COMPUCREDIT CORP (Form: 10-Q, Received: 08/01/2007 16:17:05)

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

For the quarterly period ended June 30, 2007

LOGO

COMPUCREDIT CORPORATION

a Georgia Corporation

IRS Employer Identification No. 58-2336689

SEC File Number 0-25751

245 Perimeter Center Parkway, Suite 600

Atlanta, Georgia 30346

(770) 206-6200

CompuCredit has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act during the preceding 12 months and has been subject to such filing requirements for the past 90 days.

CompuCredit is an accelerated filer and is not a shell company.

As of July 27, 2007, 49,199,083 shares of Common Stock, no par value, of CompuCredit were outstanding. (This excludes 5,677,950 loaned shares to be returned.)

COMPUCREDIT CORPORATION

FORM 10-Q

TABLE OF CONTENTS


			Page
PART I	FINANCIAL INFORMATION
	Item 1.	Financial Statements (Unaudited)
		Condensed Consolidated Balance Sheets	1
		Condensed Consolidated Statements of Operations	2
		Condensed Consolidated Statement of Shareholders’ Equity	3
		Condensed Consolidated Statements of Comprehensive (Loss) Income	4
		Condensed Consolidated Statements of Cash Flows	5
		Notes to Condensed Consolidated Financial Statements	6
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	47
	Item 4.	Controls and Procedures	48

PART II.	OTHER INFORMATION
	Item 1.	Legal Proceedings	49
	Item 1A.	Risk Factors	49
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	61
	Item 3.	Defaults Upon Senior Securities	61
	Item 4.	Submission of Matters to a Vote of Security Holders	61
	Item 5.	Other Information	61
	Item 6.	Exhibits	62
		Signatures	63

CompuCredit Corporation and Subsidiaries

Condensed Consolidated Balance Sheets

(Dollars in thousands )


	June 30, 2007			December 31, 2006
	(Unaudited)
Assets
Cash and cash equivalents (including restricted cash of $25,484 at June 30, 2007 and $15,104 at December 31, 2006)	$	133,009		$	110,412
Securitized earning assets		597,793			801,715
Non-securitized earning assets, net:
Loans and fees receivable, net (of $145,648 and $118,005 in deferred revenue and $291,200 and $225,319 in allowances for uncollectible loans and fees receivable at June 30, 2007 and December 31, 2006, respectively)		923,232			653,716
Investments in previously charged-off receivables		13,357			12,871
Investments in securities		114,675			141,657
U.S. government securities resale agreements		—			50,577
Deferred costs, net		22,770			25,762
Software, furniture, fixtures and equipment, net		81,215			63,986
Investments in equity-method investees		70,598			83,038
Intangibles, net		12,239			12,382
Goodwill		151,995			120,115
Prepaid expenses and other assets		54,361			37,666

Total assets	$	2,175,244		$	2,113,897

Liabilities
Accounts payable and accrued expenses	$	139,151		$	112,453
Notes payable and other borrowings		475,883			358,694
Convertible senior notes		550,000			550,000
Deferred revenue, primarily from forward flow agreement		46,145			55,260
Current and deferred income tax liabilities		80,867			112,983

Total liabilities		1,292,046			1,189,390
Minority interests		37,029			40,567
Commitments and contingencies (Note 10)
Shareholders’ equity
Common stock, no par value, 150,000,000 shares authorized: 61,923,981 shares issued and 54,865,983 shares outstanding at June 30, 2007 (including 5,677,950 loaned shares to be returned); and 59,464,216 shares issued and 55,093,686 shares outstanding at December 31, 2006 (including 5,677,950 loaned shares to be returned)		—			—
Additional paid-in capital		407,992			321,010
Treasury stock, at cost, 7,057,998 and 4,370,530 shares at June 30, 2007 and December 31, 2006, respectively		(208,207	)		(124,084	)
Warrants		—			25,610
Cumulative other comprehensive income		1,984			12
Retained earnings		644,400			661,392

Total shareholders’ equity		846,169			883,940

Total liabilities and shareholders’ equity	$	2,175,244		$	2,113,897

See accompanying notes.

CompuCredit Corporation and Subsidiaries

Condensed Consolidated Statements of Operations (Unaudited)

(In thousands, except per share data)


	For the three months ended June 30,						For the six months ended June 30,
	2007			2006			2007			2006
Interest income:
Consumer loans, including past due fees	$	94,741		$	65,804		$	175,375		$	118,779
Other		6,853			4,380			12,363			8,955

Total interest income		101,594			70,184			187,738			127,734
Interest expense		(17,079	)		(12,921	)		(32,863	)		(24,371	)

Net interest income before fees and related income on non-securitized earning assets and provision for loan losses		84,515			57,263			154,875			103,363
Fees and related income on non-securitized earning assets		166,881			144,369			338,032			264,139
Provision for loan losses		(203,219	)		(127,933	)		(337,659	)		(205,762	)

Net interest income, fees and related income on non-securitized earning assets		48,177			73,699			155,248			161,740
Other operating income:
Fees and related income on securitized earning assets		71,988			45,140			91,690			95,609
Servicing income		27,191			23,571			46,086			51,381
Ancillary and interchange revenues		18,563			11,044			30,324			19,238
Equity in income of equity-method investees		9,580			25,882			19,299			51,547

Total other operating income		127,322			105,637			187,399			217,775
Other operating expense:
Salaries and benefits		17,841			13,618			36,450			27,419
Card and loan servicing		78,959			60,127			148,431			120,977
Marketing and solicitation		50,907			25,770			87,548			53,152
Depreciation		10,624			7,240			20,743			14,874
Goodwill impairment		—			—			—			10,546
Other		33,587			26,296			69,113			54,955

Total other operating expense		191,918			133,051			362,285			281,923

(Loss) income before minority interests and income taxes		(16,419	)		46,285			(19,638	)		97,592
Minority interests		(794	)		(2,061	)		(1,506	)		(5,466	)

(Loss) income before income taxes		(17,213	)		44,224			(21,144	)		92,126
Income tax benefit (expense)		6,197			(15,922	)		7,612			(33,166	)

Net (loss) income	$	(11,016	)	$	28,302		$	(13,532	)	$	58,960

Net (loss) income per common share–basic	$	(0.23	)	$	0.58		$	(0.27	)	$	1.21

Net (loss) income per common share–diluted	$	(0.23	)	$	0.56		$	(0.27	)	$	1.17

See accompanying notes.

CompuCredit Corporation and Subsidiaries

Condensed Consolidated Statement of Shareholders’ Equity (Unaudited)

For the Six Months Ended June 30, 2007

(Dollars in thousands )


	Common Stock				Additional Paid-In Capital			Treasury Stock			Warrants			Cumulative Other Comprehensive Income		Retained Earnings			Total Shareholders’ Equity
	Shares Issued		Amount		Additional Paid-In Capital			Treasury Stock			Warrants			Cumulative Other Comprehensive Income		Retained Earnings			Total Shareholders’ Equity
Balance at December 31, 2006	59,464,216		$	—	$	321,010		$	(124,084	)	$	25,610		$	12	$	661,392		$	883,940
Stock options exercises and proceeds related thereto	129,591			—		1,128			—			—			—		—			1,128
Warrant exercises and proceeds related thereto, including tax benefit of $2,484	2,400,000			—		81,974			—			(25,610	)		—		—			56,364
Use of treasury stock for stock-based compensation plans	(231,737	)		—		(3,052	)		3,428			—			—		(376	)		—
Issuance of restricted stock	161,911			—		—			—			—			—		—			—
Amortization of deferred stock-based compensation costs	—			—		5,386			—			—			—		—			5,386
Purchase of treasury stock	—			—		—			(87,551	)		—			—		—			(87,551	)
Tax benefit related to stock-based compensation plans	—			—		1,546			—			—			—		—			1,546
Foreign currency translation adjustment	—			—		—			—			—			1,972		—			1,972
Cumulative effect of adopting FASB Interpretation Number 48	—			—		—			—			—			—		(3,084	)		(3,084	)
Net (loss)	—			—		—			—			—			—		(13,532	)		(13,532	)

Balance at June 30, 2007	61,923,981		$	—	$	407,992		$	(208,207	)	$	—		$	1,984	$	644,400		$	846,169

See accompanying notes.

Condensed Consolidated Statements of Comprehensive (Loss) Income (Unaudited)

For the Six Months Ended June 30, 2007

(Dollars in thousands)


	For the three months ended June 30,						For the six months ended June 30,
	2007			2006			2007			2006
Net (loss) income	$	(11,016	)	$	28,302		$	(13,532	)	$	58,960
Other comprehensive income (loss):
Foreign currency translation adjustment		2,237			(2	)		2,568			(4	)
Income tax expense related to other comprehensive income		(596	)		—			(596	)		—

Comprehensive (loss) income	$	(9,375	)	$	28,300		$	(11,560	)	$	58,956

See accompanying notes.

CompuCredit Corporation and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Unaudited)

(Dollars in thousands )


	For the six months ended June 30,
	2007			2006
Operating activities
Net (loss) income	$	(13,532	)	$	58,960
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation expense		20,743			14,874
Impairment of goodwill		—			10,546
Provision for loan losses		337,659			205,762
Amortization of intangibles		2,526			2,779
Accretion of deferred revenue		(14,566	)		(6,195	)
Stock-based compensation expense		5,386			3,309
Minority interests		1,506			5,466
Retained interests income and securitization gains adjustments, net		29,856			(11,503	)
Unrealized loss on debt and equity securities classified as trading securities		13,010			4,531
Income in excess of distributions from equity-method investments		—			(9,830	)
Changes in assets and liabilities, exclusive of business acquisitions:
Net decrease (increase) in debt, equity and U.S. government securities classified as trading securities		61,817			(5,103	)
Decrease (increase) in uncollected fees on non-securitized earning assets		49,721			(71,443	)
Decrease in deferred costs		2,992			3,863
Decrease in current and deferred tax liability		(31,624	)		(43,171	)
Increase in deferred revenue		5,445			2,892
Increase in prepaid expenses		(1,792	)		(3,926	)
Increase in accounts payable and accrued expenses		19,540			12,093
Other		(6,645	)		5,163

Net cash provided by operating activities		482,042			179,067

Investing activities
Proceeds from equity-method investees		12,440			2,440
Investments in securitized earning assets		(626,153	)		(743,738	)
Proceeds from securitized earning assets		804,227			671,408
Investments in non-securitized earning assets		(1,296,361	)		(897,037	)
Proceeds from non-securitized earning assets		806,582			635,872
Increase in notes receivable		(5,693	)		—
Acquisitions of assets		(191,646	)		—
Purchases of and development of software, furniture, fixtures and equipment		(36,381	)		(20,719	)

Net cash used in investing activities		(532,985	)		(351,774	)

Financing activities
Minority interests distribution, net		(6,271	)		(11,229	)
Proceeds from exercise of stock options		1,128			360
Proceeds from the exercise of warrants		53,880			—
Purchase of treasury stock		(87,551	)		—
Proceeds from borrowings		236,394			161,000
Repayment of borrowings		(124,413	)		(72,106	)

Net cash provided by financing activities		73,167			78,025

Effect of exchange rate changes on cash		373			—

Net increase (decrease) in cash		22,597			(94,682	)
Cash and cash equivalents at beginning of period		110,412			240,655

Cash and cash equivalents at end of period	$	133,009		$	145,973

Supplemental cash flow information
Cash paid for interest	$	31,095		$	18,041

Cash paid for income taxes	$	24,154		$	76,336

Supplemental non-cash information
Notes payable associated with capital leases	$	15,057		$	12,172
Issuance of restricted stock and stock options	$	5,802		$	23,040

See accompanying notes.

CompuCredit Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

June 30, 2007

1. Basis of Presentation

We have prepared our condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Securities and Exchange Commission (“SEC”) Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete consolidated financial statements. In the opinion of management, all normal recurring adjustments considered necessary to fairly state the results for the interim periods presented have been included. The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of our consolidated financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Certain estimates, such as credit losses, payment rates, discount rates and the yield earned on securitized receivables, significantly affect our reported gains on securitizations and income from retained interests in credit card receivables securitized (both of which are components of fees and related income on securitized earning assets on our condensed consolidated statements of operations) and our reported value of securitized earning assets on our condensed consolidated balance sheets. Additionally, estimates of future credit losses on our non-securitized loans and fees receivable have a significant effect on the provision for loan losses within our condensed consolidated statements of operations and loans and fees receivable, net, which is a component of non-securitized earning assets, net on our condensed consolidated balance sheets. Operating results for the three and six months ended June 30, 2007 are not necessarily indicative of what our results will be for the year ending December 31, 2007. Our unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes to the consolidated financial statements for our year ended December 31, 2006 contained in our Annual Report on Form 10-K filed with the SEC.

We have reclassified certain amounts in our prior period consolidated financial statements to conform to current period presentation, and we have eliminated all significant intercompany balances and transactions for financial reporting purposes.

2. Summary of Significant Accounting Policies and Condensed Consolidated Financial Statement Components

The following is a summary of significant accounting policies we followed in preparing our condensed consolidated financial statements, as well as a description of the significant components of our condensed consolidated financial statements.

Restricted Cash

Restricted cash includes $10.0 million of the gross proceeds associated with our sale of previously charged-off receivables and forward flow contract with Encore Capital Group, Inc (“Encore”), certain collections on our Auto Finance receivables, the cash balances of which are required to be distributed to note holders, and cash collateral balances underlying standby letters of credit that have been issued in favor of certain regulators in connection with our micro-loan activities.

Foreign Currency Translation

The financial statements of our foreign subsidiaries are translated into United States currency in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 52, “Foreign Currency Translation.” Assets and liabilities are translated to United States dollars at period-end exchange rates. Income and expense items are translated at average rates of exchange prevailing during the period. Translation adjustments are included in cumulative other comprehensive income in stockholders’ equity on our condensed consolidated balance sheets. Gains and losses, which result from foreign currency transactions, are included in the accompanying condenses consolidated statements of operations.

Non-Securitized Earning Assets, Net

We include loans and fees receivable, net, investments in previously charged-off receivables, investments in securities and U.S. government securities resale agreements within non-securitized earning assets, net on our condensed consolidated balance sheets.

Loans and Fees Receivable, Net . Loans and fees receivable, net consist principally of receivables associated with our largely fee-based credit card offerings to consumers at the lower end of the FICO scoring range (which, except as otherwise noted, include those receivables associated with credit cards issued under our Investment in Previously Charged-Off

CompuCredit Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)

June 30, 2007

Receivables segment’s balance transfer program for purposes of our discussion herein), micro-loan activities and auto finance business, none of which we have securitized in off-balance-sheet securitizations. As applicable, we show these receivables net of an allowance for uncollectible loans and fees receivable and net of unearned fees (or “deferred revenue”) in accordance with Statement of Financial Accounting Standards No. 91, “ Accounting for Nonrefundable Fees and Costs Associated with Originating or Acquiring Receivables and Initial Direct Costs of Leases .”

The loans and fees receivables associated with our acquisition of ACC Consumer Finance (“ACC”) are accounted for under the guidance of Statement of Position 03-3, “ Accounting for Certain Loans or Debt Securities Acquired in a Transfer ” (“SOP 03-3”), which limits the yield that may be accreted (accretable yield) to the excess of our estimate of undiscounted expected principal, interest, and other cash flows (including the effects of prepayments) expected to be collected on the date of acquisition over our initial investment in the loan. The excess of contractual cash flows over cash flows expected to be collected (nonaccretable difference) is not recognized as an adjustment of yield, loss accrual, or valuation allowance. The following tables show (in thousands) a roll-forward of accretable yield for our loans for which we account under SOP 03-3, as well as the carrying amounts of and gross loans and fees receivable balances for our loans for which we account under SOP 03-3:


	Three Months Ended June 30, 2007			Six Months Ended June 30, 2007
Roll-forward of Accretable Yield:
Balance at beginning of period	$	61,115		$	—
Accretable yield at acquisition date		787			66,868
Accretion of yield		(6,807	)		(11,773	)

Balance at June 30, 2007	$	55,095		$	55,095


SOP 03-3 loans and fees receivable:
Carrying amount of loans and fees receivable at acquisition date	$	160,592
Carrying amount of loans and fees receivable at June 30, 2007	$	132,555
Gross loans and fees receivable balance at acquisition date	$	192,084
Gross loans and fees receivable balance at June 30, 2007	$	157,712

The loans and fees receivable associated with our largely fee-based credit card offerings to consumers at the lower end of the FICO scoring range consist of finance charges and fees (both billed and accrued) and principal balances. The fees associated with these product offerings include activation, annual, monthly maintenance, late payment, over-limit, cash-advance and returned-check fees. We recognize both activation and annual fees over a twelve-month period (i.e., the year to which they apply), while we recognize all other fees when assessed to cardholders. The loans and fees receivable associated with our micro-loan activities include principal balances, associated fees due from customers (such fees being recognized as earned—generally over a two-week period) and applicable billed and accrued finance charges associated with certain of our micro-loan products. Loans and fees receivable associated with our auto finance business include principal balances and associated fees and interest, net of the unearned portion of loan discounts due from customers, which we recognize over the life of each loan.

We provide an allowance for uncollectible loans and fees receivable for loans and fees receivable we believe we ultimately will not collect. In the fourth quarter of 2006, we changed our business practices such that we no longer bill finance charges and fees on credit card accounts that become more than 90 days delinquent. For credit card accounts that became more than 90 days delinquent prior to our change in billing practices, however, we billed finance charges and fees, but we excluded those billed finance charges and fees from loans and fees receivable, gross and our allowance for uncollectible loans and fees receivable (as well as from related income and provision for loan loss amounts on our condensed consolidated statements of operations) because we concluded that collections of those finance charges and fee billings on those late-stage delinquent receivables were unlikely. We determine the necessary allowance for uncollectible loans and fees receivable by analyzing some or all of the following: historical loss rates; current delinquency and roll-rate trends; vintage analyses based on the number of months an account is open; the forecasted effects of changes in the economy on our customers; changes in underwriting criteria; and estimated recoveries. A considerable amount of judgment is required to assess the ultimate amount of uncollectible loans and fees receivable, and we continuously evaluate and update our methodologies to determine the most appropriate allowance necessary.

CompuCredit Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)

June 30, 2007

The components of loans and fees receivable, net (in millions) are as follows:


	Balance at December 31, 2006			Additions			Acquisitions		Subtractions			Balance at June 30, 2007
Loans and fees receivable, gross	$	997.0		$	1,659.0		$	167.4	$	(1,463.3	)	$	1,360.1
Deferred revenue		(118.0	)		(187.8	)		—		160.1			(145.7	)
Allowance for uncollectible loans and fees receivable		(225.3	)		(337.7	)		—		271.8			(291.2	)

Loans and fees receivable, net	$	653.7		$	1,133.5			167.4	$	(1,031.4	)	$	923.2

Subtractions from the allowance for uncollectible loans and fees receivable in the above table are net of $8.7 million in recoveries on loans and fees receivable previously charged off. Recoveries on loans and fees receivable typically have represented less than 1% of average loans and fees receivable, gross balances.

We include finance charges and late fee income associated with loans and fees receivable in interest income under the consumer loans, including past due fees category on our accompanying condensed consolidated statements of operations. Additionally, we reflect $175.2 million, $322.3 million, $135.3 million and $243.6 million of fee income associated with these loans and fees receivable for the three and six months ended June 30, 2007 and 2006, respectively, in fees and related income from non-securitized earning assets on our condensed consolidated statements of operations. As of June 30, 2007, the weighted-average remaining accretion period for the $153.2 million of deferred revenue reflected in the above table was 8.7 months.

Investments in Previously Charged-off Receivables. The following table shows (in thousands) a roll-forward of our investments in previously charged-off receivables activities:


	Three Months Ended June 30, 2007			Six Months Ended June 30, 2007
Unrecovered balance at beginning of period	$	13,750		$	12,871
Acquisitions of defaulted accounts		11,038			23,854
Cash collections		(23,008	)		(47,393	)
Accretion of deferred revenue associated with Encore forward flow contract		(4,158	)		(8,894	)
Cost-recovery method income recognized on defaulted accounts (included in fees and related income on non-securitized earning assets on our condensed consolidated statements of operations)		15,735			32,919

Balance at June 30, 2007	$	13,357		$	13,357

Estimated remaining collections (“ERC”)	$	67,368		$	67,368

In June 2005, our debt collections subsidiary sold a significant pool of previously charged-off receivables. Remaining after this sale were principally the subsidiary’s pools of previously charged-off receivables primarily associated with accounts for which debtors have filed for bankruptcy protection under Chapter 13 of the United States Bankruptcy Code (“Chapter 13 Bankruptcies”) and accounts participating in or acquired in connection with the subsidiary’s balance transfer program.

We estimate the life of each pool of previously charged-off receivables acquired by us generally to be between 24 and 36 months for normal delinquency charged-off accounts and approximately 60 months for Chapter 13 Bankruptcies. We anticipate collecting approximately 43.5% of the ERC of the existing accounts over the next twelve months, with the balance to be collected thereafter.

Investments in Securities. We periodically invest through the open market in debt and equity securities we believe will provide us with an adequate return. We purchase these debt and equity securities either outright for cash or through a combination of cash and borrowings; see Note 8, “Notes Payable, Other Borrowings and Convertible Senior Notes.” We generally classify our purchased debt and equity securities as trading securities and include realized and unrealized gains and losses in earnings in accordance with Statement of Financial Accounting Standards No. 115 “Accounting for Certain Investments in Debt and Equity Securities.” Additionally, we occasionally have received distributions of debt securities from our equity-method investees, and we have classified such distributed debt securities as held to maturity. The carrying values (in thousands) of our investments in debt and equity securities are as follows:


	As of June 30, 2007		As of December 31, 2006
Held to maturity:
Investments in debt securities of equity-method investees	$	8,257	$	10,800
Trading:
Investments in equity securities		4,748		5,211
Investments in asset-backed securities		101,570		125,646

Total investments in debt and equity securities	$	114,575	$	141,657

CompuCredit Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)

June 30, 2007

Our investments in asset-backed securities generally include a mix of investment grade, non-investment grade, subordinated and distressed asset-backed securities, including CDOs (Collateralized Debt Obligations), CMBS (Collateralized Mortgage Backed Securities), CMOs (Collateralized Mortgage Obligations) and repurchase agreements with respect to the foregoing. During the three months ended June 30, 2007, the market for these securities was extremely volatile and their values declined significantly. As a result of this volatility and decline in values, our realized and unrealized losses incurred on these securities totaled $28.5 million and $25.7 million for the three and six months ended June 30, 2007.

U.S. Government Securities Resale Agreements. Our investments in U.S. government securities resale agreements generally consist of contracts to repurchase specific U.S. Treasury Bills of varying maturities at fixed prices within 30 days, subject to renewal. The underlying U.S. Treasury Bills are the same securities included as U.S. government securities sold not yet purchased included in notes payable and other borrowings in our accompanying condensed consolidated balance sheets. The investment contracts settle at a stated price, whereas the borrowed securities settle at the market price on the date the contracts expire. Certain of our investments in asset-backed securities are subject to changes in value due to changes in market interest rates. We intend for the change in the value of the borrowed securities to offset the change in the value of the investments in asset-backed securities, if any, resulting from changes in market interest rates.

Prepaid Expenses and Other Assets

Prepaid expenses and other assets include amounts paid to third parties for marketing and other services. These amounts are expensed once services have been performed or marketing efforts have been undertaken. Also included are inventory assets held by our buy-here/pay-here auto dealerships which are expensed as the associated sales revenues are earned and various deposits that are required to be maintained with the third-party banking partners.

Fees and Related Income on Securitized Earning Assets

Fees and related income on securitized earning assets include (1) securitization gains, (2) (loss on) income from retained interests in credit card receivables securitized and (3) returned-check, cash advance and other fees associated with our securitized credit card receivables, each of which is detailed (in thousands) in the following table.


	For the three months ended June 30,					For the six months ended June 30,
	2007			2006		2007			2006
Securitization gains	$	100,957		$	3,541	$	100,957		$	4,404
(Loss on) income from retained interests in credit card receivables securitized		(33,828	)		35,746		(19,266	)		80,542
Fees on securitized receivables		4,859			5,853		9,999			10,663

Total fees and related income on securitized earning assets	$	71,988		$	45,140	$	91,690		$	95,609

We assess fees on credit card accounts underlying our securitized receivables according to the terms of the related cardholder agreements and, except for annual membership fees, we recognize these fees as contributing to income from retained interests in credit card receivables securitized or as fees on securitized receivables when they are charged to the cardholders’ accounts. We accrete annual membership fees associated with our securitized credit card receivables as a contribution to our income from retained interests in credit card receivables securitized on a straight-line basis over the twelve-month cardholder privilege period. We amortize direct receivables origination costs against fees on securitized receivables. See Note 7, “Off-Balance-Sheet Arrangements,” for further discussion on securitization gains and (loss on) income from retained interests in credit card receivables securitized (including the effects of changes in retained interest valuations).

CompuCredit Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)

June 30, 2007

Fees and Related Income on Non-Securitized Earning Assets

Fees and related income on non-securitized earning assets include: (1) lending fees associated with our retail and Internet-based micro-loan activities; (2) fees associated with our largely fee-based credit card offerings to consumers at the lower end of the FICO scoring range and our Fingerhut credit card receivables during periods in which we have held them on balance sheet; (3) income associated with our investments in previously charged-off receivables; (4) transactional, referral and other fees associated with stored-value card, merchant credit and other financial products and services; and (5) gains and losses associated with our investments in securities.

The components (in thousands) of our fees and related income on non-securitized earning assets are as follows:


	For the three months ended June 30,						For the six months ended June 30,
	2007			2006			2007			2006
Retail micro-loan fees	$	28,333		$	21,504		$	54,496		$	42,443
Fees on non-securitized credit card receivables		146,848			113,772			267,807			201,123
Investments in previously charged-off receivables		15,735			11,061			32,919			20,358
Other		(24,035	)		(1,968	)		(17,190	)		215

Total fees and related income on non-securitized earning assets	$	166,881		$	144,369		$	338,032		$	264,139

Recent Accounting Pronouncements

In July 2007, the FASB approved issuance for comment of a proposed FASB Staff Position (“Proposed FSP”) addressing convertible instruments that may be settled in cash upon conversion (including partial cash settlement). This would address instruments commonly referred as Instrument C from EITF Issue No. 90-19, “ Convertible Bonds with Issuer Option to Settle for Cash upon Conversion. ” Those instruments essentially require the issuer to settle the principal amount in cash and the conversion spread in cash or net shares at the issuer’s option. Any final guidance under the Proposed FSP is expected to be effective for fiscal periods beginning after December 15, 2007, not to permit early application and to be applied retrospectively to all periods presented (retroactive restatement) pursuant to the guidance in FASB Statement No. 154, “ Accounting Changes and Error Corrections .” We have not yet fully evaluated and computed the effects of the Proposed FSP on our net income and net income per common share. Based on our initial review, however, this Proposed FSP, if adopted and issued as proposed, would change the accounting treatment of our outstanding Convertible Senior Notes and would shift a material portion of our Convertible Senior Notes balances to additional paid-in capital on our consolidated balance sheets, create discount on the Convertible Senior Notes that would be amortized as materially higher interest expense over the life of the Convertible Senior Notes, cause us to show materially lower net income on our consolidated statements of operations, and reduce our basic and diluted net income per common share as disclosed on our consolidated statements of operations.

In March 2006, the FASB issued Statement of Financial Accounting Standards No. 156, “ Accounting for Servicing of Financial Assets – an amendment of FASB Statement No. 140 ,” (“Statement No. 156”). Statement No. 156 amends Statement of Financial Accounting Standards No. 140, “ Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities ,” (“Statement No. 140”) with respect to the accounting for separately recognized servicing assets and servicing liabilities and requires all separately recognized servicing assets and servicing liabilities to be initially measured at fair value, if practicable. The standard permits an entity to subsequently measure each class of servicing assets or servicing liabilities at fair value and report changes in fair value in the statement of income in the accounting period in which the changes occur. Statement No. 156 was effective for fiscal years beginning after September 15, 2006. The adoption of Statement No. 156 did not result in a material impact on our consolidated results of operations, financial position and cash flows.

