, at its own expense and at no cost
to Accounts Owner, arrange for third parties to provide Benefits to Cardholders
in connection with the Program.

 

(b)                                 Solicitation.  CCRT shall be entitled, at its own expense,
to solicit Cardholders for goods and services, including Benefits, and to place
Materials in communications by Accounts Owner to Cardholders.  No Materials may be distributed by CCRT
without the approval of Accounts Owner.

 

(c)                                  Inserts.  CCRT shall meet all applicable standards and
requirements in connection with inserts in periodic statements and shall comply
with applicable Requirements of Laws and Operating Rules in connection
therewith.

 

(d)                                 Income.  CCRT shall be entitled to retain all income
and fees, if any, resulting from the foregoing Benefits, solicitations,
and promotions.

 

Section 6.08.                                                     Rebates
and Fees.  Any rebates, marketing
fees, revenues or other fees or discounts (including any interchange fees) that
are paid or granted by VISA, MasterCard, or any other applicable card
association or credit card sponsoring entity to Accounts Owner with respect, or
apportionable, to Accounts shall be paid over to the applicable Receivables
Purchaser as additional consideration under this Agreement net of, with respect
to VISA, any Visa Base 1 or Base 2 billings to Accounts Owner, or with respect
to MasterCard, any INET or INAS, with respect, or apportionable, as to each, to
Accounts.

 

36

 

Section 6.09.                                                     State
Tax Assessments.  In the event that
Accounts Owner is or may be liable for State Tax, Accounts Owner shall notify
CCRT and provide appropriate information concerning the State Tax to allow CCRT
to verify the amount of the State Tax and its relationship to activities
undertaken pursuant to the Program.  CCRT
shall reimburse Accounts Owner for such State Tax amount, by the later of
thirty (30) days after the date CCRT receives notice from Accounts Owner or
thirty (30) days after the State Tax is due. 
The Parties shall consult in good faith regarding how the State Tax may
be challenged or minimized in a commercially reasonable manner; provided,
however, that Accounts Owner shall retain in its sole discretion the
right to control all fillings made in connection with such State Tax.  In the event that Accounts Owner receives
reimbursement or credit for any portion of an amount of State Tax paid by CCRT,
Accounts Owner shall promptly pay CCRT for the amount of such reimbursement or
credit.  “State Tax” shall mean
any assessment for any state or local corporate income and Franchise taxes or
similar charges imposed on or measured with respect to Accounts Owner’s net or
gross income, gross receipts, capital stock, or net worth that relate to
activities undertaken pursuant to the Program, excluding any state or local
taxes imposed on Accounts Owner with respect to fees it receives under Section 6.03
and 6.04 and any taxes or charges unrelated to activities undertaken pursuant
to the Program, even if Accounts Owner would not have been required to pay such
taxes or charges but for its participation in the Program.

 

[END OF ARTICLE VI]

 

37

 

ARTICLE VII

REPRESENTATIONS & WARRANTIES

 

Section 7.01.                                                     Representations
and Warranties of Accounts Owner. 
Accounts Owner hereby represents and warrants to, and agrees with, CCRT
and CAC that:

 

(a)                                  Organization.  Accounts Owner is a bank duly organized,
validly existing and in good standing under the laws of the State of Georgia.

 

(b)                                 FDIC Membership.  Accounts Owner is, and at all times during
the Term hereof will remain, a member of the Federal Deposit Insurance
Corporation.

 

(c)                                  Capacity;
Authority; Validity.  Accounts Owner
has all necessary power and authority to make, execute and deliver this
Agreement and the Related Agreements to which Accounts Owner is a party and to
perform all of the obligations to be performed by it under this Agreement and
the Related Agreements to which Accounts Owner is a party.  The making, execution, delivery and
performance of this Agreement and the Related Agreements to which Accounts Owner
is a party and the consummation by Accounts Owner of the transactions
contemplated hereby and thereby have been duly and validly authorized by all
necessary corporate action of Accounts Owner. 
This Agreement and the Related Agreements to which Accounts Owner is a
party have been duly and validly executed and delivered by Accounts Owner and,
assuming the due authorization, execution and delivery hereof and thereof by
the other parties thereto, this Agreement and the Related Agreements to which
Accounts Owner is a party will constitute the valid, legal and binding
obligations of Accounts Owner, enforceable against Accounts Owner in accordance
with their respective terms (except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium, receivership,
conservatorship, and other laws relating to or affecting creditors’ rights
generally and by general equity principles).

 

(d)                                 Conflicts; Defaults.  Neither the execution and delivery of this
Agreement and the Related Agreements to which the Accounts Owner is a party nor
the consummation of the transactions contemplated hereby or thereby by Accounts
Owner will (i) conflict with, result in the breach of, constitute a
default under or accelerate the performance provided by, the terms of any
order, law, regulation, contract, indenture, mortgage, instrument, commitment,
judgment or decree to which Accounts Owner is a party or by which Accounts
Owner is bound, except such conflicts, breaches, defaults or accelerations that
would not have, individually or in the aggregate, a material adverse effect on
Accounts Owner or (ii) violate the articles of incorporation or bylaws, or
any other equivalent organizational document of Accounts Owner.

 

(e)                                  Consents.  Neither the execution and delivery of this
Agreement and the Related Agreements to which Accounts Owner is a party, nor
the consummation of the transactions contemplated hereby and thereby by
Accounts Owner will (i) require any consent, approval, authorization,
registration or filing under any law, regulation, judgment, order, writ, decree,
permit, license or agreement to which Accounts Owner is a party, or (ii) require
the consent or approval of any other party to any contract, instrument or
commitment to which Accounts Owner is a party, other than (A) consents,
approvals, authorizations, registrations or filings with any Governmental
Authority, which have been or will be obtained or made prior to

 

38

 

or on the Effective Date and (B) where
the failure to obtain such consents, approvals, authorizations or registrations
or to make such filings would not have a material adverse effect on Accounts
Owner.  Any such consent, approval,
authorization, registration or filing that has been obtained, effected or given
is in full force and effect.  Accounts
Owner is not subject to any agreement with any Governmental Authority which
would prevent the consummation by it of the transactions contemplated by this
Agreement and the Related Agreements to which Accounts Owner is a party.  Accounts Owner is not in default under, and
no event has occurred which with the lapse of time or action by a third party
could result in a default under, the terms of any judgment, order, writ,
decree, permit or license of any agency of any government or court, whether federal,
state, municipal or local and whether at law or in equity, which would
reasonably be expected to have a material adverse effect on Accounts Owner.

 

(f)                                    Litigation.  There is no action, suit, proceeding, claim,
or other litigation, or any investigation by any Governmental Authority,
pending, or, to Accounts Owner’s Knowledge, any action, suit, proceeding,
claim, or other litigation or any investigation by any Governmental Authority
threatened, against Accounts Owner or any of its Affiliates that has had or
would reasonably be expected to have, individually or in the aggregate, a
material adverse effect on Accounts Owner.

 

(g)                                 Insolvency.  Accounts Owner did not enter into the
transactions contemplated by this Agreement or any Related Agreement to which
Accounts Owner is a party (i) in contemplation of its insolvency, (ii) after
committing an act of insolvency, (iii) with a view to preferring one
creditor over another or to preventing the application of its assets in the
manner required by applicable law or regulations, or (iv) with intent to
hinder, delay or defraud itself or any of its creditors.

 

(h)                                 Compliance with
Laws and Operating Rules.  Accounts
Owner has in effect on the date hereof all qualifications required under all
applicable Requirements of Law and Operating Rules to perform its
obligations hereunder, and is in material compliance with such Requirements of
Laws and Operating Rules.

 

(i)                                     Accuracy of
Representations and Warranties.  The
representations and warranties of Accounts Owner contained herein shall be true
and correct in all material respects, in each case on and as of the date of
this Agreement and the Effective Date as though made on and as of such time.

 

Section 7.02.                                                     Representations
and Warranties of CCRT.  As of the
date hereof, CCRT hereby represents and warrants to, and agrees with, CAC and
Accounts Owner as of the date hereof that:

 

(a)                                  Organization.  CCRT is a corporation, duly organized and
validly existing and in good standing under the laws of the State of Georgia.

 

(b)                                 Capacity;
Authority; Validity.  CCRT has all
necessary power and authority to make, execute and deliver this Agreement and
the Related Agreements to which it is a party and to perform all of the
obligations to be performed by it under this Agreement and the Related
Agreements to which CCRT is a party.  The
making, execution, delivery and

 

39

 

performance of this Agreement and the Related
Agreements to which CCRT is a party and the consummation by CCRT of the transactions
contemplated hereby and thereby have been duly and validly authorized by all
necessary corporate action of CCRT.  This
Agreement and the Related Agreements to which CCRT is a party have been duly
and validly executed and delivered by CCRT and, assuming the due authorization,
execution and delivery hereof and thereof by the other parties thereto, this
Agreement and the Related Agreements to which CCRT is a party will constitute
the valid, legal and binding obligations of CCRT, enforceable against CCRT in
accordance with their respective terms (except as such enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium, receivership,
conservatorship, and other laws relating to or affecting creditors’ rights
generally and by general equity principles).

 

(c)                                  Conflicts;
Defaults.  Neither the execution and
delivery of this Agreement and the Related Agreements to which CCRT is a party
by CCRT nor the consummation of the transactions contemplated hereby or thereby
by CCRT will (i) conflict with, result in the breach of, constitute a
default under or accelerate the performance provided by, the terms of any
order, law, regulation, contract, indenture, mortgage, instrument, commitment,
judgment or decree to which CCRT is a party or by which CCRT is bound, except
such conflicts, breaches, defaults or accelerations that would not have,
individually or in the aggregate, a material adverse effect on CCRT or (ii) violate
the articles of incorporation or bylaws, or any other equivalent organizational
document of CCRT.

 

(d)                                 Consents.  Neither the execution and delivery of this
Agreement and the Related Agreements to which CCRT is a party, nor the
consummation of the transactions contemplated hereby and thereby by CCRT will (i) require
any consent, approval, authorization, registration or filing under any law,
regulation, judgment, order, writ, decree, permit, license or agreement to
which CCRT is a party or (ii) require the consent or approval of any other
party to any contract, instrument or commitment to which CCRT is a party, other
than (A) consents, approvals, authorizations, registrations or filings
with any Governmental Authority, which have been or will be obtained or made
prior to or on the Effective Date and (B) where the failure to obtain such
consents, approvals, authorizations or registrations or to make such filings
would not have a material adverse effect on CCRT.  Any such consent, approval, authorization,
registration or filing that has been obtained, effected or given is in full
force and effect.  CCRT is not subject to
any agreement with any Governmental Authority which would prevent the
consummation by it of the transactions contemplated by this Agreement and the
Related Agreements to which CCRT is a party. 
CCRT is not in default under, and no event has occurred which with the
lapse of time or action by a third party could result in a default under, the
terms of any judgment, order, writ, decree, permit or license of any agency of
any government or court, whether federal, state, municipal or local and whether
at law or in equity, which would reasonably be expected to have a material
adverse effect on CCRT.

 

(e)                                  Litigation.  There is no action, suit, proceeding, claim,
or other litigation, or any investigation by any Governmental Authority,
pending, or, to CCRT’s Knowledge, any action, suit, proceeding, claim, or other
litigation or any investigation by any Governmental Authority threatened,
against CCRT or any of its Affiliates that has had or would reasonably be
expected to have, individually or in the aggregate, a material adverse effect
on CCRT.

 

40

 

(f)                                    Compliance with
Laws and Operating Rules.  CCRT has
in effect on the date hereof all qualifications required under all applicable
Requirements of Law and Operating Rules in order to properly service the
Accounts and the Receivables and to perform its obligations hereunder, and is
in material compliance with such Requirements of Law and Operating Rules.

 

(g)                                 Maintenance of
Accounts.  CCRT has performed its
servicing obligations with respect to the Accounts under the Original Affinity
Agreement and the Original Facilities Agreement in compliance with all
applicable Requirements of Law and Operating Rules.

 

(h)                                 Business Continuity
and Recovery Standards.  In
accordance with the requirements set forth in Exhibit E, CCRT
maintains a plan that complies with the Business Continuity and Recovery
Standards to be implemented in the event a disaster disrupts or impairs its
production business or operations and maintains a back-up, disaster recovery
and off-site storage capabilities to assure business continuity and recovery.

 

(i)                                     CompuCredit
Marks.  The CompuCredit Marks
licensed to Accounts Owner pursuant to Section 9.02 do not infringe
upon the rights of any third party.

 

(j)                                     Accuracy of
Representations and Warranties.  The
representations and warranties of CCRT contained herein shall be true and
correct in all material respects, in each case on and as of the date of this
Agreement and the Effective Date as though made on and as of such time.

 

Section 7.03.                                                     Representations
and Warranties of CAC.  As of the
date hereof, CAC hereby represents and warrants to, and agrees with, Accounts
Owner and CCRT that:

 

(a)                                  Organization.  CAC is a Nevada corporation, duly organized
and validly existing and in good standing under the laws of the State of
Nevada.

 

(b)                                 Capacity,
Authority, Validity.  CAC has all
necessary power and authority to make, execute and deliver this Agreement and
the Related Agreements to which CAC is a party and to perform all of the
obligations to be performed by it under this Agreement and the Related
Agreements to which CAC is a party.  The
making, execution, delivery and performance of this Agreement and the Related
Agreements and the consummation by CAC of the transactions contemplated hereby
and thereby have been duly and validly authorized by all necessary corporate
action of CAC.  This Agreement and the
Related Agreements to which CAC is a party have been duly and validly executed
and delivered by CAC, and, assuming the due authorization, execution and
delivery hereof and thereof by the other parties thereto, this Agreement and
the Related Agreements to which CAC is a party will constitute the valid, legal
and binding obligations of CAC, enforceable against CAC in accordance with
their respective terms (except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium, receivership,
conservatorship, and other laws relating to or affecting creditors’ rights
generally and by general equity principles).

 

(c)                                  Conflicts;
Defaults.  Neither the execution and
delivery of this Agreement and the Related Agreements to which CAC is a party by CAC nor the consummation of the transactions
contemplated hereby or thereby by CAC will (i) conflict with, result in
the breach

 

41

 

of, constitute a default under or accelerate
the performance provided by, the terms of any order, law, regulation, contract,
indenture, mortgage, instrument, commitment, judgment or decree to which CAC is
a party or by which CAC is bound, except such conflicts, breaches, defaults or
accelerations that would not have, individually or in the aggregate, a material
adverse effect on CAC or (ii) violate the articles of incorporation or
bylaws, or any other equivalent organizational document of CAC.