In June 2006, the FASB issued Interpretation Number 48, “ Accounting for Uncertainty in Income Taxes ,” (“Interpretation No. 48”). Interpretation No. 48 requires companies to assess the probability that a tax position taken may not ultimately be sustained. For those positions that do not meet the more-likely-than-not recognition threshold required under Interpretation No. 48, no benefit may be recognized. We adopted Interpretation No. 48 as of January 1, 2007 and have

CompuCredit Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)

June 30, 2007

increased our tax liabilities and reduced retained earnings by $3.1 million in connection with its adoption. As of the adoption date, we had gross tax-effected unrecognized tax benefits of $52.5 million of which $11.7 million, if recognized, would affect our effective tax rate.

We conduct business globally, and as a result, one or more of our subsidiaries files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. In the normal course of business we are subject to examination by taxing authorities throughout the world, including such major jurisdictions as the United Kingdom, the Netherlands and the United States. With few exceptions, we are no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations for years before 2003.

We recognize potential accrued interest and penalties related to unrecognized tax benefits in income tax expense. In conjunction with our adoption of Interpretation No. 48, we recognized $5.6 million for the payment of interest and penalties at January 1, 2007, which is included as a component of the $52.5 million unrecognized tax benefits noted above. During the six months ended June 30, 2007, we recognized $0.7 million in potential interest and penalties associated with uncertain tax positions. To the extent interest and penalties are not assessed with respect to uncertain tax positions, amounts accrued will be reduced and reflected as a reduction of income tax expense.

In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157, “ Fair Value Measurements,” (“Statement No. 157”). Statement No. 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. This Statement applies under other accounting pronouncements that require or permit fair value measurements, except accounting pronouncements that address share-based payment transactions and their related interpretive accounting pronouncements, and does not eliminate the practicability exceptions to fair value measurements in accounting pronouncements within the scope of the Statement. Statement No. 157 is effective for fiscal years beginning after November 15, 2007 and is required to be adopted by us beginning January 1, 2008. Although not reasonably estimable at this time, we currently are evaluating the effects that the adoption of Statement No. 157 could have on our consolidated results of operations, financial position and cash flows.

In February 2007, the FASB issued Statement of Financial Accounting Standards No. 159, “ The Fair Value Option for Financial Assets and Liabilities,” (“Statement No. 159”). Statement No. 159 allows companies to carry the vast majority of financial assets and liabilities at fair value, with changes in fair value recorded into earnings. Statement No. 159 is effective for fiscal years beginning after November 15, 2007. Early adoption is permitted provided a company makes the election to do so within 120 days of the beginning of the fiscal year of adoption. We currently are evaluating the effects that the adoption of Statement No. 159 could have on our consolidated results of operations, financial position and cash flows.

3. Segment Reporting

We operate primarily within one industry consisting of five reportable segments by which we manage our business. Our five reportable segments are: Credit Cards; Investments in Previously Charged-off Receivables; Retail Micro-Loans; Auto Finance; and Other.

During the first quarter of 2007, we acquired (1) the assets of ACC, an originator of auto loans generated through its relationships with franchised auto dealers, and a related portfolio of auto loans for which ACC acts as servicer and (2) a 75-percent ownership interest in Just Right Auto Sales (“JRAS”), which sells vehicles to consumers and provides the underlying consumer financing associated with these vehicle sales. The post-acquisition financial results from these operations are included in our condensed consolidated financial statements and Auto Finance segment data for the three and six months ended June 30, 2007.

During the second quarter of 2007, we acquired (1) a portfolio of approximately £490 million ($970 million) in face amount of Monument-branded credit card receivables in the United Kingdom (the “UK Portfolio”) from Barclaycard, a division of Barclays Bank PLC and (2) MEM Capital Limited and its subsidiaries (“MEM”), a United Kingdom-based on-line micro-loans provider. The post-acquisition results from the UK Portfolio are included within our Credit Cards segment while those for MEM are included within our Other Segment.

Historically, we had included within our Investments in Previously Charged-off Receivables segment only a portion of the transactions associated with this segment’s balance transfer program operations—that portion representing the transactions and financial results thereof for the period from acquisition of a debtor’s account balance through the date the debtor became eligible to receive a credit card under the terms of the balance transfer program. Beginning in 2007, however, we have included within our Investments in Previously Charged-off Receivables segment the balance transfer program transactions and financial results thereof for all pre- and post-credit card issuance activities. We have reclassified 2006 balance transfer program data within our segment table below to conform to this new presentation.

CompuCredit Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)

June 30, 2007

We measure the profitability of our reportable segments based on their income after allocation of specific costs and corporate overhead. Overhead costs are allocated based on headcounts and other applicable measures to better align costs with the associated revenues. Summary operating segment information (in thousands) is as follows:


Three months ended June 30, 2007	Credit Cards			Investments in Previously Charged-Off Receivables		Retail Micro-Loans			Auto Finance			Other			Total
Net interest income, fees and related income (loss) on non-securitized earning assets	$	(2,150	)	$	15,630	$	22,573		$	9,189		$	2,935		$	48,177

Total other operating income	$	126,268		$	467	$	—		$	587		$	—		$	127,322

(Loss) income before income taxes	$	(23,563	)	$	10,909	$	2,669		$	(3,063	)	$	(4,165	)	$	(17,213	)

Loans and fees receivable, gross	$	956,830		$	16,137	$	87,475		$	286,721		$	12,917		$	1,360,080

Loans and fees receivable, net	$	552,765		$	12,760	$	79,333		$	268,250		$	10,124		$	923,232

Total assets	$	1,498,255		$	40,131	$	201,467		$	352,982		$	82,409		$	2,175,244


Three months ended June 30, 2006	Credit Cards			Investments in Previously Charged-Off Receivables		Retail Micro-Loans			Auto Finance			Other			Total
Net interest income, fees and related income (loss) on non-securitized earning assets	$	35,486		$	10,868	$	19,060		$	10,031		$	(1,746	)	$	73,699

Total other operating income	$	103,502		$	108	$	1,780		$	247		$	—		$	105,637

Income (loss) before income taxes	$	42,820		$	6,630	$	(725	)	$	3,187		$	(7,688	)	$	44,224

Loans and fees receivable, gross	$	525,426		$	6,790	$	69,494		$	147,041		$	10,201		$	758,952

Loans and fees receivable, net	$	296,296		$	5,266	$	59,553		$	120,233		$	8,104		$	489,452

Total assets	$	1,495,713		$	35,197	$	197,176		$	160,394		$	25,738		$	1,914,218


Six months ended June 30, 2007	Credit Cards			Investments in Previously Charged-Off Receivables		Retail Micro-Loans			Auto Finance			Other			Total
Net interest income, fees and related income on non-securitized earning assets	$	52,561		$	33,360	$	43,937		$	22,493		$	2,897		$	155,248

Total other operating income	$	185,484		$	783	$	—		$	1,132		$	—		$	187,399

(Loss) income before income taxes	$	(31,703	)	$	22,348	$	3,680		$	(3,656	)	$	(11,813	)	$	(21,144	)

Loans and fees receivable, gross	$	956,830		$	16,137	$	87,475		$	286,721		$	12,917		$	1,360,080

Loans and fees receivable, net	$	552,765		$	12,760	$	79,333		$	268,250		$	10,124		$	923,232

Total assets	$	1,498,255		$	40,131	$	201,467		$	352,982		$	82,409		$	2,175,244

CompuCredit Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)

June 30, 2007


Six months ended June 30, 2006	Credit Cards		Investments in Previously Charged-Off Receivables		Retail Micro-Loans			Auto Finance		Other			Total
Net interest income, fees and related income (loss) on non-securitized earning assets	$	92,625	$	20,513	$	31,957		$	17,883	$	(1,238	)	$	161,740

Total other operating income	$	211,655	$	169	$	5,515		$	411	$	25		$	217,775

Income (loss) before income taxes	$	112,185	$	12,021	$	(17,764	)	$	4,034	$	(18,350	)	$	92,126

Loans and fees receivable, gross	$	525,426	$	6,790	$	69,494		$	147,041	$	10,201		$	758,952

Loans and fees receivable, net	$	296,296	$	5,266	$	59,553		$	120,233	$	8,104		$	489,452

Total assets	$	1,495,713	$	35,197	$	197,176		$	160,394	$	25,738		$	1,914,218

4. Treasury Stock

During the six months ended June 30, 2007, we repurchased an aggregate of 2,884,163 shares of our common stock in a privately negotiated transaction, and we have placed the repurchased shares in treasury. At our discretion, we use treasury shares to satisfy option exercises and restricted stock vesting, and we use the cost approach when accounting for the repurchase and reissuance of our treasury stock. During the three and six months ended June 30, 2007, we reissued 62,265 and 231,737 treasury shares at an approximate gross cost of $1.0 million and $3.4 million, respectively, in satisfaction of option exercises and share vestings under our restricted stock plan. Also during the three and six months ended June 30, 2007, we effectively purchased 3,900 and 35,042 shares at a cost of $0.1 million and $1.1 million, respectively, by having employees who were exercising options or vesting in their restricted stock grants exchange a portion of their stock for our payment of required minimum tax withholdings.

5. Warrants

In connection with a securitization facility into which we entered during the first quarter of 2004, we issued warrants to acquire 2.4 million shares of our common stock at an exercise price of $22.45 per share. The costs associated with this warrant were recorded at fair value ($25.6 million determined using the Black-Scholes model) within deferred costs, net, on our condensed consolidated balance sheets, and the initial deferred cost amount was amortized against income from retained interests in credit card receivables securitized (which is a component of fees and related income from securitized earning assets) over the vesting period of the warrant. In January 2007, the then-current warrant holders exercised their warrants by paying us an aggregate $53.9 million in exercise price.

6. Investments in Equity-Method Investees

As of June 30, 2007 we held a 61.25% interest in CSG, LLC (“CSG”). Because of specific voting and veto rights held by each investor in CSG, we do not control (as defined by FASB Statement of Financial Accounting Standards No. 94, “Consolidation of All Majority-Owned Subsidiaries”) this entity. We account for our CSG investment using the equity method of accounting. As of June 30, 2007, we also held a 47.5% interest in a joint venture in which we invested in 2005 and 33.3% interests in each of Transistor Holdings, LLC (“Transistor”) and Capacitor Holdings, LLC (“Capacitor”) in which we invested in 2004. We account for our investment interests in these entities using the equity method of accounting, and these investments are included in investments in equity-method investees on our condensed consolidated balance sheets.

CompuCredit Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)

June 30, 2007

In the following tables, we summarize (in thousands) combined balance sheet and results of operations data for our equity-method investees:


	As of June 30, 2007		As of December 31, 2006
Securitized earning assets	$	146,901	$	168,288

Total assets	$	154,617	$	179,107

Total liabilities	$	8,490	$	10,147

Members’ capital	$	146,127	$	168,960


	For the three months ended June 30,				For the six months ended June 30,
	2007		2006		2007		2006
Net interest income, fees and related income on non-securitized earning assets	$	2	$	35,608	$	4	$	75,786

Fees and related income on securitized earning assets	$	18,791	$	28,448	$	37,674	$	51,685

Total other operating income	$	21,824	$	32,607	$	43,971	$	60,273

Net income	$	20,447	$	61,321	$	41,225	$	121,641

7. Off-Balance-Sheet Arrangements

We securitize certain credit card receivables that we purchase on a daily basis through our third-party financial institution relationships (i.e., generally those receivables that are not associated with our largely fee-based credit card offerings to consumers at the lower end of the FICO scoring range). In connection with our securitization transactions, we transfer receivables associated with credit card accounts originated by our third-party financial institution relationships to a master trust (the “originated portfolio” master trust), which issues notes representing undivided ownership interests in the assets of the master trust. Additionally, in various transactions, we have acquired portfolios of receivables from third parties and subsequently securitized them; the latest of these transactions was our acquisition of the UK Portfolio and the securitization of its approximately $970 million of gross face amount underlying credit card receivables in the quarter ended June 30, 2007.

Our only interest in the credit card receivables we securitize is in the form of retained interests in the securitization trusts. GAAP requires us to treat our transfers to the securitization trusts as sales and to remove the receivables from our consolidated balance sheets. Under Statement No. 140, an entity recognizes the assets it controls and liabilities it has incurred, and derecognizes the financial assets for which control has been surrendered and all liabilities that have been extinguished. An entity is considered to have surrendered control over the transferred assets and, therefore, to have sold the assets if the following conditions are met:

The transferred assets have been isolated from the transferor and put presumptively beyond the reach of the transferor and its creditors.

Each transferee has the right to pledge or exchange the assets it has received, and no condition both constrains the transferee from taking advantage of its right to pledge or exchange and provides more than a trivial benefit to the transferor.

The transferor does not maintain effective control over the transferred assets through either (i) an agreement that both entitles and obligates the transferor to repurchase or redeem them before their maturity, or (ii) the ability to unilaterally cause the holder to return specific assets, other than through a clean-up call.

Our securitization transactions do not affect the relationship we have with our customers, and we continue to service the securitized credit card receivables.

CompuCredit Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)

June 30, 2007

The table below summarizes (in thousands) our securitization activity for the periods presented. As with other tables included herein, it does not include the securitization activities of our equity-method investees:


	For the three months ended June 30,					For the six months ended June 30,
	2007			2006		2007			2006
Gross amount of receivables securitized at period end	$	2,362,871		$	1,681,651	$	2,362,871		$	1,681,651

Proceeds from collections reinvested in revolving-period securitizations	$	319,242		$	299,010	$	573,172		$	602,732

Excess cash flows received on retained interests	$	42,612		$	65,598	$	91,365		$	136,582

Securitization gains	$	100,957		$	3,541	$	100,957		$	4,404
(Loss on) income from retained interests in credit card receivables securitized		(33,828	)		35,746		(19,266	)		80,542
Fees on securitized receivables		4,859			5,853		9,999			10,663

Total fees and related income on securitized earning assets	$	71,988		$	45,140	$	91,690		$	95,609

The investors in our securitization transactions have no recourse against us for our customers’ failure to pay their credit card receivables. However, most of our retained interests are subordinated to the investors’ interests until the investors have been fully paid.

Generally, we include all collections received from the cardholders underlying each securitization in the securitization cash flows. This includes collections from the cardholders for interest, fees and other charges on the accounts and collections from those cardholders repaying the principal portion of their account balances. In general, the cash flows are then distributed to us as servicer in the amounts of our contractually negotiated servicing fees, to the investors as interest on their outstanding notes, to the investors to repay any portion of their outstanding notes that becomes due and payable and to us as the seller to fund new purchases. Any collections from cardholders remaining each month after making the various payments noted above generally are paid to us on our retained interests.

We carry the retained interests associated with the credit card receivables we have securitized at estimated fair market value within the securitized earning assets category on our condensed consolidated balance sheets, and because we classify them as trading securities, we include any changes in fair value in income. Because quoted market prices for our retained interests generally are not available, we estimate fair value based on the estimated present value of future cash flows using our best estimates of key assumptions.

The measurements of retained interests associated with our securitizations are dependent upon our estimate of future cash flows using the cash-out method. Using the cash-out method, we record the future cash flows at a discounted value. We discount the cash flows based on the timing of when we expect to receive the cash flows. We base the discount rates on our estimates of returns that would be required by investors in investments with similar terms and credit quality. We estimate yields on the credit card receivables based on stated annual percentage rates and applicable terms and conditions governing fees as set forth in the credit card agreements, and we base estimated default and payment rates on historical results, adjusted for expected changes based on our credit risk models. We typically charge off credit card receivables when the receivables become 180 days past due, although earlier charge offs may occur specifically related to accounts of bankrupt or deceased customers. We generally charge off bankrupt and deceased customers’ accounts within 30 days of verification.

Our retained interests in credit card receivables securitized (labeled as securitized earning assets on our condensed consolidated balance sheets) include the following (in thousands):


	June 30 2007			December 31, 2006
Interest only (“I/O”) strip	$	84,876		$	81,129
Accrued interest and fees		21,036			15,976
Servicing liability		(19,969	)		(8,838	)
Amounts due from securitization		13,416			8,738
Fair value of retained interests		498,434			704,710

Securitized earning assets	$	597,793		$	801,715

CompuCredit Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)

June 30, 2007

The I/O strip reflects the fair value of our rights to future income from securitizations arranged by us and includes certain credit enhancements. Accrued interest and fees represent the estimated collectible portion of fees earned but not billed to the cardholders underlying the credit card receivables portfolios we have securitized. The servicing liability reflects, for those securitization structures for which servicing compensation is not adequate, the fair value of the costs to service the receivables above and beyond the servicing income we expect to receive from the securitizations. Amounts due from securitization represent cash flows that are distributable to us from the prior month’s cash flows within each securitization trust; we generally expect to receive these amounts within 30 days from the close of each respective month. Lastly, we measure retained interests at fair value as set forth within the fair value of retained interests category in the above table.

Changes in any of the assumptions used to value our retained interests in our securitizations could affect our fair value estimates. The weighted-average key assumptions we used to estimate the fair value of our retained interests in the receivables we have securitized are presented below:


	June 30, 2007		December 31, 2006		June 30, 2006
Net collected yield (annualized)	27.1	%	26.2	%	29.9	%
Payment rate (monthly)	5.6		6.7		7.0
Expected principal credit loss rate (annualized)	14.6		9.3		14.2
Residual cash flows discount rate	20.0		16.9		14.3
Servicing liability discount rate	14.0		14.0		14.0

During the third quarter of 2006, we re-aligned our net collected yield and expected principal credit loss rate assumptions to better reflect the specific categories of expected returns on our retained interests. In prior periods, these two assumptions represented gross billed yield (exclusive of certain fees earned on securitized receivables) and expected credit loss rates (which were inclusive of expected losses of both billed yield and principal), respectively. Accordingly, the effects of this re-alignment were to reduce the yield used in our Statement No. 140 models to reflect only those cash flows associated with yield that we expect to collect, as well as to correspondingly reduce our expected credit loss rate to reflect only the principal losses we expect to incur. The trending increase in the residual cash flows discount rates reflects reduced levels of excess collateral within our securitization trusts over the past several quarters and some increases throughout 2006 in the LIBOR interest rate index underlying our asset-backed securitization facilities and those in the market generally. Our Statement No. 140 models recognize in computing the residual cash flows discount rate that variations in collateral enhancement levels affect the returns that investors require on residual interests within securitization structures; specifically, at lower levels of collateral enhancement (and hence greater investment risk), investors in securitization structure residual interests will require higher investment returns.

The following illustrates the hypothetical effect on the June 30, 2007 value of our retained interests in credit card receivables securitized (dollars in thousands) of an adverse 10 and 20 percent change in our key valuation assumptions:


	Credit Card Receivables
Net collected yield (annualized)		27.1	%
Impact on fair value of 10% adverse change	$	(38,235	)
Impact on fair value of 20% adverse change	$	(76,574	)
Payment rate (monthly)		5.6	%
Impact on fair value of 10% adverse change	$	(6,460	)
Impact on fair value of 20% adverse change	$	(12,907	)
Expected principal credit loss rate (annualized)		14.6	%
Impact on fair value of 10% adverse change	$	(21,882	)
Impact on fair value of 20% adverse change	$	(48,379	)
Residual cash flows discount rate		20.0	%
Impact on fair value of 10% adverse change	$	(7,326	)
Impact on fair value of 20% adverse change	$	(14,438	)
Servicing liability discount rate		14.0	%
Impact on fair value of 10% adverse change	$	(148	)
Impact on fair value of 20% adverse change	$	(295	)

CompuCredit Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)

June 30, 2007

These sensitivities are hypothetical and should be used with caution. As the figures indicate, changes in fair value based on a 10% and a 20% variation in assumptions generally cannot be extrapolated because the relationship of a change in assumption to the change in fair value of our retained interests in credit card receivables securitized may not be linear. Also, in this table, the effect of a variation in a particular assumption on the fair value of the retained interests is calculated without changing any other assumptions; in reality, changes in one assumption may result in changes in another. For example, increases in market interest rates may result in lower prepayments and increased credit losses, which could magnify or counteract the sensitivities.

Our managed receivables portfolio underlying our securitizations (including only those of our consolidated subsidiaries) is comprised of our retained interests in the credit card receivables we have securitized and other investors’ shares of these securitized receivables. The investors’ shares of securitized credit card receivables are not our assets. The following table summarizes (in thousands) the balances included within, and certain operating statistics associated with, our managed receivables portfolio underlying both the outside investors’ shares of and our retained interests in credit card receivables securitizations.


	June 30, 2007		December 31, 2006
Total managed principal balance	$	2,165,926	$	1,468,533
Total managed finance charge balance		196,945		155,289

Total managed receivables	$	2,362,871	$	1,623,822

Receivables delinquent — 60 or more days	$	247,519	$	165,555

Net charge offs for the three months ended	$	104,786	$	43,498

8. Notes Payable, Other Borrowings and Convertible Senior Notes

As of June 30, 2007, we had total notes payable and other borrowings of $475.9 million and Convertible Senior debt of $550.0 million, compared to $358.7 million and $550.0 million, respectively, at December 31, 2006. As of June 30, 2007, our notes payable and other borrowings balances (in millions), interest rates and maturities were as follows:


	Amount Outstanding		Interest Rate	Maturity Date
Structured financing within our Credit Cards segment	$	200.0	7.1%	March 2008
Structured financings within our Auto Finance segment		188.9	7.3% to 7.8%	September 2008 – April 2013
Third-party financing of Auto Finance segment receivables		4.6	10.3%	January 2009
Third-party financing of Auto Finance segment inventory		0.5	24.0%	Month-to Month
Vendor-financed acquisitions of software and equipment		15.1	2% to 7%	October 2006 – August 2009
MEM subordinated debt		0.5	9.0%	July 2009
Seller note within our Retail Micro-Loans segment		5.0	10.0%	July 2007
Repurchase agreements		61.3	6.0%	July 2007

Balance as of June 30, 2007	$	475.9

To finance our February 2007 acquisition of the portfolio of ACC-serviced auto finance receivables that we acquired contemporaneous with our ACC acquisition, we entered into a financing facility with a maximum capacity of $146.0 million. This facility has an interest rate at the one-month LIBOR rate plus 200 basis points, matures in April 2013 and is recourse only to the acquired portfolio of ACC-serviced auto finance receivables. This financing facility will be repaid as the portfolio of acquired ACC-serviced auto finance receivables is repaid.

In February 2007, we also amended the other financing facility within our Auto Finance segment to provide for greater operational flexibility as well as lower pricing, to extend the facility through September 2008 and to reduce its size to $100.0 million.

JRAS, acquired within the Auto Finance segment in January 2007, has a financing facility with a maximum capacity of $10.0 million that is recourse only to its assets and a revolving financing facility to fund inventory.

The repurchase agreements relate to our investments in debt securities, are made through a wholly owned subsidiary and are recourse only to the specific debt security investments underlying each individual repurchase agreement.

We are in compliance with the covenants underlying all of our various notes payable and debt facilities.

CompuCredit Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)

June 30, 2007

9. Goodwill and Intangible Assets

Goodwill

Goodwill represents the excess of the purchase price and related costs over the value assigned to net tangible and identifiable intangible assets acquired and accounted for under the purchase method. Statement of Financial Accounting Standards No. 142, “ Goodwill and Other Intangible Assets ,” (“Statement No. 142”) requires that entities assess the fair value of all acquisition-related goodwill on a reporting unit basis. We review the recorded value of goodwill for impairment at least annually at the beginning of the fourth quarter of each year, or earlier if events or changes in circumstances indicate that the carrying amount may exceed fair value. As part of our preliminary purchase price allocations for our Auto Finance segment’s acquisitions of ACC and JRAS in the first quarter of 2007, our Auto Finance segment recorded goodwill of $6.8 million and $1.6 million, respectively. During the second quarter of 2007, we recorded $273,000 of additional goodwill related to purchase price adjustments on our Auto Finance segment’s acquisitions, and as of June 30, 2007, our Auto Finance segment had goodwill of $30.8 million.

As part of our preliminary purchase price allocations for our acquisition of MEM in the second quarter of 2007, we recorded goodwill of £11.6 million ($22.9 million).

During February 2006, we learned from our principal Retail Micro-Loans segment bank partner that the FDIC had effectively asked insured financial institutions to cease deferred-presentment and installment micro-loan activities conducted through processing and servicing agents. Cessation of these activities directly affected our micro-loan subsidiaries’ ability to continue operating as a processing and servicing agent in four states. As such, we conducted an assessment of the fair value of our Retail Micro-Loans segment using, in accordance with Statement No. 142, a combination of the expected present value of future cash flows associated with the business and prices of comparable businesses. Based on this assessment, we recorded during the first quarter of 2006 a goodwill impairment charge of $10.5 million to properly report goodwill at its fair value.

Changes in the carrying amount (in thousands) of goodwill by reportable segment for the six months ended June 30, 2006 and 2007 are as follows:


	Retail Micro- Loans			Auto Finance		Other		Consolidated
Balance as of December 31, 2005	$	108,501		$	22,160	$	139	$	130,800
Impairment loss		(10,546	)		—				(10,546	)

Balance as of June 30, 2006	$	97,955		$	22,160	$	139	$	120,254

Balance as of December 31, 2006	$	97,955		$	22,160	$	—	$	120,115
Goodwill acquired during the period		—			8,435		22,868		31,303
Purchase price adjustment		—			273		—		273
Foreign currency translation		—			—		304		304

Balance as of June 30, 2007	$	97,955		$	30,868	$	23,172	$	151,995

Intangible Assets

We had $3.2 million of intangible assets that we determined had an indefinite benefit period, as of both June 30, 2007 and December 31, 2006. As part of our preliminary purchase price allocations for the acquisitions of ACC and JRAS during the first quarter of 2007, we recorded $2.4 million of intangible assets subject to amortization related to customer relationships, and trade names. The net unamortized carrying amount of intangible assets subject to amortization was $9.0 million as of June 30, 2007 and $9.1 million as of December 31, 2006. Intangible asset-related amortization expense was $1.3 million and $1.9 million for the three months ended June 30, 2007 and 2006, respectively, and $2.5 million and $2.8 million for the six months ended June 30, 2007 and 2006, respectively. The amortization expense for the three and six months ended June 30, 2006 include $0.8 million of impairment charges.

10. Commitments and Contingencies

In the normal course of business through the origination of unsecured credit card receivables, we incur off-balance-sheet risks. These risks include our commitments of $3.4 billion at June 30, 2007 to purchase receivables associated with cardholders who have the right to borrow in excess of their current balances up to the maximum credit limit on their credit

CompuCredit Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)

June 30, 2007

card accounts. These commitments involve, to varying degrees, elements of credit risks in excess of the amounts we have securitized. We have not experienced a situation in which all of our customers have exercised their entire available line of credit at any given point in time, nor do we anticipate that this will ever occur in the future. We also have the effective right to reduce or cancel these available lines of credit at any time.

For various receivables portfolio investments we have made through our subsidiaries and equity-method investees, we have entered into guarantee agreements and/or note purchase agreements whereby we have agreed to guarantee the purchase of or purchase directly additional interests in portfolios of credit card receivables owned by trusts, the retained interests in which are owned by our subsidiaries and equity-method investees, should there be net new growth in the receivables or should collections not be available to fund new cardholder purchases. As of June 30, 2007, neither we nor any of our subsidiaries or equity-method investees had purchased or been required to purchase any additional notes under the note purchase agreements. Our guarantee is limited to our respective ownership percentages in the various subsidiaries and equity-method investees multiplied by the total amount of the notes that each of the subsidiaries and equity-method investees could be required to purchase. As of June 30, 2007, the maximum aggregate amount of our collective guarantees and direct purchase obligations related to all of our subsidiaries and equity-method investees was $442.5 million—an increase from the $369.0 million level at March 31, 2007 as a result of our UK Portfolio acquisition. In general, this aggregate contingency amount will decline in the absence of portfolio acquisitions as the amounts of credit available to cardholders for future purchases declines. The acquired credit card receivables portfolios of all of our affected subsidiaries and equity-method investees have declined with each passing quarter since acquisition and we expect them to continue to decline because we expect payments to exceed new purchases each month. We currently do not have any liability recorded with respect to these guarantees or direct purchase obligations, but we will record one if events occur that make payment probable under the guarantees or direct purchase obligations. The fair value of these guarantees and direct purchase obligations is not material.

Our agreements with our third-party originating financial institutions require us to purchase on a daily basis the credit card receivables that are originated in the accounts maintained for our benefit. To secure this obligation for one of our third-party originating financial institutions, we have provided the financial institution a $10.0 million standby letter of credit and have pledged retained interests carried at $104.4 million. Our arrangements with this particular originating financial institution expire in March 2009. If we were to terminate a sub-service agreement under which this institution also provides certain services for us, we would incur penalties of $9.8 million as of June 30, 2007. Our other third-party originating financial institution relationships require similar arrangements for which we have pledged $20.4 million in collateral as of June 30, 2007. In addition, in connection with the April 2007 acquisition of our UK Portfolio, we guarantee certain obligations of our subsidiaries and our third-party originating financial institution to Visa Europe. Those obligations include, among other things, compliance with Visa Europe’s operating regulations and by-laws. We also guarantee the performance and payment obligations of our servicer subsidiary to the indenture trustee and the trust created under the securitization relating to our UK Portfolio.