 

(d)                                 Consents.  Neither the execution and delivery of this
Agreement and the Related Agreements to which CAC is a party by CAC, nor the
consummation of the transactions contemplated hereby and thereby by CAC  will (i) require any consent, approval,
authorization, registration or filing under any law, regulation, judgment,
order, writ, decree, permit, license or agreement to which CAC is a party or (ii) require
the consent or approval of any other party to any contract, instrument or
commitment to which CAC is a party, other than (A) consents, approvals,
authorizations, registrations or filings with any Governmental Authority, which
have been or will be obtained or made prior to or on the Effective Date and (B) where
the failure to obtain such consents, approvals, authorizations or registrations
or to make such filings would not have a material adverse effect on CAC.  Any such consent, approval, authorization,
registration or filing that has been obtained, effected or given is in full
force and effect.  CAC is not subject to
any agreement with any Governmental Authority which would prevent the
consummation by it of the transactions contemplated by this Agreement and the
Related Agreements to which CAC is a party. 
CAC is not in default under, and no event has occurred which with the
lapse of time or action by a third party could result in a default under, the
terms of any judgment, order, writ, decree, permit or license of any agency of
any government or court, whether federal, state, municipal or local and whether
at law or in equity, which would reasonably be expected to have a material
adverse effect on CAC.

 

(e)                                  Litigation.  There is no action, suit, proceeding, claim,
or other litigation, or any investigation by any Governmental Authority,
pending, or, to CAC’s Knowledge, any action, suit, proceeding, claim, or other
litigation or any investigation by any Governmental Authority threatened,
against CAC or any of its Affiliates that has had or would reasonably be
expected to have, individually or in the aggregate, a material adverse effect
on CAC.

 

(f)                                    Compliance with
Laws and Operating Rules.  CAC has in
effect on the date hereof all qualifications required under all applicable Requirements
of Law and Operating Rules in order to perform its obligations hereunder,
if any, and is in material compliance with such Requirements of Law and
Operating Rules.

 

(g)                                 Maintenance of
Accounts.  CAC has performed its
obligations if any with respect to the Accounts under the Original Affinity
Agreement and Original Facilities Agreement in compliance with all applicable
Requirements of Law and Operating Rules.

 

(h)                                 Accuracy of
Representations and Warranties.  The
representations and warranties of CAC contained herein shall be true and
correct in all material respects, in each case on and as of the date of this
Agreement and the Effective Date as though made on and as of such time.

 

[END OF ARTICLE VII]

 

42

 

ARTICLE VIII

COVENANTS

 

Section 8.01.                                                     Mutual
Covenants and Agreements.  Each Party
hereto covenants and agrees that:

 

(a)                                  Cooperation.  During the terms and for a period that is
five (5) years after the expiration or termination of this Agreement, it
shall cooperate with the other Parties hereto in furnishing any information, or
performing any action reasonably requested by a party hereto, which information
or action is necessary for the prompt consummation of the transactions
contemplated by this Agreement; provided, however, that the
foregoing (i) shall not require a Party to permit any inspection, or to
disclose any information, that would result in the disclosure of any trade
secrets of third parties, or trade secrets of a Party or any Affiliate of a Party
unrelated to the transactions contemplated by this Agreement, or violate any
obligations of a Party to any third party with respect to confidentiality if
such Party shall have used its reasonable best efforts to obtain the consent of
such third party to such inspection or disclosure and (ii) shall not
require any disclosure by a Party that shall, as a result of such disclosure,
have the effect of causing the waiver of any attorney-client privilege.

 

(b)                                 Other Required
Information.  It shall promptly furnish
to the other Parties hereto all information as is required to be set forth in
any application or statement, or amendment thereto, to be filed with any
Governmental Authority, or is requested by any Governmental Authority to be set
forth therein, in connection with the regulatory approval or review of the
transactions contemplated by this Agreement.

 

(c)                                  Miscellaneous
Agreements.  Subject to the terms and
conditions herein provided, each Party to this Agreement shall use its
reasonable best efforts to take, or cause to be taken, all action, and to do,
or cause to be done, all things necessary, appropriate or desirable hereunder
and under applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement. 
Each Party shall use its reasonable best efforts to obtain consents of
all third parties and Governmental Authorities necessary for the consummation
of the transactions contemplated by this Agreement.  The Parties and their respective officers,
directors and/or employees shall use their reasonable best efforts to take such
further actions subsequent to the date hereof as are reasonably necessary,
appropriate or desirable to carry out the purposes of this Agreement.

 

(d)                                 Preserve Accuracy
of Representations and Warranties. 
Each Party hereto shall refrain from taking any action which would
render any representation or warranty of such Party contained in Article VII
inaccurate except to the extent such action is necessary under Requirements of
Law and Operating Rules, in which case the Party taking such action will use
its reasonable best efforts to inform the other Parties prior to taking such
required action.  Each Party shall
promptly notify the other Parties of any action, suit or proceeding known to it
that shall be instituted or threatened against such Party to restrain, prohibit
or otherwise challenge the legality of any transaction contemplated by this
Agreement.

 

(e)                                  Notice of Material
Developments.  Each Party shall
notify the other Parties as soon as practicable upon learning of (i) the
institution or threat of any material lawsuit,

 

43

 

administrative
action, proceeding, investigation or inquiry against CCRT or Accounts Owner or
otherwise relating to any Cardholder(s) or prospective Cardholder(s) or
Account(s), or (ii) any material claim or assertion, whether by a
Governmental Authority or Cardholder or prospective Cardholder or other Person
that any of the matters referred to in Section 4.02  fail to comply with any applicable
Requirements of Law, or (iii) any other material developments which may
affect any of the Accounts, Cardholders or prospective Cardholders or the
Program generally.

 

(f)                                    Recordkeeping.  Each Party shall maintain books of account and
records, in accordance with standard accounting practices and procedures, of
all financial transactions arising in connection with its obligations pursuant
to this Agreement for a period of not less than five (5) years from the
date last recorded or created, and after such time the other Parties shall be
offered a reasonable opportunity to take possession of such records at the
requesting Party’s expense prior to their destruction.  In addition to and notwithstanding the
foregoing, to the extent a Party has sole possession of any records required to
be maintained by the other Parties pursuant to applicable Requirements of Law
or Operating Rules, the Party with possession shall maintain such records in
such form and for such time periods as are provided for in such Requirements of
Law and Operating Rules.  Subject to the
first sentence of this Section 8.01(f), a Party may, at its own
expenses and upon reasonable prior notice to the other Parties, have full
access to and the right to inspect and copy the books and records of the other
Parties relating to services performed herein by that Party, and during the
Term, each Party shall furnish to the other Parties all such information
concerning transactions and services provided by it pursuant to this Agreement
as that Party may reasonably request.

 

Section 8.02.                                                     Covenants
of Accounts Owner.  Accounts Owner
hereby covenants and agrees with CCRT and CAC as follows:

 

(a)                                  Corporate
Existence, Etc.  Accounts Owner shall
maintain in full force and effect its applicable bank charter and all licenses
and permits required to perform its obligations under this Agreement.  Accounts Owner shall comply in all material
respects with all Requirements of Law and Operating Rules in connection
with the performance of its obligations under this Agreement.

 

(b)                                 Preservation of
Accounts.  During the Term, Accounts
Owner shall not, directly or indirectly, transfer, sell or disclose to any
other Person any Cardholder List (whether in written or other form).  Accounts Owner shall not, directly or
indirectly, solicit Cardholders by using a Cardholder List, in whole or in
part, for any other credit card, or for any other purpose, without the prior
written consent of CCRT.  This Section 8.02(b) shall
not prohibit any transfer, sale or disclosure of the name, address or telephone
number of, or any solicitation of, any person of whose existence Accounts Owner
has or obtains knowledge otherwise than by reason of Accounts Owner’s
participation in this Agreement.

 

(c)                                  Sale of Accounts.  Except as provided in this Agreement,
Accounts Owner shall not sell or transfer any Account created under the
Program, or any interest therein, to any unaffiliated party without the prior
written consent of CCRT.

 

(d)                                 Adverse Action.  During the Term, (i) Accounts Owner
shall take no action (or fail to take any action) that would serve to allow for
the creation of a lien, pledge,

 

44

 

security
interest, or other encumbrance on any of the Receivables or Accounts,
(ii) Accounts Owner shall take no action (or fail to take any action) that
could result in Accounts Owner no longer being the lawful owner of the Accounts
and Receivables, and (iii) Accounts Owner shall take no action (or fail to
take any action) that could prevent Accounts Owner from having the absolute
right and authority to sell the Accounts and Receivables.

 

(e)                                  Credit Criteria.  Accounts Owner shall exercise its
commercially reasonable best efforts to secure from its loan and underwriting
committees, or their equivalent, the approval and ratification of the Credit
Criteria and ensure that the permanent records of Accounts Owner reflect such
approval and ratification.

 

(f)                                    Insolvency.  Accounts Owner will not transfer any
Receivable to Receivables Purchaser (i) in contemplation of its
insolvency, (ii) after committing an act of insolvency, (iii) with a
view to preferring one creditor over another or to preventing the application
of its assets in the manner required by applicable law or regulations, or
(iv) with intent to hinder, delay, or defraud itself or any of its
creditors.

 

(g)                                 Official Records.  Each of this Agreement, the Related
Agreements to which Accounts Owner is a party, and all resolutions and
approvals of Accounts Owner relating thereto will be maintained by Accounts
Owner as an official record continuously from the time of its execution.

 

(h)                                 Obligations.  Accounts Owner shall perform its obligations
under this Agreement and the applicable Related Agreements in a timely manner
and with due care.

 

(i)                                     Other rights of
CCRT.  Accounts Owner shall not take
any other action or fail to take any actions that would adversely affect the
rights of CCRT or CAC hereunder.

 

(j)                                     Compliance with
Law.  In performing its obligations
under this Agreement, Accounts Owner will comply in all material respects with
all Requirements of Law, including Title V of the GLBA and its implementing
regulations, and Operating Rules. 
Accounts Owner also will comply with any written guidance from a banking
agency that applies to the Accounts Owner’s obligations under this Agreement.

 

Section 8.03.                                                     Covenants
of CCRT.  CCRT hereby covenants and
agrees with Accounts Owner and CAC as follows:

 

(a)                                  Obligations.  CCRT will perform its obligations under this
Agreement and the applicable Related Agreements in a timely manner and with due
care.

 

(b)                                 Compliance with Law.  In performing its obligations under this
Agreement, CCRT will comply in all material respects with all Requirements of
Law, including Title V of the GLBA and its implementing regulations, and
Operating Rules.  CCRT also will comply
with any written guidance from a banking agency that applies to the Accounts
Owner’s or CCRT’s obligations under this Agreement.

 

45

 

(c)                                  Other Rights of
Accounts Owner.  CCRT will not take
any other action (or fail to take any action) with respect to the Accounts that
would adversely affect the rights of Accounts Owner as owner of the Accounts.

 

Section 8.04.                                                     Covenants
of CAC.  CAC hereby covenants and agrees
with Accounts Owner and CCRT as follows:

 

(a)                                  Obligations.  CAC will perform its obligations under this
Agreement and the applicable Related Agreements in a timely manner and with due
care.

 

(b)                                 Compliance with Law.  CAC will comply in all material respects with
all Requirements of Law, including Title V of the GLBA and its
implementing regulations.  CAC also will
comply with any written guidance from a banking agency that applies to the
Accounts Owner’s or CAC’s obligations under this Agreement.

 

(c)                                  Other Rights of
Accounts Owner.  CAC will not take
any other action (or fail to take any action) with respect to the Accounts that
would adversely affect the rights of Accounts Owner as owner of the Accounts.

 

[END OF
ARTICLE VIII]

 

46

 

ARTICLE IX

INTELLECTUAL PROPERTY

 

Section 9.01.                                                     Use
of Accounts Owner’s Name and Trademarks.

 

(a)                                  Accounts Owner
License Grant.  Accounts Owner hereby
grants to CCRT and CAC and their Affiliates, as appropriate, a non-exclusive,
royalty-free, non-assignable right and license to use the Accounts Owner name
and trademarks provided in Exhibit G (“CB&T Marks”) as
necessary to fulfill CCRT’s or CAC’s obligations under this Agreement and the
Related Agreements.  Accounts Owner
acknowledges and agrees that all Credit Cards re-issued to Cardholders after
the Effective Date shall include CB&T Marks, subject to applicable
Requirements of Law.  CCRT and CAC shall
use CB&T Marks (a) only in connection with the Accounts, (b) in a
manner consistent with the current practices of CCRT and CAC, (c) in the
forms and formats approved by Accounts Owners; and (d) except as
specifically authorized in this Article IX, shall not use the
CB&T Marks without the Accounts Owner’s prior written consent.  This license granted hereby shall expire at
the end of the Wind Down Period, or as otherwise required by applicable
Requirements of Law.

 

(b)                                 Rights Reserved by
Accounts Owner.  It is expressly
agreed that neither CCRT nor CAC is purchasing or acquiring any right, title or
interest in the CB&T Marks, or any portion thereof, of Accounts Owner or
its Affiliates.  CCRT and CAC acknowledge
that Accounts Owner exclusively owns the CB&T Marks and the goodwill
related thereto and symbolized thereby. 
Without Accounts Owner’s prior written consent, neither CCRT nor CAC
shall combine the CB&T Marks with any other mark or term.  CCRT and CAC shall not use the CB&T Marks
in any manner which could reasonably be expected to materially damage or
diminish Accounts Owner’s goodwill related to the CB&T Marks.  CCRT and CAC shall immediately upon receipt
of written notice from Accounts Owner cease any act or practice that is not
permitted by this Article IX.

 

Section 9.02.                                                     Use
of CCRT’s Name and Trademarks.

 

(a)                                  CCRT License Grant.  CCRT hereby grants to Accounts Owner and its
Affiliates, as appropriate, a non-exclusive, royalty-free, non-assignable right
and license to use the CCRT’s names and its trademarks, including the “Aspire”
servicemark (the “CompuCredit Marks”) as necessary to fulfill Accounts
Owner’s obligations under this Agreement and the Related Agreements.  Accounts Owners shall use the CompuCredit
Marks (a) only in connection with the Accounts, (b) in a manner
consistent with the current practices of Accounts Owner, (c) in the forms
and formats approved by CCRT; and (d) except as specifically authorized in
this Article IX, shall not use the CompuCredit Marks without the
CCRT’s prior written consent.  This
license granted hereby shall expire at the end of the Wind Down Period, or as
otherwise required by applicable Requirements of Law.

 

(b)                                 Rights Reserved by
CCRT.  It is expressly agreed that
Accounts Owner is not purchasing or acquiring any right, title or interest in
the CompuCredit Marks, or any portion thereof, of CCRT or its Affiliates.  Accounts Owner acknowledges that CCRT
exclusively owns the CompuCredit Marks and the goodwill related thereto and
symbolized thereby.  Without CCRT’s prior
written consent, Accounts Owner shall not combine the CompuCredit Marks with

 

47

 

any other mark
or term.  Accounts Owner shall not use
the CompuCredit Marks in any manner which could reasonably be expected to
materially damage or diminish CCRT’s goodwill related to the CompuCredit Marks.  Accounts Owner shall immediately upon receipt
of written notice from CCRT cease any act or practice that is not permitted by
this Article IX.

 

[END OF
ARTICLE IX]

 

48

 

ARTICLE X

CONFIDENTIALITY

 

Section 10.01.                                               General
Confidentiality.

 

(a)                                  Confidential
Information.  For purposes of this
Agreement, “Confidential Information” shall mean, with respect to a
Party, any of the following: 
(i) information that is provided by or on behalf of the Party to
another Party or its agents in connection with obligations set forth in this
Agreement; or (ii) information about the Party or its Affiliates, or their
respective business, employees or customers, that is otherwise obtained by
another Party in connection with this Agreement, in each case, including:  (A) information concerning business
objectives and financial results; (B) information regarding business
systems, methods, processes, clients, financing data, programs and products;
(C) information unrelated to the Accounts obtained by a Party in
connection with this Agreement, including by accessing or being present at the
business location of another Party; and (D) proprietary technical
information, including source codes.

 

(b)                                 Exclusions.  The restrictions on disclosure of
Confidential Information under this Article X shall not apply to,
with respect to a Party, information that: 
(i) is already rightfully known with no restrictions on disclosure
to such Party at the time it obtains Confidential Information from another
Party; (ii) is or becomes generally available to the public other than as
a result of disclosure in breach of this Agreement or any other confidentiality
obligations; (iii) is lawfully received on a non-confidential basis from a
third party authorized to disclose such information without restriction and
without breach of this Agreement; (iv) is contained in, or is capable of
being discovered through examination of publicly available records or products;
(v) is required to be disclosed by Requirements of Law or by a
self-regulatory body (provided, however, that the Party subject
to such Requirements of Law shall notify the other applicable Party of any such
use or requirement prior to disclosure of any Confidential Information obtained
from that Party in order to afford such Party an opportunity to seek a
protective order to prevent or limit disclosure of the Confidential Information
to third parties and shall disclose Confidential Information of the other Party
only to the extent required by such Requirements of Law); or (vi) is
developed by a Party without the use of any proprietary, non-public information
provided by either of the other Parties under this Agreement.  Nothing herein shall be construed to permit
the Receiving Party to disclose to any third party any Confidential Information
that the Receiving Party is required to keep confidential under the GLBA and
its implementing regulations, or other applicable Requirements of Law or
Operating Rules.

 

(c)                                  Permissible Tax
Disclosures.  Notwithstanding anything to the contrary in this Agreement or the Related
Agreements, each Party may disclose to any and all Persons, without limitation
of any kind, the tax treatment and tax structure of the transaction entered
into pursuant to this Agreement and the Related Agreements, and all materials
of any kind (including opinions or other tax analyses) that are provided to
such parties relating to such tax treatment and tax structure.  This authorization of tax disclosure is retroactively
effective to the commencement of the first discussions among the parties
regarding the transactions contemplated by this Agreement and the Related
Agreements.  For these purposes, “tax
structure” is limited to facts relevant to the U.S. federal and state income
tax treatment of the transactions entered into under this Agreement and the
Related Agreements.

 

49

 

(d)                                 Agreement Terms.  The terms and conditions of this Agreement
shall be deemed the Confidential Information of all of the Parties.

 

(e)                                  Cardholder
Nonpublic Personal Information. 
Cardholders’ Nonpublic Personal Information, as defined in the GLBA, is
the Confidential Information of Accounts Owner, regardless of any permissible
use of such Nonpublic Personal Information by either of the other Parties, but
shall become the Confidential Information of the party assuming ownership of
the Accounts upon termination or expiration of this Agreement or the party that
otherwise acquires such Accounts.

 

(f)                                    Intellectual
Property.  The Intellectual Property
owned by each Party shall be the Confidential Information of such Party.

 

(g)                                 Disclosure to
SEC.  Without limiting the
generality of Section 10.01(b)(v), and notwithstanding Section 10.01(d),
if CCRT is required to file this Agreement with the United States Securities
and Exchange Commission (“SEC”) CCRT shall be permitted to do so; provided,
however, that CCRT shall use its reasonable best efforts to maintain
confidentiality of the Exhibits to this Agreement to the fullest extent
permitted under the rules and regulations of the SEC.

 

Section 10.02.                       Duties
of Receiving Party.  A Party that
receives Confidential Information of another Party (“Receiving Party”),
shall do the following with respect to the Confidential Information of the
other such Party (“Disclosing Party”): 
(i) keep the Confidential Information of the Disclosing Party
secure and confidential; (ii) treat all Confidential Information of the
Disclosing Party with the same degree of care as it accords its own Confidential
Information, but in no event less than a reasonable degree of care; and
(iii) implement and maintain commercially reasonable physical, electronic,
administrative and procedural security measures, including commercially
reasonable authentication, access controls, virus protection and intrusion
detection practices and procedures.

 

Section 10.03.                                               Use
and Disclosure of Confidential Information.

 

(a)                                  Each Receiving Party
shall use and disclose the Confidential Information of the Disclosing Party
only for the purpose of performing its obligations or enforcing its rights with
respect to this Agreement, and shall not accumulate in any way or make use of
such Confidential Information for any other purpose.

 

(b)                                 Each Receiving Party
shall:  (i) limit access to the
Disclosing Party’s Confidential Information to those employees, authorized
agents, vendors, consultants and Service Providers who have a reasonable need
to access such Confidential Information in connection with this Agreement; and
(ii) except for a disclosure pursuant to Section 10.01(g),
 ensure that any Person with access to the Disclosing Party’s Confidential
Information agrees to be bound by the provisions of this Article X and
maintains the existence of this Agreement and the nature of their obligations
hereunder strictly confidential.

 

Section 10.04.                                               Unauthorized
Use or Disclosure of Confidential Information.  Each Receiving Party agrees that any
unauthorized use or disclosure of Confidential Information of the Disclosing
Party might cause immediate and irreparable harm to the Disclosing Party for

 

50

 

which money
damages might not constitute an adequate remedy.  In that event, the Receiving Party agrees
that injunctive relief may be warranted in addition to any other remedies the
Disclosing Party may have.  In addition,
the Receiving Party agrees promptly to advise the Disclosing Party by telephone
and in writing via facsimile of any security breach that may have compromised
any Confidential Information, of any unauthorized misappropriation, disclosure
or use by any Person of the Confidential Information of the Disclosing Party
which may come to its attention and to take all steps at its own expense
reasonably requested by the Disclosing Party to limit, stop or otherwise remedy
such misappropriation, disclosure or use.

 

Section 10.05.                                               Return
or Destruction of Confidential Information. 
Upon the termination or expiration of this Agreement, the Receiving
Party shall comply with the Disclosing Party’s reasonable instructions
regarding the disposition of the Disclosing Party’s Confidential Information,
which may include return of any and all the Disclosing Party’s Confidential
Information (including any electronic or paper copies, reproductions, extracts
or summaries thereof); provided, however:  (i) the Receiving Party in possession of
tangible property containing the Disclosing Party’s Confidential Information
may retain one archived copy of such material, subject to the terms of this
Agreement, which may be used solely for regulatory purposes and may not be used
for any other purpose; (ii) the Receiving Party shall have the right to
continued use of Intellectual Property of the Disclosing Party to the extent
permitted in this Agreement; and (iii) the Receiving Party shall be
permitted to retain in accordance with the requirements of this Article X,
that portion of the Confidential Information required to be maintained in
accordance with Requirements of Law or the requirements of its auditors.  Such compliance shall be certified in
writing, including a statement that no copies of Confidential Information have
been kept, except as necessary for compliance with applicable Requirements of
Law or Operating Rules.

 

Section 10.06.                                               Cardholder
Privacy.

 

(a)                                  GLBA Definitions
and Applicability.  All capitalized
terms used in this Article X and not otherwise defined shall have
the meaning set forth in Title V of the GLBA and the implementing
regulations.  The Parties acknowledge
that the GLBA governs each Party’s disclosure of Nonpublic Personal Information
about Cardholders or prior Cardholders. 
The Parties shall comply with the terms and provisions of the GLBA and
other applicable Requirements of Law and Operating Rules, including the
provisions of the GLBA regarding the re-use, sharing and re-disclosure of
Nonpublic Personal Information and the Safeguards Rule implementing
Section 501(b) of the GLBA.

 

(b)                                 Privacy Protections.  The Parties each represent that it has
implemented a comprehensive written information security program that includes
administrative, technical and physical safeguards to ensure the security and
confidentiality of consumer information as provided in Article XI.  Each Party shall have the right to request
information on the security program of the other Parties and shall have the
right to review audit reports generated by the other Parties’ independent
auditors relating to the other Party’s compliance with such security program
and any data privacy requirements and standards provided for in this
Agreement.  No Party shall be under any
obligation to take any action, which, in its reasonable judgment, would
constitute a violation of the GLBA or other applicable Requirements of Law and
Operating Rules.  No Party shall take any
action in connection with this Agreement which another Party, in

 

51

 

its reasonable
judgment, believes would constitute a violation of the GLBA or other applicable
Requirements of Law or Operating Rules or such other Party’s internal
privacy policy issued in compliance with the GLBA.

 

[END OF
ARTICLE X]

 

52

 

ARTICLE XI

INFORMATION SECURITY

 

Section 11.01.                                               General
Information Security.  The Parties
shall comply with the following guidelines, or as the Parties may otherwise
agree from time to time:

 

(a)                                  each Party shall
implement and maintain an information security plan that meets or exceeds
industry standards and which complies with the GLBA regulation guidelines for
safeguarding customer information;

 

(b)                                 CCRT and CAC each
shall appoint one (1) employee who is knowledgeable about information
security matters (“Information Security Officer”) to respond to Accounts Owner’s
inquiries regarding computer and information security; and

 

(c)                                  each Party shall test,
on a reasonable periodic basis, the implementation of its information security
plan through the use of network, system, and application vulnerability scanning
tools and/or penetration testing.

 

Section 11.02.                                               Network
and Communications Security.  Each Party
shall deploy security controls in a multi-layered approach, including intrusion
detection and anti-virus systems.  All
security control layers shall log and notify any unusual activity twenty-four
(24) hours per day, three hundred sixty five (365) days a year.  Administrators shall review logs regularly
(at least monthly) and respond to alerts within a reasonable amount of
time.  Logs shall be archived onto a
write once/read only media for a reasonable amount of time and be accessible
for investigation purposes.

 

Section 11.03.                                               Infrastructure
Platforms, Services, and Operations Security.  As appropriate, each Party shall ensure all
infrastructure platforms, authentication mechanisms, and services (operating
systems, Web servers, database servers, firewalls, routers, etc.) used in
connection with Account information are configured and utilized according to
industry best practices.

 

Section 11.04.                                               Access
Restrictions.  Each Party shall
restrict access to its systems used to fulfill its obligations under this
Agreement to those staff members with a job-related need to access the
system.  Each Party shall maintain
appropriate mechanisms to maintain access restrictions within its systems.

 

Section 11.05.                                               Physical
Security.  Each Party shall maintain
all workstations, servers, and network equipment (excluding mobile devices)
used to fulfill its obligations under this Agreement in secure facilities
owned, operated, or contracted for by the Party.  Each Party shall:

 

(a)                                  limit access to these
secure facilities to authorized staff members and permitted subcontractors with
job-related needs;

 

(b)                                 monitor access to
these secure facilities through the use of security guards, surveillance
cameras, authorized entry systems, or similar methods capable of recording
entry and exit information;

 

53

 

(c)                                  maintain all backup
and archival media containing Account information under this Agreement
consistent with industry standard practices;

 

(d)                                 limit access to backup
and archival media storage areas and contents to authorized issuer staff
members with job-related needs;

 

(e)                                  perform and document
appropriate criminal background checks before personnel assignment and before
access is granted to Account information;

 

(f)                                    revoke access in
the event of a subsequent known criminal violation, excluding minor traffic
violations;

 

(g)                                 dispose of
Confidential Information and data from any system or media no longer in use by
using paper shredders, and CD/DVD shredders, and industry standard magnetic
disk destruction methods as appropriate for the applicable medium; and

 

(h)                                 implement appropriate
security measures and safeguards with respect to mobile devices.

 

Section 11.06.                                               Malicious
Code and Virus Protection.  Each
Party shall use the latest, commercially available virus and malicious code
detection and protection product(s) on all workstations and servers (including
mobile devices) used to provide services or fulfill obligations under this
Agreement.

 

Section 11.07.                                               Report
Incidents.  CCRT and CAC each shall
report occurrences of any security incident, including viruses and malicious
code impacting services or obligations under this Agreement to the other
Parties within twenty-four (24) hours after discovery, or as soon as permitted
by applicable Requirements of Law and Operating Rules.

 

Section 11.08.                                               Business
Continuity and Recovery.  Each Party
shall perform backups of all systems, applications, and data used to provide
services or fulfill obligations under this Agreement in a manner consistent
with the Business Continuity and Recovery Standards.

 

Section 11.09.                                               Corrective
Action.  Upon the occurrence of any
security breach or incident that may cause or result in a security breach, the
Party primarily responsible for or experiencing such event (which shall include
any such breach caused by any third party service provider or subcontractor of
such Party) shall, as soon as possible and at its sole expense, implement an
action plan to prevent the continuation of such security breach and to mitigate
the effects of such security breach, including (a) seeking to recover all
personally identifiable data that has been disclosed, lost or released in an
unauthorized manner as a result of such security breach and (b) provide
notice of such security breach to Cardholders and other Persons as required by
all applicable Requirements of Law and Operating Rules.

 

Section 11.10.                                               Generally
Accepted Security Procedures.  Each
Party shall, in addition to the other requirements set forth herein, ensure
that its security measures are consistent with industry standard practices and
with any generally accepted security procedures and practices that may be
developed or adopted.

 

54

 

Section 11.11.                                               Audit
Rights.  The Parties shall grant each
other reasonable and appropriate audit rights for the purpose of verifying
compliance with the security measures set forth herein.

 

Section 11.12.                                               Penalties
and Fines.  Without limiting any
other indemnification obligations of the Parties set forth herein, each Party
recognizes and acknowledges that it shall be responsible for any and all Losses
related to or arising from any security incident caused by such Party, and
shall hold harmless and indemnify the other Parties for any such Losses.