Also, under the agreements with our third-party originating financial institutions, we have agreed to indemnify the financial institutions for certain costs associated with the financial institutions’ card issuance and other lending activities on our behalf. Our indemnification obligations generally are limited to instances in which we either (1) have been afforded the opportunity to defend against any potentially indemnifiable claims or (2) have reached agreement with the financial institutions regarding settlement of potentially indemnifiable claims.

Commencing in June 2006, the FDIC began investigating the policies, practices and procedures used in connection with our credit card originating financial institution relationships. In December 2006, the Federal Trade Commission (“FTC”) commenced a related investigation. In general, the investigations focus upon whether marketing and other materials contained misrepresentations regarding, among other things, fees and credit limits and whether servicing and collection practices were conducted in accordance with applicable law. We have provided substantial information to both the FDIC and FTC, and we continue to respond to their requests. The FDIC and FTC have proposed limitations on certain marketing, servicing and collection practices, reimbursement of significant fees to affected customers and the payment of fines. We believe that our marketing and other materials and servicing and collection practices comply with applicable law, and we are vigorously contesting the proposed reimbursement of fees and payment of fines. The matters under investigation involve a significant amount of fees and a substantial number of accounts, and although it is premature to determine the outcomes of these investigations or their effects on our financial condition, results of operations, business position and consolidated financial statements, an adverse outcome could have a materially adverse effect upon us.

Certain of our subsidiaries had agreements with third-party financial institutions pursuant to which the applicable subsidiaries serviced micro-loans on behalf of the financial institutions in exchange for servicing fees; these servicing activities ceased in May 2006 as a result of the FDIC’s decision effectively asking FDIC-insured financial institutions to

CompuCredit Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)

June 30, 2007

cease loan origination activities through these types of servicing arrangements. As a result of this guidance, the originating bank for which we previously serviced loans in four states exited that business and liquidated its existing loans through a loan participation relationship with Maverick Management Company LLC (“Maverick”). To facilitate that transaction and our orderly exit from these servicing operations, we agreed to indemnify Maverick for up to $2.8 million in losses that it may incur as a result of its being a successor to the bank’s interest in the loans and their liquidation. Richard W. Gilbert, a member of our Board of Directors and our Chief Operating Officer, has a 20% economic interest in Maverick, and Mr. Gilbert’s son is its manager. As of June 30, 2007, we had paid claims submitted by Maverick of $1.7 million against this indemnification obligation, and no further claims will be made as we have received a waiver terminating any further indemnification obligation to Maverick.

One of our most significant sources of liquidity is the securitization of credit card receivables. The maturity terms of our securitizations vary. As of June 30, 2007, securitization facilities underlying our securitization trusts included: a six-year term securitization facility (expiring October 2010), a five-year term securitization facility (expiring October 2009), a two-year variable funding securitization facility with renewal options (term expiring January 2008) and a one-year conduit securitization facility with renewal options (term expiring September 2007) issued out of our originated portfolio master trust; a ten-year amortizing term securitization facility issued out of our Embarcadero Trust (expiring January 2014); a multi-year variable funding securitization facility (expiring September 2014) issued out of the trust associated with our securitization of $92.0 million and $72.1 million (face amount) in credit card receivables acquired during 2004 and in the first quarter of 2005, respectively; and an amortizing term securitization facility (denominated and referenced in UK sterling and expiring April 2014) issued out of the trust underlying our UK Portfolio securitization. In July 2007, we renewed our two-year variable funding securitization facility (term expiring January 2008) through January 2010 at a reduced size of $750 million.

While we have never triggered an early amortization within any of the series underlying our arranged securitization facilities and do not believe that we will, we may trigger an early amortization of one or more of the outstanding series within our securitization trusts. As each securitization facility expires or comes up for renewal, there can be no assurance that the facility will be renewed, or if renewed, there can be no assurance that the terms will be as favorable as the terms that currently exist. Either of these events could significantly increase our need for additional liquidity.

We are subject to various legal proceedings and claims that arise in the ordinary course of business. In one of these legal proceedings, CompuCredit Corporation and five of our subsidiaries are defendants in a purported class action lawsuit entitled Knox, et al. vs. First Southern Cash Advance, et al., No 5 CV 0445, filed in the Superior Court of New Hanover County, North Carolina, on February 8, 2005. The plaintiffs allege that in conducting a so-called “payday lending” business, certain of our Retail Micro-Loans segment subsidiaries violated various laws governing consumer finance, lending, check cashing, trade practices and loan brokering. The plaintiffs further allege that CompuCredit is the alter ego of its subsidiaries and is liable for their actions. The plaintiffs are seeking damages of up to $75,000 per class member. We intend to vigorously defend this lawsuit. These claims are similar to those that have been asserted against several other market participants in transactions involving small balance, short-term loans made to consumers in North Carolina. There are no other material pending legal proceedings to which we are a party. We do not believe the pending legal proceedings will have a material effect on our financial position.

CompuCredit Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)

June 30, 2007

11. Net (Loss) Income Per Common Share

The following table sets forth the computation (in thousands, except per share data) of net (loss) income per common share:


	For the three months ended June 30,					For the six months ended June 30,
	2007			2006		2007			2006
Numerator:
Net (loss) income	$	(11,016	)	$	28,302	$	(13,532	)	$	58,960

Denominator:
Basic weighted-average shares outstanding		48,485			48,651		49,369			48,642
Effect of dilutive stock options, warrants and restricted shares		—			1,660		—			1,692

Diluted adjusted weighted-average shares outstanding		48,485			50,311		49,369			50,334

Net (loss) income per common share – basic	$	(0.23	)	$	0.58	$	(0.27	)	$	1.21

Net (loss) income per common share – diluted	$	(0.23	)	$	0.56	$	(0.27	)	$	1.17

As their effects were anti-dilutive due to our net losses for the three and six months ended June 30, 2007, we excluded all of our stock options and unvested restricted shares from the three and six months ended June 30, 2007 net (loss) per common share calculations. As their effects were anti-dilutive, we excluded 520,000 stock options from both the three and six months ended June 30, 2006 net income per common share calculations.

12. Stock-Based Compensation

As of June 30, 2007, we had five stock-based employee compensation plans (an employee stock purchase plan, three stock option plans and a restricted stock plan).

Stock Options

Effective January 1, 2006, we adopted Statement No. 123(R) using the modified prospective application. For the three and six months ended June 30, 2007, we expensed compensation costs of $0.6 million and $1.1 million, respectively, related to our stock option plans and recognized income tax benefit within additional paid-in capital of $0.8 million and $1.5 million, respectively, related to our stock option plans. For the three and six months ended June 30, 2006, we expensed compensation costs of $0.4 million and $0.6 million, respectively, related to our stock option plans and recognized income tax benefit within additional paid-in capital of $68,000 and $0.2 million, respectively, related to our stock option plans. We recognize stock-option-related compensation expense for any awards with graded vesting on a straight-line basis over the vesting period for the entire award.

The following table provides the reserved common shares and common shares available for future issuance for each of our stock option plans as of June 30, 2007:


	Shares Reserved	Available for Issuance	Outstanding
1998 Stock Option Plan	1,200,000	307,281	341,000
2000 Stock Option Plan	1,200,000	93,911	58,384
2003 Stock Option Plan	1,200,000	566,915	599,164

CompuCredit Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)

June 30, 2007

A summary of the status of our stock options as of June 30, 2007 and changes for the six months then ended is presented below:


	Number of Shares		Weighted- Average Exercise Price		Weighted Average of Remaining Contractual Life	Aggregate Intrinsic value
Outstanding at January 1, 2007	1,079,889		$	23.96
Granted	50,000			34.75
Exercised	(130,341	)		8.69
Cancelled/Forfeited	(1,000	)		7.15

Outstanding at June 30, 2007	998,548		$	26.51	3.57	$	8,499,672

Exercisable at June 30, 2007	443,548		$	9.36	0.86	$	11,380,172

As of June 30, 2007, our unamortized deferred compensation costs associated with non-vested stock options were $7.0 million. We received $1.1 million in cash proceeds from stock option exercises during the six months ended June 30, 2007.

During the six months ended June 30, 2007, we estimated the fair value of granted options at the date of grant using a Black-Scholes option-pricing model with the assumptions described below.


Assumptions	For the Six Months Ended June 30, 2007
Fair value per share	$	11.14
Dividend yield		—
Volatility factors of expected market price of stock(1)		30	%
Risk-free interest rate		5.25	%
Expected option term (in years)		4.0

(1)	We use the implied volatility evidenced within our publicly traded convertible bonds, warrants and over-the-counter stock options as a basis for the expected volatility assumption.

Restricted Share Awards

During the three and six months ended June 30, 2007, we granted 50,000 and 162,396 shares, respectively, of restricted stock with a fair value of $1.7 million and $5.8 million, respectively, under our 2004 Restricted Stock Plan. Our restricted share grants generally vest over a range of 24 to 60 months, and we are amortizing associated deferred compensation amounts to compensation expense ratably over the vesting period. As of June 30, 2007, our unamortized deferred compensation costs associated with non-vested restricted stock awards were $16.8 million with a weighted-average remaining amortization period of 2.8 years.

Occasionally, we issue or sell stock in our subsidiaries to certain members of the subsidiaries’ management teams. The terms of these awards vary but generally include vesting periods comparable to those of stock issued under our restricted stock plan. Generally, these shares can be converted to cash or our stock at our discretion after the specified vesting period or the occurrence of other contractual events. Ownership in these shares constitutes minority interests in the subsidiaries. We are amortizing this compensation cost commensurate with the applicable vesting period. The weighted average remaining vesting period was 3.7 years as of June 30, 2007.

13. Acquisitions

In January 2007, we acquired a 75% ownership interest in JRAS for $3.3 million from its former owners, and we intend to expand its operations over the next several years through a mixture of its own debt financing and additional equity contributions that we plan to make, which are expected to gradually increase our ownership interest in JRAS. At its acquisition date, JRAS operated 4 retail locations in Georgia. As of June 30, 2007, JRAS had 5 retail locations and has 2 additional locations that opened in July 2007. JRAS sells vehicles to consumers and provides the underlying financing associated with the vehicle sales. Customer purchases are financed for periods of time between 24 and 30 months and credit is approved and payments are received in each store front; this type of operation is commonly referred to as a “Buy Here/Pay Here” operation. JRAS currently retains all loans and servicing for all customer financing contracts and has a $10.0 million line of credit provided by a commercial finance company, $4.6 million of which was outstanding at June 30, 2007. As part of the JRAS acquisition transaction, we have recorded $1.7 million of goodwill and $0.7 million of intangible assets.

CompuCredit Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)

June 30, 2007

In February 2007, we acquired all of the assets of San Diego, California-based ACC. At acquisition date, ACC serviced approximately $275 million in auto finance receivables. ACC operates in 12 states with collection centers in San Diego, California and Denver, Colorado and has approximately 170 employees. Contemporaneous with this purchase, we also acquired a $195.0 million auto loan portfolio from Patelco Credit Union. These assets were originated by ACC and were serviced by ACC on behalf of Patelco. The total purchase price paid for the two acquisitions was $168.5 million. ACC serves a consumer niche that, from a credit quality perspective, is slightly above the niche served by CAR, which we acquired in April 2005. As part of the ACC transaction, we recorded $7.0 million of goodwill and $1.7 million of intangible assets.

In April 2007, we acquired 95% of the outstanding shares of MEM for £11.6 million ($22.3 million) in cash. A contingent performance-related earnout could be payable to the sellers on achievement of certain earnings measurements for the years ended 2007, 2008 and 2009. The maximum amount payable under for this earnout is £120.0 million. MEM operates in England and Wales, originates weekly, 1-month and 3-month micro-loans over the Internet and sells and finances mobile phone handsets with financing terms up to 7 months.

Also in April 2007, we acquired our UK Portfolio of approximately £490 million ($970 million) in face amount of credit card receivables from Barclaycard, a division of Barclays Bank PLC. We paid the purchase price of £383.5 million ($766.4 million) in cash. A substantial portion of the cash purchase price obligation was funded through a traditional securitization financing arranged by Banc of America Securities Limited and related entities pursuant to a Statement No. 140 transfer in exchange for notes and a subordinated, certificated interest issued by the trust, thereby resulting in a securitization gain of $100.4 million. See Note 7, “Off Balance Sheet Arrangements,” for further discussion.

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with our condensed consolidated financial statements and the related notes included herein and our Annual Report on Form 10-K for the year ended December 31, 2006, where certain terms (including trust, subsidiary and other entity names and financial, operating and statistical measures) have been defined.

This Management’s Discussion and Analysis of Financial Condition and Results of Operations includes forward-looking statements. We have based these forward-looking statements on our current plans, expectations and beliefs about future events. Actual results could differ materially because of factors discussed in “Risk Factors” in Part II, Item 1A and elsewhere in this report.

OVERVIEW

We are a provider of various credit and related financial services and products to or associated with the underserved, or sub-prime, consumer credit market and “un-banked” consumers. One of the ways in which we serve these markets is through our marketing and solicitation of credit card accounts and our servicing of various credit card receivables underlying both originated and acquired accounts. Because only financial institutions can issue general-purpose credit cards, we contract with third-party financial institutions pursuant to which the financial institutions issue general purpose Visa and MasterCard credit cards and we purchase the receivables relating to such accounts on a daily basis. We market to cardholders other fee-based products, including credit and identity theft monitoring, health discount programs, shopping discount programs, debt waiver and life insurance. Our largely fee-based credit card offerings to consumers at the lower end of the FICO scoring range are now a significant source of growth for us. At June 30, 2007, the gross face amount of credit card receivables underlying these product offerings was $973.0 million.

Our product and service offerings also include “micro-loans”—generally small-balance short-term cash advance loans (generally for less than 30 days) and small-balance installment loans (the amortizing term of which generally is less than one year)—marketed through various channels, including retail branch locations, direct marketing, telemarketing and the Internet. We also (1) originate auto loans through franchised auto dealers, (2) purchase and/or service auto loans from or for a pre-qualified network of dealers in the Buy Here/Pay Here used car business, and (3) sell used automobiles through our own Buy Here/Pay Here lots, originating the loans under which these automobile sales are financed. Moreover, our licensed debt collections subsidiary purchases and collects previously charged-off receivables from us, the trusts that we service and third parties. Lastly, we engage in a variety of new product research and development efforts, including our ongoing efforts: to originate, purchase and/or service motorcycle, all-terrain vehicle, personal watercraft and similar loans through, from or for pre-qualified networks of dealers in these products; to develop and roll out an on-line mall of consumer electronics and other products for which we will provide the underlying consumer financing; and to sell and finance mobile phone handsets and market and finance underlying minutes usage by the customers who purchase these handsets.

Our business experienced several significant changes during the three months ended June 30, 2007:

•

Our April 2007 acquisition of a UK Portfolio of approximately £490 million ($970 million) in face amount of credit card receivables from Barclaycard, a division of Barclays Bank PLC;

•

Our April 2007 acquisition of MEM, an Internet-based micro-loan originator and financier of mobile phone handsets;

•

Our incurrence of realized and unrealized losses associated with unexpected market volatility and price declines with respect to investments that we have in mortgage and other asset-backed securities; and

•

Our significant marketing efforts over the Internet and television, and the resulting significant growth in gross new accounts and receivables underlying our largely fee-based credit card offerings to consumers at the lower end of the FICO scoring range.

We expect to continue marketing credit card accounts within our traditional originated portfolio and to grow the accounts and receivables underlying our largely fee-based credit card offerings to consumers at the lower end of the FICO scoring range, as well as the receivables underlying our other financial products and services. Our growth expectations set forth in this report are predicated, however, on the continued availability of liquidity (either debt or equity) to us in growing amounts over time at terms that allow us to achieve our desired returns on equity.

Our credit card and other operations are heavily regulated, and over time there will be changes to how we conduct our operations. For example, in response to comments about minimum payments and negative amortization received from the FDIC in the course of its examinations of the banks that issue credit cards on our behalf, during the third and fourth quarters of 2006 we discontinued billing finance charges and fees on credit card accounts that become over 90 days delinquent. This

change had significant adverse effects on our fourth quarter 2006 and first quarter 2007 managed receivables net interest margins and other income ratios. We also have made certain changes to our collections programs and practices during the first two quarters of 2007 in response to comments from the FDIC about negative amortization, and these changes have had the effect of increasing our delinquencies and our expected future charge-off levels and ratios.

Commencing in June 2006, the FDIC began investigating the policies, practices and procedures used in connection with our credit card originating financial institution relationships. In December 2006, the FTC commenced a related investigation. In general, the investigations focus upon whether marketing and other materials contained misrepresentations regarding, among other things, fees and credit limits and whether servicing and collection practices were conducted in accordance with applicable law. We have provided substantial information to both the FDIC and FTC, and we continue to respond to their requests. The FDIC and FTC have proposed limitations on certain marketing, servicing and collection practices, reimbursement of significant fees to affected customers and the payment of fines. We believe that our marketing and other materials and servicing and collection practices comply with applicable law, and we are vigorously contesting the proposed reimbursement of fees and payment of fines. The matters under investigation involve a significant amount of fees and a substantial number of accounts, and although it is premature to determine the outcomes of these investigations or their effects on our financial condition, results of operations, business position and consolidated financial statements, an adverse outcome could have a materially adverse effect upon us.

Our shareholders should expect us to continue to evaluate and pursue for acquisition additional credit card receivables portfolios and other business activities and asset classes that are complementary to our historic sub-prime credit card business. Our focus is on making good economic decisions that will result in high returns on equity to our shareholders over a long-term horizon, even if these decisions may result in volatile earnings under GAAP—such as in the case of incurring significant marketing expenses in one particular quarter to facilitate expected future long-term growth and profitability or in the case of the accounting requirements for securitizations under Statement No. 140. To the extent that we grow our overall portfolio of credit card receivables (through origination, acquisition or other new channels) and then securitize these assets, for example, we will have securitization gains or losses, which may be material. For further discussion of our historic results and the impact of securitization accounting on our results, see the “Results of Operations” and “Liquidity, Funding and Capital Resources” sections below, as well as our condensed consolidated financial statements and the notes thereto included herein.

RESULTS OF OPERATIONS

Three and Six Months Ended June 30, 2007, Compared to the Three and Six Months Ended June 30, 2006

Total interest income. Total interest income consists primarily of finance charges and late fees earned on loans and fees receivable that we have not securitized in off-balance-sheet securitization transactions—principally receivables associated with our largely fee-based credit card offerings to consumers at the lower end of the FICO scoring range and our Auto Finance segment. The $31.4 million and $60.0 million increases when comparing the three and six months ended June 30, 2007 to the same respective periods in 2006 are primarily due to growth in credit card receivables associated with our largely fee-based credit card offerings to consumers at the lower end of the FICO scoring range. In addition, our newly acquired ACC and JRAS subsidiaries contributed $8.4 million and $13.7 million, respectively, of interest income during the three and six months ended June 30, 2007.

Also included within total interest income (under the other category) is the interest income that we earned on our various investments in debt securities, including interest earned on bonds distributed to us from our equity-method investees and on our subordinated, certificated interest in the Embarcadero Trust. Principal amortization caused reductions in interest income levels associated with some of our bonds and the Embarcadero Trust interest. Nevertheless, our other interest income levels for the three and six months ended June 30, 2007 increased relative to the same respective periods in 2006 as interest paid on our investments in debt securities (typically in bonds issued by other third-party asset-backed securitizations) increased with our additional investments in these securities.

We expect continued growth in receivables associated with our largely fee-based credit card offerings to consumers at the lower end of the FICO scoring range and within our Auto Finance segment. Unless we securitize these receivables in off-balance-sheet arrangements—which we are exploring—this expected growth will translate into continued growth in our total interest income.

Interest Expense. Interest expense increased $4.2 million and $8.5 million for the three and six months ended June 30, 2007, respectively, compared to the same periods in 2006 principally due to the debt of our newly acquired ACC and JRAS operations, which contributed an additional $3.1 million and $4.4 million in interest expense for the three and six months ended June 30, 2007, respectively. The remainder of these increases results principally from interest expense related to our March 2006 structured financing associated with our largely fee-based credit card offerings to consumers at the lower end of the FICO scoring range.

Fees and related income on non-securitized earning assets. The following table details (in thousands) the components of fees and related income on non-securitized earning assets:


	For the three months ended June 30,						For the six months ended June 30,
	2007			2006			2007			2006
Retail micro-loan fees	$	28,333		$	21,504		$	54,496		$	42,443
Fees on non-securitized credit card receivables		146,848			113,772			267,807			201,123
Investments in previously charged-off receivables		15,735			11,061			32,919			20,358
Other		(24,035	)		(1,968	)		(17,190	)		215

Total fees and related income on non-securitized earning assets	$	166,881		$	144,369		$	338,032		$	264,139

The increases of $22.5 million and $73.9 million in fees and related income on non-securitized earning assets for the three and six months ended June 30, 2007, respectively, were largely attributable to:

•

growth in fees on our largely fee-based credit card offerings to consumers at the lower end of the FICO scoring range, which increased $33.1 million and $66.7 million for the three and six months ended June 30, 2007, respectively, principally due to increased originations;

•

growth in our Retail Micro-Loans segment, in which fees increased $6.8 million and $12.1 million for the three and six months ended June 30, 2007, respectively, primarily due to our expansion into Michigan, Texas, Nevada and the United Kingdom and our conversion of operations in Arkansas and Florida from bank-model servicing operations to direct lending operations in the second half of 2006;

•

an increase in income within our Investments in Previously Charged-Off Receivables segment of $4.7 million and $12.6 million for the three and six months ended June 30, 2007, respectively, which relates to growth in the segment’s balance transfer program and Chapter 13 bankruptcy activities and to heightened levels of previously charged-off receivables sales under our forward flow contract with Encore and correspondingly greater accretion of deferred revenue ($1.6 million and $4.4 million, respectively) in the three and six months ended June 30, 2007 compared to the same periods in 2006;

•

$2.4 million of fee income from our MEM operations, which we acquired during the second quarter of 2007; and

•

gross margin on automotive vehicle sales from our JRAS operations, which we acquired during the first quarter of 2007;

partially offset, however, by:

•

significant net realized and unrealized losses on our investments in debt and equity securities of $25.3 million and $23.3 million for the three and six months ended June 30, 2007, respectively, compared to the same periods in 2006 (and for which additional details are provided below).

Among other less significant items, the other category above includes gross profit associated with automotive vehicle sales by our newly acquired JRAS subsidiary, Internet micro-loan fees, and realized and unrealized gains and losses in both 2007 and 2006 associated with our investments in debt and equity securities that we classify as trading securities. Further details concerning our investments in asset-backed securities that we classify as trading securities are as follows:

•

For over ten years, we have been a frequent issuer of asset-backed securities and have worked extensively with lenders, rating agencies, asset-backed securitization structures, and cash flow modeling to develop an understanding of the valuation of various traunches of asset-backed securities issued out of securitization trusts. Based upon this expertise, we decided in the fourth quarter of 2004 to begin investing in third-party asset-backed securities supported by credit cards, mortgages and other financial assets. Over the period beginning in the fourth quarter of 2004 through late 2006, we invested $52.1 million in various third-party asset-backed securities, using the brokerage services of United Capital Markets, Inc., an entity affiliated with John Devaney. The results we achieved—which reflected advice that we received from Mr. Devaney—were good, and in late 2006, we formed a new subsidiary to continue and grow those investments. That subsidiary entered into a Managed Account Agreement with United Capital Asset Management LLC (“UCAM”), another of Mr. Devaney’s affiliated entities, and we capitalized this subsidiary with our then-existing portfolio of third-party asset-backed securities, which at that time had a value of $61.3 million (representing the original $52.1 million of capital that we allocated to this effort plus $9.2 million in earnings on that amount). The value of the portfolio (net of debt) grew through interest income and realized and unrealized net gains to $70.5 million at the end of the first quarter of 2007.

•

During the second quarter of 2007, our subsidiary experienced realized losses (net of interest income) of $15.2 million and unrealized losses of $10.3 million on its portfolio – principally related to its investments in CDOs and CMOs backed by mortgages as well as trading positions in an ABX index. These losses were the result of what we believe to be a significant dislocation in the market for mortgage-related and other asset-backed securities caused, in part, by leverage and liquidity constraints facing many market participants. Because our portfolio is held in a separate subsidiary (and not in a third-party fund), and because the debt that we incurred in order to leverage our original investment is recourse only to the individual securities underlying each particular item of debt and is non-recourse to CompuCredit, our remaining exposure (i.e., exposure to pre-tax loss) associated with our investments in third party asset-backed securities was $45.0 million at June 30, 2007. While our subsidiary’s ABX positions were closed in the second quarter of 2007, our subsidiary has experienced continued trading weakness in its investments subsequent to June 30, 2007, and coupled with considerable ongoing market volatility, we may experience further material realized and unrealized losses in our third quarter and beyond. However, we believe the dislocation that we are seeing is producing trading values for many securities that are irrationally low relative to the estimated discounted cash flow value of the securities, and we currently are assessing all potential options with respect to our portfolio, including maintaining our positions and evaluating for purchase other potential securities for which we believe the trading values are less than values that are supported by a discounted cash flow analysis.

With respect to the other category, we expect to see continued growth in gross profits from our JRAS operations and fees from our US and UK internet lending operations throughout 2007 and beyond. Likewise, we expect further continued growth in our retail micro-loans fees and fees on non-securitized credit card receivables categories.

Provision for loan losses. Our provision for loan losses increased $75.3 million and $131.9 million for the three and six months ended June 30, 2007 when compared to the same respective periods of 2006. These increases correspond with our significant year-over-year growth in on-balance-sheet loans and fees receivable principally related to our largely fee-based credit card offerings to consumers at the lower end of the FICO scoring range.

Our provision for loan losses covers aggregate loss exposures on (1) principal receivable balances, (2) finance charges and late fees receivable underlying income amounts included within our total interest income category, and (3) other fees receivable. Although we do not expect to see any material near-term degradation in the credit quality of our on-balance-sheet loans and fees receivable, we do expect our provision for loan losses to increase in future quarters if for no other reason than our expected loans and fees receivable growth.

The percentage of our allowance for uncollectible loans and fees receivable to gross period-end loans and fees receivable at June 30, 2007 (21.4%) is higher than it was at both March 31, 2007 (19.3%) and June 30, 2006 (21.0%). Additionally, our provision for loan losses as a percentage of average gross loans and fees receivable in the second quarter of 2007 (16.1%) is higher than it was in the first quarter of 2007 (12.5%) but lower than it was in the second quarter of 2006 (18.4%). The above figures include the acquisition of ACC, which under the accounting guidance of SOP 03-3 results in a net loan balance presentation with no corresponding allowance for uncollectible loans and fees receivable. Removing the balances attributable to the ACC acquisition would result in a 23.8% and 22.2% allowance for uncollectible loans and fees receivable as a percentage of gross period-end loans and fees receivable at June 30, and March 31, 2007, respectively, and an 18.2% and 13.4% provision for loan losses as a percentage of average gross loans and fees receivable for the three months ended June 30, and March 31, 2007, respectively.

The above statistics are overwhelmingly influenced by the receivables associated with our largely fee-based credit card offerings to consumers at the lower end of the FICO scoring range, which is by far the most significant category of receivables reflected on our consolidated balance sheets. Furthermore, our provision for loan losses percentage is affected by (1) the timing of account originations in that a significant portion of our gross loans and fees receivable at the time of origination relate to activation and annual fees for which revenues are deferred, (2) the timing of finance charge, fee and principal charge-offs against the allowance for uncollectible loans and fees receivable, and most significantly (3) the necessary levels of our allowance for uncollectible loans and fees receivable as of the close of each reporting period. Observations concerning our allowance levels are as follows:

•

The above statistics reflect the mix change over the past year in the receivables comprising our gross loans and fees receivable, such that an increasing percentage of the overall balance is comprised of receivables associated with our largely fee-based credit card offerings to consumers at the lower end of the FICO scoring range, for which loss rates are higher than for the remaining receivables within our gross loans and fees receivable balance, which consist primarily of receivables within our Auto Finance segment and our Retail Micro-Loans segment.

•

Relative to our typical allowances for uncollectible receivables associated with our largely fee-based credit card offerings to consumers at the lower end of the FICO scoring range, we are providing allowances at a higher rate for our significantly growing portfolio of these receivables originated over the Internet and television. While we expect that these receivables will perform at levels close to the performance of our other receivables associated with our largely fee-based credit card offerings to consumers at the lower end of the FICO scoring range over the long term, these higher allowances are necessary based on our relative lack of experience in these particular channels and based on differences in underwriting standards used for many of the accounts originated through these channels.

Fees and related income on securitized earning assets. Fees and related income on securitized earning assets include (1) securitization gains, (2) income from retained interests in credit card receivables securitized and (3) returned-check, cash advance and other fees associated with our securitized credit card receivables, each of which is detailed (in thousands) in the following table.


	For the three months ended June 30,					For the six months ended June 30,
	2007			2006		2007			2006
Securitization gains	$	100,957		$	3,541	$	100,957		$	4,404
(Loss on) income from retained interests in credit card receivables securitized		(33,828	)		35,746		(19,266	)		80,542
Fees on securitized receivables		4,859			5,853		9,999			10,663

Total fees and related income on securitized earning assets	$	71,988		$	45,140	$	91,690		$	95,609

The $26.8 million increase and $3.9 million decreases in total fees and related income on securitized earning assets for the three and six months ended June 30, 2007, respectively, when compared to the same periods in 2006 reflects:

•

a securitization gain of $100.4 million related to our UK Portfolio, which we acquired and securitized during the second quarter of 2007.

partially offset (in the case of the three months ended June 30, 2007) and fully offset (in the case of the six months ended June 30, 2007), however, by:

•

slower growth in the receivables within our originated portfolio master trust, which produced only $0.6 million of securitization gains for the three and six months ended June 30, 2007, compared to $3.5 million and $4.4 million during the same respective periods of 2006;

•

a $47.8 million loss on retained interests in the securitization trust underlying our UK Portfolio, which we acquired and securitized during the second quarter of 2007—such loss being principally attributable to our quarter-end mark-to-market of the then-carryover basis in our retained interests that resulted from our securitization of the portfolio;

•

a first quarter 2007 reduction in the income from retained interests in credit card receivables attributable to the fourth quarter 2006 implementation of our billing practice change to no longer bill finance charges and fees on credit card accounts that become more than 90 days delinquent;

•

a reduction in income from retained interests in credit card receivables associated with the desecuritization of the Fingerhut Trust III receivables in the fourth quarter of 2006; and

•

contraction in income from retained interests in our purchased portfolios of securitized credit card receivables due to (a) continued reductions in managed receivables levels within their respective securitization trusts throughout 2006 and thus far in 2007 and (b) a decrease in the favorable effects of purchase discounts underlying our retained interests in principally the Embarcadero Trust throughout both periods. (The benefits of purchase discounts associated with the managed receivables underlying our retained interests in the Embarcadero Trust abated significantly during these periods. We anticipated this change as the mix of managed receivables within the Embarcadero Trust has continued to shift over time (i.e., from receivables to which purchase discounts applied at the date of acquisition to new receivables generated from post-acquisition cardholder purchases for which there are no purchase discounts). Related to these mix changes are higher principal charge offs being netted against our income from retained interests in credit card receivables securitized, as well as lower inclusions of accretable yield as a component of our income from retained interests in credit card receivables securitized.)

In our Credit Cards segment discussion below, we provide further details concerning delinquency and credit quality trends, which affect the level of our income from retained interests in credit card receivables securitized and fees on securitized receivables. We also note here, however, that the unusually high levels of securitization gain and loss on the retained interests in the UK Portfolio are unique to this quarter; our sizable quarter-end mark-to-market adjustments to our then carryover basis in our retained interests in the UK Portfolio (which flowed through loss on retained interests in the UK Portfolio) have been fully taken into account during the second quarter of 2007. In subsequent quarters for the foreseeable future, we expect income from retained interests in the UK Portfolio to be derived based on positive excess spreads that we are realizing each month on the portfolio and our expectation of only minor modifications to mark-to-market adjustments for the portfolio as we move forward from June 30, 2007.

Servicing income. Servicing income increased $3.6 million for the three months ended June 30, 2007 when compared to the same period in 2006 and was $5.3 million lower for the six months ended June 30, 2007 when compared to the same period in 2006. The increase for the second quarter was due to the April 2007 acquisition and securitization of our UK Portfolio for which we have been engaged as servicer, partially offset, however, by the effects on our servicing compensation of liquidations in our purchased credit card receivables portfolios and those of our equity-method investees for which we have been engaged as servicer. We expect a gradual decrease in servicing income for the remainder of this year as we do not expect to experience growth in our originated portfolio master trust receivables at levels that will exceed net liquidations of the securitized acquired portfolios (including the UK Portfolio) for which we have been engaged as servicer.

Servicing income also declined for the six months ended June 30, 2007 compared to the same period of 2006 because the FDIC effectively asked FDIC-insured financial institutions in February 2006 to cease cash advance and installment micro-loan activities conducted through processing and servicing agents such as our Retail Micro-Loans segment subsidiaries. As such, we did not earn any servicing income within our Retail Micro-Loans segment during the three and six months ended June 30, 2007, while we earned $1.8 million and $5.5 million of servicing income in this segment for the three and six months ended June 30, 2006, respectively. We subsequently converted the Retail Micro-Loans segment’s operations in two of the four states affected by this FDIC action to a direct lending model; as such, this lost servicing income has been replaced by lending fees, which are reported within fees and related income on non-securitized earning assets.

Ancillary and interchange revenues. Ancillary and interchange revenues increased $7.5 million and $11.1 million for the three and six months ended June 30, 2007, respectively, compared to the same periods in 2006 correlating with both growth in our managed receivables levels based on our origination of new credit card accounts and a commensurate mix change in our cardholder account base for which a greater percentage of our cardholder account base now is comprised of newer credit card accounts for which we typically experience higher ancillary revenues and higher purchasing volumes and associated interchange fees than for more mature cardholder accounts. Throughout the remainder of 2007 and beyond, we expect further growth in our ancillary and interchange revenues based on our current emphasis on new account originations.

Equity in income of equity-method investees. Notwithstanding our July 2006 purchase of an additional 11.25% interest in CSG and a correspondingly higher income allocation there from, equity in income of equity-method investees decreased $16.3 million and $32.2 million for the three and six months ended June 30, 2007, respectively, when compared to the same periods in 2006 primarily due to diminished earnings over time as we continue to liquidate the receivables balances associated with these equity-method investees.

Total other operating expense. Total other operating expense increased by $58.9 million and $80.4 million for the three and six months ended June 30, 2007, respectively, when compared to the same periods in 2006 due principally to:

•

$4.2 million and $9.0 million respective increases in salaries and benefits primarily due to (a) growth in receivables within our originated portfolio master trust and receivables associated with our largely fee-based credit card offerings to consumers at the lower end of the FICO scoring range, (b) personnel additions in connection with our acquisitions of JRAS in January 2007, ACC in February 2007, and MEM and the UK Portfolio in April of 2007, (c) additional information technology and other management personnel that we have hired associated with several new product and systems launches within our Credit Cards, Retail Micro-Loans, Auto Finance and Other segments and (d) $0.8 million and $2.1 million respective increases in salaries and benefits expense associated with the amortization of restricted stock and stock option grants based in large part on sizable grants to our President in May 2006;

•

$18.8 million and $27.5 million respective increases in card and loan servicing expense due to (a) servicing costs related to growth in receivables associated with our largely fee-based credit card offerings to consumers at the

lower end of the FICO scoring range and net growth in our originated portfolio master trust receivables, (b) higher servicing costs associated with our expanding number of issuing bank relationships and new product lines, (c) servicing costs now incurred for our newly acquired JRAS, ACC and MEM operations, and (d) servicing costs associated with the acquisition of our UK Portfolio, all such increases being offset partially by diminished servicing costs associated with our credit card portfolios acquired in prior years given their continuing liquidations during 2006 and 2007;

•

$25.1 million and $34.4 million respective increases in marketing and solicitation costs (including significantly higher advertising costs through television and the Internet, which represent significantly expanded marketing channels for us) aimed at growing account originations within our largely fee-based credit card offerings to consumers at the lower end of the FICO scoring range and our originated portfolio master trust and micro-loan receivables originated over the Internet; and

•

$12.4 million and $26.6 million respective increases in other expenses, including depreciation and occupancy and related expenses, due primarily to (a) increased costs associated with infrastructure build-out to handle growth within our originated portfolio and our largely fee-based credit card offerings to consumers at the lower end of the FICO scoring range (along with associated customer service enhancements), (b) our implementation of an advanced data analytics platform that allows us to access, query and analyze our large data sets with increased efficiency, speed and power, thereby decreasing our unit costs for data management while contributing to our competitive advantage in data analysis, (c) heightened legal, regulatory and compliance efforts and costs associated with the FDIC and FTC investigations and our establishment of an expanded number of issuing bank relationships and new product offerings, (d) several new product and systems launches within our Credit Cards, Retail Micro-Loans, Auto Finance and Other segments, (e) added expense related to our newly acquired JRAS, ACC and MEM operations, (f) the addition of our UK Portfolio and its associated infrastructure costs, (g) accelerated depreciation associated with shortened useful lives of our leasehold improvements within our existing Atlanta, Georgia headquarters office facilities given our anticipated mid-2007 move out of these facilities, (h) additional rent expense related to our new office lease as we have now taken possession of the new facilities in anticipation of our currently ongoing staged move into these facilities, and (i) $0.8 million lease termination costs that we recognized in the second quarter of 2007 associated with the termination of one of our Atlanta-area office leases to facilitate movement of personnel to our new Atlanta, Georgia headquarters office.

partially offset, however, by:

•

$1.6 million and $17.1 million of impairment charges (including $10.5 million for goodwill impairment recorded during the first quarter of 2006) incurred in the three and six month periods ended June 30, 2006 within our Retail Micro-Loans segment associated with the February 2006 FDIC decision effectively asking FDIC-insured financial institutions to cease cash advance and installment micro-loan activities conducted through processing and servicing agents such as our Retail Micro-Loans segment subsidiaries.

While we incur certain base levels of fixed costs associated with the infrastructure that we have built to support our growth and diversification into new products and services, the majority of our operating costs are highly variable based on the levels of receivables that we service (both for our own account and for others) and the pace and breadth of our search for, acquisition of and introduction of new business lines, products and services. We expect to continue growing and diversifying our business throughout 2007, and while certain unique expenses undertaken in the past may not be repeated and while we continue to derive cost reductions through our outsourcing and other cost-control efforts, we do expect to see continued growth in our total other operating expense levels (on a year-over-year and quarter-over-quarter comparative basis) based on growth that we plan to undertake. We also expect to incur some additional operating costs in 2007 associated with our ongoing staged move of our corporate headquarters and other Atlanta, Georgia facilities to new buildings; among these higher costs are the physical costs of moving, heightened levels of technology spending associated with the move, potential loss recognition if we determine that we are unable to sublease our existing facilities at lease rates in excess of the costs of our existing leases, and additional depreciation for leasehold improvements and any furniture and fixtures related to the new lease.

Minority interests. We reflect the ownership interests of minority holders of equity in our majority-owned subsidiaries (including management team holders of restricted shares in our subsidiary entities, See Note 12, “Stock-Based Compensation”) as minority interests in our condensed consolidated statements of operations. The minority interests expense associated with these subsidiaries totaled $0.8 million, $1.5 million, $2.1 million and $5.5 million for the three and six months ended June 30, 2007 and 2006, respectively. Generally, this expense is declining, which is consistent with (1) liquidations of acquired credit card portfolios within securitization trusts, the retained interests of which are owned by our majority-owned subsidiaries and (2) the resulting relative decline in contributions of our majority-owned subsidiaries (as discussed in “ Fees and related income on securitized earning assets ,” above) to income from retained interests in credit card receivables securitized as noted above. This decline is being offset slightly by minority interests expense related to income of JRAS, our new majority-owned Auto Finance subsidiary acquired in January 2007, and MEM, our new majority-owned United Kingdom Internet micro-loans subsidiary acquired in April 2007.

Income taxes. Our effective tax rate was 36.0% for both the three and six months ended June 30, 2007 and the three and six months ended June 30, 2006.

Credit Cards Segment

Our Credit Cards segment consists of our credit card investment and servicing activities, as conducted with respect to receivables underlying accounts originated and portfolios purchased by us. This segment represents aggregate activities associated with substantially all of our credit card products, including our largely fee-based credit card offerings to consumers at the lower end of the FICO scoring range. Because we have not yet securitized the receivables associated with our largely fee-based credit card offerings to consumers at the lower end of the FICO scoring range through an off-balance-sheet securitization, revenues associated with these offerings include interest income (along with late fees), fees and related income. With respect to our securitized credit card receivables (which represent the majority of our credit card receivables), our fees and related income on securitized earning assets within the Credit Cards segment include (1) securitization gains, (2) (loss on) income from retained interests in credit card receivables securitized and (3) returned-check, cash advance and other fees associated with our securitized credit card receivables. Also within our Credit Cards segment are equity in the income of equity-method investees and servicing income revenue sources. We earn servicing income from the trusts underlying our securitizations and the securitizations of our equity-method investees. Our revenue categories most affected by delinquency and credit loss trends are the net interest income, fees and related income on non-securitized earnings assets category (which is net of a provision for loan losses) and the (loss on) income from retained interests in credit card receivables securitized category.

In April 2007, we acquired our UK Portfolio of approximately £490 million ($970 million) in face amount of credit card receivables and 594,000 underlying managed accounts from Barclaycard, a division of Barclays Bank PLC. We paid the purchase price of £383.5 million ($766.4 million) in cash. The full amount of the acquisition discount associated with the UK Portfolio acquisition was allocated to credit quality and will be used to offset charge offs on pre-acquisition receivables as they occur over the life of the portfolio.

We did not acquire any credit card receivables portfolios during the six months ended June 30, 2006.

Background

For our credit card securitizations that qualify for sale treatment under GAAP, we remove the securitized receivables from our consolidated balance sheets. The performance of the underlying credit card receivables will nevertheless affect the future cash flows we actually receive. Various references within this section are to our managed receivables, which include our non-securitized credit card receivables and the credit card receivables underlying our off-balance-sheet securitization facilities. Managed receivables data also include our equity interest in the receivables that we manage for our equity-method investees but exclude minority interest holders’ shares of the receivables we manage for our majority-owned subsidiaries.

Financial, operating and statistical data based on these aggregate managed receivables are key to any evaluation of our performance in managing (including underwriting, valuing purchased receivables, servicing and collecting) the aggregate of the portfolios of credit card receivables reflected on our balance sheet and underlying our securitization facilities. In allocating our resources and managing our business, management relies heavily upon financial data and results prepared on a so-called “managed basis.” It is also important to analysts, investors and others that we provide selected financial, operating and statistical data on a managed basis because this allows a comparison of us to others within the specialty finance industry. Moreover, our management, analysts, investors and others believe it is critical that they understand the credit performance of the entire portfolio of our managed receivables because it reveals information concerning the quality of loan originations and the related credit risks inherent within the securitized portfolios and our retained interests in our securitization facilities.

Managed receivables data assume that none of the credit card receivables underlying our off-balance-sheet securitization facilities was ever transferred to securitization facilities and present the net credit losses and delinquent balances for the receivables as if we still owned the receivables. Reconciliation of the managed receivables data to our GAAP financial statements requires: (1) recognition that a majority of our credit card loans and fees receivable (i.e., all but $946.8 million of GAAP credit card loans and fees receivable at gross face value) had been sold in securitization transactions as of June 30, 2007; (2) an understanding that our managed receivables data are based on billings and actual charge offs as reported to us through underlying systems of record (i.e., without regard to an allowance for uncollectible loans and fees receivable); (3) a look-through to our economic share of (or equity interest in) the receivables that we manage for our equity-method investees; and (4) removal of our minority interest holders’ interests in the managed receivables underlying our GAAP consolidated results.

The historical period-end and average managed receivables data (as well as delinquency and charge off statistics) that follow within this section exclude some receivables associated with accounts in late delinquency status in sellers’ hands as of the dates of our acquisitions of the receivables or interests therein. Pursuant to this treatment, the only activity within the following statistical data associated with these excluded accounts are recoveries, which we include within the numerator of the other income ratio computation, as well as the costs of pursuing these recoveries, which we include within the numerator of the operating ratio computation. As of June 30, 2007, no accounts fell into this category of excluded accounts.

We typically have purchased credit card receivables portfolios at substantial discounts. All or some portion of each acquisition discount is related to the credit quality of the acquired receivables, which we calculate as the expected future net charge offs of pre-acquisition receivables balances (i.e., those receivables that existed at the acquisition date). This credit quality discount is used to offset these pre-acquisition receivables net charge offs as they occur over the life of the portfolio. We refer to the balance of the discount for each purchase not needed for credit quality as accretable yield, which we accrete into net interest margin using the interest method over the estimated life of each acquired portfolio. As of the close of each financial reporting period, we evaluate the appropriateness of the credit quality discount component of our acquisition discount and the accretable yield component of our acquisition discount based on actual and projected future results.

Asset Quality

Our delinquency and charge off data at any point in time reflect the credit performance of our managed receivables. The average age of our credit card accounts, the timing of portfolio purchases, the success of our collection and recovery efforts and general economic conditions all affect our delinquency and charge off rates. The average age of our credit card receivables portfolio also affects the stability of our delinquency and loss rates. We consider the delinquency and charge off data reflected herein in determining our allowance for uncollectible loans and fees receivable with respect to our loans and fees receivable, net on our condensed consolidated balance sheets, as well as the valuation of our retained interests in credit card receivables securitized which is a component of securitized earning assets on our condensed consolidated balance sheets. As we charge off receivables, we reflect the charge offs of non-securitized receivables within our provision for loan losses, and we reflect the charge offs of securitized receivables as an offset in determining (loss on) income from retained interests in credit card receivables securitized within fees and related income on securitized earning assets on our condensed consolidated statements of operations.

Late in the third quarter and continuing into the fourth quarter of 2006, we discontinued our practice of billing finance charges and fees on credit card accounts that become over 90 days delinquent. Prior to this change, our policy was to bill finance charges and fees on all credit card accounts, except in limited circumstances, until we charged off the account and all related receivables, finance charges and other fees. In such prior periods, however, we excluded from our GAAP income and gross yield, net interest margin and other income ratio managed receivables data the finance charge and fee income on all significantly delinquent on-balance-sheet credit card receivables for which we believed that collectibility was significantly in doubt on the date of billing. As such, managed receivables charge-off data associated with our on-balance-sheet credit card receivables were largely unaffected by our billing practice change. This change in billing practice has affected, however, our securitized off-balance-sheet managed receivables data.

Our strategy for managing delinquency and receivables losses consists of account management throughout the customer relationship. This strategy includes credit line management and pricing based on the risks of the credit card accounts.

Delinquencies. Delinquencies have the potential to impact net income in the form of net credit losses. Delinquencies are also costly in terms of the personnel and resources dedicated to resolving them. We intend for the account management strategies that we use on our portfolio to manage and, to the extent possible, reduce the higher delinquency rates that can be expected in a managed portfolio like ours. These account management strategies include conservative credit line management, purging of inactive accounts and collection strategies (as described under the heading “How Do We Collect from Our Customers?” in “Item 1. Business” of our Annual Report on Form 10-K for the year ended December 31, 2006) intended to optimize the effective account-to-collector ratio across delinquency buckets. We measure the success of these efforts by measuring delinquency rates. These rates exclude accounts that have been charged off.

The following table presents the delinquency trends (dollars in thousands; percentages of total) for our managed receivabes, including: (1) all of the credit card receivables underlying the securitizations by our consolidated subsidiaries (adjusted to exclude the receivables associated with minority interest holders’ equity in our majority-owned consolidated subsidiaries); (2) our respective 61.25%, 33.3% and 47.5% shares of the receivables that we manage on behalf of our equity-method investees; and (3) all non-securitized credit card receivables except for those associated with our Investment in Previously Charged-Off receivables segment’s balance transfer program ($956.8 million face amount of receivables at June 30, 2007):


	At or for the three months ended
	2007						2006												2005
	Jun. 30			Mar. 31			Dec. 31			Sep. 30			Jun. 30			Mar. 31			Dec. 31			Sep. 30
Period-end managed receivables	$	3,501,413		$	2,525,856		$	2,599,477		$	2,544,797		$	2,472,122		$	2,351,667		$	2,317,751		$	2,230,108
Period-end managed accounts		4,756			3,797			3,700			3,611			3,502			3,414			3,248			3,039
Receivables delinquent:
30 to 59 days past due	$	162,107		$	104,051		$	121,149		$	119,432		$	115,441		$	84,081		$	93,583		$	82,070
60 to 89 days past due		153,488			91,156			101,615			102,920			89,164			71,213			68,531			66,287
90 or more days past due		336,958			258,918			277,896			269,752			206,234			184,693			156,414			158,161

Total 30 or more days past due	$	652,553		$	454,125		$	500,660		$	492,104		$	410,839		$	339,987		$	318,528		$	306,518

Total 60 or more days past due	$	490,446		$	350,074		$	379,511		$	372,672		$	295,398		$	255,906		$	224,945		$	224,448

Receivables delinquent as % of period-end loans:
30 to 59 days past due		4.6	%		4.1	%		4.7	%		4.7	%		4.7	%		3.6	%		4.0	%		3.7	%
60 to 89 days past due		4.4	%		3.6	%		3.9	%		4.0	%		3.6	%		3.0	%		3.0	%		3.0	%
90 or more days past due		9.6	%		10.3	%		10.7	%		10.6	%		8.3	%		7.9	%		6.7	%		7.1	%

Total 30 or more days past due		18.6	%		18.0	%		19.3	%		19.3	%		16.6	%		14.5	%		13.7	%		13.8	%

Total 60 or more days past due		14.0	%		13.9	%		14.6	%		14.6	%		11.9	%		10.9	%		9.7	%		10.1	%

We have experienced a trend-line of generally increasing delinquencies over the past 8 quarters as noted in the above table, predominantly attributable to a mix change resulting from disproportionate growth in our largely fee-based credit card offerings to consumers at the lower end of the FICO scoring range, the receivables of which experience greater delinquency and charge-off levels than we experience with respect to our other credit card receivables. As these receivables underlying our largely fee-based credit card offerings to consumers at the lower end of the FICO scoring range become a larger component of our overall managed receivables balance, this mix change tends to cause further trending increases in our overall delinquency and charge-off levels. Nevertheless, we believe that the heightened delinquency and charge-off levels associated with our largely fee-based credit card offerings to consumers at the lower end of the FICO scoring range are reasonable based on the relative returns offered.

Because of seasonality factors, the most relevant comparison in the above table is the comparison of our delinquency levels year over year between June 30, 2006 and June 30, 2007; our 30-plus day delinquencies have increased 200 basis points and our 60-plus day delinquencies have increased 210 basis points over June 30, 2006 levels. Factors relevant to an analysis of these increases include:

•

The effects of the aforementioned change in the mix of our managed receivables (i.e., with a greater and increasing percentage of our managed receivables being comprised of those associated with our largely fee-based credit card offerings to consumers at the lower end of the FICO scoring range for which delinquencies and charge-off levels are much higher than for many of our other upper-tier and near-prime credit card offerings) on delinquencies was significantly muted in the second quarter of 2007 by our UK Portfolio acquisition, the receivables of which bear delinquencies significantly below the delinquency levels of our receivables associated with our largely fee-based credit card offerings to consumers at the lower end of the FICO scoring range—that is to say that the UK Portfolio acquisition had the effect of depressing an otherwise expected significant increase in delinquencies associated with our mix change toward a greater percentage of our receivables being comprised of those associated with our largely fee-based credit card offerings to consumers at the lower end of the FICO scoring range.

•

Delinquencies for our acquired UK Portfolio run several hundred basis points higher than delinquency levels we typically experience for our other upper-tier and near-prime credit card receivables, thereby also contributing to the delinquency increases between June 30, 2006 and June 30, 2007.

•

Disregarding the effects on our delinquencies of our acquired UK Portfolio and our mix change toward a greater proportion of our credit card receivables being comprised of those receivables associated with our largely fee-based credit card offerings to consumers at the lower end of the FICO scoring range, we remain pleased with the overall delinquency levels that we are seeing for our other credit card receivables; while certain of our receivables show delinquency rate declines relative to June 30, 2006 levels, overall levels of delinquencies for our other credit card receivables are up somewhat from June 30, 2006 in part associated with changes that we have made to some of our collection programs in response to discussions with the FDIC and our issuing bank partners concerning the effects of some of our historic collection programs on negative amortization.

•

The fourth quarter 2006 implementation of our billing change under which we no longer bill finance charges and fees on credit card accounts once they become over 90 days delinquent accounts has helped to reduce the level of delinquency increases since June 30, 2006.

As we liquidate our UK Portfolio and continue to grow the receivables associated with our largely fee-based credit card offerings to consumers at the lower end of the FICO scoring range at likely a greater growth rate than for the receivables associated with our upper-tier or near-prime offerings, we expect to experience a continuing trend of increasing delinquencies for the foreseeable future. Nevertheless, based on our analyses of vintage data, we continue to be pleased with the overall credit quality of our managed receivables, including those underlying our largely fee-based credit card offerings to consumers at the lower end of the FICO scoring range.

Charge offs. We generally charge off credit card receivables when they become contractually 180 days past due or within 30 days of notification and confirmation of a customer’s bankruptcy or death. However, if a cardholder makes a payment greater than or equal to two minimum payments within a month of the charge off date, we may reconsider whether charge off status remains appropriate. Additionally, in some cases of death, receivables are not charged off if, with respect to the deceased customer’s account, there is a surviving, contractually liable individual or an estate large enough to pay the debt in full.

The following table presents charge-off and other data (dollars in thousands; percentages annualized) for: (1) all of the credit card receivables underlying the securitizations by our consolidated subsidiaries (adjusted to exclude the receivables associated with minority interest holders’ equity in our majority-owned consolidated subsidiaries); (2) our respective 61.25%, 33.3% and 47.5% shares of the receivables that we manage on behalf of our equity-method investees; and (3) all non-securitized credit card receivables except for those associated with our Investment in Previously Charged-Off receivables segment’s balance transfer program ($956.8 million face amount of receivables at June 30, 2007):


	For the three months ended
	2007						2006												2005
	Jun. 30			Mar. 31			Dec. 31			Sep. 30			Jun. 30			Mar. 31			Dec. 31			Sep. 30
Average managed receivables	$	3,419,192		$	2,576,300		$	2,557,897		$	2,512,066		$	2,420,272		$	2,341,712		$	2,256,994		$	2,211,547
Gross yield ratio		28.6	%		28.8	%		32.9	%		35.3	%		32.6	%		32.9	%		31.1	%		30.2	%
Combined gross charge offs	$	295,341		$	222,805		$	227,869		$	196,697		$	173,709		$	129,111		$	162,917		$	120,989
Net charge offs	$	143,816		$	86,067		$	76,384		$	64,773		$	57,572		$	47,571		$	75,708		$	58,473
Adjusted charge offs	$	81,237		$	84,201		$	68,377		$	59,642		$	51,225		$	39,344		$	62,078		$	42,463
Combined gross charge off ratio		34.6	%		34.6	%		35.6	%		31.3	%		28.7	%		22.1	%		28.9	%		21.9	%
Net charge off ratio		16.8	%		13.4	%		11.9	%		10.3	%		9.5	%		8.1	%		13.4	%		10.6	%
Adjusted charge off ratio		9.5	%		13.1	%		10.7	%		9.5	%		8.5	%		6.7	%		11.0	%		7.7	%
Net interest margin		19.0	%		17.9	%		22.6	%		25.6	%		23.7	%		25.2	%		22.6	%		23.3	%
Other income ratio		8.5	%		10.6	%		11.2	%		10.3	%		12.4	%		14.9	%		12.4	%		10.4	%
Operating ratio		10.5	%		12.0	%		13.7	%		11.2	%		10.0	%		10.7	%		12.9	%		9.0	%

Through the third quarter of 2006 we experienced a general trend-line of improving gross yield ratios, net interest margin and other income ratios due to the change in mix of our managed receivables toward a greater proportion of them being comprised of receivables associated with our largely fee-based credit card offerings to consumers at the lower end of the FICO scoring range; these receivables have significantly higher delinquency rates and late fee and over-limit assessments than do our other originated and purchased receivables portfolios, which overshadow the fact that these offerings bear lower APRs than our other credit card product offerings. This trend was largely reversed in the fourth quarter of 2006, and these ratios were significantly depressed in the first and second quarter of 2007 by one or more of the following factors:

•

Our late third quarter 2006 decision to discontinue finance charge and fee billings on credit card accounts that become over 90 days delinquent and our transitional implementation of that decision in the fourth quarter of 2006 has reduced our ongoing gross yield ratio as we no longer bill finance charges and fees on any accounts over 90 days delinquent. This billing practice change had only a modest effect on our net interest margin and our other income ratio in the second quarter of 2007 and is expected to have a modest effect on these ratios in future quarters; these effects are modest because a large percentage of finance charge and fee billings on 90-day plus delinquent accounts ultimately charge off and because we net such finance charge and fee charge offs against our net interest margin and other income ratio as they occur. The billing practice change did, however, profoundly reduce our fourth quarter of 2006 and first quarter of 2007 net interest margins and other income ratios; in these two quarters, we experienced a mismatch between gross finance charge and fee billings and charge offs of finance charges and fee because charge offs of finance charges and fees netted against these ratios included balances attributable to finance charges and fees assessed on accounts that became over 90 days delinquent prior to our change to discontinue these billings.