 

[END OF
ARTICLE XI]

 

55

 

ARTICLE XII

INSURANCE

 

Section 12.01.                                               CCRT
Insurance.  Throughout the Term of this Agreement, CCRT shall maintain at all times
at its own cost and expense:

 

(a)                                  Commercial General Liability Insurance, and
umbrella coverage, covering its premises, including bodily injury, property
damage, broad form contractual liability and independent contractors, with
primary limits of not less than twenty-five million dollars ($25,000,000.00).

 

(b)                                 Fidelity Insurance covering employee dishonesty
with respect to all aspects of the Program, in an amount not less than ten
million dollars ($10,000,000.00).

 

(c)                                  Workers’ Compensation Insurance as mandated or
allowed by the state in which the Program are being performed, including at
least five hundred thousand dollars ($500,000.00) coverage for Employer’s
Liability.

 

(d)                                 All Risk Property Insurance in an amount adequate
to cover the cost of replacement of all equipment, improvements, and
betterments CCRT is required to maintain pursuant to its obligations under Section 7.02(h),
in the event of loss or damage to the same.

 

(e)                                  Errors and Omissions Insurance in the amount of
at least five million dollars ($5,000,000.00).

 

(f)                                    Business Interruption and Extra Expense Insurance
in the amount of at least one million dollars ($1,000,000.00).

 

Section 12.02.                                               Policy
Ratings.  All policies of such
insurance shall be written by a carrier or carriers rated “A” or above by AM
Best, shall contain a clause requiring the carrier to give Accounts Owner at
least thirty (30) days’ prior written notice of any material change or
cancellation of coverage for any reason.  Simultaneously with CCRT’s
execution of this Agreement, and thereafter upon written request, CCRT shall
deliver to Accounts Owner original Certificates of Insurance evidencing the
coverage required by this Article XII.

 

[END OF
ARTICLE XII]

 

56

 

ARTICLE XIII

EVENTS OF DEFAULT

 

Section 13.01.                                               Events
of Default.  Each of the following
shall be an “Event of Default” hereunder with respect to each Party:

 

(a)                                  Performance
Default.  The occurrence of a
Performance Default.  A “Performance
Default” shall mean a Party defaults in the performance of any of its
material duties or obligations under this Agreement, other than with respect to
a Receivables Purchase Payment Default and other than with respect to any
Non-Program Prohibition violation and fails to correct the default to the
reasonable satisfaction of the other non-defaulting Party, within a thirty (30)
day cure period commencing upon receipt of notice from the non-defaulting party
or, if, at the reasonable discretion of the non-defaulting Party, such
non-performance cannot be cured within thirty (30) days, such additional time
as deemed reasonable by the non-defaulting Party to cure such default, but not
more than an additional thirty (30) days, and so long as the defaulting Party
has notified the non-defaulting Party within the initial thirty (30) day period
and in sufficient detail of its plans to initiate substantive steps to remedy
the breach and diligently thereafter pursues the same to completion within such
additional thirty (30) day period.

 

(b)                                 Bankruptcy Event.  The Occurrence of a Bankruptcy Event.  A “Bankruptcy Event” shall mean a
Party files any petition in bankruptcy or for reorganization or debt
consolidation under the federal bankruptcy laws or under any comparable law, or
a Party makes an assignment of its assets for the benefit of creditors, or upon
the application of a Party for the appointment of a receiver or trustee of its
assets.

 

(c)                                  Receivables
Purchase Payment Default.  The
occurrence of a Receivables Purchase Payment Default.  A “Receivables Purchase Payment Default”
shall mean the failure of a Receivables Purchaser, as applicable, to pay the
full Purchase Price due by such Receivables Purchaser as specified by Accounts
Owner for any day by 4:00 p.m. (Eastern time) that day pursuant to Section 5.01
(or, if Accounts Owner was late in notifying Receivables Purchaser of the
Purchase Price due by such Receivables Purchaser, by 4:00 p.m. (Eastern
time) of the next Business Day following such Receivables Purchaser’s receipt
of notice from Accounts Owner of the Purchase Price due), unless such failure
is fully corrected by such Receivables Purchaser, in the manner described below
by 4:00 p.m. (Eastern time) of the third calendar day thereafter (or on
the first Business Day after such third calendar day if such third calendar day
is not a Business Day).  For purposes of
this Section 13.01(c), the failure to pay the Purchase Price due
for any day shall be considered “fully corrected” only when the applicable
Receivables Purchaser  shall have both
(i) paid Accounts Owner by wire transfer of collected funds the full
Purchase Price due from such Receivables Purchaser as specified by Accounts
Owner for the first day the Purchase Price due was not paid in full and for
each day thereafter for which the Purchase Price due as specified by Accounts
Owner was not paid in full by the applicable Receivables Purchaser (“Past
Due Amounts”) and (ii) to the extent Accounts Owner shall have drawn
on the Letter of Credit to satisfy all or part of any of such Past Due Amounts,
replenished the Letter of Credit by the full amount drawn and caused Accounts
Owner to be in receipt of written notification from the Letter of Credit bank
of such replenishment, or alternatively, provided Accounts Owner written
authority to communicate with the bank issuing the Letter of Credit and like written
authority for said bank to disclose to Accounts Owner that the Letter of

 

57

 

Credit has
been replenished and the details associated therewith and the bank confirms
that the Letter of Credit has been replenished.

 

(d)                                 Pledge Default.  The occurrence of a Pledge Default.  A “Pledge Default” shall mean
(i) an “Event of Default” (as defined in the Pledge and Security
Agreement) shall have occurred or (ii) CCRT shall fail to comply with its
obligations under Section 4.02(c) of the Pledge and Security
Agreement.

 

[END OF
ARTICLE XIII]

 

58

 

ARTICLE XIV

TERM & TERMINATION

 

Section 14.01.                                               Term
Periods.

 

(a)                                  Term.  The term of this Agreement shall commence on
the Effective Date and continue until the end of the Wind Down Period (the “Term”).

 

(b)                                 Initial Term.  The “Initial Term” of this Agreement
shall commence on the Effective Date and continue until March 31, 2009.

 

(c)                                  Renewals.  This Agreement shall be extended for renewal
terms of two (2) years each (each such two (2) year period a “Renewal
Term”), unless one Party notifies the other Parties of its intent to
terminate this Agreement (“Termination Notice”) by giving written notice
to the other Parties (i) by October 31, 2008 with respect to a
renewal following the Initial Term, and (ii) thereafter, by
October 31 of the calendar year prior to the end of any applicable Renewal
Term (or if such October 31st date is not a Business Day, the next following
Business Day).

 

Section 14.02.                                               General
Termination Rights.  Each Party,
reserving all other remedies and rights hereunder, in whole or in part, may
terminate this Agreement:

 

(a)                                  immediately upon
written notice to (i) the other Parties by Accounts Owner upon the occurrence
of a Bankruptcy Event by CCRT or CAC or (ii) Accounts Owner by CCRT and
CAC upon the occurrence of a Bankruptcy Event by Accounts Owner;

 

(b)                                 upon ten
(10) Business Days prior written notice to (i) the other Parties by
Accounts Owner upon the occurrence of a Performance Default with respect to
CCRT or CAC or (ii) Accounts Owner by CCRT and CAC upon the occurrence of
a Performance Default with respect to Accounts Owner;

 

(c)                                  on or after the
ninetieth (90) day following the giving of notice by a Party to the other
Parties that such notice-giving Party’s performance is prevented or delayed by
a Force Majeure Event if the failure to perform has not been cured at the end
of such ninety (90) day period;

 

(d)                                 on or after the
ninetieth (90) day following the giving of notice by a Party to the other
Parties that such notice-giving Party’s performance is rendered (through no act
or omission of such Party) illegal or impermissible for that Party or its
ultimate parent corporation due to changes in Requirements of Law or Operating
Rules applicable to the terminating party or upon such earlier date as may
be required to comply with such change in Requirements of Law or Operating
Rules; and

 

(e)                                  upon written notice
to the other Parties by CCRT pursuant to its termination right set forth in Section 3.08(c).

 

Section 14.03.                                               Accounts
Owner Termination Rights.  In
addition to its rights under Section 14.02, Accounts Owner,
reserving all other remedies and rights hereunder, in whole or in part, may
terminate this Agreement:

 

59

 

(a)                                  immediately upon
written notice to CCRT and CAC upon a Receivables Purchase Payment Default;

 

(b)                                 immediately upon
written notice to CCRT and CAC upon a Pledge Default;

 

(c)                                  immediately upon the
occurrence of any event specified in Section 4.13(f) giving
Accounts Owner a termination right in connection with a Non-Program Prohibition
violation or a Non-Program Violation Notice violation.

 

Section 14.04.                                               Ownership
of a Bank by CCRT.  If CCRT or its
Affiliates receives approval to establish or obtain control of any bank, thrift
or industrial loan company, upon notice to Accounts Owner, CCRT may terminate
this Agreement and exercise its rights under Section 14.06 to
purchase all Accounts and Receivables then owned by Accounts Owner or an
Affiliate of Accounts Owner, for a total price equal to one hundred percent
(100%) of the Receivables then owed by Accounts Owner and any Affiliate of
Accounts Owner, with such sale to occur as expeditiously as possible on a
mutually agreed upon date.

 

Section 14.05.                                               Wind
Down Period.

 

(a)                                  General
Obligations.  The Parties agree that
there will be a one hundred and eighty (180) day period for winding down the
servicing and administration provided by CCRT pursuant to this Agreement and
converting the Accounts to an alternative credit card issuer or processor (the “Wind
Down Period”) that will commence upon the first to occur of the
following:  (i) the end of the
Initial Term or any Renewal Term if a Termination Notice has been issued in
accordance with Section 14.01(c); or (ii) the earlier
termination or expiration of this Agreement pursuant to its terms.

 

(b)                                 Conversion Plan.  During the Wind Down Period, the Parties
shall use all commercially reasonable efforts to develop and implement a plan
to convert the Accounts to such alternative accounts owner or credit card
issuer or if applicable, CCRT.

 

(c)                                  Ongoing
Obligations.  During the Wind Down
Period, the Parties shall continue to perform their obligations and shall
remain liable for the representations and warranties, covenants and
indemnification obligations under this Agreement and the Related
Agreements.  Notwithstanding the
foregoing, Accounts Owner reserves the right to close any or all Accounts in
the event that Accounts Owner has terminated this Agreement due to a
Receivables Purchase Payment Default.

 

(d)                                 Reimbursement
Obligations.  Receivables Purchaser
shall reimburse Accounts Owner for all costs reasonably incurred by Accounts
Owner in connection with the Program during the Wind Down Period.

 

(e)                                  Duties After
Termination.  During the Wind Down
Period, in order to preserve the goodwill of Cardholders, the Parties shall
cooperate in order to ensure a smooth and orderly termination of their
relationship and a transition of Accounts. 
In the event Accounts Owner terminates this Agreement, Accounts Owner
shall continue to fulfill all of its obligations hereunder (which shall not
include establishing any new Accounts) during the Wind Down

 

60

 

Period in
order to allow CCRT to convert the Accounts to an alternative credit card
issuer or processor; provided, however, that (i) if the
termination results from a Receivables Purchase Payment Default, then Accounts
Owner, effective immediately upon such termination, may refuse to authorize any
new charges on Accounts and (ii) in the event of any other termination of
this Agreement by Accounts Owner, if during the Wind Down Period there occurs a
Receivables Purchase Payment Default, then effective immediately upon notice to
CCRT, Accounts Owner may refuse to authorize any new charges on Accounts.  Article XVI shall be inapplicable to
disputes relating to the matters referred to in the proviso in the preceding
sentence.  The Parties acknowledge that
neither the termination of this Agreement nor the termination of any Related
Securitization Agreement (under which specified Receivables are purchased by a
Receivables Purchaser from Accounts Owner in connection with securitizations or
similar transactions by a Receivables Purchaser) shall terminate the
obligations of Receivables Purchaser to purchase and pay for all Receivables
pursuant to Section 5.01.

 

Section 14.06.                                               CCRT
Purchase of Accounts.

 

(a)                                  Purchase and Put
Rights.  Upon expiration or termination
of this Agreement (i) CCRT shall have the right, exercisable by providing
written notice to Accounts Owner no later than sixty (60) days after notice of
termination is provided by a Party hereunder, to purchase all of the Accounts
and all Receivables then owned by Accounts Owner or to arrange for said
purchase by a financial institution designated by CCRT and (ii) Accounts
Owner shall have the right, exercisable by providing written notice to CCRT, to
cause CCRT to purchase all of the Accounts and (to the extent not previously
purchased by CCRT or CAC) all of the Receivables as of the date of such
purchase.  The purchase price in the
event of a purchase and sale under this Section 14.06(a) shall
be equal to one hundred percent (100%) of the Receivables related to the
Accounts then owned by Accounts Owner whether or not such Accounts are
charged-off on the date of purchase.

 

(b)                                 Books and Records.  Upon termination or expiration of this
Agreement, Accounts Owner shall transfer to CCRT all Books and Records relating
to the Accounts and Receivables and each Party shall return all property
belonging to the other Parties which is in its possession or control at the
time of termination and shall discontinue the use of and return to the other
Parties, or at the request of the other Parties destroy, all written and
printed materials bearing the other Parties’ name and logo.

 

(c)                                  Accounts Owner
Purchase and Third Party Sale Rights. 
In the event CCRT defaults in its obligation to purchase the Accounts
pursuant to Section 14.06(a)(ii) and CCRT’s Letter of Credit
becomes exhausted, Accounts Owner (without limiting any other remedy it may
have) may elect to retain the Accounts, in which case Accounts Owner shall so
notify CCRT and may repurchase from CCRT its interest in any Receivables, for a
total price equal to one hundred percent (100%) of the Receivables owned by
CCRT on the purchase date, or the Parties may mutually agree to sell the
Accounts and Receivables to an unrelated purchaser, in which case any premium
received on the sale of the Accounts shall be payable in full to CCRT, less any
fees due to Accounts Owner under this Agreement and any reasonable and actually
incurred expenses incurred by Accounts Owner in connection with the sale of the
Accounts.

 

61

 

(d)                                 Segregation of Sold
Accounts.  From and after the date of
the purchase by CCRT of the Accounts, Accounts Owner agrees to
(i) segregate, specially mark, and otherwise appropriately identify all
Accounts purchased by CCRT as belonging to CCRT and (ii) to execute and
deliver to CCRT such additional documents and instruments and to take such
action, all without further consideration, as CCRT shall reasonably request to
effectuate the giving, granting, bargaining, sale, conveyance, setting over,
delivery, transfer, confirmation and assignment provided for therein, including
such Uniform Commercial Code financing statement as may be requested by
CCRT.  CCRT agrees to reimburse Accounts
Owner for those reasonable and customary outside legal fees actually incurred
related to the purchase if the purchase is by CCRT or an Affiliate of
CCRT.  CCRT agrees to reimburse Accounts
Owner for those reasonable and customary outside legal fees actually incurred
relating to a purchase by an entity that is not CCRT or an Affiliate of CCRT.