•

Marketing volume-based volatility for the receivables associated with our largely fee-based credit card offerings to consumers at the lower end of the FICO scoring range caused a peak in delinquencies at the end of the third and fourth quarters of 2006 and higher charge-off levels in the fourth quarter of 2006 and first quarter of 2007. This class of receivables reaches peak charge off on a vintage basis between approximately eight to nine months after card activation, and we experienced marketing-based volatility in our volumes associated with this product offering as we ramped up its growth rates significantly late in 2005 and in the first half of 2006. As such, we experienced a heightened level of charge offs and delinquencies for this class of receivables in both the fourth quarter of 2006 and the first quarter of 2007 as significant vintages of receivables reached their charge-off peak during these quarters. As growth rates for receivables associated with our largely fee-based credit card offerings to consumers at the lower end of the FICO scoring range normalize and as our asset base for this pool of receivables grows, , the impact of expected delinquencies and charge offs should be less volatile. The higher charge offs cited here depressed our net interest margin (which is net of finance charge and late fee charge offs) and our other income ratio (which is net of other fee charge offs) in both the fourth quarter of 2006 and the first quarter of 2007 with some modest residual impact on our second quarter of 2007.

•

Our April 4, 2007 acquisition of our UK Portfolio significantly muted the gross yield ratio, net interest margin and other income ratio relative to the ratios we otherwise would have experienced with our ongoing mix change toward a greater percentage of our managed receivables being comprised of those associated with our largely fee-based credit card offerings to consumers at the lower end of the FICO scoring range. While ratios associated with the UK Portfolio are performing as expected, the yields associated with these card offerings are much lower than those of our largely fee-based credit card offerings to consumers at the lower end of the FICO scoring range and are more typical of those experienced within our originated portfolio master trust.

•

We experienced better than expected early delinquency bucket roll rates and lower than expected delinquencies in the first quarter of 2007, which significantly reduced our expected late fee assessments, thereby resulting in a lower first quarter of 2007 gross yield ratio and net interest margin. This phenomenon also cause some marginal depression in our other income ratio as over-limit billings included in the other income ratio are typically higher for delinquent cardholder accounts. While adversely affecting first quarter 2007 income, the lower than expected first quarter 2007 delinquencies are expected to result in lower charge offs for us in predominantly the third quarter of this year.

•

Our gross yield, net interest margin and other income ratios have been affected by the ongoing investigations by the FDIC and FTC. Throughout the course of the investigations and, in particular, in the first quarter of 2007, we have made certain account management decisions in deference to our relationships with our issuing bank partners. For example, in the first quarter of 2007, we systematically issued certain late fee and over-limit fee billing credits to 85,000 customer accounts related to the potential for customer confusion over a change we made to their minimum payment requirements.

•

As noted previously, in the second quarter of 2007, we experienced losses of $28.5 million (realized losses of $18.2 million and unrealized losses of $10.3 million) on investments in debt securities – principally related to investments in CDOs and CMOs backed by mortgages as well as trading positions in an ABX index. Gains and losses on these investment activities have historically been reflected in our Credit Cards segment’s other income ratio, hence the significant reduction in the other income ratio in the second quarter of 2007.

Other factors relevant to an analysis of the above table include:

•

Higher trending quarterly gross yield ratios through the third quarter of 2006 correlate with (1) interest rate increases associated with cardholder accounts, such rates being indexed to prime rates that increased along with Federal Reserve Board rate increases during that time period, (2) higher quarterly delinquency rates (and hence higher quarterly late fee billings) experienced in the latter half of 2006 for the receivables within our originated portfolio master trust and purchased portfolios, and most significantly and (3) higher trending quarterly delinquency rates (and hence higher quarterly late fee billings) associated with our change in receivables mix toward a greater percentage of our receivables being comprised of those receivables associated with our largely fee-based credit card offerings to consumers at the lower end of the FICO scoring range. As noted previously, these receivables experience greater delinquency and charge-off levels than we experience with respect to our other credit card receivables.

•

While our charge off levels and ratios have recently benefited (particularly throughout 2006) from our marketing of new accounts underlying our originated portfolio master trust, the favorable effects of new account additions have been offset by growth in our largely fee-based credit card offerings to consumers at the lower end of the FICO scoring range, the receivables of which experience (a) greater gross charge off levels than we experience within our originated portfolio master trust and with respect to any of our acquired receivables portfolios, and (b) adjusted net charge off rates higher than with those we experience within our originated portfolio master trust and with respect to our acquired receivables portfolios.

•

Our April 4, 2007 UK Portfolio acquisition caused a higher second quarter 2007 combined gross charge off ratio and net charge off ratio than we would have experienced absent the acquisition. A significant number of receivables within the UK Portfolio were in a late stage of delinquency at the time of our acquisition and have charged off in the months following the close of our acquisition. These charge offs were substantially offset by our purchase price (or “credit quality”) discounts on the UK Portfolio, which led to a lower adjusted charge off ratio than we have experienced in recent prior quarters. As our credit quality discount is used over the next several quarters and as we begin to experience charge offs of new UK Portfolio cardholder purchases that we have funded sterling for sterling with no discount, we expect that our adjusted charge off ratio will climb and that the gap between our net charge off ratio and adjusted charge off ratio will narrow as is typical following our portfolio acquisitions. Also typical of our prior acquisitions, we expect to derive improved charge off performance (i.e., lower charge offs) from our account management actions with respect to the UK Portfolio, and we are very encouraged by the early improvements we have seen compared to the seller’s historical experiences with the portfolio.

•

The rush of consumers to file for bankruptcy prior to the October 2005 effective date of the new bankruptcy laws caused unusually high fourth quarter 2005 charge offs that exceeded our expectations coming into that fourth quarter. This rush of bankruptcy filings served to accelerate certain charge offs that we otherwise would have experienced in 2006; as such, we experienced significantly lower bankruptcy and other delinquency charge offs than normal during the first quarter of 2006. Bankruptcy-related charge offs during the subsequent quarters of 2006 also were somewhat lower than normal as well due to the October 2005 bankruptcy law changes, but the effects of these lower bankruptcy-related charge offs were and continue to be offset by increased charge offs associated with our largely fee-based credit card offerings to consumers at the lower end of the FICO scoring range.

•

Given the shorter life cycle of many of the accounts underlying the receivables associated with our largely fee-based credit card offerings to consumers at the lower end of the FICO scoring range, we can experience greater volatility in our charge offs depending on the timing and relative volumes of quarterly account originations underlying these receivables in the months preceding their charge off. As noted above, we experienced significant adverse effects of this volatility in the fourth quarter of 2006 and first quarter of 2007 as a significant level of high volume vintages reached peak charge-off vintage during these two quarters. Not only did these peak charge-off vintages adversely affect our net interest margin and other income ratio as noted above, but they also significantly increased our net charge off and adjusted charge off ratios in the fourth quarter of 2006 and to a much greater degree in the first quarter of 2007.

•

Our net interest margin declined between the first and second quarter of 2006 principally due to (1) diminished second quarter 2006 beneficial effects of the October 2005 bankruptcy law changes on finance charge and late fee charge offs, (2) increased interest costs on higher balances drawn on our structured financing facilities secured by those receivables associated with our largely fee-based credit card offerings to consumers at the lower end of the FICO scoring range and (3) heightened levels of finance charge and late fee non-accruals into our net interest margin associated with greater amounts of delinquent receivables underlying our largely fee-based credit card offerings to consumers at the lower end of the FICO scoring range, which we marketed heavily in the last two quarters of 2005. This general decline reversed in the third quarter of 2006 (1) in part because the percentage of managed receivables against which we have leverage and incur interest costs as an offset to our net interest margin decreased in the third quarter and (2) in part due to lower levels of finance charge and late fee non-accruals into our net interest margin in the third quarter given normalization of delinquencies for our largely fee-based credit card offerings to consumers at the lower end of the FICO scoring range coming into that particular quarter.

•

Our general trend-line of improving net interest margins (through the third quarter of 2006) correlates with improved gross yield ratios during that time period. Additionally, the October 2005 bankruptcy law changes discussed above resulted in significantly diminished first quarter of 2006 and somewhat lower second and third quarter of 2006 bankruptcy charge offs—thereby favorably influencing our net interest margins during those quarters.

•

Growth in our largely fee-based credit card offerings to consumers at the lower end of the FICO scoring range accounts for much of the trending increase in the combined gross charge off ratio throughout 2006 and into 2007 relative to the respective quarters of 2005 and 2006, notwithstanding that the net charge off ratio actually declined slightly in the third and fourth quarters of 2006 relative to the third and fourth quarters of 2005. The mix change in our receivables based on disproportionately larger growth in our largely fee-based credit card offerings to consumers at the lower end of the FICO scoring range can be expected to increase our combined gross charge off ratios; however, the fact that the ratio of principal receivables to total receivables for this category of receivables is smaller than for our other originated and purchased credit card receivables means that the effects of the mix change are not as great for our net charge off and adjusted charge off ratios as they are for our combined gross charge off ratio.

•

While some of the significant rise in the combined gross charge off ratio between the third quarter of 2006 and the fourth quarter of 2006 can be explained by our receivables mix change as discussed previously, much of this increase is attributable to marketing volume-based volatility for our largely fee-based credit card offerings to consumers at the lower end of the FICO scoring range. Given the shorter life cycle of many of the accounts underlying the receivables associated with our largely fee-based credit card offerings to consumers at the lower end of the FICO scoring range, we can experience greater volatility in our combined gross charge off statistics depending on the timing and relative volumes of quarterly account originations underlying these receivables in the months preceding their charge off. We experienced adverse effects of this volatility in the fourth quarter of 2006 and the first quarter of 2007 as a significant level of high volume vintages flowed through to peak charge-off vintage during these two quarters.

•

Credit quality improvements within our portfolios during 2006 and the pull-through effects of the October 2005 bankruptcy law changes discussed above contributed to lower net charge off ratios when comparing 2006 quarterly data to 2005 quarterly data. The change in receivables mix toward greater percentages of our receivables being comprised of those receivables associated with our largely fee-based credit card offerings to consumers at the lower end of the FICO scoring range has adversely affected our net charge off ratios throughout 2006 and in 2007 as these offerings experience higher principal charge offs and principal charge off ratios than we generally experience for our other originated and purchased credit card receivables. The magnitude of these adverse effects on our net charge off ratio increased in the fourth quarter of 2006 and into the first quarter of 2007 as a significant level of high volume vintages flowed through to peak charge-off vintage during these two quarters.

•

Prior to our second quarter 2007 UK Portfolio acquisition, our most recent purchase of a credit card receivables portfolio purchased at a discount to the face amount of the portfolio’s receivables was in the first quarter of 2005. The gap between our net charge off ratio and our adjusted charge off ratio generally narrowed throughout the 2005 and 2006 quarters subsequent to that first quarter 2005 purchase. As each quarter passes from our most recent purchase of a portfolio purchased at a discount to the face amount of the portfolio’s receivables, there is a greater percentage of our total managed receivables and charge offs thereon that is comprised of receivables that we have originated at par rather than purchased at discounts off of their par value; this phenomenon causes the gap between our net charge offs and adjusted charge offs (and their associated ratios) to narrow with each such passing quarter.

•

Our decision in the third quarter of 2006 to discontinue billing finance charges and fees on credit card accounts that become over 90 days past due was in part in response to prior discussions with the FDIC concerning negative amortization and minimum payments. Leading to this decision, we also experimented with potential revisions to our over-limit fee billing practices, which had the effect of depressing our other income ratio in the third quarter relative to its level in prior quarters. While we have not ruled out future changes to our over-limit fee billing practices, some of which, if implemented, would adversely affect our other income ratio, we concluded late in the third quarter that the discontinuation of billing finance charges and fees on credit card accounts that become over 90 days past due was an appropriate step in response to concerns regarding negative amortization.

•

While the fulfillment of our commitments under the assurance agreement with the New York Attorney General contributed to the increase in our operating ratio in the second quarter of 2006, the general trending increase in 2006 and 2007 operating ratios compared to similar quarter 2005 operating ratios is principally associated with a mix change in our receivables toward lower balance receivables associated with our largely fee-based credit card offerings to consumers at the lower end of the FICO scoring range. This disproportionately growing category of receivables is comprised of accounts with smaller receivables balances than those accounts underlying our originated portfolio master trust and acquired portfolios. The addition of these many new accounts with small receivables balances means many more customer service interactions, and hence higher costs as a percentage of average managed receivables, than we have historically experienced with our originated portfolio master trust and

acquired portfolios’ receivables. Also throughout 2006 and into 2007, we have experienced heightened legal, regulatory and compliance efforts and costs associated with the New York Attorney General, FDIC and FTC investigations and our establishment of an expanded number of issuing bank relationships and new product offerings. Our expanding number of issuing bank relationships and new product lines also has contributed to higher credit card servicing costs. We summarize other factors influencing a shift to higher operating ratio levels in the explanation of total other operating expense within the “Results of Operations” section of this Management’s Discussion and Analysis of Financial Condition and Results of Operations.

•

Our fourth quarter 2006 and 2005 operating ratios bear the respective effects of a $15.0 million charitable contribution and a $12.0 million charitable contribution.

Some of our future expectations regarding the financial, operating and statistical data noted in the above table include:

•

Our acquisition of approximately £490 million ($970 million) in face amount of UK Portfolio receivables at a discount to face is expected to continue to have profound effects on the above financial, operating and statistical data. Considering the effects of this acquisition (coupled with the mix change dynamics for our largely fee-based credit card offerings to consumers at the lower end of the FICO scoring range), we expect to see a gradually increasing adjusted charge off ratio after the third quarter of 2007 as our net charge off ratio and adjusted charge off ratio narrows with the charge off of cardholder purchases that we have funded sterling for sterling since our acquisition of the UK Portfolio. We also expect a lower operating ratio than we have experienced in recent prior quarters based on the fact that UK Portfolio is comprised of accounts with larger balance receivables than those receivables associated with our largely fee-based credit card offerings to consumers at the lower end of the FICO scoring range. This operation ratio trend will reverse over time and our operating ratio will again rise as the UK Portfolio liquidates and as we continue to disproportionately grow our receivables associated with our largely fee-based credit card offerings to consumers at the lower end of the FICO scoring range.

•

We expect to see a permanently lower gross yield ratio and combined gross charge offs ratio (all other factors being equal) associated with the now complete implementation of our decision to cease billing finance charges and fees on credit card accounts that become over 90 days past due.

•

Absent the income effects of further potential volatility and dislocation which may affect our investments in debt securities (for which we are unable to make any accurate predictions at this time), we expect our net interest margins and other income ratios to show improvement and trending increases in the third and fourth quarters of 2007 based on growth in our receivables associated with our largely fee-based credit card offerings to consumers at the lower end of the FICO scoring range.

Investments in Previously Charged-off Receivables Segment

The following table shows a roll-forward (in thousands) of our investments in previously charged-off receivables activities:


	Three Months Ended June 30, 2007			Six Months Ended June 30, 2007
Unrecovered balance at beginning of period	$	13,750		$	12,871
Acquisitions of defaulted accounts		11,038			23,854
Cash collections		(23,008	)		(47,393	)
Accretion of deferred revenue associated with Encore forward flow contract		(4,158	)		(8,894	)
Cost-recovery method income recognized on defaulted accounts (included as a component of fees and related income on non-securitized earning assets on our condensed consolidated statements of operations)		15,735			32,919

Balance at the June 30, 2007	$	13,357		$	13,357

Estimated remaining collections (“ERC”)	$	67,368		$	67,368

The above table reflects our use of the cost recovery method of accounting for our investments in previously charged-off receivables. Under this method, we establish static pools consisting of homogenous accounts and receivables for each portfolio acquisition. Once we establish a static pool, we do not change the receivables within the pool. We record each static pool at cost and account for it as a single unit for payment application and income recognition purposes. Under the cost recovery method, we do not recognize income associated with a particular portfolio until cash collections have exceeded the investment.

Additionally, until such time as cash collected for a particular portfolio exceeds our investment in the portfolio, we will incur commission costs and other internal and external servicing costs associated with the cash collections on the portfolio investment that we will charge as an operating expense without any offsetting income amounts.

Previously charged-off receivables held as of June 30, 2007 are principally comprised of those associated with Chapter 13 Bankruptcies and those acquired through our balance transfer program, which we expect to continue to service and grow through future acquisitions. We expect our Investments in Previously Charged-Off Receivables segment to continue its acquisitions and servicing of Chapter 13 Bankruptcies, its acquisitions through its balance transfer program and other previously charged-off receivables activities throughout 2007 and beyond. Such activities will include its acquisition of previously charged-off receivables from the securitization trusts that we service and from us and its sales of these charge offs for a fixed sales price under its five-year forward flow contract with Encore.

We generally estimate the life of each pool of charged-off receivables that we typically acquire to be between 24 and 36 months for normal delinquency charged-off accounts and approximately 60 months for Chapter 13 Bankruptcies. We anticipate collecting approximately 43.5% of the ERC of the existing accounts over the next twelve months, with the balance to be collected thereafter. Our acquisition of charged-off accounts through our balance transfer program results in receivables with a higher than typical expected collectible balance. As the composition of our defaulted accounts includes more of this type of receivables, the resulting estimated remaining collectible portion per dollar invested is expected to increase.

During the three and six months ended June 30, 2007, our Investments in Previously Charged-off Receivables segment’s pre-tax income increased 64.5% and 85.9%, respectively, compared with the same periods in 2006, reflecting increased volumes of charged off accounts sold under its 5-year forward flow agreement with Encore and continued growth in charged-off receivables purchases through its balance transfer and Chapter 13 Bankruptcy purchasing niches. We expect our Investments in Previously Charged-off Receivables segment to grow its revenues and income at a more modest rate throughout 2007 as its purchase and sale activities under the Encore forward flow agreement are expected to remain relatively flat, while its balance transfer and chapter 13 bankruptcy activities are expected to grow rapidly for the foreseeable future. During the past three quarters, Jefferson Capital has modestly increased its purchases of third-party normal delinquency charge offs (which are not connected to the Encore forward flow agreement) as it has seen pricing for certain charge-off portfolios become more attractive. Any significant portfolio acquisition of third-party normal delinquency charge offs could have a short-term negative impact on Jefferson Capital’s income as operating expenses would be incurred under its cost recovery accounting method, while revenue recognition would be delayed until complete recovery of the acquired portfolio’s basis.

Retail Micro-Loans Segment

The Retail Micro-Loans segment consists primarily of a network of storefront locations that, depending on the location, provide some or all of the following products or services: (a) small-denomination, short-term, unsecured cash advances that are typically due on the customer’s next payday; (b) installment loan and other credit products; and (c) money transfer and other financial services. As of June 30, 2007, our Retail Micro-Loans segment subsidiaries operated a total of 487 storefront locations in 16 states as well as the United Kingdom.

In most of the states in which they have historically operated, our Retail Micro-Loans subsidiaries have made cash advances and other micro-loans directly to customers. However, in four states (Arkansas, Florida, North Carolina and West Virginia), they previously acted only as a processing and servicing agent for a state-chartered, FDIC-insured bank that issued loans to the customers pursuant to the authority of the laws of the state in which the bank was located and federal interstate banking laws, regulations and guidelines. During February 2006, we learned from our bank partner that the FDIC had effectively asked insured financial institutions to cease deferred presentment and installment micro-loan activities conducted through processing and servicing agents. In response to the FDIC’s actions, our subsidiaries began to evaluate strategic alternatives within these states, including the possibility of switching to a direct lending model in compliance with the regulatory frameworks within each of the four states, or, alternatively, closing certain branch locations within the four affected states. In addition, effective March 11, 2006, our North Carolina Retail Micro-Loans subsidiary agreed with the Attorney General of the State of North Carolina to cease its traditional marketing and servicing of deferred-presentment and installment micro-loans in North Carolina. As a result of this agreement, our North Carolina Retail Micro-Loans subsidiary began pursuing a direct lending model in North Carolina in compliance with existing State regulatory frameworks, as well as closing several North Carolina locations. Subsequently, during the second quarter of 2006, our subsidiaries decided to abandon the pursuit of these alternative lending models in both North Carolina and West Virginia, as they could not see the alternative lending products as providing acceptable long-term returns for the business. By the end of the third quarter of 2006, our North Carolina subsidiary had closed all of its original 52 branch locations and our West Virginia subsidiary had closed all of its original 11 branch locations. In Arkansas, during the second quarter of 2006, our subsidiary began offering loans directly to customers under an alternative lending model, in compliance with state law. This alternative lending model has been well-received by our customers, and, during the third quarter of 2006, our subsidiary succeeded in returning its Arkansas operations to profitability. In Florida, the fourth state in which a subsidiary previously processed and serviced micro-loans on behalf of our bank partner, our subsidiary began offering loans directly to customers during the fourth quarter of 2006, and we expect our Florida subsidiary to return to profitability during 2007.

During the three and six months ended June 30, 2007, our subsidiaries opened 19 and 29 branch locations, respectively, including 25 locations in Texas, 3 locations in the United Kingdom and 1 location in Louisiana in the six months ended June 30, 2007. Our subsidiaries plan to continue expanding store operations in Texas and the United Kingdom during the remainder of 2007. During the three and six months ended June 30, 2007, our subsidiaries closed 1 and 17 branch locations, respectively. During the first quarter of 2007, one of our subsidiaries closed all 7 of our branch locations in Virginia. The decision to close all of its Virginia locations was driven by the exit from North Carolina and West Virginia, which left Virginia branches isolated geographically and made it more difficult to scale the Virginia operations toward profitability. As of June 30, 2007, one of our subsidiaries operated 45 locations in the state of Texas, where our Texas micro-lending subsidiary offers and provides credit services under a credit services organization (“CSO”) program to customers who apply for micro-loans offered by NCP Finance Limited Partnership, an independent third-party lender. In addition to assisting customers with loan applications, if the customer is approved for and accepts the loan, our Texas subsidiary provides a letter of credit to the third-party lender to secure the customer’s payment obligations in the event of a customer default. The customer is charged a fee under the CSO program (“CSO fees”) for the provision of these credit services. In addition to offering credit services in our Texas retail branch locations, our Texas subsidiary also began testing the marketing of credit services via the Internet to Texas residents during the third quarter of 2006. Though representing a different marketing channel, these credit services are offered under the same CSO program as the retail branch locations.

During the first half of 2006, we began exploring potential international market opportunities for our Retail Micro-Loans segment. As part of this effort, we focused on potential opportunities in the United Kingdom, where we believe customers will be receptive to the kind of “multi-line” financial centers that have characterized our recent store expansion strategy in the United States. As of June 30, 2007, our United Kingdom subsidiary had 4 de novo stores operating in the greater London area.

Financial, operating and statistical metrics for our Retail Micro-Loans segment are detailed (dollars in thousands) in the following tables.


	For the six months ended June 30,
	2007		2006
Beginning number of locations	475		509
Opened locations	29		26
Closed locations	(17	)	(23	)

Ending locations	487		512


	For the three months ended June 30,					For the six months ended June 30,
	2007		2006			2007		2006
Gross retail micro-loans fees (exclusive of processing and servicing revenues from FDIC-chartered bank)	$	28,333	$	21,504		$	54,496	$	42,443
Processing and servicing revenues from FDIC-chartered bank		—		1,780			—		5,515

Total gross revenues	$	28,333	$	23,284		$	54,496	$	47,958

Income (loss) before income taxes	$	2,669	$	(725	)	$	3,680	$	(17,764	)

Period end loans and fees receivable, gross	$	87,475	$	69,494		$	87,475	$	69,494

The loss before income taxes within our Retail Micro-Loans segment for the second quarter of 2006 reflects certain operating losses sustained through the branch closings in North Carolina and West Virginia and the transition of Arkansas and Florida branch locations to a direct lending model, as well as the write-off of certain intangible assets and impairment charges related to these operations ($1.6 million) and the incurrence of prepayment penalties and deferred loan cost write-offs in connection with early repayment of the Retail Mirco-Loans segment’s debt facilities in the second quarter of 2006. The loss before income taxes for the six months ended June 30, 2006 reflects certain impairment, indemnification, loan loss, and other charges of $17.1 million (including $10.5 million of associated goodwill impairment) primarily related to operating changes resulting from the FDIC’s actions in February 2006. While the FDIC’s February 2006 actions resulted in the losses cited above, we are pleased with the revenue growth evident in our core direct storefront micro-loan operations. We believe this growth demonstrates positive momentum and favorable operating trends in the core ongoing business of our Retail Micro-Loans segment. Throughout the remainder of 2007, we expect the new products that we have been rolling out under our multi-product line strategy to continue contributing to revenue growth within our Retail Micro-Loans segment, and we expect to see continued profitability improvement, both overall and on a per-store basis.

Auto Finance Segment

Our Auto Finance segment now includes a variety of auto sales and lending activities.

Our original platform, acquired in April 2005, consists of a nationwide network of pre-qualified auto dealers in the “Buy Here/Pay Here” used car business, from which our Auto Finance segment purchases auto loans at a discount or for which we service auto loans for a fee. We generate revenues on purchased loans through interest earned on the face value of the installment agreements combined with discounts on loans purchased. We generally earn discount income over the life of the applicable loan. Additionally, we generate revenues from servicing loans on behalf of dealers for a portion of actual collections and by providing back-up servicing for similar quality securitized assets. In the second quarter of 2006, we launched a new product, Dealer Equity Advance Loan (“DEAL”), whereby we earn interest income on loans made directly to dealers. In the DEAL program, the dealer maintains the responsibility to service the customer accounts securing the loan to the dealer. Also during the second quarter of 2006, we launched a contract custodial program to service smaller line of credit loan providers in the markets it services. We began a limited test launch of a second new product, Dealer Select Advance or DSA, in 2006, which continued into 2007. It is expected that this new product will see growth through the remainder of 2007 as it is rolled out in a general release. In addition to these offerings, we also form strategic alliances with aftermarket product and service providers in an effort to cross-sell to their existing customer base and are testing our ability to cross-sell other CompuCredit segment products to a select number of customers from within our existing customer base.

In January 2007, we acquired a 75% ownership interest in JRAS, a “Buy Here/Pay Here” dealer, for $3.3 million. Through the JRAS platform, we sell vehicles to consumers and provide the underlying financing associated with the vehicle sales. Customer purchases are financed for periods of time between 24 and 30 months and credit is approved and payments are received in each storefront. We currently retain all loans and servicing for all contracts. At acquisition date, our JRAS platform operated 4 retail locations in Georgia. As of June 30, 2007, JRAS had 5 retail locations, and it has opened 2 additional locations in July 2007. We intend to expand these operations over the next year.

We also acquired the assets of San Diego, California-based ACC in February 2007. In conjunction with this purchase, we also acquired a $195.0 million auto loan portfolio from Patelco Credit Union. These assets were originated and serviced by ACC on behalf of Patelco. The total purchase price paid for the two acquisitions was $168.5 million. ACC serves a consumer niche that, from a customer quality perspective, is slightly above the niche historically served by our Auto Finance segment. While we had historically acquired existing retail installment contracts directly from buy-here/pay-here dealers and small finance companies, ACC directly extends loans to consumers of predominantly franchise automobile dealerships.

Collectively, we serve 1,413 dealers through our Auto Finance segment in 45 states. Selected financial, operating and statistical data (dollars in thousands) for our Auto Finance segment are as follows:


	For the three months ended June 30,					For the six months ended June 30,
	2007			2006		2007			2006
Gross revenue from financing/servicing activities	$	18,089		$	13,431	$	37,223		$	25,152

Automotive sales gross margin	$	2,188		$	—	$	2,978		$	—

(Loss) income before income taxes	$	(3,063	)	$	3,187	$	(3,656	)	$	4,034

Period-end loans and fees receivable, gross	$	286,721		$	147,041	$	286,721		$	147,041

Number of automobiles sold		502			—		760			—

Number of loans held/serviced as of period end		50,698			44,399		50,698			44,399

Relative to comparable prior year and first quarter 2007 data, the above second quarter 2007 data reflect solid growth in our top-line revenues, gross loans and fees receivable, and loan origination activities. While our acquisition activities have obviously contributed to these growth trends, we are pleased with most of the origination activities within our Auto Finance segment. Our loan originations through franchised dealers and our loans underlying our own buy-here/pay-here auto dealerships have grown at a pace that has offset liquidations of the Patelco portfolio receivables. We continue to experience loan contractions, however, with respect to our loan purchase and lending activities to third-party buy-here/pay-here dealers.

Our second quarter and year-to-date 2007 losses relate in part to our continuing need to reduce overhead and expense levels with respect to our loan purchase and lending activities to third-party buy-here/pay-here dealers. Our Auto Finance segment management team has undertaken a series of expense reduction initiatives to right-size expense levels based on its lower

loans receivable levels in this area, and we expect to see further reductions associated with these and future initiatives throughout the remainder of 2007. The more significant of the contributions to our Auto Finance segment’s losses, however, are (a) fixed costs that we are now incurring within our franchised dealers lending operations and buy-here/pay-here auto dealerships as we ramp up these immature business activities and (b) high provisions for loan losses given the buildup of allowances for uncollectible loans and fees receivables associated with relatively high growth in auto loan originations.

We remain optimistic about our ability to grow our new platforms significantly throughout 2007 and beyond, our ability to integrate our various platform acquisitions together to the extent necessary to realize operating efficiencies in risk, collections, information technology and other infrastructure and overhead categories, and our potential to realize quarterly profits within the Auto Finance segment, potentially by the latter half of 2008 depending on loan growth levels and corresponding allowance for uncollectible loans and fees receivable build-up levels.

Other Segment

Our Other segment encompasses various activities that are start-up in nature. As reflected in the financial data for the Other segment within our segment data (see Note 3, “Segment Reporting,” to our condensed consolidated financial statements included herein), we have invested significantly in a variety of start-up businesses in keeping with our diversification strategy. Moreover, as with any start-up effort, there is testing that needs to occur as we work to refine our product offerings and businesses within our Other segment. For example, we have experimented in recent months with different underwriting processes and thresholds for a variety of Internet-based micro-loan products—this all in an effort to determine the right mix of marketing costs and systems costs versus first-pay defaults. Through our April 2007 acquisition of MEM, we now have a platform for the expansion of Internet-based micro-loan underwriting in the United Kingdom. MEM is the UK’s leading online provider of micro-loans, offering cash advances as its core product, as well as term loans and other financial services products including financing for mobile telephone handsets.

Additionally, our overall direction has shifted significantly over the past few years with respect to our stored-value card offering. Our customer responses to this product offering support our belief that “un-banked” consumers want the convenience and flexibility of a stored-value card. Nevertheless, the financial investments associated with our initial strategy of tying our technologies together with third-party retail partners proved too great relative to the revenue potential of this product offering. As such, we retooled our stored-value card offering to expand the utility of the product and to focus on distribution of this product as an adjunct to certain of our credit card offerings or as an offer to consumers who come to us through Internet and other marketing channels and who may not be in a situation that currently warrants our extending credit to them through one of our lending products. Our expectations are that we can learn about the income and spending patterns of these particular stored-value card customers so that we can graduate them into our credit products over time. We also continue to look at potential out-sourcing partnerships relative to this card offering to better align ourselves within the market and to further reduce costs within this area.

Beyond our shift in focus for our stored-value card offerings, we continue to develop an underwriting, servicing and collections platform that utilizes non-traditional processes to offer credit products directly to consumers. These techniques include the utilization of external databases other than the traditional credit bureaus, the application of proprietary scoring models built off of internal and external data attributes, proprietary application processing and approval methods and payment processing tools that currently are unique in the marketplace. We generally refer to these collective methods, models and processes as our Market Expansion Platform (or “MEP”), and we consider them proprietary in nature. To date (and after an extensive research and development effort), we have launched the Imagine MasterCard credit card product utilizing the MEP; we now include the costs and revenues associated with this product within our Credit Cards segment. The MEP has enabled us to expand the scope of consumers we can approve profitably for these credit card products beyond what we traditionally could approve using our credit bureau-oriented underwriting models. Customers acquired to date have lower average FICO scores than we see in our other credit card products, a very limited credit bureau history or no credit bureau history at all. The MEP also has allowed us to market our products on television, the Internet and through retail distribution at the point-of-sale, channels that until now have proven to be unsuccessful in generating large numbers of profitable credit card customers for us. Starting in the third quarter of last year, we began to utilize the MEP in connection with our installment lending activities, and we believe we can use it to enter other product lines, including retailer financing, auto lending and consumer receivables factoring, in the future.

Our Other segment also is using its technologies to underwrite, service and collect a variety of third-party consumer finance receivables. Through our dealer relationships and based on studies of asset quality that we performed over the past two years or so, we hope to be able to define and implement a profitable business model for the purchase of asset-secured consumer finance receivables such as loans secured by motorcycles, all terrain vehicles, personal watercraft and the like later this year. Also before the end of this year, we plan to roll out an on-line mall of consumer electronics and other products for which we will provide the underlying consumer financing and to sell and finance mobile phone handsets and market and finance underlying minutes usage by the customers who purchase these handsets.

In summary, through our Other segment activities and by employing our credit and underwriting knowledge and leveraging and improving upon an established technology infrastructure, we can continue to develop and test new credit delivery programs. We see tremendous opportunity to grow our lending businesses through the use of Internet lead generators and search engines, and we expect most of the activities supported by the Other segment to ultimately be profitable for us. As an example, our Other segment has been instrumental in our effort to marry the MEP underwriting technologies with credit card product offerings as discussed above. These product offerings are generating incremental profits for us within our Credit Cards segment, and we have reclassified costs initially incurred within the Other segment to our Credit Cards segment so as to reflect a consistent matching of costs and revenues for these new products within the Credit Cards segment.

The following table details (in thousands) the pre-tax losses that we have incurred for our major initiatives within the Other segment:


	For the three months ended June 30,						For the six months ended June 30,
	2007			2006			2007			2006
Stored-value card	$	(292	)	$	(2,536	)	$	(984	)	$	(6,496	)
Internet micro-loans		(1,137	)		(2,919	)		(3,222	)		(6,206	)
Third-party receivables servicing and asset-secured consumer finance receivables		(1,444	)		(1,932	)		(3,957	)		(4,675	)
Other		(1,292	)		(301	)		(3,650	)		(973	)

Total	$	(4,165	)	$	(7,688	)	$	(11,813	)	$	(18,350	)

Liquidity, Funding and Capital Resources

At June 30, 2007, we had $107.5 million in unrestricted cash. Because the characteristics of our assets and liabilities change, liquidity management is a dynamic process affected by the pricing and maturity of our assets and liabilities. We finance our business through cash flows from operations, asset-backed securitizations and the issuance of debt and equity:

•

During the six months ended June 30, 2007, we generated $482.0 million in cash flow from operations, compared to $179.1 million during the six months ended June 30, 2006. The $302.9 million increase is due in part to (1) the returns and cash flows that we experience with respect to our growing portfolio of receivables associated with our largely fee-based credit card offering to consumers at the lower end of the FICO scoring range and (2) increased income and cash flows recognized with respect to our Investment in Previously Charged-Off Receivables segment based on increased sales under its 5-year forward flow agreement with Encore Capital and continued growth in charged-off receivables purchases through its balance transfer and chapter 13 Bankruptcy purchasing. Partially offsetting these increases are (1) reductions in profitability associated with our purchased portfolios as the receivables underlying these trusts continue to decline and (2) reductions in overall fee billings given our fourth quarter decision to no longer bill finance charges and fees on credit card accounts that become more than 90 days delinquent.

•

During the six months ended June 30, 2007, we used $533.0 million of cash in investing activities, compared to using $351.8 million of cash for the six months ended June 30, 2006. This $181.2 million increase in cash used in investing activities reflects our use of $192.1 million related to our acquisitions of our UK Portfolio, ACC, MEM and JRAS which closed during the six months ended June 30, 2007, as well as our continued growth in our largely fee-based credit card offering to consumers at the lower end of the FICO scoring range. This increase is partially offset by the shift from (1) our making net investments in our securitized earning assets in 2006 to receiving proceeds on these investments in 2007, a shift that has resulted from draws of cash from securitization facilities within our securitization trusts to fund cardholder purchases in 2007, whereas cardholder purchases were funded with other cash resources in 2006 and (2) cash flows being generated within our securitization trusts for distribution to us on our retained interests because of the liquidations of our purchased portfolios (i.e., as payments from cardholders exceed cardholder purchases within our purchased portfolios).

•

During the six months ended June 30, 2007, our financing activities provided $73.2 million, compared to $78.0 million during the same period in 2006. Our respective financing activities in the six months ended June 30, 2007 and June 30, 2006 were varied. Major financing activities thus far in 2007 have included $146.0 million of borrowings related to our acquisition of ACC and $53.9 million of proceeds from the exercise of warrants, offset by the $86.5 million used to purchase treasury stock. Major financing activities in the six months ended June 30, 2006 included draws of $150.0 million on a structured financing facility secured by those receivables associated with our largely fee-based credit card offering to consumers at the lower end of the FICO scoring range and the repayment of $50.0 million in debt by our Retail Micro-Loans segment.

As of June 30, 2007, we had approximately $300 million in immediately available liquidity. This available liquidity is represented by cash balances and draw potential against our collateral base within our originated portfolio master trust and our collateral base supporting our existing structured financing transaction that is secured by substantially all of the credit card receivables associated with our largely fee-based credit card offerings to consumers at the lower end of the FICO scoring range. Based on our current marketing and organic growth plans throughout the remainder of 2007 and beyond, we plan to supplement our approximately $300 million of available liquidity before the close of 2007 through securitization or other financing facilities.

One of the financing structures we currently are evaluating is an off-balance-sheet securitization of most if not all of our portfolio of credit card receivables associated with our largely fee-based credit card offerings to consumers at the lower end of the FICO scoring range. Should we complete such a transaction, it will have a significant impact on our financial statements, including (1) material reductions in our total interest income, interest expense, fees and related income on non-securitized earning assets, and provision for loan losses balances on our future consolidated statements of operations, (2) material reductions in our loans and fees receivable, net and notes payable and other borrowings balances on our future consolidated balance sheets, (3) material increases in our fees and related income on securitized earning assets and servicing income balances on our future consolidated statements of operations (i.e., of an aggregate magnitude much greater than the material reductions in the aforementioned consolidated statement of operations balances in (1) above), and (4) material increases in our securitized earnings assets, current and deferred income tax liabilities and retained earnings balances on our future consolidated balance sheets (i.e., with an increase in net assets much greater than the material reductions in the aforementioned consolidated balance sheet balances in (2) above).

Beyond any potential off-balance-sheet securitization transaction, we expect for the foreseeable future to evaluate debt and equity issuances as a means to fund our financial products and services originations and our credit card receivables portfolio and other complementary acquisitions, and we expect to avail ourselves of opportunities to raise additional capital if terms and pricing are attractive to us.

The first quarter 2007 repurchase of an aggregate 2,884,163 shares of our common stock evidenced on our consolidated statements of cash flows was part of the share repurchase program that our board of directors authorized in May 2006. Following this repurchase, we are authorized to repurchase 7,115,837 additional shares under our repurchase program. At our discretion, we may use acquired shares in treasury to satisfy option exercises and restricted stock grants. We will continue to evaluate our stock price relative to other investment opportunities and, to the extent we believe that the repurchase of our stock represents an appropriate return of capital, we will repurchase additional shares of our stock.

Securitization Facilities

Our most significant source of liquidity is the securitization of credit card receivables. As of June 30, 2007, we had committed total securitization facilities of $2.7 billion, of which we had drawn $1.6 billion. At June 30, 2007, the weighted-average borrowing rate on our securitization facilities was approximately 7.33%. The maturity terms of our securitizations vary.

In the table below, we have noted the securitization facilities (in millions) with respect to which a substantial majority of our managed credit card receivables serve as collateral as of June 30, 2007. Following the table are further details concerning each of the facilities.


Maturity date	Facility Limit(1)
September 2007(2)	$	306.0
January 2008(3)		1,000.0
October 2009(4)		299.5
October 2010(4)		299.5
January 2014(5)		131.8
September 2014(6)		25.5
April 2014(7)		649.7

Total	$	2,712.0

(1)

Excludes securitization facilities related to receivables managed by our equity-method investees because such receivables and their related securitization facilities are appropriately excluded from direct presentation in our condensed consolidated statements of operations or condensed consolidated balance sheet items included herein.

(2)	Represents the end of the revolving period for a $306.0 million conduit facility, which we expect to renew prior to its expiration.

(3)

This two-year variable funding note facility also contains one-year renewal periods (subject to certain conditions precedent) at the expiration of the term and an orderly amortization of the facility at expiration. In July 2007, we renewed this facility through January 2010 at a reduced size of $750 million; the note holder consented to our reduction in the size of this facility, which we desired to save costs associated with unused capacity as we have sufficient funding capacity within our originated portfolio master trust to meet our growth expectations within that trust.

(4)

In October 2004, we completed two term securitization facilities that we issued out of our originated portfolio master trust: a 5-year facility represented by $299.5 million aggregate principal notes and a 6-year facility also represented by $299.5 million aggregate principal notes. To date, we have elected to sell only $287.0 million of the principal notes underlying the 5-year facility and $264.0 million of the principal notes underlying the 6-year facility. However, assuming the continuation of current market conditions and performance within our original portfolio master trust, we believe we can sell the remaining principal notes under terms advantageous to us should we need additional liquidity from the sale of the notes during the life of the facilities.

(5)	Represents a ten-year amortizing term series issued out of the Embarcadero Trust.

(6)

Represents the conduit notes associated with our 75.1% membership interest in our majority-owned subsidiary that securitized the $92.0 million (face amount) of receivables it acquired in the third quarter of 2004 and the $72.1 million (face amount) of receivables it acquired in the first quarter of 2005.

(7)	In April 2007, we closed an amortizing securitization facility in connection with our UK Portfolio acquisition; this facility is denominated and referenced in UK sterling.

We have never triggered an early amortization within any of the series underlying our originated portfolio master trust securitizations, and we do not believe that we will. Still, it is conceivable that, even with close management, we may trigger an early amortization of one or more of the outstanding series within this trust. Early amortization for any of the originated portfolio master trust securitization series would have adverse effects on our liquidity, certainly during the early amortization period and potentially beyond repayment of any such series as potential investors could elect to abstain from future CompuCredit-backed issuances.

Contractual Obligations, Commitments and Off-Balance-Sheet Arrangements

See Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2006.

Commitments and Contingencies

We also have certain contractual arrangements that would require us to make payments or provide funding if certain circumstances occur (“contingent commitments”). We do not currently expect that these contingent commitments will result in any material amounts being paid by us. See Note 10, “Commitments and Contingencies,” to our condensed consolidated financial statements for further discussion of these matters.

Recent Accounting Pronouncements

See Note 2, “Summary of Significant Accounting Policies and Condensed Consolidated Financial Statement Components,” to our condensed consolidated financial statements for a discussion of recent accounting pronouncements.

Critical Accounting Estimates

We have prepared our financial statements in accordance with GAAP. These principles are numerous and complex. We have summarized our significant accounting policies in the notes to our condensed consolidated financial statements. In many instances, the application of GAAP requires management to make estimates or to apply subjective principles to particular facts and circumstances. A variance in the estimates used or a variance in the application or interpretation of GAAP could yield a materially different accounting result. It is impracticable for us to summarize every accounting principle that requires us to use judgment or estimates in our application. In our Annual Report on Form 10-K for the year ended December 31, 2006, we discuss the six areas (valuation of retained interests, investments in previously charged-off receivables, non-consolidation of qualifying special purpose entities, allowance for uncollectible loans and fees, goodwill and identifiable assets and impairment analyses, and investments in securities) where we believe that the estimations, judgments or interpretations that we have made, if different, would have yielded the most significant differences in our financial statements, and we urge you to review that discussion. In addition, in Note 7, “Off-Balance-Sheet Arrangements,” to the condensed consolidated financial statements included in this report, we have updated a portion of our sensitivity analysis with respect to retained interest valuations.

Related Party Transactions

Since 2001, we have been subleasing 7,316 square feet of excess office space to Frank J. Hanna, Jr., who is the father of our Chairman and Chief Executive Officer, David G. Hanna, and one of our directors, Frank J. Hanna, III. The sublease rate of $24.19 per square foot is the same as the rate that we pay on the prime lease. Total rent for the three and six months ended June 30, 2007 for the sublease was approximately $44,000 and $88,000, respectively. This sub-lease is scheduled to be terminated by August 2007 as part of our move to our new Atlanta headquarters office location.

In June 2007, we signed a sublease for 1,000 square feet of excess office space at our new Atlanta headquarters office location, to HBR Capital, Ltd., a corporation co-owned by David G. Hanna and Frank J. Hanna, III. The sublease rate of $22.00 per square foot is the same as the rate that we pay on the prime lease. This sublease expires in May of 2022.

In June, 2007, a partnership formed by Richard W. Gilbert (our Chief Operating Officer and Vice Chairman of our Board of Directors), Richard R. House, Jr. (our President and a member of our Board of Directors), J.Paul Whitehead III (our Chief Financial Officer), Krishnakumar Srinivasan (President of our Credit Cards segment), and other individual investors (including an unrelated third-party individual investor), acquired £4.7 million ($9.2 million) of class “B” notes originally issued to another investor out of our UK Portfolio securitization trust. This acquisition price of the notes was the same price at which the original investor had sold $60 million of notes to another unrelated third party. The notes comprise approximately 1.5% of the $649.7 million in total notes within the trust as of June 30, 2007 and are subordinate to the senior traunches within the trust. The “B” traunche bears interest at LIBOR plus 9%.

On December 4, 2006, we established a contractual relationship with Urban Trust Bank, a federally chartered savings bank (“Urban Trust”), pursuant to which we purchase credit card receivables underlying specified Urban Trust credit card accounts. Under this arrangement, in general Urban Trust receives 5% of all payments received from cardholders and is obligated to pay 5% of all net costs incurred by us in connection with managing the program, including the costs of purchasing, marketing, servicing and collecting the receivables. Frank J. Hanna, Jr., owns a substantial minority interest in Urban Trust and serves on its Board of Directors. In December 2006, Urban Trust deposited $0.7 million with us to cover its share of future expenses of the program. Also in December 2006, we deposited $0.3 million with Urban Trust to cover purchases by Urban Trust cardholders. Through June 30, 2007, Urban Trust used all of the $0.7 million deposit to fund its share of the net costs of the program and was making additional contributions to cover further growth. Also through June 30, 2007, we increased our deposit with Urban Trust to $4.1 million to cover the growth in purchases by Urban Trust cardholders. Urban Trust’s share of receivables under cardholder accounts was approximately $4.5 million as of June 30, 2007.

See Note 2, “Summary of Significant Accounting Policies and Consolidated Financial Statements Components,” to the consolidated financial statements included within our Annual Report on Form 10-K for the year ended December 31, 2006 for a discussion of the investments in previously charged-off receivables by one of our subsidiaries from trusts serviced by us.

See Note 10, “Commitments and Contingencies,” to the condensed consolidated financial statements included in this report for discussion of a now-terminated indemnity agreement into which we had entered with Maverick associated with its participation in loans originated by a financial institution for which we have provided micro-loan servicing and processing services. Richard W. Gilbert, a Director on our Board of Directors and our Chief Operating Officer, has a 20% economic interest in Maverick, and Mr. Gilbert’s son is its manager.

Forward-Looking Information

We make forward-looking statements throughout this report including statements with respect to our expected revenue, income, receivables, income ratios, marketing-based volatility in peak charge-off vintages, acquisitions and other growth opportunities, location openings, loss exposure and loss provisions, delinquency and charge-off rates, securitizations and gains and losses from securitizations, changes in the credit quality of our on-balance sheet loans and fees receivable, account growth, the performance of investments that we have made, operating expenses, marketing plans, the profitability of our Auto Finance segment, expansion and growth of JRAS and ACC platforms, integration of our Auto Finance platforms, growth and performance of receivables originated over the Internet or television, our plans in the United Kingdom, the impact of the acquisition of our UK Portfolio of credit card receivables on our financial performance, performance of UK portfolio, sources of funding operations and acquisitions, our ability to raise funds or renew financing facilities, the potential effects of off-balance-sheet securitizations on our financial condition and results of operations, our income in equity-method investees, growth in our ancillary and interchange revenues, our servicing income levels, gains and losses from investments in securities (including asset-backed securities), new product research and development efforts and other statements of our plans, beliefs or expectations are forward-looking statements. In some cases these statements are identifiable through the use of words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” “project,” “target,” “can,” “could,” “may,” “should,” “will,” “would” and similar expressions.

You are cautioned not to place undue reliance on these forward-looking statements. The forward-looking statements we make are not guarantees of future performance and are subject to various assumptions, risks and other factors that could cause actual results to differ materially from those suggested by these forward-looking statements. Actual results may differ materially from those suggested by the forward-looking statements that we make for a number of reasons including those described in Part II, Item 1A, “Risk Factors,” of this report.

We expressly disclaim any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Sensitivity and Market Risk

Interest rate sensitivity is comprised of basis risk, gap risk and market risk. Basis risk is caused by the difference in the interest rate indices used to price assets and liabilities. Gap risk is caused by the difference in repricing intervals between assets and liabilities. Market risk is the risk of loss from adverse changes in market prices and rates. Our principal market risk is related to changes in interest rates. This affects us directly in our lending and borrowing activities, as well as indirectly as interest rates may impact the payment performance of our customers.

We incur basis risk because we fund managed assets at a spread over commercial paper rates or LIBOR, while the rates on the underlying our U.S. managed assets generally are indexed to the prime rate. This basis risk results from the potential variability over time in the spread between the prime rate on the one hand, and commercial paper rates and LIBOR on the other hand. We have not hedged our basis risk because we believe that the cost of hedging this risk is greater than the benefits we would get from elimination of this risk. We incur gap risk because the debt underlying our securitization trust facilities reprices monthly; whereas, some of our receivables do not adjust automatically (as in the case of our U.K. Portfolio) unless we specifically adjust them with appropriate notification. This gap risk, however, is relatively minor as we generally can reprice the substantial majority of our receivables quickly in response to a rate change.

As to the issue of market risk, we attempt to minimize the impact of interest rate fluctuations on net income by regularly evaluating the risk inherent within our asset and liability structure, especially our off-balance-sheet assets (such as securitized receivables) and their corresponding liabilities. The impact of interest rate fluctuations on our securitized receivables is reflected in the valuation of our retained interests in credit card receivables securitized. This risk arises from continuous changes in our asset and liability mix, changes in market interest rates (including such changes that are caused by fluctuations in prevailing interest rates, payment trends on our interest-earning assets and payment requirements on our interest-bearing liabilities) and the general timing of all other cash flows. To manage our direct risk to interest rates, management actively monitors interest rates and the interest sensitive components of our securitization structures. Management seeks to minimize the impact of changes in interest rates on the fair value of assets, net income and cash flows primarily by matching asset and liability repricings. There can be no assurance, however, that we will be successful in our attempts to manage such risks.

At June 30, 2007, a substantial majority of our managed credit card receivables, including those related to our equity-method investees, and other interest-earning assets had variable rate pricing, with substantially all U.S. credit card receivables carrying annual percentage rates at a spread over the prime rate (8.25% at June 30, 2007), subject to interest rate floors. At June 30, 2007, $18.7 million of our total U.S. managed receivables were priced at their floor rate, of which, $9.2 million of these receivables were closed and therefore ineligible to be repriced and the remaining $9.5 million were open and eligible to be repriced. Every 10% increase in LIBOR that we experience until the $9.2 million in closed account receivables reach their floor rate would result in an approximate $36,000 after-tax negative impact on our annual cash flows. However, to the extent we choose to reprice any of the $9.5 million of receivables underlying the open accounts that are below their floor rate, we can mitigate against their possible adverse impact on our cash flows.

Foreign Currency Risk

The translation of the balance sheets of our newly launched and acquired non-U.S. operations from local currencies into U.S. dollars is sensitive to changes in foreign currency exchange rates. These translation gains and losses are recorded as foreign currency translation adjustments within shareholders’ equity. We will also have transactional gains and losses that are caused by changes in foreign currency exchange rates compared to the U.S. dollar. These transaction gains and losses flow through our condensed consolidated statement of operations. We have not hedged our foreign currency risk because we believe that the cost of hedging this risk is greater than the benefits we would get from elimination of this risk; we are continuing, however, to weigh the benefits versus costs of hedging this risk.

Commodity Price Risk

From time-to-time we purchase debt and equity securities of others, principally those issued by asset-backed securitization trusts (e.g., notes secured or “backed” by pools of assets). These securities in many cases are junior, including below investment grade, traunches of securities issued by the trusts. The assets underlying these securities are not originated by us and, accordingly, may not meet the underwriting standards that we follow in originating receivables. Further, we do not

have direct control over the management of the underlying assets and, similarly, they may not be managed as effectively as we would manage similar assets. As a result, the securities in which we invest may carry higher risks, including risks of higher delinquencies and charge offs, risks of covenant violations and risks of value impairment due to the claims of more senior securities issued by the trusts, than similar assets originated and owned by us. These higher risks can cause much greater valuation volatility for these securities than we typically have experienced and would expect to experience on our holdings of securities underlying the trusts that we service; such was the case during the second quarter of 2007 during which we experienced material realized and unrealized losses on our portfolio of these securities. Although these securities generally are traded in an active secondary market, valuation volatility also can be expected to result from liquidity needs that we might have in the future, including any need that we may have for quick liquidity or to meet margin requirements related to our investments in these securities should their prices decline. In turn, this could result in steep and immediate impairments in the values of the securities as presented within our financial statements and could cause our financial position and results of operations to deteriorate, possibly materially. At June 30, 2007, we had investments (net of non-recourse debt) in third-party asset-backed securities with a value of $45.0 million. For further discussion of the current market conditions surrounding our portfolio of third-party asset-backed securities, see our “RESULTS OF OPERATIONS” discussion in Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” within this report under the heading “ Fees and related income on non-securitized earning assets.”

ITEM 4.

CONTROLS AND PROCEDURES

(a) Disclosure controls and procedures.

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of the end of the period covered by this report, our disclosure controls and procedures were effective at meeting their objectives.

(b) Internal control over financial reporting.

There were not any changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II—OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS

We are involved in various legal proceedings that are incidental to the conduct of our business. In one of these legal proceedings, CompuCredit Corporation and five of our subsidiaries are defendants in a purported class action lawsuit entitled Knox, et al., vs. First Southern Cash Advance, et al., No 5 CV 0445, filed in the Superior Court of New Hanover County, North Carolina, on February 8, 2005. The plaintiffs allege that in conducting a so-called “payday lending” business, certain of our Retail Micro-Loans segment subsidiaries violated various laws governing consumer finance, lending, check cashing, trade practices and loan brokering. The plaintiffs further allege that CompuCredit is the alter ego of our subsidiaries and is liable for their actions. The plaintiffs are seeking damages of up to $75,000 per class member. We are vigorously defending this lawsuit. These claims are similar to those that have been asserted against several other market participants in transactions involving small balance, short-term loans made to consumers in North Carolina. As of June 30, 2007, we have not recorded any accruals related to this lawsuit.

In addition, the FDIC and the FTC are investigating whether marketing and other materials contained misrepresentations regarding, among other things, fees and credit limits, and whether servicing and collection practices were conducted in accordance with applicable law. We have provided substantial information to both the FDIC and the FTC, and we continue to respond to their requests. The FDIC and FTC have proposed limitations on certain marketing, servicing and collection practices, reimbursement of significant fees to affected customers and the payment of fines We believe that our marketing and other materials and servicing and collection practices comply with applicable law, and we are vigorously contesting the proposed reimbursement of fees and payment of fines. The matters under investigation involve a significant amount of fees and a substantial number of accounts.