 

(e)                                  Further Assurances.  Accounts Owner shall (i) give such
further assurances to CCRT and shall execute, acknowledge and deliver all such
acknowledgments, assignments and other instruments and take such further action
as may be reasonably necessary and appropriate to effectively vest in CCRT the
full legal and equitable title to all Accounts and Receivables purchased by
CCRT and (ii) make reasonable efforts to assist CCRT in the orderly transition
of the operations being acquired by CCRT, including sending to CCRT any
payments on Accounts which may be received by Accounts Owner after its purchase
of Accounts.  Accounts Owner agrees to
work with CCRT’s personnel to assure a smooth transition of the Accounts and
continuity of operations with respect to the Accounts.

 

[END OF
ARTICLE XIV]

 

62

 

ARTICLE XV

INDEMNIFICATION; LIMITATIONS ON RECOURSE

 

Section 15.01.                                               CCRT
and CAC Indemnification Obligations

 

(a)                                  General
Indemnification Obligations.  CCRT
and CAC, jointly and severally shall indemnify and hold harmless Accounts Owner
and its respective directors officers, employees, agents and affiliates and
permitted assigns from and against any all Losses arising out of (i) any
failure of CCRT or CAC to comply with any of the terms and conditions of this
Agreement, (ii) any inaccuracy of a representation or warranty made by
CCRT or CAC herein, or (iii)  any infringement or alleged infringement of
any of the CompuCredit Marks or CAC Marks, or the use thereof hereunder, on the
rights of any third party.

 

(b)                                 Additional
Indemnification Obligations. 
Notwithstanding any provision in this Agreement or the Related
Agreements to the contrary, CCRT and CAC hereby jointly and severally agree to
indemnify and hold harmless Synovus, its Affiliates and each of their
successors, assigns, officers, directors, employees and agents (collectively,
the “Indemnified Accounts Owner Parties”), from and against any and all
liabilities, losses, claims, damages, judgments, awards, interest, penalties,
punitive damages, fines, amounts paid in settlement, costs and expenses of any
kind, including attorneys and expert witness fees, court costs and other
expenses of litigation (any such liability, loss, claim, damages, judgment,
award, interest, penalty, punitive damages, fine, amount paid in settlement,
cost or expense, a “Covered Loss”), arising directly or indirectly out
of (i) any past, present or future failure or alleged failure of any of
the Materials, procedures or matters
referred to Section 4.02, heretofore or hereafter used in
connection with the Program, or otherwise in connection with the activities
pursuant to or contemplated by the Original Affinity Agreement, the Original
Facilities Agreement, and this Agreement, to comply with any applicable Requirements of Law or Operating Rules, (excluding however,
the Synovus Share which, to the extent hereinafter set forth, Synovus shall
itself bear) or (ii) the violation of any Non-Program Prohibition.

 

Section 15.02.                                               Scope
of Liability.

 

(a)                                  Joint and Several
Liability.  Accounts Owner, CCRT and
CAC agree that CCRT and CAC shall be jointly and severally liable for all
obligations of CCRT, or CAC, or both, under this Agreement, regardless of
whether such obligations are referred to as the obligations of CCRT or of CAC,
or of both such corporations. 
Notwithstanding any contrary provision in this Agreement, CCRT and CAC
shall have no indemnity obligations pursuant to this Article XV to
the extent that (i) any Covered Loss directly and solely arises from
Accounts Owner’s written direction to CCRT and CAC that CCRT or CAC take, or
refrain from taking, any action, (ii) CCRT or CAC notifies Accounts Owner
in writing within ten (10) Business Days from receipt of the written
direction from Accounts Owner that it believes that such direction violates
Requirements of Law or Operating Rules, and (iii) any liability for a
Covered Loss arises from the violation of the specific Requirements of Law or
Operating Rules cited by CCRT or CAC in its written objection to Accounts
Owner.

 

63

 

(b)                                 CCRT’s Liability
Obligations.  CCRT’s obligations
under this Agreement shall:

 

(i)                                     be unlimited,
(subject only to the provisions hereof relating to the Synovus Share);

 

(ii)                                  apply irrespective of
whether Accounts Owner is held or alleged to have caused, committed, or been
solely or contributorily negligent or otherwise engaged in actions or omissions
which contributed to, the failure to comply;

 

(iii)                               survive the expiration
or termination of this Agreement and any Related Agreement and any other
agreement to which any of the Parties may be party;

 

(iv)                              be in addition to, and
not in limitation of, any other indemnities in favor of any of the Indemnified
Accounts Owner Parties and shall not be subject to any limitations, exclusions
or defenses as may apply to any such other indemnities in favor of any of the
Indemnified Accounts Owner Parties;

 

(v)                                 apply notwithstanding
any representation, warranty, indemnity or other agreement relating to
compliance as may have been given by Accounts Owner in any Related Agreement
(including any Related Securitization Agreement) to which Accounts Owner may be
party and, to the extent any such representation, warranty, indemnity or other
agreement is given effect, either in whole or in part such that Accounts Owner
is held or alleged to be liable with respect to any matter of noncompliance or
alleged noncompliance for which CCRT is obligated to provide indemnification
under this Agreement, the indemnification provided for in this Agreement shall
take precedence and shall apply such that CCRT shall indemnify and hold
harmless Synovus and the other Indemnified Accounts Owner Parties from and
against (in addition to other matters covered by this Agreement) any amounts
for which Accounts Owner is held or alleged to be liable under any such
Accounts Owner representation, warranty, indemnity or other agreement
(irrespective of whether such Accounts Owner representation, warranty,
indemnity or other agreement is construed to run in favor of CCRT, or either of
their assigns, or any third party beneficiary of any such Accounts Owner
representation, warranty, indemnity or other agreement, or any other Person);
and

 

(vi)                              apply notwithstanding any
review or approval by Accounts Owner or its counsel of any such Materials,
procedures or matters involved in the failure or alleged failure to comply,
unless (A) such liability directly and solely arises from Accounts Owner’s
written direction to CCRT and CAC that CCRT or CAC take, or refrain from
taking, any action, (ii) CCRT or CAC notifies Accounts Owner in writing
within ten (10) Business Days from receipt of the written direction from
Accounts Owner that it believes that such direction violates Requirements of
Law or Operating Rules, and (iii) such liability arises from the violation
of the specific Requirements of Law or Operating Rules cited by CCRT or
CAC in its written objection to Accounts Owner.

 

(c)                                  Synovus Share.  Synovus shall remain responsible for an
amount not to exceed two million dollars ($2,000,000.00) in the aggregate (“Synovus
Share”), of the total of amounts awarded or paid from time to time to
claimants under final judgments (excluding

 

64

 

amounts
awarded as counsel fees) and final settlements (excluding amounts included for
counsel fees) (each, a “Net Final Judgment” and “Net Final Settlement,”
respectively) which would otherwise be the subject of CCRT’s indemnification
obligations to the Indemnified Accounts Owner Parties pursuant to Section 15.01(b).  The Synovus Share shall be ten percent (10%)
of each Net Final Judgment and Net Final Settlement from time to time
indemnified by CCRT pursuant to this Agreement; provided, however,
that the Synovus Share shall be limited to a cumulative total of two million
dollars ($2,000,000.00) in the aggregate for all judgments and settlements as
may occur from time to time over the life of this indemnity; and, provided,
further, that the Synovus Share shall not apply with respect to any of
CCRT’s indemnification obligation arising out of or relating to any violation
of any Non-Program Prohibition.

 

(d)                                 Prompt Payment.  Amounts owing by CCRT under this Agreement
shall be paid promptly upon written demand for indemnification containing in
reasonable detail the facts giving rise to such liability.

 

(e)                                  Defense Costs.  All defense costs in connection with any
matter to which the indemnification of this Agreement relates, including
counsel fees and expenses, shall be borne entirely by CCRT.  Defense counsel shall be selected by mutual
agreement of Synovus and CCRT, and shall have an attorney-client relationship
to both Synovus and CCRT.  Synovus
retains the right to employ separate counsel of its own, at Synovus’ expense,
who shall be entitled to participate in such defense.

 

(f)                                    Severability.
 If
any portion of the indemnification provided for herein is held void or
unenforceable for reasons of public policy or otherwise, then the remaining
portion thereof shall be construed as severable from the void portion and shall
be given the maximum effect  possible.

 

(g)                                 Synovus Covered
Loss.  The Parties recognize,
acknowledge, and agree that, for purposes of this Agreement, a Covered Loss of
Accounts Owner shall be deemed a Covered Loss, in like amount, of Synovus, for
which Synovus shall be entitled to indemnification in accordance with this
Agreement, irrespective of whether the indemnification hereunder of Accounts
Owner in respect of such Covered Loss is for any reason held to be void or
unenforceable against CCRT in whole or in part; provided, however,
that CCRT shall not be obligated to indemnify both Accounts Owner and Synovus
in respect of the same Covered Loss.

 

(h)                                 Obligation Absolute.  The obligations of CCRT under this Section 15.02
are absolute, irrevocable and unconditional under any and all
circumstances.  CCRT irrevocably and
unconditionally agrees, to the fullest extent permitted by law, to waive any
defense or setoff to its obligations hereunder.

 

Section 15.03.                                               Accounts
Owner’s Indemnification Obligations. 
Except to the extent of: (a) any Losses which arise from the direct
acts or omissions of CCRT or CAC, (b) any Covered Losses under Section 15.01(b) and
(c) any CCRT liability obligations under Section 15.02(b),
Accounts Owner shall be liable to and shall indemnify and hold harmless CCRT
and CAC and their respective officers, directors, employees, agents and
Affiliates, from and against any Losses arising out of (i) the failure of
Accounts Owner to comply with any of the terms and conditions of this
Agreement, (ii) the inaccuracy of any representation or warranty

 

65

 

made by
Accounts Owner herein, (iii) any infringement or alleged infringement of
any of the CB&T Marks, or the use thereof hereunder, on the rights of any
third party, or (iv) any losses resulting from a failure of Accounts Owner
to comply, in respect of its obligations in connection with the Program hereunder,
with any applicable Requirements of Law and Operating Rules whether
immaterial or material, regardless of whether such failure to comply would
constitute a breach of a representation, warranty or covenant of Accounts Owner
hereunder.

 

Section 15.04.                                               Indemnification
Procedures.

 

(a)                                  Notice of Claims.  The Parties agree that in case any claim is
made or any suit or action is commenced by any party that is not a party to
this Agreement or an Affiliate thereof with respect to Losses that may give
rise to a right of indemnification (a “Third Party Claim”), or any
knowledge is received of a state of facts which, if not corrected, may give
rise to a right of indemnification, for such party hereunder (“Indemnified
Party”) from the other party (“Indemnifying Party”), the Indemnified Party
shall give notice to the Indemnifying Party as promptly as practicable after
the receipt by the Indemnified Party of notice or knowledge of such claim,
suit, action or state of facts.  Notice
to the Indemnifying Party under the preceding sentence shall be given no later
than fifteen (15) days after receipt by the Indemnified Party of service of
process in the event a suit or action has commenced or thirty (30) days under
all other circumstances.  The failure to
give prompt notice shall not relieve an Indemnifying Party of its obligation to
indemnify except to the extent the Indemnifying Party is prejudiced by such
failure.  Such notice shall describe in
reasonable detail the issue that has or may result in indemnification pursuant
to Section 15.01 or 15.03. 
The Indemnified Party shall (i) provide to the Indemnifying Party
copies of all notices and documents (including court papers) received by the
Indemnified Party relating to any Third Party Claim that are not separately
addressed to the Indemnifying Party and (ii) make available to the
Indemnifying Party and its counsel and accountants at reasonable times and for
reasonable periods, during normal business hours, all Books and Records of the
Indemnified Party relating to any Third Party Claim or other claim for
indemnification, and each Party shall render to the other such assistance as it
may reasonably require of the other Parties in order to insure prompt and
adequate defense of any suit, claim or proceeding based upon a state of facts
which may give rise to a right of indemnification hereunder.

 

(b)                                 Right to Defend.  The Indemnifying Party shall have the right
to defend, compromise and settle any Third Party Claim in the name of the
Indemnified Party to the extent that the Indemnifying Party may be liable to
the Indemnified Party in connection therewith. 
The Indemnifying Party shall notify the Indemnified Party within ten
(10) Business Days of having received written notice pursuant to this Section 15.04
of the Third Party Claim whether the Indemnifying Party elects to assume the
defense of any such Third Party Claim and employ
counsel; provided; however, that the Indemnified Party does not object to such
counsel in a reasonable exercise of its discretion.  The Indemnified Party shall have the right to
employ its own counsel if the Indemnifying Party so elects to assume such
defense, but the fees and expenses of such counsel shall be at the Indemnified
Party’s expense, unless (i) the employment of such counsel shall have been
authorized in writing by the Indemnifying Party, (ii) the Indemnifying
Party shall not have employed counsel to take charge of the defense of such
action prior to or promptly after electing to assume the defense thereof, or
(iii) in the reasonable judgment of counsel to the Indemnified Party, as
evidenced in writing, there is a reasonable basis

 

66

 

for a possible
conflict of interest between the Indemnified Party and the Indemnifying Party
or there are defenses available to the Indemnified Party which are different
from or additional to those available to the Indemnifying Party (in which case
the Indemnifying Party shall not have the right to direct the defense of such
action on behalf of the Indemnified Party), in any of which events said
reasonable fees and expenses shall be borne by the Indemnifying Party.

 

(c)                                  Settlement of
Claims.  The Indemnified Party may at
any time notify the Indemnifying Party of its intention to settle or compromise
any claim, suit or action against the Indemnified Party (without the consent of
the Indemnifying Party) in respect of which indemnification payments may be
sought from the Indemnifying Party hereunder; provided, however,
that the Indemnifying Party shall have no liability in respect of such settled
or compromised claim, suit or action; and provided  further, that
the Indemnifying Party shall not compromise or settle any claim, suit or
proceeding which seeks any non-monetary relief without the consent of the
Indemnified Party, which consent shall not be unreasonably withheld.  Except to the extent provided in the
preceding sentence, the Indemnified Party may not settle or compromise any
claim, suit or action against the Indemnified Party without the consent of the
Indemnifying Party, which consent shall not be
unreasonably withheld.

 

Section 15.05.                                               Subrogation.  The Indemnifying Party shall be subrogated to
any claims or rights of the Indemnified Party as against any other Persons with
respect to any amount paid by the Indemnifying Party under this Article XV.
The Indemnified Party shall cooperate with the Indemnifying Party, at the
Indemnifying Party’s expense, in the assertion by the Indemnifying Party of any
such claim against such other Persons.

 

[END OF
ARTICLE XV]

 

67

 

ARTICLE XVI

DISPUTE RESOLUTION

 

Section 16.01.                                               Dispute
Resolution.  The Parties agree that
it is their desire to use their best efforts to resolve amicably any and all
disputes or disagreements that may arise between them with respect to the
interpretation of any provision of this Agreement or with respect to the
performance by the parties under this Agreement, in order to avoid an early
termination of this Agreement.  Toward that
end, the Parties agree that in the event any dispute or disagreement arises
that cannot be resolved at the operating level by the employees of each Party
having direct responsibility for the performance or operating function in
question, each of Accounts Owner and CCRT shall promptly appoint a designated
officer to meet for the purpose of endeavoring to resolve such dispute or
negotiate an adjustment to such provision. 
Subject to Section 16.02, any disputes that, if not
resolved, may lead to an allegation by one party that an Event of Default has
occurred by the other Party shall be referred to the Chief Financial Officer of
Accounts Owner and the Chief Financial Officer of CCRT, who shall confer and
diligently attempt to find reasonable methods of correcting the condition
giving rise to the anticipated Event of Default or other dispute.  No legal proceedings for the resolution of
any such dispute may be commenced or notice of termination of this Agreement
may be served until such Chief Financial Officers have so conferred, and until
either Accounts Owner or CCRT concludes, in good faith, that amicable
resolution through continued negotiation of the matter at issue does not appear
likely and the disputing Party provides written notice of same to the other
Parties.

 

Section 16.02.                                               Exclusions.  The provisions of Section 16.01
shall not apply with respect to:

 

(a)                                  any Event of Default
other than a Performance Default;

 

(b)                                 any matter within the
scope of Section 3.08 relating to Regulatory Criticism;

 

(c)                                  any matter within the
scope of Section 4.07 relating to remedies for failures to meet
Service Level Standards;

 

(d)                                 any event set forth in
Section 14.05(e) with respect to certain matters occurring
during the Wind Down Period; and

 

(e)                                  any matter within the
scope of Section 4.13 relating to any Non-Program Prohibition or
Non-Program Violation Notice violation.

 

[END OF
ARTICLE XVI]

 

68

 

ARTICLE XVII

MISCELLANEOUS

 

Section 17.01.                                               Entire
Agreement.  This Agreement, together
with the Exhibits and Schedules constitutes the entire agreement by the Parties
and supersedes any other agreement, whether written or oral, that may have been
made or entered into between or among the Parties relating to the matters
contemplated hereby.

 

Section 17.02.                                               Amendments
and Waivers.  This Agreement may be
amended, amended and restated, modified, superseded, or canceled, and any of
the terms, representations, warranties or covenants hereof may be waived, only
by written instrument executed by each of the Parties or, in the case of a
waiver, by the Party waiving compliance. 
In the course of the planning and coordination of this Agreement,
written documents have been exchanged between the parties.  Such written documents shall not be deemed to
amend or supplement this Agreement.  The
failure of any Party at any time or times to require performance of any
provision hereof shall in no manner affect the right at a later time to enforce
the same.  No waiver by any Party of any
condition or of any breach of any term, representation, warranty or covenant
under this Agreement, whether by conduct or otherwise, in any one or more
instances, shall be deemed to be or construed as a further or continuing waiver
of any other condition or of any breach of any other term, representation,
warranty or covenant under this Agreement.

 

Section 17.03.                                               Assignment.  This Agreement and the rights and obligations
created under it shall be binding upon and inure solely to the benefit of the
Parties and theirs respective successors and assigns, and no other Person shall
acquire or have any right under or by virtue of this Agreement.  Except as otherwise provided herein, this
Agreement shall not be assigned by a Party, except to a wholly-owning parent or
to a wholly-owned subsidiary of such assigning Party’s wholly-owning parent
without the written consent of the other Parties, which consent shall not
unreasonably be withheld or delayed, and any such permitted assignment shall
terminate when such assignee is no longer a wholly-owning parent of such party
or a wholly-owned subsidiary of such Party’s wholly-owning Parent.  Notwithstanding any contrary provision in
this Agreement, nothing contained herein shall restrict any assignment rights a
Receivables Purchaser may have under any Related Securitization Agreement.

 

Section 17.04.                                               Governing
Law.  THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
GEORGIA  WITHOUT REGARD TO ITS CONFLICT
OF LAWS PRINCIPLES.

 

Section 17.05.                                               Notices.  All demands, notices, requests and approvals
required by this Agreement shall (a) be in writing, (b) be addressed
to the Parties as indicated below unless notified in writing of a change in
address, and (c) be deemed to have been duly given either when personally
delivered or, if sent by mail, in which event it shall be sent postage prepaid,
upon delivery thereof, or, if sent by telegraph, telex, facsimile (with oral
confirmation of receipt), electronic mail, or nationally recognized overnight
delivery, upon delivery thereof.  The
addresses of the parties are as follows:

 

69

 

	
  If to Accounts Owner:

  	
   

  	
  Columbus Bank and Trust Company

  
	
   

  	
   

  	
  1148 Broadway

  
	
   

  	
   

  	
  Columbus, Georgia 31901

  
	
   

  	
   

  	
  Attn: James R. Farrar, Risk Management

  
	
   

  	
   

  	
  Fax Number: (706) 649-2001

  
	
   

  	
   

  	
   

  
	
  With a copy (which copy shall

  	
   

  	
   

  
	
  not constitute notice) to:

  	
   

  	
  Synovus Financial Corp.

  
	
   

  	
   

  	
  Synovus Centre

  
	
   

  	
   

  	
  1111 Bay Avenue, Suite 501

  
	
   

  	
   

  	
  Columbus, GA 31909

  
	
   

  	
   

  	
  Attn: Michael D. Smith

  
	
   

  	
   

  	
  Fax Number: (706) 649-1957

  
	
   

  	
   

  	
   

  
	
  If to CCRT:

  	
   

  	
  CompuCredit Corporation

  
	
   

  	
   

  	
  245 Perimeter Center Parkway Center Drive

  
	
   

  	
   

  	
  Suite 600

  
	
   

  	
   

  	
  Atlanta, GA 30346

  
	
   

  	
   

  	
  Attn: General Counsel

  
	
   

  	
   

  	
  Fax Number: (770) 206-6187

  
	
   

  	
   

  	
   

  
	
  If to CAC:

  	
   

  	
  CompuCredit Acquisition Corporation

  
	
   

  	
   

  	
  101 Convention Center Drive

  
	
   

  	
   

  	
  Suite 850-15B

  
	
   

  	
   

  	
  Las Vegas, NV 89109

  
	
   

  	
   

  	
  Attn: Chief Financial Officer

  
	
   

  	
   

  	
  Fax Number: (702) 598-3651

  

 

Section 17.06.                                               Severability.  If any 
provision of this Agreement or portion thereof is held invalid, illegal,
void or unenforceable by reason of any Requirements of Law or public policy,
all other provisions of this Agreement shall nevertheless remain in full force
and effect.

 

Section 17.07.                                               Relationship
of the Parties.  The Parties agree
that in performing their responsibilities pursuant to this Agreement they are
in the position of independent contractors. 
This Agreement is not intended to create, nor does it create and shall
not be construed to create, a relationship of partners or joint venturers or
any association for profit between and among Accounts Owner, CCRT, and CAC.

 

Section 17.08.                                               Press
Releases and Inquiries.  Except as
may be required by Requirements of Law, Operating Rules or any stock
exchange, none of Accounts Owner, CCRT, or CAC, nor their respective parents or
Affiliates, shall issue a press release or make public announcement or any
disclosure to any third party related to the terms of this Agreement without
the prior consent of the other Parties, which consent shall not be unreasonably
withheld or delayed.  Upon receipt of any
press inquiry (including any inquiry that may reasonably be expected to be
posted on any Website “blog”) concerning the Program or role of the Parties in
the Program, the Party receiving such inquiry shall promptly notify the other
Parties and, to the extent practicable, consult with the other parties prior to
providing any response to such inquiry.

 

70

 

Section 17.09.                                               Requirements
of Law.  Nothing in this Agreement
shall be construed as requiring the Parties to take any action or omit to take
any action in violation of any Requirements of Law, including Title V of
the GLBA and its implementing regulations, or any Cardholder Agreements.

 

Section 17.10.                                               Construction.  Each Party acknowledges that: (a) it has
read this Agreement; (b) it has been represented in the preparation,
negotiation and execution of this Agreement by legal counsel of its own choice
or has voluntarily declined to seek such counsel; and (c) it understands
the terms and consequences of this Agreement and is fully aware of the legal and
binding effect of this Agreement.

 

Section 17.11.                                               Survival.  The provisions of Sections 4.02,
8.01(a), 8.01(f), 14.05(e) and Articles I; VII; X; XV; and XVII shall
survive the termination or expiration of this Agreement.

 

Section 17.12.                                               Counterparts.  This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original for all purposes and
all of which shall be deemed, collectively, one agreement, but in making proof
hereof it shall not be necessary to exhibit more than one.

 

[END OF
ARTICLE XVII]

 

71

 

IN WITNESS
WHEREOF, Accounts Owner, CCRT and CAC have caused this Accounts Ownership and
Administration Agreement to be duly executed by their respective officers as of
the day and year first above written.

 

	
   

  	
  COLUMBUS BANK AND TRUST COMPANY

  
	
   

  	
  By:

  	
  /s/ James R.
  Farrar

  	
   

  
	
   

  	
  Name:  James R. Farar

  
	
   

  	
  Title:  SVP, Secretary

  
	
   

  
	
   

  	
  COMPUCREDIT CORPORATION

  
	
   

  	
  By:

  	
  /s/ Richard
  W. Gilbert

  	
   

  
	
   

  	
  Name:  Richard W. Gilbert

  
	
   

  	
  Title:  Chief Operating Officer

  
	
   

  
	
   

  	
  COMPUCREDIT ACQUISITION CORPORATION

  
	
   

  	
  By:

  	
  /s/ Joshua
  C. Miller

  	
   

  
	
   

  	
  Name:  Joshua C. Miller

  
	
   

  	
  Title:  Assistant Secretary

  
	
   

  
	
   

  
	
   

  
	
  SYNOVUS
  FINANCIAL CORP.,

  
	
  Solely
  for purposes of Section 15.02(c), Section 15.02(e),

  
	
  Section 15.02(g) and
  Section 15.02(h)

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Mark G. Holladay

  	
   

  
	
  Name:  Mark G. Holladay

  
	
  Title:  EVP, Chief Credit Officer

  
									

 

72

 

AMENDED AFFINITY AGREEMENT EXHIBITS

 

A.                                   Related
Securitization Agreements

 

B.                                     Compliance Plan

 

C.                                     Credit Criteria

 

D.                                    Service Level
Standards; Remediation Level; Termination Level

 

E.                                      Business
Continuity and Recovery Standards

 

F.                                      Form of
Letter of Credit

 

G.                                     CB&T Marks

 

H.                                    Program Related
Fees

 

I.                                         Debt Waiver
Program Terms and States

 

J.                                        CCRT
Authorization Letter

 

K.                                    Originated Accounts

 

73

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
   

  	
  PAGE

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE I

  	
  DEFINITIONS

  	
  3

  
	
  Section 1.01.

  	
   

  	
  Definitions

  	
  3

  
	
  Section 1.02.

  	
   

  	
  Rules of Construction

  	
  9

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
  RESTATEMENT OF ORIGINAL AFFINITY AGREEMENT
  AND CONTINUATION OF RELATED SECURITIZATION AGREEMENTS

  	
  11

  
	
  Section 2.01.

  	
   

  	
  Restated Affinity Agreement

  	
  11

  
	
  Section 2.02.

  	
   

  	
  Termination of Original Facilities
  Agreement

  	
  11

  
	
  Section 2.03.

  	
   

  	
  Certain Agreements not Affected

  	
  11

  
	
  Section 2.04.

  	
   

  	
  Related Securitization Agreement

  	
  11

  
	
  Section 2.05.

  	
   

  	
  No Separate Accounts

  	
  11

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
  ACCOUNTS OWNER RIGHTS &
  OBLIGATIONS

  	
  12

  
	
  Section 3.01.

  	
   

  	
  Issuance of Cards; Maintenance of Accounts

  	
  12

  
	
  Section 3.02.

  	
   

  	
  Cardholder Approval.

  	
  12

  
	
  (a)

  	
  Applications

  	
  12

  
	
  (b)

  	
  Acceptance

  	
  12

  
	
  Section 3.03.

  	
   

  	
  Establishment
  of Accounts

  	
  12

  
	
  Section 3.04.

  	
   

  	
  Account Terms and Credit Criteria

  	
  12

  
	
  (a)

  	
  Cardholder Agreements

  	
  12

  
	
  (b)

  	
  Credit Criteria Changes

  	
  12

  
	
  Section 3.05.

  	
   

  	
  Right to Approve all Materials

  	
  13

  
	
  Section 3.06.

  	
   

  	
  Credit Card Association Membership

  	
  13

  
	
  Section 3.07.

  	
   

  	
  Ownership of Account Relations

  	
  13

  
	
  Section 3.08.

  	
   

  	
  Regulatory Criticism

  	
  14

  
	
  (a)

  	
  Receipt of Criticism

  	
  14

  
	
  (b)

  	
  Consultation; Accounts Owner Corrective
  Action

  	
  14

  
	
  (c)

  	
  Time Constraints; CCRT Termination Right

  	
  14

  
	
  (d)

  	
  Good Faith Obligation

  	
  15

  
	
  Section 3.09.

  	
   

  	
  Compliance Plan

  	
  15

  
	
  Section 3.10.

  	
   

  	
  GLBA Compliance

  	
  15

  
	
  Section 3.11.

  	
   

  	
  Compliance Officer

  	
  15

  
						

 

1

 

	
  Section 3.12.

  	
   

  	
  Compliance Counsel

  	
  16

  
	
  Section 3.13.

  	
   

  	
  Non-exclusive Arrangement

  	
  16

  
	
  Section 3.14.

  	
   

  	
  Charged-Off Accounts

  	
  16

  
	
  Section 3.15.

  	
   

  	
  [Reserved]

  	
  17

  
	
  Section 3.16.

  	
   

  	
  Debt Waiver Program Offering

  	
  17

  
	
  (a)

  	
  Establishment of Debt Waiver Program

  	
  17

  
	
  (b)

  	
  Administrator

  	
  17

  
	
  Section 3.17.