ITEM 1A.

RISK FACTORS

An investment in our common stock or other securities involves a number of risks. You should carefully consider each of the risks described below before deciding to invest in our common stock. If any of the following risks develops into actual events, our business, financial condition or results of operations could be negatively affected, the market price of our common stock or other securities could decline and you may lose all or part of your investment.

Our Cash Flows Are Dependent Upon the Cash Flows Received on the Receivables Underlying Our Securitizations and From Our Other Credit Products .

The collectibility of the receivables underlying our securitizations and those that we hold and do not securitize is a function of many factors including the criteria used to select who is issued credit, the pricing of the credit products, the lengths of the relationships, general economic conditions, the rate at which customers repay their accounts or become delinquent, and the rate at which cardholders use their cards. To the extent we have over estimated collectibility, in all likelihood we have over estimated our financial performance. Some of these concerns are discussed more fully below.

We may not successfully evaluate the creditworthiness of our customers and may not price our credit products so as to remain profitable. The creditworthiness of our target market generally is considered “sub-prime” based on guidance issued by the agencies that regulate the banking industry. Thus, our customers generally have a higher frequency of delinquencies, higher risk of nonpayment and, ultimately, higher credit losses than consumers who are served by more traditional providers of consumer credit. Some of the consumers included in our target market are consumers who are dependent upon finance companies, consumers with only retail store credit cards and/or lacking general purpose credit cards, consumers who are establishing or expanding their credit, and consumers who may have had a delinquency, a default or, in some instances, a bankruptcy in their credit histories, but have, in our view, demonstrated recovery. We price our credit products taking into account the perceived risk level of our customers. If our estimates are incorrect, customer default rates will be higher, we will receive less cash from the receivables, the value of our retained interests and our loans and fees receivable will decline, and we will experience reduced levels of net income.

An economic slowdown could increase credit losses and/or decrease our growth. Because our business is directly related to consumer spending, any period of economic slowdown or recession could make it more difficult for us to add or retain accounts and receivables. In addition, during periods of economic slowdown or recession, we expect to experience an increase in rates of delinquencies and frequency and severity of credit losses. Our actual rates of delinquencies and frequency and severity of credit losses may be higher during periods of economic abundance or recession than those experienced by more traditional providers of consumer credit because of our focus on the sub-prime market. Changes in credit use, payment patterns and the rate of defaults by account holders may result from a variety of unpredictable social, economic and geographic factors. Social factors include, among other things, changes in consumer confidence levels, the public’s perception of the use of credit and changing attitudes about incurring debt and the stigma of personal bankruptcy. Economic factors include, among other things, the rates of inflation, the unemployment rates and the relative interest rates offered for various types of credit. Moreover, adverse changes in economic conditions in states where customers are located, including as a result of severe weather, could have a direct impact on the timing and amount of payments of receivables.

We recently purchased a substantial portfolio of receivables in the United Kingdom and now will have greater exposure to the U.K. economy and currency exchange rates. In April 2007, we purchased a portfolio of credit card receivables having a face value of £490 million ($970 million) as of the date of purchase. Although we have had minor operations in the United Kingdom previously, this is our first significant investment there, and we now will have substantially greater exposure to fluctuations in the United Kingdom economy. As a result of this investment, we also will have greater exposure to fluctuations in the relative values of the United States dollar and the British pound.

Because a significant portion of our reported income is based on management’s estimates of the future performance of securitized receivables, differences between actual and expected performance of the receivables may cause fluctuations in net income. Income from the sale of receivables in securitization transactions and income from retained interests in receivables securitized have constituted, and are likely to continue to constitute, a significant portion of our income. Significant portions of this income are based on management’s estimates of cash flows we expect to receive from the interests that we retain when we securitize receivables. The expected cash flows are based on management’s estimates of interest rates, default rates, payment rates, cardholder purchases, costs of funds paid to investors in the securitizations, servicing costs, discount rates and required amortization payments. These estimates are based on a variety of factors, many of which are not within our control. Substantial differences between actual and expected performance of the receivables will occur and will cause fluctuations in our net income.

Increases in expected losses and delinquencies may prevent us from securitizing future receivables on terms similar to those that currently are available or otherwise from obtaining favorable financing for non-securitized receivables. Greater than expected delinquencies and losses also could impact our ability to complete other securitization or financing transactions on acceptable terms or at all, thereby decreasing our liquidity and forcing us to either decrease or stop our growth or rely on alternative, and potentially more expensive, funding sources if even available.

Increased utilization of existing credit lines by cardholders would require us to establish additional securitization and financing facilities or curtail credit lines. Our existing commitments to extend credit to cardholders exceed our available securitization and financing facilities. If all of our cardholders were to use their entire lines of credit at the same time, we would not have sufficient capacity to fund card use. However, in that event, we could either reduce our cardholders’ available credit lines or establish additional securitization and financing facilities. This would subject us to several of the other risks that we have described in this section.

Increases beyond expected losses and delinquencies may cause us to incur losses on our retained interests and losses on our loans and fees receivable. If the actual amounts of delinquencies and losses that occur in our securitized receivables or our on-balance-sheet receivables are greater than expected, the value of our retained interests in the securitization transactions and our loans and fees receivable, net on our condensed consolidated balance sheet will decrease. Since we derive substantial income from our retained interests and loans and fees receivable, higher than expected rates of delinquency and loss could cause our net income to be lower than expected. In addition, under the terms of our securitizations agreements, levels of loss and delinquency could result in us being required to repay our securitization investors earlier than expected, reducing funds available to us for future growth. Similarly with respect to financing agreements secured by our on-balance-sheet receivables, levels of loss and delinquency could result in our being required to repay our lenders earlier than expected, thereby reducing funds available to us for future growth.

Our portfolio of receivables is not diversified and originates from customers whose creditworthiness is considered sub-prime. We obtain the receivables that we securitize and retain on our balance sheet in one of two ways—we either originate the receivables or purchase pools of receivables from other issuers. In either case, substantially all of our receivables originate from sub-prime borrowers. Our reliance on sub-prime receivables has in the past (and may in the future) negatively impacted our performance. For example, in 2001, we suffered a substantial loss after we increased the discount rate that we use in valuing our retained interests to reflect the higher rate of return required by securitization investors in sub-prime markets. These losses might have been mitigated had our portfolios consisted of higher-grade receivables in addition to our sub-prime receivables. Because our portfolios are undiversified, negative market forces have the potential to cause a widespread adverse impact. We have no immediate plans to issue or acquire significant higher-grade receivables.

Seasonal factors may result in fluctuations in our net income. Our quarterly income may substantially fluctuate as a result of seasonal consumer spending. In particular, our credit card customers may charge more and carry higher balances during the year-end holiday season and during the late summer vacation and back-to-school period, resulting in corresponding increases in the receivables we manage and subsequently securitize or finance during those periods.

The timing and volume of originations with respect to our largely fee-based credit card offerings to consumers at the lower end of the FICO scoring range may cause significant fluctuations in quarterly income. Fluctuations in the timing or

the volume of receivables will cause fluctuations in our quarterly income. Factors that affect the timing or volume include marketing efforts, the general economy and the other factors discussed in this section. Given the significant and variable growth rates that we have experienced for our largely fee-based credit card offerings to consumers at the lower end of the FICO scoring range and given the appreciably shorter vintage life cycles for these offerings relative to our more traditional credit card offerings, we have experienced, and in the future expect to experience, significant volatility of quarterly earnings from these offerings based on the varying levels of marketing and receivables origination in the quarters preceding peak vintage charge-off periods.

Increases in interest rates will increase our cost of funds and may reduce the payment performance of our customers. Increases in interest rates will increase our cost of funds, which could significantly affect our results of operations and financial condition. Our credit card accounts have variable interest rates. Significant increases in these variable interest rates may reduce the payment performance of our customers.

Due to the lack of historical experience with Internet customers, we may not be able to successfully target these customers or evaluate their creditworthiness. There is less historical experience with respect to the credit risk and performance of customers acquired over the Internet. As part of our growth strategy, we are expanding our origination of accounts over the Internet; however, we may not be able to successfully target and evaluate the creditworthiness of these potential customers. Therefore, we may encounter difficulties managing the expected delinquencies and losses and appropriately pricing our products.

We Are Substantially Dependent Upon Securitizations and Other Borrowed Funds to Fund the Receivables That We Originate or Purchase.

All of our securitization and financing facilities are of finite duration (and ultimately will need to be extended or replaced) and contain conditions that must be fulfilled in order for funding to be available. Although our primary credit card receivables securitization facility with Merrill Lynch alleviates for the foreseeable future our principal exposure to advance rate fluctuations within our originated portfolio master trust, in the event that future advance rates (i.e., the percentage on a dollar of receivables that lenders will lend us) for securitizations or financing facilities are reduced, investors in securitizations or financing facilities lenders require a greater rate of return, we fail to meet the requirements for continued funding or securitizations, or financing arrangements otherwise become unavailable to us, we may not be able to maintain or grow our base of receivables or it may be more expensive for us to do so. In addition, because of advance rate limitations, we retain subordinate interests in our securitizations, so-called “retained interests,” that must be funded through profitable operations, equity raised from third parties or funds borrowed elsewhere. The cost and availability of equity and borrowed funds is dependent upon our financial performance, the performance of our industry generally and general economic and market conditions, and at times equity and borrowed funds have been both expensive and difficult to obtain. Some of these concerns are discussed more fully below.

Our growth is dependent on our ability to add new securitization and financing facilities. We finance our receivables through securitizations and financing facilities. To the extent we grow our receivables significantly, our cash requirements are likely to exceed the amount of cash we generate from operations, thus requiring us to add new securitization or financing facilities. Our historic and projected performance impact whether, on what terms and at what cost we can sell interests in our securitizations or obtain financing from lenders. If additional securitization and financing facilities are not available on terms we consider acceptable, or if existing securitization and financing facilities are not renewed on terms as favorable as we have now or are not renewed at all, we may not be able to grow our business and it may contract in size.

As our securitization and financing facilities mature, they will be required to accumulate cash that therefore will not be available to us for reinvestment or other purposes. Repayment for our securitization facilities begins as early as one year prior to their maturity dates. Once repayment begins and until the facility is paid, payments from customers on receivables are accumulated to repay the investors and no longer are reinvested in new receivables. When a securitization facility matures, the underlying trust continues to own the receivables and effectively the maturing facility maintains its priority in its right to payments following collections on the underlying receivables until it is repaid in full. As a result, new purchases need to be funded using debt, equity or a replacement facility subordinate to the maturing facility’s interest in the underlying receivables. Although this subordination historically has not made it more difficult to obtain replacement facilities, it may do so in the future. If our securitization facilities begin to accumulate cash and we also are unable to obtain alternative sources of liquidity, such as debt, equity or new securitization facilities that are structurally subordinate to the facilities accumulating cash, we may be forced to prohibit new purchases in some or all of our accounts in order to significantly reduce our need for any additional cash.

The documents governing our securitization facilities provide that, upon the occurrence of certain adverse events known as “early redemption events,” investors can accelerate payments. Early redemption events include portfolio performance triggers, the termination of the affinity agreement with CB&T, breach of certain representations, warranties and covenants,

insolvency or receivership, and servicer defaults, and may include the occurrence of an early redemption event with respect to another securitization transaction. In the Merrill Lynch facility, an early redemption event also may be triggered based on a total consolidated equity test or a change of control in CompuCredit. If an early redemption event occurs, principal payments would be made to investors to reduce their interests in our securitizations. As investors’ interests in our securitizations decrease, our liquidity would be negatively impacted and our financial results may suffer. We would need to obtain alternative sources of funding, and there is no certainty that we would be able to do so. Similar triggers exist with respect to the financing facilities for our loans and fees receivable retained on our balance sheet, the refunding of which could be made more difficult or impossible at terms acceptable to us if we hit such triggers.

We may be unable to obtain capital from third parties needed to fund our existing securitizations and loans and fees receivable or may be forced to rely on more expensive funding sources. We need equity or debt capital to fund our retained interests in our securitizations and the difference between our loans and fees receivable and the amount that lenders will advance or lend to us against those receivables. Investors should be aware of our dependence on third parties for funding and our exposure to increases in costs for that funding. External factors, including the general economy, impact our ability to obtain funds. For instance, in 2001, we needed additional liquidity to fund our operations and the growth in our retained interests, and we had a difficult time obtaining the needed cash. If in the future we need to raise cash by issuing additional debt or equity or by selling a portion of our retained interests, there is no certainty that we will be able to do so or that we will be able to do so on favorable terms. Our ability to raise cash will depend on factors such as our performance and creditworthiness, the performance of our industry, the performance of issuers of other non-credit card-based asset-backed securities and the general economy.

The performance of our competitors may impact the costs of our securitizations and financing facilities. Investors in our securitizations and financing facilities compare us to other sub-prime credit card issuers and, to some degree, our performance is tied to many of the factors that impact their performance. Generally speaking, investors in our securitizations also invest in our competitors’ securitizations, and lenders against our receivables also lend against our competitors’ receivables. These investors and lenders broadly invest in or lend against receivables, and when they evaluate their investments and lending arrangements, they typically do so on the basis of overall industry performance. Thus, when our competitors perform poorly, we typically experience negative investor and lender sentiment, and the investors in our securitizations and lenders against our receivables require greater returns, particularly with respect to subordinated interests in our securitizations. In 2001, for instance, investors demanded unprecedented returns.

In the event that investors require higher returns and we sell our retained interests in securitizations at that time, the total return to the buyer may be greater than the discount rate we are using to value the retained interests in our financial statements. This would result in a loss for us at the time of the sale as the total proceeds from the sale would be less than the carrying amount of the retained interests in our financial statements. We also might increase the discount rate used to value all of our other retained interests, which also would result in further losses. Conversely, if we sold our retained interests for a total return to the investor that was less than our current discount rate, we would record income from the sale, and we would potentially decrease the rate used to value all of our other retained interests, which would result in additional income.

We may be required to pay to investors in our securitizations an amount equal to the amount of securitized receivables if representations and warranties made to us by sellers of the receivables are inaccurate. The representations and warranties made to us by sellers of receivables we have purchased may be inaccurate. We rely on these representations and warranties when we securitize these purchased receivables. In securitization transactions, we make representations and warranties to investors and, generally speaking, if there is a breach of our representations and warranties, then under the terms of the applicable investment agreement we could be required to pay the investors the amount of the non-compliant receivables. Thus, our reliance on a representation or warranty of a receivables seller, which proves to be false and causes a breach of one of our representations or warranties, could subject us to a potentially costly liability.

Our Financial Performance Is, in Part, a Function of the Aggregate Amount of Receivables That Are Outstanding.

The aggregate amount of outstanding receivables is a function of many factors including purchase rates, payment rates, interest rates, seasonality, general economic conditions, competition from other credit card issuers and other sources of consumer financing, access to funding as noted above and the success of our marketing efforts. To the extent that we have over estimated the size or growth of our receivables, in all likelihood we have over estimated our future financial performance.

Intense competition for customers may cause us to lose receivables to competitors. We may lose receivables to competitors that offer lower interest rates and fees or other more attractive terms or features. We believe that customers choose credit card issuers and other lenders largely on the basis of interest rates, fees, credit limits and other product features. For this reason, customer loyalty is often limited. Our future growth depends largely upon the success of our marketing programs and strategies. Our credit card business competes with national, regional and local bank and other credit card issuers, including issuers of American Express ^{^®} , Discover ^{^®} , Visa ^{^®} and MasterCard ^{^®} credit cards. Our other businesses have substantial

competitors as well. Some of these competitors already may use or may begin using many of the programs and strategies that we have used to attract new accounts. In addition, many of our competitors are substantially larger than we are and have greater financial resources. Further, the Gramm-Leach-Bliley Act of 1999, which permits the affiliation of commercial banks, insurance companies and securities firms, may increase the level of competition in the financial services market, including the credit card business.

We may be unable to sustain and manage our growth. We may experience fluctuations in net income or sustain net losses if we are not able to sustain or effectively manage our growth. Growth is a product of a combination of factors, many of which are not in our control. Factors include:

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growth in both existing and new receivables;

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the degree to which we lose receivables to competitors;

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levels of delinquencies and charge offs;

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the availability of funding, including securitizations, on favorable terms;

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our ability to sell retained interests on favorable terms;

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our ability to attract new customers through originations or portfolio purchases;

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the level of costs of soliciting new customers;

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the level of response to our solicitations;

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our ability to employ and train new personnel;

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our ability to maintain adequate management systems, collection procedures, internal controls and automated systems; and

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general economic and other factors beyond our control.

Our decisions regarding marketing can have a significant impact on our growth. We can increase or decrease the size of our outstanding receivables balances by increasing or decreasing our marketing efforts. Marketing is expensive, and during periods when we have less liquidity than we like or when prospects for continued liquidity in the future do not look promising, we may decide to limit our marketing and thereby our growth. We decreased our marketing during 2003, although we increased our marketing in 2004 through 2006 because of our improved access to capital.

Our operating expenses and our ability to effectively service our accounts are dependent on our ability to estimate the future size and general growth rate of the portfolio. One of our servicing agreements causes us to make additional payments if we overestimate the size or growth of our business. These additional payments compensate the servicer for increased staffing expenses it incurs in anticipation of our growth. If we grow more slowly than anticipated, we still may have higher servicing expenses than we actually need, thus reducing our net income.

We Operate in a Heavily Regulated Industry.

Changes in bankruptcy, privacy or other consumer protection laws, or to the prevailing interpretation thereof, may expose us to litigation, adversely affect our ability to collect account balances in connection with our traditional credit card business, our debt collection subsidiary’s charged-off receivables operations, auto finance and micro-loan activities, or otherwise adversely affect our operations. Similarly, regulatory changes could adversely affect our ability or willingness to market credit cards and other products and services to our customers. The accounting rules that govern our business are exceedingly complex, difficult to apply and in a state of flux. As a result, how we value our receivables and otherwise account for our business (including whether we consolidate our securitizations) is subject to change depending upon the interpretation of, and changes in, those rules. Some of these issues are discussed more fully below.

Reviews and enforcement actions by regulatory authorities under banking and consumer protection laws and regulations may result in changes to our business practices, may make collection of account balances more difficult or may expose us to the risk of fines, restitution and litigation. Our operations, and the operations of the issuing banks through which we originate credit products, are subject to the jurisdiction of federal, state and local government authorities, including the SEC, the FDIC, the Office of the Comptroller of the Currency, the FTC, U.K. banking authorities, state regulators having jurisdiction over financial institutions and debt origination and collection and state attorneys general. Our business practices, including the terms of our products and our marketing, servicing and collection practices, are subject to both periodic and special reviews by these regulatory and enforcement authorities. These reviews can range from the investigations of specific consumer complaints or concerns to broader inquiries into our practices generally. If as part of these reviews the regulatory authorities conclude that we are not complying with applicable law, they could request or impose a wide range of remedies including requiring changes in advertising and collection practices, changes in the terms of our products (such as decreases in

interest rates or fees), the imposition of fines or penalties, or the paying of restitution or the taking of other remedial action with respect to affected customers. They also could require us to stop offering some of our products, either nationally or in selected states. To the extent that these remedies are imposed on the issuing banks through which we originate credit products, under certain circumstances we are responsible for the remedies as a result of our indemnification obligations with those banks. We also may elect to change practices or products that we believe are compliant with law simply to avoid regulatory scrutiny. Furthermore, negative publicity relating to any specific inquiry or investigation could hurt our ability to conduct business with various industry participants or to attract new accounts and could negatively affect our stock price, which would adversely affect our ability to raise additional capital and would raise our costs of doing business.

As discussed in more detail below, in March 2006, one of our subsidiaries stopped processing and servicing micro-loans in North Carolina in settlement of a review by the North Carolina Attorney General, and also in 2006, we terminated our processing and servicing of micro-loans for third-party banks in three other states in response to a position taken in February 2006 with respect to banks generally by the FDIC.

In June 2006, we entered into an assurance agreement with the New York Attorney General in order to resolve an inquiry into our marketing and other materials and our servicing and collection practices, principally as a result of New York Personal Property Law Section 413. Pursuant to this agreement, we agreed to pay a $0.5 million civil penalty to the State of New York and to refund certain fees to New York cardholders, which resulted in cash payments of under $2.0 million and a charge against a $5.0 million liability that we accrued for this purpose. In addition, we assured the New York Attorney General that we would not engage in certain marketing, billing, servicing and collection practices, a number of which we previously had discontinued.

Also, commencing in June 2006, the FDIC began investigating the policies, practices and procedures used in connection with our credit card originating financial institution relationships. In December 2006, the FTC commenced a related investigation. In general, the investigations focus upon whether marketing and other materials contained misrepresentations regarding, among other things, fees and credit limits and whether servicing and collection practices were conducted in accordance with applicable law. We have provided substantial information to both the FDIC and FTC, and we continue to respond to their requests. The FDIC and FTC have proposed limitations on certain marketing, servicing and collection practices, reimbursement of significant fees to affected customers and the payment of fines. We believe that our marketing and other materials and servicing and collection practices comply with applicable law, and we are vigorously contesting the proposed reimbursement of fees and payment of fines. The matters under investigation involve a significant amount of fees and a substantial number of accounts, and although it is premature to determine the outcomes of these investigations or their effects on our financial condition, results of operations, business position and consolidated financial statements, an adverse outcome could have a materially adverse effect upon us.

If any additional deficiencies or violations of law or regulations are identified by us or asserted by any regulator, or if the FDIC, FTC or any other regulator requires us to change any of our practices, there can be no assurance that the correction of such deficiencies or violations, or the making of such changes, would not have a material adverse effect on our financial condition, results of operations or business. In addition, whether or not we modify our practices when a regulatory or enforcement authority requests or requires that we do so, there is a risk that we or other industry participants may be named as defendants in litigation involving alleged violations of federal and state laws and regulations, including consumer protection laws. Any failure to comply with legal requirements by us or the issuing banks through which we originate credit products in connection with the issuance of those products, or by us or our agents as the servicer of our accounts, could significantly impair our ability to collect the full amount of the account balances. The institution of any litigation of this nature, or any judgment against us or any other industry participant in any litigation of this nature, could adversely affect our business and financial condition in a variety of ways.

Increases in required minimum payment levels could impact our business adversely. Recently, regulators of credit card issuers have requested or required that issuers increase their minimum monthly payment requirements to prevent so-called “negative amortization,” in which the monthly minimum payment is not sufficient to reduce the outstanding balance even if new purchases are not made. This can be caused by, among other things, the imposition of over-limit, late and other fees. We request a minimum payment from our credit cardholders equal to the greater of 3% or 4% (depending upon the credit card product) of their outstanding balance or an amount that is sufficient to cover over-limit, late and other fees—a minimum payment level that is designed to prevent negative amortization. However, we have followed a more consumer-friendly practice of not treating cardholders as delinquent (with commensurate adverse credit agency reporting) provided they make a minimum payment of only 3% or 4% (depending on the credit card product) of their outstanding balance (i.e., exclusive of the requested over-limit, late and other fees). Because of this practice, as of June 30, 2007, approximately 3.1% of our accounts in the United States (representing approximately 5.3% of our receivables in the United States) were experiencing negative amortization; this compares with 3.8% of accounts and 5.9% of our receivables experiencing negative amortization as of December 31, 2006 and 3.8% of accounts and 5.7% of our receivables experiencing negative amortization as of June 30, 2006.

In response to comments about minimum payments and negative amortization received from the FDIC in the course of its routine examinations of the banks that issue credit cards on our behalf, during the second quarter of 2006 we began a review of our practices in this area. As a result of this review, commencing during the third and fourth quarters of 2006, we discontinued billing finance charges and fees on credit card accounts once they become over 90 days delinquent. In addition, we are reviewing alternative minimum payment, fee and other credit terms designed to prevent negative amortization. We have not, however, made any assessment of the impact of any changes on our business, although changes could adversely impact our delinquency and charge off statistics and the amounts ultimately collected from cardholders.

Adverse regulatory action with respect to issuing banks could adversely impact our business. It is possible that a regulatory position or action taken with respect to any of the issuing banks through which we originate credit products or for whom we service receivables, might result in the bank’s inability or unwillingness to originate credit products on our behalf or in partnership with us. For instance, in February 2006 the FDIC effectively asked insured financial institutions not to issue cash advance and installment micro-loans through third-party servicers. As a result of this request, the issuing bank for which we provided services in four states stopped making new loans. Similarly, two of the banks through which we traditionally have opened accounts currently are not opening new accounts, principally because of the pendency of the FDIC and FTC investigations discussed above, although we expect them to resume opening new accounts once these investigations are substantially complete. In the future, regulators may find other aspects of the products that we originate or service objectionable, including, for instance, the terms of the credit offerings (particularly for our high fee products), the manner in which we market them or our servicing and collection practices. We are entirely dependent in our issuing relationships with these institutions, and their regulators could at any time limit their ability to issue some or all products on our behalf, or that we service on their behalf, or to modify those products significantly. Any significant interruption of those relationships would result in our being unable to originate new receivables and other credit products, which would have a materially adverse impact on our business.

Changes to consumer protection laws or changes in their interpretation may impede collection efforts or otherwise adversely impact our business practices. Federal and state consumer protection laws regulate the creation and enforcement of consumer credit card receivables and other loans. As an originator and servicer of sub-prime receivables, we typically charge higher interest rates and fees than lenders serving consumers with higher credit scores. Sub-prime lenders are commonly the target of legislation (and revised legislative interpretations) intended to prohibit or curtail these and other industry-standard practices as well as non-standard practices. For instance, Congress recently enacted legislation that regulates loans to military personnel through imposing interest rate and other limitations and requiring new disclosures, all as regulated by the Department of Defense. Among others, changes in the consumer protection laws could result in the following:

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receivables not originated in compliance with law (or revised interpretations) could become unenforceable and uncollectible under their terms against the obligors;

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we may be required to refund previously collected amounts;

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certain of our collection methods could be prohibited, forcing us to revise our practices or adopt more costly or less effective practices;

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federal and state laws may limit our ability to recover on charged-off receivables regardless of any act or omission on our part;

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reductions in statutory limits for fees and finance charges could cause us to reduce our fees and charges;

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some of our products and services could be banned in certain states or at the federal level; for example, in 2004 the State of Georgia made certain micro-loan practices illegal and regulatory action and litigation has been brought in North Carolina alleging that certain micro-loan practices are prohibited in that state;

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federal or state bankruptcy or debtor relief laws could offer additional protections to customers seeking bankruptcy protection, providing a court greater leeway to reduce or discharge amounts owed to us; and

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a reduction in our ability or willingness to lend to certain individuals, such as military personnel.

Accordingly, our business is always subject to changes in the regulatory environment. Changes or additions to the consumer protection laws and related regulations, or to the prevailing interpretations thereof, could invalidate or call into question a number of our existing products, services and business practices, including our credit card origination, charged-off receivable collection, auto finance and micro-loan activities. Any material regulatory developments could adversely impact our results from operations.

Changes in bankruptcy laws may have an adverse impact on our performance. Effective October 17, 2005, the federal bankruptcy code was amended in several respects. One of the changes made it substantially more difficult for individuals to obtain a complete release from their debts through a bankruptcy filing. As a result, immediately prior to the effective date of the amendments there was a substantial increase in bankruptcy filings by individuals. While much of the impact of this

particular law change appears to have been simply to accelerate the bankruptcy filings by individuals who otherwise would have filed in due course and while this particular law may have ongoing future benefits to us through potential reductions in future bankruptcy filings, other future bankruptcy law changes could potentially have a materially adverse effect on our business.

The Retail Micro-Loans segment of our business operates in an increasingly hostile regulatory environment. Most states have specific laws regulating micro-loan activities and practices. (One form of these activities is sometimes referred to as “payday” lending.) Moreover, during the last few years, legislation has been adopted in some states that prohibits or severely restricts micro-loan cash advance services. For example, in 2004, a new law became effective in Georgia that effectively prohibits certain micro-loan practices in the state. Several other state legislatures have introduced bills to restrict or prohibit “cash advance” micro-loans by limiting the amount of the advance and or reducing the allowable fees. In addition, Mississippi and Arizona have sunset provisions in their laws permitting micro-loans that require renewal of the laws by the state legislatures at periodic intervals. Although states provide the primary regulatory framework under which we conduct our micro-loan services, certain federal laws also impact our business. In March 2005 the FDIC issued guidance limiting the frequency of borrower usage of cash advance micro-loans offered by FDIC-supervised institutions and the period a customer may have cash advance micro-loans outstanding from any lender to three months during the previous 12-month period. Subsequently, in February 2006, the FDIC effectively asked FDIC-insured financial institutions to cease cash advance and installment micro-loan activities conducted through a processing and servicing agent such as us. Moreover, future laws or regulations (at the state, federal or local level) prohibiting micro-loan services or making them unprofitable could be passed at any time or existing micro-loan laws could expire or be amended, any of which could have a material adverse effect on our business, results of operations and financial condition.