  	
   

  	
  Transfer of Accounts to a Third Party

  	
  18

  
	
  Section 3.18.

  	
   

  	
  Credit Card Association Compliance

  	
  18

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
  CCRT RIGHTS & OBLIGATIONS

  	
  19

  
	
  Section 4.01.

  	
   

  	
  Solicitation of New Accounts

  	
  19

  
	
  Section 4.02.

  	
   

  	
  Compliance with Applicable Requirements of
  Law

  	
  19

  
	
  (a)

  	
  CCRT Compliance

  	
  19

  
	
  (b)

  	
  Survival of Obligations

  	
  20

  
	
  Section 4.03.

  	
   

  	
  Compliance Plan

  	
  20

  
	
  Section 4.04.

  	
   

  	
  Settlement and Status Reports

  	
  20

  
	
  Section 4.05.

  	
   

  	
  Service Level Standards

  	
  20

  
	
  (a)

  	
  Service Level Standards

  	
  20

  
	
  (b)

  	
  Changes to Service Level Standards

  	
  20

  
	
  (c)

  	
  Notice of Non-Conformance

  	
  21

  
	
  (d)

  	
  Monthly Service Level Standards Reports

  	
  21

  
	
  Section 4.06.

  	
   

  	
  Customer Experience

  	
  21

  
	
  Section 4.07.

  	
   

  	
  Action Plan and Dispute Resolution.

  	
  21

  
	
  (a)

  	
  Formal Action Plan

  	
  21

  
	
  (b)

  	
  Resolution Period

  	
  22

  
	
  (c)

  	
  Compliance Fee Payment

  	
  22

  
	
  (d)

  	
  Arbitration

  	
  22

  
	
  (e)

  	
  Remedies Cumulative

  	
  22

  
	
  Section 4.08.

  	
   

  	
  Website Linkage Approval

  	
  23

  
	
  Section 4.09.

  	
   

  	
  CCRT Business Plans

  	
  23

  
						

 

2

 

	
  Section 4.10.

  	
   

  	
  Business Continuity and Recovery Standards

  	
  23

  
	
  Section 4.11.

  	
   

  	
  Inspections

  	
  23

  
	
  Section 4.12.

  	
   

  	
  Removal of Services.

  	
  23

  
	
  (a)

  	
  Removed Service

  	
  23

  
	
  (b)

  	
  Transition of Services

  	
  24

  
	
  Section 4.13.

  	
   

  	
  Non-Program Prohibitions

  	
  24

  
	
  (a)

  	
  General Prohibition

  	
  24

  
	
  (b)

  	
  Notice Requirements

  	
  26

  
	
  (c)

  	
  Liquidated Damages for Violation of
  Non-Program Prohibitions

  	
  27

  
	
  (d)

  	
  Prohibiting New Accounts and Offers

  	
  28

  
	
  (e)

  	
  Accounts Owner Corrective Action

  	
  28

  
	
  (f)

  	
  Termination of Agreement

  	
  28

  
	
  (g)

  	
  Intentional Violations

  	
  29

  
	
  (h)

  	
  Liquidated Damages Payment and Letter of
  Credit Draw

  	
  29

  
	
  (i)

  	
  Acknowledgement of Reasonableness of
  Liquidated Damages

  	
  29

  
	
  (j)

  	
  Remedies Cumulative

  	
  29

  
	
  (k)

  	
  Equitable Relief

  	
  29

  
	
  Section 4.14.

  	
   

  	
  Subcontracting and Access Rights

  	
  30

  
	
  (a)

  	
  Subcontracting

  	
  30

  
	
  (b)

  	
  Accounts Owner Information Rights

  	
  30

  
	
  (c)

  	
  Accounts Owner Step In Rights

  	
  30

  
	
  Section 4.15.

  	
   

  	
  Credit Card Association Compliance

  	
  30

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
  RECEIVABLES PURCHASER RIGHTS &
  OBLIGATIONS

  	
  31

  
	
  Section 5.01.

  	
   

  	
  Receivables Purchaser Obligations.

  	
  31

  
	
  (a)

  	
  Purchase of Receivables.

  	
  31

  
	
  (b)

  	
  Settlement Procedures.

  	
  31

  
	
  (c)

  	
  Dispute and Letter of Credit Draw

  	
  32

  
	
  (d)

  	
  Account Ownership

  	
  33

  
	
  (e)

  	
  Additional Documentation

  	
  33

  
	
  (f)

  	
  Full Purchase Price

  	
  33

  
					

 

3

 

	
  Section 5.02.

  	
   

  	
  Regulatory Inspections

  	
  34

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
  FINANCIAL PROVISIONS

  	
  35

  
	
  Section 6.01.

  	
   

  	
  Deposit

  	
  35

  
	
  Section 6.02.

  	
   

  	
  Letter of Credit

  	
  35

  
	
  Section 6.03.

  	
   

  	
  Debt Waiver Program Fee

  	
  35

  
	
  Section 6.04.

  	
   

  	
  Other Fees

  	
  35

  
	
  Section 6.05.

  	
   

  	
  Interest on Late Payments

  	
  35

  
	
  Section 6.06.

  	
   

  	
  Payments After Termination

  	
  35

  
	
  Section 6.07.

  	
   

  	
  Non-Credit Revenue on Accounts.

  	
  36

  
	
  (a)

  	
  Benefits

  	
  36

  
	
  (b)

  	
  Solicitation

  	
  36

  
	
  (c)

  	
  Inserts

  	
  36

  
	
  (d)

  	
  Income

  	
  36

  
	
  Section 6.08.

  	
   

  	
  Rebates and Fees

  	
  36

  
	
  Section 6.09.

  	
   

  	
  State Tax Assessments

  	
  36

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII

  	
  REPRESENTATIONS & WARRANTIES

  	
  37

  
	
  Section 7.01.

  	
   

  	
  Representations and Warranties of Accounts
  Owner

  	
  37

  
	
  (a)

  	
  Organization

  	
  37

  
	
  (b)

  	
  FDIC Membership

  	
  37

  
	
  (c)

  	
  Capacity; Authority; Validity

  	
  37

  
	
  (d)

  	
  Conflicts; Defaults

  	
  37

  
	
  (e)

  	
  Consents

  	
  37

  
	
  (f)

  	
  Litigation

  	
  38

  
	
  (g)

  	
  Insolvency

  	
  38

  
	
  (h)

  	
  Compliance with Laws and Operating Rules

  	
  38

  
	
  (i)

  	
  Accuracy of Representations and Warranties

  	
  38

  
	
  Section 7.02.

  	
   

  	
  Representations and Warranties of CCRT

  	
  38

  
	
  (a)

  	
  Organization

  	
  38

  
	
  (b)

  	
  Capacity; Authority; Validity

  	
  38

  
	
  (c)

  	
  Conflicts; Defaults

  	
  39

  
					

 

4

 

	
  (d)

  	
  Consents

  	
  39

  
	
  (e)

  	
  Litigation

  	
  39

  
	
  (f)

  	
  Compliance with Laws and Operating Rules

  	
  40

  
	
  (g)

  	
  Maintenance of Accounts

  	
  40

  
	
  (h)

  	
  Business Continuity and Recovery Standards

  	
  40

  
	
  (i)

  	
  CompuCredit Marks

  	
  40

  
	
  (j)

  	
  Accuracy of Representations and Warranties

  	
  40

  
	
  Section 7.03.

  	
   

  	
  Representations and Warranties of CAC

  	
  40

  
	
  (a)

  	
  Organization

  	
  40

  
	
  (b)

  	
  Capacity, Authority, Validity

  	
  40

  
	
  (c)

  	
  Conflicts; Defaults

  	
  40

  
	
  (d)

  	
  Consents

  	
  41

  
	
  (e)

  	
  Litigation

  	
  41

  
	
  (f)

  	
  Compliance with Laws and Operating Rules

  	
  41

  
	
  (g)

  	
  Maintenance of Accounts

  	
  41

  
	
  (h)

  	
  Accuracy of Representations and Warranties

  	
  41

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  	
  COVENANTS

  	
  42

  
	
  Section 8.01.

  	
   

  	
  Mutual Covenants and Agreements

  	
  42

  
	
  (a)

  	
  Cooperation

  	
  42

  
	
  (b)

  	
  Other Required Information

  	
  42

  
	
  (c)

  	
  Miscellaneous Agreements

  	
  42

  
	
  (d)

  	
  Preserve Accuracy of Representations and
  Warranties

  	
  42

  
	
  (e)

  	
  Notice of Material Developments

  	
  42

  
	
  (f)

  	
  Recordkeeping

  	
  43

  
	
  Section 8.02.

  	
   

  	
  Covenants of Accounts Owner

  	
  43

  
	
  (a)

  	
  Corporate Existence, Etc

  	
  43

  
	
  (b)

  	
  Preservation of Accounts

  	
  43

  
	
  (c)

  	
  Sale of Accounts

  	
  43

  
	
  (d)

  	
  Adverse Action

  	
  43

  
	
  (e)

  	
  Credit Criteria

  	
  44

  
					

 

5

 

	
  (f)

  	
  Insolvency

  	
  44

  
	
  (g)

  	
  Official Records

  	
  44

  
	
  (h)

  	
  Obligations

  	
  44

  
	
  (i)

  	
  Other rights of CCRT

  	
  44

  
	
  (j)

  	
  Compliance with Law

  	
  44

  
	
  Section 8.03.

  	
   

  	
  Covenants of CCRT

  	
  44

  
	
  (a)

  	
  Obligations

  	
  44

  
	
  (b)

  	
  Compliance with Law

  	
  44

  
	
  (c)

  	
  Other Rights of Accounts Owner

  	
  45

  
	
  Section 8.04.

  	
   

  	
  Covenants of CAC

  	
  45

  
	
  (a)

  	
  Obligations

  	
  45

  
	
  (b)

  	
  Compliance with Law

  	
  45

  
	
  (c)

  	
  Other Rights of Accounts Owner

  	
  45

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IX

  	
  INTELLECTUAL PROPERTY

  	
  46

  
	
  Section 9.01.

  	
   

  	
  Use of Accounts Owner’s Name and Trademarks

  	
  46

  
	
  (a)

  	
  Accounts Owner License Grant

  	
  46

  
	
  (b)

  	
  Rights Reserved by Accounts Owner

  	
  46

  
	
  Section 9.02.

  	
   

  	
  Use of CCRT’s Name and Trademarks

  	
  46

  
	
  (a)

  	
  CCRT License Grant

  	
  46

  
	
  (b)

  	
  Rights Reserved by CCRT

  	
  46

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE X

  	
  CONFIDENTIALITY

  	
  48

  
	
  Section 10.01.

  	
   

  	
  General Confidentiality

  	
  48

  
	
  (a)

  	
  Confidential Information

  	
  48

  
	
  (b)

  	
  Exclusions

  	
  48

  
	
  (c)

  	
  Permissible Tax Disclosures

  	
  48

  
	
  (d)

  	
  Agreement Terms

  	
  49

  
	
  (e)

  	
  Cardholder Nonpublic Personal Information

  	
  49

  
	
  (f)

  	
  Intellectual Property

  	
  49

  
	
  (g)

  	
  Disclosure to SEC

  	
  49

  
	
  Section 10.02.

  	
   

  	
  Duties of Receiving Party

  	
  49

  
					

 

6

 

	
  Section 10.03.

  	
   

  	
  Use and Disclosure of Confidential
  Information

  	
  49

  
	
  Section 10.04.

  	
   

  	
  Unauthorized Use or Disclosure of
  Confidential Information

  	
  49

  
	
  Section 10.05.

  	
   

  	
  Return or Destruction of Confidential
  Information

  	
  50

  
	
  Section 10.06.

  	
   

  	
  Cardholder Privacy

  	
  50

  
	
  (a)

  	
  GLBA Definitions and Applicability

  	
  50

  
	
  (b)

  	
  Privacy Protections

  	
  50

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XI

  	
  INFORMATION SECURITY

  	
  52

  
	
  Section 11.01.

  	
   

  	
  General Information Security

  	
  52

  
	
  Section 11.02.

  	
   

  	
  Network and Communications Security

  	
  52

  
	
  Section 11.03.

  	
   

  	
  Infrastructure Platforms, Services, and
  Operations Security

  	
  52

  
	
  Section 11.04.

  	
   

  	
  Access Restrictions

  	
  52

  
	
  Section 11.05.

  	
   

  	
  Physical Security

  	
  52

  
	
  Section 11.06.

  	
   

  	
  Malicious Code and Virus Protection

  	
  53

  
	
  Section 11.07.

  	
   

  	
  Report Incidents

  	
  53

  
	
  Section 11.08.

  	
   

  	
  Business Continuity and Recovery

  	
  53

  
	
  Section 11.09.

  	
   

  	
  Corrective Action

  	
  53

  
	
  Section 11.10.

  	
   

  	
  Generally Accepted Security Procedures

  	
  53

  
	
  Section 11.11.

  	
   

  	
  Audit Rights

  	
  53

  
	
  Section 11.12.

  	
   

  	
  Penalties and Fines

  	
  54

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XII

  	
  INSURANCE

  	
  55

  
	
  Section 12.01.

  	
   

  	
  CCRT Insurance

  	
  55

  
	
  Section 12.02.

  	
   

  	
  Policy Ratings

  	
  55

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XIII

  	
  EVENTS OF DEFAULT

  	
  56

  
	
  Section 13.01.

  	
   

  	
  Events of Default

  	
  56

  
	
  (a)

  	
  Performance Default

  	
  56

  
	
  (b)

  	
  Bankruptcy Event

  	
  56

  
	
  (c)

  	
  Receivables Purchase Payment Default

  	
  56

  
	
  (d)

  	
  Pledge Default

  	
  57

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XIV

  	
  TERM & TERMINATION

  	
  58

  
	
  Section 14.01.

  	
   

  	
  Term Periods

  	
  58

  
					

 

7

 

	
  (a)

  	
  Term

  	
  58

  
	
  (b)

  	
  Initial Term

  	
  58

  
	
  (c)

  	
  Renewals

  	
  58

  
	
  Section 14.02.

  	
   

  	
  General Termination Rights

  	
  58

  
	
  Section 14.03.

  	
   

  	
  Accounts Owner Termination Rights

  	
  58

  
	
  Section 14.04.

  	
   

  	
  Ownership of a Bank by CCRT

  	
  59

  
	
  Section 14.05.

  	
   

  	
  Wind Down Period

  	
  59

  
	
  (a)

  	
  General Obligations

  	
  59

  
	
  (b)

  	
  Conversion Plan

  	
  59

  
	
  (c)

  	
  Ongoing Obligations

  	
  59

  
	
  (d)

  	
  Reimbursement Obligations

  	
  59

  
	
  (e)

  	
  Duties After Termination

  	
  59

  
	
  Section 14.06.

  	
   

  	
  CCRT Purchase of Accounts.

  	
  60

  
	
  (a)

  	
  Purchase and Put Rights

  	
  60

  
	
  (b)

  	
  Books and Records

  	
  60

  
	
  (c)

  	
  Accounts Owner Purchase and Third Party
  Sale Rights

  	
  60

  
	
  (d)

  	
  Segregation of Sold Accounts

  	
  61

  
	
  (e)

  	
  Further Assurances

  	
  61

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XV

  	
  INDEMNIFICATION; LIMITATIONS ON RECOURSE

  	
  62

  
	
  Section 15.01.

  	
   

  	
  CCRT and CAC Indemnification Obligations

  	
  62

  
	
  (a)

  	
  General Indemnification Obligations

  	
  62

  
	
  (b)

  	
  Additional Indemnification Obligations

  	
  62

  
	
  Section 15.02.

  	
   

  	
  Scope of Liability

  	
  62

  
	
  (a)

  	
  Joint and Several Liability

  	
  62

  
	
  (b)

  	
  CCRT’s Liability Obligations

  	
  63

  
	
  (c)

  	
  Synovus Share

  	
  63

  
	
  (d)

  	
  Prompt Payment

  	
  64

  
	
  (e)

  	
  Defense Costs

  	
  64

  
	
  (f)

  	
  Severability

  	
  64

  
	
  (g)

  	
  Synovus Covered Loss

  	
  64

  
					

 

8

 

	
  (h)

  	
  Obligation Absolute

  	
  64

  
	
  Section 15.03.

  	
   

  	
  Accounts Owner’s Indemnification
  Obligations

  	
  64

  
	
  Section 15.04.

  	
   

  	
  Indemnification Procedures

  	
  65

  
	
  (a)

  	
  Notice of Claims

  	
  65

  
	
  (b)

  	
  Right to Defend

  	
  65

  
	
  (c)

  	
  Settlement of Claims

  	
  66

  
	
  Section 15.05.

  	
   

  	
  Subrogation

  	
  66

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XVI

  	
  DISPUTE RESOLUTION

  	
  67

  
	
  Section 16.01.

  	
   

  	
  Dispute Resolution

  	
  67

  
	
  Section 16.02.

  	
   

  	
  Exclusions

  	
  67

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XVII

  	
  MISCELLANEOUS

  	
  68

  
	
  Section 17.01.

  	
   

  	
  Entire Agreement

  	
  68

  
	
  Section 17.02.

  	
   

  	
  Amendments and Waivers

  	
  68

  
	
  Section 17.03.

  	
   

  	
  Assignment

  	
  68

  
	
  Section 17.04.

  	
   

  	
  Governing Law

  	
  68

  
	
  Section 17.05.

  	
   

  	
  Notices

  	
  68

  
	
  Section 17.06.

  	
   

  	
  Severability

  	
  69

  
	
  Section 17.07.

  	
   

  	
  Relationship of the Parties

  	
  69

  
	
  Section 17.08.

  	
   

  	
  Press Releases and Inquiries

  	
  69

  
	
  Section 17.09.

  	
   

  	
  Requirements of Law

  	
  70

  
	
  Section 17.10.

  	
   

  	
  Construction

  	
  70

  
	
  Section 17.11.

  	
   

  	
  Survival

  	
  70

  
	
  Section 17.12.

  	
   

  	
  Counterparts

  	
  70

  
					

 

9Exhibit
10.1

 

CARREKER
CORPORATION

EXECUTIVE

NON-QUALIFIED STOCK OPTION AGREEMENT

 

The following are the
terms and conditions of the Non-Qualified Stock Option Agreement (the “Agreement”),
which are incorporated by reference into the Notice of Grant of Stock Options
and Option Agreement (the “Notice of Grant”), signed by the Company and agreed and
accepted by the Optionee.

 

Pursuant to the Carreker
Corporation (the “Company”) Third Amended and Restated 1994 Long Term Incentive
Plan (the “Plan”), the Compensation Committee of the Board of Directors of the
Company (the “Committee”) has granted to you a non-qualified stock option (the “Option”)
to purchase, on the terms and conditions set forth herein, shares (the “Option
Shares”) of the Company’s Common Stock, $.01 par value (the “Stock”). The terms
and conditions of the Option are set forth below:

 

1.                                       Date
of Grant. The Option is granted to you on the date shown in the Notice of
Grant.

 

2.                                       Exercise
of Option. The Option, to the extent vested, may be exercised as follows:

 

(a)                                  The Optionee may
exercise the Option with respect to all or any part of the Option Shares then
vested in the manner specified from time to time by the Company (the “Exercise
Date”).

 

(b)                                 On the Exercise Date
or as soon thereafter as practicable, the Company shall cause to be delivered
to the Optionee or brokerage firm the Option Shares then being purchased upon
full payment for such Option Shares.

 

(c)                                  The Company’s
obligation to deliver Option Shares is subject to applicable federal (including
FICA), state and local tax withholding requirements. The Company may require
the Optionee or other person receiving such Option Shares to pay to the Company
the amount of any such taxes that the Company is required to withhold with
respect to such Option Shares, or the Company may deduct from other wages paid
by the Company the amount of any withholding taxes due with respect to such
Option Shares.

 

3.                                       Termination
of Option.  The Option, and all
rights hereunder with respect thereto, to the extent such rights shall not have
been exercised, shall terminate and become null and void on the earliest to
occur of the following dates:

 

(a)                                  the
expiration date shown on the Notice of Grant;

 

(b)                                 in
the event Optionee’s employment with the Company or any subsidiary is
terminated, other than by reason of death or isability (as defined below) or
terminated for Cause (as defined below), then this Option may be exercised, to
the extent vested, at any time within ninety (90) calendar days after the date
of termination of employment, but not later than the Expiration Date. Following
the expiration of such ninety (90) calendar day period, this Option shall
terminate;

 

(c)                                  in
the event Optionee’s employment with the Company or any subsidiary is
terminated for Cause, then this Option shall terminate and no longer be
exercisable immediately upon the date of termination. “Cause” means (a) any
act by the Optionee that is materially adverse to the best interests of the
Company and which, if the subject of a criminal proceeding, could result in a
criminal conviction for a felony or (b) the failure by the Optionee to
substantially perform his/her duties hereunder, which duties

 

1

 

are within the control of
the Optionee (other than the failure resulting from the Optionee’s incapacity
due to physical or mental illness); provided, however, that the Optionee shall
not be deemed to be terminated for Cause under this subsection (b) unless
and until (1) after the Optionee receives written notice from the Company
specifying with reasonable particularity the actions of Optionee which
constitute a violation of this subsection (b) and (2) within a
period of thirty (30) days after receipt of such notice (and during which the
violation is within the control of the Optionee), Optionee fails to reasonably
and prospectively cure such violation.

 

(d)                                 in
the event Optionee dies while employed with the Company or any subsidiary, this
Option may be exercised, to the extent then vested, by the Optionee’s executor,
estate, personal representative or beneficiary, as the case may be, and to whom
this Option is transferred by operation of law, at any time within one (1) year
after the date of death, but not later than the Expiration Date. Following the
expiration of such one-year period, this Option shall terminate;

 

(e)                                  in
the event Optionee’s employment with the Company or any subsidiary is
terminated by reason of his disability (which shall mean “permanent and total
disability” as defined in Section 22(e)(3) of the Code, or any
successor statute), this Option may be exercised, to the extent then vested, at
any time within one (1) year after the date of such disability, but not
later than the Expiration Date. Following the expiration of such one-year
period, this Option shall terminate..

 

4.                                       Adjustment
of and Changes in Stock of the Company. 
In the event of a reorganization, re-capitalization, change of shares,
stock split, spin-off, stock dividend, reclassification, subdivision or
combination of shares, merger, consolidation, rights offering, or any other
change in the corporate structure or shares of capital stock of the Company,
the Committee shall make such adjustment as it deems appropriate in the number
and kind of shares of Stock subject to the Option or in the Exercise Price; provided,
however, that no such adjustment shall give the Optionee any additional
benefits under the Option.

 

5.                                       Capital
Transactions.  In the event that,
following the date of this Agreement, during the term hereof and prior to the
termination of the Option in accordance with Section 3 hereof, there shall
occur (a) a merger or consolidation of the Company with or into another
corporation in which the Company shall not be the surviving corporation (other
than such a merger or consolidation undertaken to reincorporate in another
jurisdiction) (for purposes of this Section 5, the Company shall not be
deemed the surviving corporation in any such transaction if, as the result
thereof, it becomes a wholly-owned subsidiary of another corporation), (b) a
dissolution of the Company, or (c) a transfer of all or substantially all
of the assets or shares of Stock of the Company in one transaction or a series
of related transactions to one or more other persons or entities (any such
transaction being referred to herein as a “Capital Transaction”), and, either (i) the
Optionee’s employment with the Company was terminated ninety (90) days prior to
a Capital Transaction without Cause, or (ii) the Optionee’s employment with the Company or any
subsidiary is terminated without Cause or the Optionee terminates his
employment with the Company or any subsidiary for “Good Reason” (as that term
is defined below) on or within two (2) years following the
closing date of any Capital Transaction, then any or all Option Shares,
unvested at the time of termination of employment,  shall become fully vested and exercisable and
the Optionee, without the necessity of any further action by the Committee,
shall be entitled to purchase, prior to the expiration of a sixty (60) day
period following the later of (i) the date of termination of Optionee’s
employment or (ii) the occurrence of a Capital Transaction, the number of
Option Shares which are then vested and exercisable.

 

“Good Reason” means the
occurrence of a Capital Transaction (as defined above) and (a) without
his/her prior concurrence, the Optionee is assigned any duties or
responsibilities that are inconsistent with his/her position, duties,
responsibilities or status at the commencement of the term of this

 

2

 

Agreement, or his/her
reporting responsibilities or titles in effect at such time are changed, (b) the
Optionee’s total compensation is reduced, (c) any change in any Optionee
benefit plans or arrangements in effect on the date hereof in which the Optionee
participates (including without limitation any pension and retirement plan,
savings and profit sharing plan, stock ownership or purchase plan, stock option
plan, or life, medical or disability insurance plan), which would adversely
affect the Optionee’s rights or benefits thereunder, unless such change occurs
pursuant to a program applicable to all executive officers of the Company and
does not result in a proportionately greater reduction in the rights of or
benefits to the Optionee as compared to any other executive officer of the
Company, or (d) without his/her prior concurrence, the Optionee is
required to engage in an increased amount of travel on the Company’s business.

 

6.                                       Rights
of Shareholder.  Neither the Optionee
nor any heir, personal representative or other person shall be, or shall have
any of the rights and privileges of, a shareholder of the Company with respect
to any shares of Stock purchasable or issuable upon the exercise of the Option,
in whole or in part, prior to the date of exercise of the Option.

 

7.                                       Guidelines for Stock Ownership by Executive
Officers.  If Optionee is a senior executive officer of
the Company at the time of exercise of any Option, and has not yet achieved the
ownership levels contained in the Company’s guidelines for executive officers,
the Optionee hereby agrees to retain at least 25% of the Option Shares
remaining after satisfaction of applicable tax liabilities.

 

8.                                       Transferability
of Option.  During Optionee’s
lifetime, the Option hereunder shall be exercisable only by the Optionee or any
guardian or legal representative of the Optionee, and the Option shall not be
transferable except, in case of the death of the Optionee, by will or the laws
of descent and distribution, nor shall the Option be subject to attachment,
execution or other similar process. In the event of (a) any attempt by Optionee
to alienate, assign, pledge, hypothecate or otherwise dispose of the Option,
except as provided for herein, or (b) the levy of any attachment,
execution or similar process upon the rights or interest hereby conferred, the
Company may terminate the Option by notice to the Optionee and it shall
thereupon become null and void.

 

9.                                       Employment
Not Affected.  Neither the granting
of the Option nor its exercise shall be construed as granting to the Optionee
any right with respect to continuance of employment. Except as may otherwise be
limited by a written agreement between the Company or one of its subsidiaries,
as the case may be, and the Optionee, the right of the Company (or one of its
subsidiaries) to terminate the Optionee’s employment at any time is
specifically reserved.

 

10.                                 Amendment
of Option.  The Option and this
Agreement may be amended by the Board or the Committee at any time without the
consent of Optionee (i) if the Board or the Committee determines, in its
sole discretion, that the amendment is necessary or advisable in the light of
any addition to or change in the Code or in the regulations issued thereunder,
or any federal or state securities law or other law or regulation, which change
occurs after the date hereof and by its terms applies to the Option or (ii) in
order to make the adjustments set forth in Section 5 hereof. Other than
the matters set forth in the preceding sentence, the consent of Optionee shall
be required in order to amend any other provision of this Agreement.
Notwithstanding the foregoing, the Committee may, in its sole discretion,
accelerate the exercisability of the Option at any time.

 

11.                                 Notices.
 Any notice to the Company provided for
in this Agreement shall be addressed to it in care of its Corporate Secretary
at the Company’s executive offices. Any notice to the Optionee shall be
addressed to Optionee at the current address shown on the payroll records of
the Company or by email. Any notice shall be deemed to be duly given if and
when properly addressed and posted by registered or certified mail, postage
prepaid or by email.

 

3

 

12.                                 Incorporation
of Plan by Reference.  The Option is
granted pursuant to the terms of the Plan, the terms of which are incorporated
herein by reference, and the Option shall in all respects be interpreted in
accordance with the Plan. The Committee shall interpret and construe the Plan
and this Agreement, and its interpretations and determinations shall be
conclusive and binding on the parties hereto and any other person claiming an
interest hereunder, with respect to any issue arising hereunder or thereunder.
In the event any of the terms and conditions set forth in this Agreement are in
conflict or are inconsistent with the terms of the Plan, the terms of the Plan
shall control.

 

13.                                 Governing
Law.  The validity, construction,
interpretation and effect of this instrument shall exclusively be governed by
and determined in accordance with the law of the State of Delaware.

 

14.                                 Capitalized
Terms.  Unless otherwise defined
herein, each capitalized term appearing in this Agreement shall have the same
meaning as the corresponding term in the Plan.

 

15.                                 Binding
Effect.  This Agreement shall be
binding upon the parties hereto, together with their respective executors,
administrators, successors, personal representatives, heirs and assigns.

 

16.                                 Entire
Agreement.  This Agreement and the Notice
of Grant embody the entire agreement and understanding between the parties
hereto with respect to the subject matter hereof and supersedes all prior
agreements and understandings relating to the subject matter hereof.

 

4

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