Additionally, state attorneys general, banking regulators and others continue to scrutinize the micro-loan industry and may take actions that could require us to cease or suspend operations in their respective states. For example, one of our subsidiaries agreed with the Attorney General of the State of North Carolina in March 2006 to stop servicing micro-loans for third-party banks, a practice that we also terminated in three other affected states based on the February 2006 FDIC action cited above. Also, a group of plaintiffs brought a series of putative class action lawsuits in North Carolina claiming, among other things, that the cash advance micro-loan activities of the defendants violate numerous North Carolina consumer protection laws. The lawsuits seek various remedies including treble damages. One of these lawsuits is pending against CompuCredit and five of our subsidiaries. If these cases are determined adversely to us, there could be significant consequences to us, including the payment of monetary damages. In the future, we also might voluntarily (or with the encouragement of a regulator) withdraw particular products from particular states, which could have a similar effect.

Negative publicity may impair acceptance of our products. Critics of sub-prime credit and micro-loan providers have in the past focused on marketing practices that they claim encourage consumers to borrow more money than they should, as well as on pricing practices that they claim are either confusing or result in prices that are too high. Consumer groups, Internet chat sites and media reports frequently characterize sub-prime lenders as predatory or abusive toward consumers and may misinform consumers regarding their rights. If these negative characterizations and misinformation become widely accepted by consumers, demand for our products and services could be adversely impacted. Increased criticism of the industry or criticism of us in the future could hurt customer acceptance of our products or lead to changes in the law or regulatory environment, either of which would significantly harm our business.

We Recently Entered Into and Have Subsequently Expanded Our Automobile Lending Activities, and These Activities Involve Risks in Addition to Those We Historically Have Faced.

In 2005, we acquired Wells Fargo Financial’s CAR business unit. We are operating these assets in forty-five states through eleven branches, three regional processing centers and one national collection center based in Lake Mary, Florida under the name CAR Financial Services, Inc. In February 2007, we acquired the business of ACC, also an automobile lender. Automobile lending is a new business for us, and we expect to expand further in this business over time. As a new business, we may not be able to integrate or manage the business effectively. In addition, automobile lending exposes us to a range of risks to which we previously have not been exposed, including the regulatory scheme that governs installment loans and those attendant to relying upon automobiles and their liquidation value as collateral. In addition, the CAR Financial Services business acquires loans on a wholesale basis from used car dealers, for which we will be relying upon the legal compliance and credit determinations by those dealers.

Our automobile lending business is dependent upon referrals from dealers. Currently we provide automobile loans only to or through new and used car dealers. Providers of automobile financing have traditionally competed based on the interest rate charged, the quality of credit accepted and the flexibility of loan terms offered. In order to be successful, we not only will need to be competitive in these areas, but also will need to establish and maintain good relations with dealers and provide them with a level of service greater than what they can obtain from our competitors. This is particularly true with our newly acquired ACC business, which stopped originating loans in November 2006 and is in the process of reestablishing its relationships with dealers.

The financial performance of our automobile loan portfolio is in part dependent upon the liquidation of repossessed automobiles. Our newly acquired ACC business regularly repossesses automobiles and sells repossessed automobiles at wholesale auction markets located throughout the United States. Auction proceeds from these sales and other recoveries rarely are sufficient to cover the outstanding balances of the contracts; where we experience these shortfalls, we will experience credit losses. Decreased auction proceeds resulting from depressed prices at which used automobiles may be sold in periods of economic slowdown or recession will result in higher credit losses for us. Furthermore, depressed prices for automobiles also may result from significant liquidations of rental fleet inventories and from increased volumes of trade-ins due to promotional programs offered by new vehicle manufacturers. Additionally, higher gasoline prices may decrease the auction value of certain types of vehicles, such as SUVs.

Repossession of Automobiles Entails the Risk of Litigation and Other Claims. Although we contract with reputable repossession firms to repossess automobiles on defaulted loans, it is not uncommon for consumers to assert that we were not entitled to repossess an automobile or that the repossession was not conducted in accordance with applicable law. These claims increase the cost of our collection efforts and, if correct, can result in awards against us.

We Routinely Explore Various Opportunities to Grow Our Business, to Make Investments and to Purchase and Sell Assets.

We routinely consider acquisitions of, or investments in, portfolios and other businesses as well as the sale of portfolios and portions of our business. There are a number of risks attendant to any acquisition, including the possibility that we will overvalue the assets to be purchased, that we will not be able to successfully integrate the acquired business or assets and that we will not be able to produce the expected level of profitability from the acquired business or assets. Similarly, there are a number of risks attendant to sales, including the possibility that we will undervalue the assets to be sold. As a result, the impact of any acquisition or sale on our future performance may not be as favorable as expected and actually may be adverse.

Portfolio purchases may cause fluctuations in reported credit card managed receivables data, which may reduce the usefulness of historical credit card managed loan data in evaluating our business. Our reported managed credit card receivables data may fluctuate substantially from quarter to quarter as a result of recent and future credit card portfolio acquisitions. As of June 30, 2007, credit card portfolio acquisitions account for 37.6% of our total credit card managed receivables portfolio based on our ownership percentages, and in April 2007 we purchased a portfolio in the United Kingdom having a face amount of approximately £490 million ($970 million) as of the date of purchase.

Receivables included in purchased portfolios are likely to have been originated using credit criteria different from our criteria. As a result, some of these receivables have a different credit quality than receivables we originated. Receivables included in any particular purchased portfolio may have significantly different delinquency rates and charge off rates than the receivables previously originated and purchased by us. These receivables also may earn different interest rates and fees as compared to other similar receivables in our receivables portfolio. These variables could cause our reported managed receivables data to fluctuate substantially in future periods making the evaluation of our business more difficult.

Any acquisition or investment that we make, will involve risks different from and in addition to the risks to which our business is currently exposed. These include the risks that we will not be able to successfully integrate and operate new businesses, that we will have to incur substantial indebtedness and increase our leverage in order to pay for the acquisitions, that we will be exposed to, and have to comply with, different regulatory regimes and that we will not be able to apply our traditional analytical framework (which is what we expect to be able to do) in a successful and value-enhancing manner.

Other Risks of Our Business

Unless we obtain a bank charter, we cannot issue credit cards other than through agreements with banks. Because we do not have a bank charter, we currently cannot issue credit cards other than through agreements with banks. Previously we applied for permission to acquire a bank and our application was denied. Unless we obtain a bank or credit card bank charter, we will continue to rely upon banking relationships to provide for the issuance of credit cards to our customers. Even if we obtain a bank charter, there may be restrictions on the types of credit that it may extend. Our longest standing issuing agreement is with CB&T and is scheduled to expire on March 31, 2009. If we are unable to execute a new agreement with CB&T or our other issuing banks at the expirations of our current agreements with them, or if our existing or new agreements with our issuing banks were terminated or otherwise disrupted, there is a risk that we would not be able to enter into agreements with an alternate provider on terms that we consider favorable or in a timely manner without disruption of our business.

We may not be able to purchase charged-off receivables at sufficiently favorable prices or terms for our debt collection operations to be successful. The charged-off receivables that are acquired and serviced by Jefferson Capital, our

debt collection subsidiary, or sold to third parties pursuant to forward flow contracts have been deemed uncollectible and written off by the originators. Jefferson Capital seeks to purchase charged-off receivables portfolios only if it expects projected collections or prices received for sales of such charged-off receivables to exceed its acquisition and servicing costs. Accordingly, factors causing the acquisition price of targeted portfolios to increase could reduce the ratio of collections (or sales prices received) to acquisitions costs for a given portfolio, and thereby negatively affect Jefferson Capital’s profitability. The availability of charged-off receivables portfolios at favorable prices and on favorable terms depends on a number of factors, including the continuation of the current growth and charge off trends in consumer receivables, our ability to develop and maintain long-term relationships with key charged-off receivable sellers, our ability to obtain adequate data to appropriately evaluate the collectibility of portfolios and competitive factors affecting potential purchasers and sellers of charged-off receivables, including pricing pressures, which may increase the cost to us of acquiring portfolios of charged-off receivables and reduce our return on such portfolios.

Additionally, sellers of charged-off receivables generally make numerous attempts to recover on their non-performing receivables, often using a combination of their in-house collection and legal departments as well as third-party collection agencies. Charged-off receivables are difficult to collect, and we may not be successful in collecting amounts sufficient to cover the costs associated with purchasing the receivables and funding our Jefferson Capital operations.

The analytical model we use to project credit quality may prove to be inaccurate. We assess credit quality using an analytical model that we believe predicts the likelihood of payment more accurately than traditional credit scoring models. For instance, we have identified factors (such as delinquencies, defaults and bankruptcies) that under some circumstances we weight differently than do other credit providers. We believe our analysis enables us to better identify consumers within the underserved market who are likely to be better credit risks than otherwise would be expected. Similarly, we apply our analytical model to entire portfolios in order to identify those that may be more valuable than the seller or other potential purchasers might recognize. There can be no assurance, however, that we will be able to achieve the collections forecasted by our analytical model. If any of our assumptions underlying our model proves materially inaccurate or changes unexpectedly, we may not be able to achieve our expected levels of collection, and our revenues will be reduced, which would result in a reduction of our earnings.

Because we outsource account-processing functions that are integral to our business, any disruption or termination of that outsourcing relationship could harm our business. We outsource account and payment processing pursuant to agreements with CB&T and its affiliates. In 2006, we paid CB&T and its affiliates $36.5 million for these services. If these agreements were not renewed or were terminated or the services provided to us otherwise disrupted, we would have to obtain these services from an alternative provider, such as First Data Resources, Inc., which currently provides only limited account and payment processing for us. There is a risk that we would not be able to enter into a similar agreement with an alternate provider on terms that we consider favorable or in a timely manner without disruption of our business.

If we obtain a bank charter, any changes in applicable state or federal laws could adversely affect our business. From time-to-time we have explored the possibility of acquiring a bank or credit card bank. If we obtain a bank or credit card bank charter, we will be subject to the various state and federal regulations generally applicable to similar institutions, including restrictions on the ability of the banking subsidiary to pay dividends to us. We are unable to predict the effect of any future changes of applicable state and federal laws or regulations, but such changes could adversely affect the bank’s business and operations.

If we ever consolidate the entities that hold our receivables, the changes to our financial statements are likely to be significant. When we securitize receivables, they are owned by special purpose entities that are not consolidated with us for financial reporting purposes. The rules governing whether these entities are consolidated are complex and evolving. These rules at some point could be changed or interpreted in a manner that requires us to consolidate these entities. In addition, we might at some point modify how we securitize receivables, or propose modifications to existing securitization facilities, such that the consolidation of these entities could be required. If this occurred, we would include the receivables as assets on our balance sheet and also would include a loan loss reserve. Similarly, we no longer would include the corresponding retained interests as assets. There also would be significant changes to our statements of operations and cash flows. The net effect of consolidation would be dependent upon the amount and nature of the receivables at the time they were consolidated, and although it is difficult to predict the net effect of consolidation, it is likely to be material.

Internet security breaches could damage our reputation and business. Internet security breaches could damage our reputation and business. As part of our growth strategy, we may expand our origination of credit card accounts over the Internet. The secure transmission of confidential information over the Internet is essential to maintaining consumer confidence in our products and services offered online. Advances in computer capabilities, new discoveries or other developments could result in a compromise or breach of the technology used by us to protect customer application and transaction data transmitted over the Internet. Security breaches could damage our reputation and expose us to a risk of loss or litigation. Moreover, consumers generally are concerned with security and privacy on the Internet, and any publicized security problems could

inhibit the growth of the Internet as a means of conducting commercial transactions. Our ability to solicit new account holders over the Internet would be severely impeded if consumers become unwilling to transmit confidential information online.

Investments that we make in the securities of others may be more risky and volatile than similar assets owned by us. From time-to-time we purchase debt and securities of others, principally those issued by asset-backed securitization trusts (e.g., notes secured or “backed” by pools of assets). These securities in many cases are junior, including below investment grade, traunches of securities issued by the trusts. The assets underlying these securities are not originated by us and, accordingly, may not meet the underwriting standards that we follow in originating receivables. Further, we do not have direct control over the management of the underlying assets and, similarly, they may not be managed as effectively as we would manage similar assets. As a result, the securities in which we invest may carry higher risks, including risks of higher delinquencies and charge offs, risks of covenant violations and risks of value impairment due to the claims of more senior securities issued by the trusts, than similar assets originated and owned by us. These higher risks can cause much greater valuation volatility for these securities than we typically have experienced and would expect to experience on our holdings of securities underlying the trusts that we service. And although these securities generally are traded in an active secondary market, valuation volatility also can be expected to result from liquidity needs that we might have in the future, including any need that we may have for quick liquidity or to meet margin requirements related to our investments in these securities should their prices decline. In turn, this could result in steep and immediate impairments in the values of the securities as presented within our financial statements and could cause our financial position and results of operations to deteriorate, possibly materially. Most recently, we have made these investments through a subsidiary that was advised by United Capital Asset Management LLC. These investments experienced realized losses (net of interest income) of $15.2 million and unrealized losses of $10.3 million during the three months ended June 30, 2007. These losses were the result of what we believe to be a significant dislocation in the market for mortgage-related and other asset-backed securities caused, in part, by leverage and liquidity constraints facing many market participants. We have experienced additional losses subsequent to June 30, 2007, and may experience additional losses in the future. Because our investments in these securities are leveraged—the equity investment supporting our $99.8 million securities portfolio at June 30, 2007 was $45.0 million—market price movements can have a significant and rapid impact on the value of our investments.

Risks Relating to an Investment in Our Common Stock

The price of our common stock may fluctuate significantly, and this may make it difficult for you to resell your shares of our common stock when you want or at prices you find attractive. The price of our common stock on the NASDAQ Global Market constantly changes. We expect that the market price of our common stock will continue to fluctuate. The market price of our common stock may fluctuate in response to numerous factors, many of which are beyond our control. These factors include the following:

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actual or anticipated fluctuations in our operating results;

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changes in expectations as to our future financial performance, including financial estimates by securities analysts and investors;

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the operating and stock performance of our competitors;

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announcements by us or our competitors of new products or services or significant contracts, acquisitions, strategic partnerships, joint ventures or capital commitments;

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changes in interest rates;

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the announcement of enforcement actions or investigations against us or our competitors or other negative publicity relating to us or our industry;

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changes in accounting principles generally accepted in the United States of America (“GAAP”), laws, regulations or the interpretations thereof that affect our various business activities and segments;

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general domestic or international economic, market and political conditions;

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additions or departures of key personnel; and

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future sales of our common stock and the share lending agreement.

In addition, the stock markets from time to time experience extreme price and volume fluctuations that may be unrelated or disproportionate to the operating performance of companies. These broad fluctuations may adversely affect the trading price of our common stock, regardless of our actual operating performance.

Future sales of our common stock or equity-related securities in the public market, including sales of our common stock pursuant to share lending agreements or in short sales transactions by purchasers of convertible notes securities, could adversely affect the trading price of our common stock and our ability to raise funds in new stock offerings. Sales of significant amounts of our common stock or equity-related securities in the public market, including sales pursuant to share

lending agreements, or the perception that such sales will occur, could adversely affect prevailing trading prices of our common stock and could impair our ability to raise capital through future offerings of equity or equity-related securities. No prediction can be made as to the effect, if any, that future sales of shares of common stock or the availability of shares of common stock for future sale, including sales of our common stock in short sales transactions by purchasers of the notes, will have on the trading price of our common stock.

We have the ability to issue preferred shares without shareholder approval. Our common shares may be subordinate to classes of preferred shares issued in the future in the payment of dividends and other distributions made with respect to common shares, including distributions upon liquidation or dissolution. Our articles of incorporation permit our board of directors to issue preferred shares without first obtaining shareholder approval. If we issued preferred shares, these additional securities may have dividend or liquidation preferences senior to the common shares. If we issue convertible preferred shares, a subsequent conversion may dilute the current common shareholders’ interest.

Our executive officers, directors and parties related to them, in the aggregate, control a majority of our voting stock and may have the ability to control matters requiring shareholder approval. Our executive officers, directors and parties related to them own a large enough stake in us to have an influence on, if not control of, the matters presented to shareholders. As a result, these shareholders may have the ability to control matters requiring shareholder approval, including the election and removal of directors, the approval of significant corporate transactions, such as any reclassification, reorganization, merger, consolidation or sale of all or substantially all of our assets and the control of our management and affairs. Accordingly, this concentration of ownership may have the effect of delaying, deferring or preventing a change of control of us, impede a merger, consolidation, takeover or other business combination involving us or discourage a potential acquirer from making a tender offer or otherwise attempting to obtain control of us, which in turn could have an adverse effect on the market price of our common stock.

Note Regarding Risk Factors

The risk factors presented above are all of the ones that we currently consider material. However, they are not the only ones facing our company. Additional risks not presently known to us, or which we currently consider immaterial, may also adversely affect us. There may be risks that a particular investor views differently from us, and our analysis might be wrong. If any of the risks that we face actually occur, our business, financial condition and operating results could be materially adversely affected and could differ materially from any possible results suggested by any forward-looking statements that we have made or might make. In such case, the trading price of our common stock could decline, and you could lose part or all of your investment. We expressly disclaim any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

We held our annual shareholders meeting on May 9, 2007. Proxies for the meeting were solicited pursuant to Section 14(a) of the Securities Exchange Act of 1934, and there was no solicitation in opposition to the board’s solicitation. The matters were submitted to a vote and the results thereof are set forth below.

(1)

Proposal to elect nine directors to hold office for a term of one year and until their respective successors are duly elected and qualified.


Nominee	For	Withheld
David G. Hanna	49,128,028	1,129,489
Richard W. Gilbert	49,135,926	1,121,591
Richard R. House, Jr.	49,136,216	1,121,301
Gregory J. Corona	49,057,386	1,200,131
Frank J. Hanna, III	49,033,834	1,223,683
Deal W. Hudson	49,153,382	1,104,135
Mack F. Mattingly	49,261,882	995,635
Nicholas B. Paumgarten	49,263,725	993,792
Thomas G. Rosencrants	49,052,540	1,204,977

(2)

Proposal for approval of material terms of the performance criteria for executive incentive compensation under the 2004 Restricted Stock Plan.


For	Against	Abstained	Broker non-votes
43,436,129	853,613	14,854	5,952,921

ITEM 5.

OTHER INFORMATION

In July 2007, we renewed our Series 2004-One variable funding securitization facility through January 2010 at a reduced the size of $750 million; the note holder consented to our reduction in the size of this facility, which we desired to save costs associated with unused capacity as we have sufficient funding capacity within our originated portfolio master trust to meet our growth expectations within that trust.

ITEM 6.

EXHIBITS


Exhibit Number	Description of Exhibit	Incorporated by reference from CompuCredit’s SEC filings unless otherwise indicated:

10.1	Agreement relating to the Sale and Purchase of Monument Business, dated April 4, 2007	Filed herewith

10.2	Account Ownership Agreement for Partridge Acquired Portfolio Business Trust, dated April 4, 2007, with R Raphael & Sons PLC	Filed herewith

10.3	Receivables Purchase Agreement for Partridge Acquired Portfolio Business Trust, dated April 4, 2007, with R Raphael & Sons PLC	Filed herewith

10.4	Receivables Purchase Agreement for Partridge Acquired Portfolio Business Trust, dated April 4, 2007, with Partridge Funding Corporation	Filed herewith

10.5	Master Indenture for Partridge Acquired Portfolio Business Trust, dated April 4, 2007, among Partridge Acquired Portfolio Business Trust, Deutsche Bank Trust Company Americas, Deutsche Bank AG, London Branch and CompuCredit International Acquisition Corporation	Filed herewith

10.6	Series 2007-One Indenture Supplement for Partridge Acquired Portfolio Business Trust, dated April 4, 2007	Filed herewith

10.7	Transfer and Servicing Agreement for Partridge Acquired Portfolio Business Trust, dated April 4, 2007, among Partridge Funding Corporation, CompuCredit International Acquisition Corporation, Partridge Acquired Portfolio Business Trust and Deutsche Bank Trust Company Americas	Filed herewith

10.8	Second Amendment to the Note Purchase Agreement, Dated As Of July 30, 2007, among CompuCredit Credit Card Master Note Business Trust, CompuCredit Funding Corp., CompuCredit Corporation and Merrill Lynch Mortgage Capital Inc.	Filed herewith

31.1	Certification per Section 302 of the Sarbanes-Oxley Act of 2002 for David G. Hanna	Filed herewith

31.2	Certification per Section 302 of the Sarbanes-Oxley Act of 2002 for J.Paul Whitehead, III	Filed herewith

32.1	Certification per Section 906 of the Sarbanes-Oxley Act of 2002 for David G. Hanna and J.Paul Whitehead, III	Filed herewith

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	COMPUCREDIT CORPORATION

August 1, 2007	By	/s/ J. PAUL WHITEHEAD, III
		J. Paul Whitehead, III
		Chief Financial Officer
		(duly authorized officer and principal financial officer)

Exhibit 10.1


D ATED		4 ^TH A PRIL 2007

B ARCLAYS B ANK PLC

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C OMPU C REDIT UK L IMITED

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C OMPU C REDIT I NTERNATIONAL A CQUISITION C ORPORATION

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C OMPU C REDIT S ERVICES C ORPORATION

A GREEMENT

RELATING TO

THE SALE AND PURCHASE OF

M ONUMENT B USINESS

Lovells

C ONTENTS


C LAUSE		Page
1.	I NTERPRETATION	1
2.	S ALE AND PURCHASE	13
3.	P URCHASE P RICE AND P AYMENT	15
4.	P RE - COMPLETION MATTERS	16
5.	C OMPLETION	20
6.	P OST -C REDIT C ARD C OMPLETION M ATTERS	24
7.	R EIMBURSEMENT AND P OST C LOSING P AYMENTS	26
8.	VAT	28
9.	W ARRANTIES	29
10.	L IMITATION ON C LAIMS	30
11.	A SSUMPTION OF A SSUMED L IABILITIES AND A PPORTIONMENT OF BUSINESS RESPONSIBILITY	30
12.	E MPLOYEES	34
13.	P OST C OMPLETION COVENANTS	38
14.	C ONFIDENTIALITY	42
15.	A NNOUNCEMENTS	43
16.	F URTHER ASSURANCE AND AVAILABILITY OF INFORMATION	43
17.	P ROPERTY AND C APITAL A LLOWANCES	44
18.	P ENSIONS	45
19.	A SSIGNED C ONTRACTS	45
20.	S UCCESSORS AND A SSIGNMENT	46
21.	N OTICES	47
22.	E NTIRE AGREEMENT AND VARIATION	49
23.	G ENERAL PROVISIONS	49
24.	G UARANTEES	50
25.	G OVERNING LAW , JURISDICTION AND SERVICE OF PROCESS	52
26.	D ESIGNEE	53
27.	P URCHASERS ’ L IABILITY J OINT AND S EVERAL	53

S CHEDULES

1.	P URCHASE P RICE
	P ART A: A LLOCATION
	P ART B: R EVIEWING THE S IGNING S TATEMENT
	P ART C: F ORM OF S IGNING S TATEMENT
2.	W ARRANTIES
3.	P URCHASERS ’ W ARRANTIES
4.	S ELLER ’ S KNOWLEDGE
5.	D OMAIN N AMES


6.		P ROPERTY
		P ART A: T HE P ROPERTY
		P ART B: T ERMS APPLICABLE TO THE PROPERTY
		P ART C:T ERMS APPLICABLE TO THE PROPERTY SUBLEASE
		P ART D: D ILAPIDATIONS C LAIMS UNDER THE P ROPERTY L EASE
7.		P ENSION P ROVISIONS
8.		C ONTRACTS
		P ART A: A SSIGNED C ONTRACTS
		P ART B: M ATERIAL C ONTRACTS
9.		F ORM OF S ECTION 198 E LECTION
10.		G UIDELINES FOR D ETERMINING T RANCHE B A CCOUNTS
11.		I NFRASTRUCTURE A SSETS
		P ART A: O THER A SSETS
		P ART B: I NFORMATION T ECHNOLOGY I NFRASTRUCTURE A SSETS
12.		R EFUND P OLICY
13.		S IGNING S TATEMENT P ROCEDURES
14.		L IMITATIONS ON C LAIMS
15.		U NENFORCEABILITY A LLEGATIONS
16.		E MPLOYMENT M ATTERS

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D OCUMENTS IN THE AGREED TERMS

Index of Disclosure Documents

Legal Assignment of Assets (clause 2.5)

Declaration of Trust (clauses 2.5 and 5.2(c))

Pre-Signing Statement (clause 4.1)

Notices of Assignment (clause 5.2(b))

Assignment of the Monument Credit Card Intellectual Property (clause 5.3(b)(i))

Licence Back (clause 5.3(b)(ii))

Letter to Bank of America, CompuCredit Corporation and Raphael Bank (clause 5.3(b)(iv))

Assignments or novations of Assigned Contracts (clause 5.5(d))

Assignment of the Monument Infrastructure Intellectual Property (clause 5.5(i))

Letter to Seller from CompuCredit Corporation (clause 5.7(b)(iv))

Notice to Cardholders (clause 6.1)

Measures Letter (clause 12.14)

Announcements (clause 15)

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T HIS AGREEMENT is made on		4 ^th April 2007

B ETWEEN :

(1)	Barclays Bank PLC , a company incorporated in England and Wales with registered number 01026167 whose registered office is at 1 Churchill Place London E14 5HP (the “Seller” );

(2)	CompuCredit UK Limited , a company incorporated in England and Wales with number 6032187 whose registered office is at c/o Allen & Overy LLP, One Bishops Square, London E1 6AO ( “CompuCredit UK “ );

(3)	CompuCredit International Acquisition Corporation , a company incorporated in Nevada, USA, with number E0041862007-2 whose registered office is at Suite 850-33A, 101 Convention Center Drive, Las Vegas, Nevada 89109, USA ( “CCIA” ); and

(4)	CompuCredit Services Corporation , a company incorporated in Nevada, with number C21445-1998 whose registered office is at Suite 850-33A, 101 Convention Center Drive, Las Vegas, Nevada 89109, USA (the “Guarantor” ) .

R ECITALS :

(A)

The Seller has agreed to sell the Assets and to transfer the Business to the Purchasers (or in respect of CCIA to Raphael Bank as CCIA’s designee) and the Purchasers have agreed to purchase (or, in respect of CCIA, to procure the acquisition by Raphael Bank as CCIA’s designee of) the Assets and the Business on and subject to the terms of this Agreement.

(B)	CCIA has agreed to guarantee the obligations of CompuCredit UK contained in this Agreement and the Guarantor has agreed to guarantee the obligations of the Purchasers contained in this Agreement on the terms set out in clause 24.

(C)	CCIA intends to designate Raphael Bank to acquire certain of the Credit Card Assets.

I T IS AGREED :

1.	I NTERPRETATION

1.1	In this Agreement:

“Affiliate” means, with respect to any person, corporation or entity, any other person, corporation or entity that directly or indirectly controls, is controlled by or is under common control with such person, corporation or entity. 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;

“Applicable Laws” means all applicable by-laws, rules, statutes, regulations (including any applicable regulations or requirements of the FSA or any other relevant regulator having jurisdiction with respect to the Business), voluntary codes of practice including orders, ordinances, protocols, codes, guidelines, tax treaties, policies, notices, directions and judgments or other requirements of any Governmental Authority;

“Assets” means collectively the Credit Card Assets and the Infrastructure Assets to be sold and purchased under this Agreement and includes (where the context permits) each or any of the Assets;

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“Assigned Contracts” means the contracts listed or referred to in Part A of Schedule 8;

“Assignment Date” means the date which is 10 days after the notices referred to in clause 6.1 have been posted to Cardholders in accordance with such clause;

“Assumed Liabilities” has the meaning given in clause 11.1;

“Authorised Guarantee Agreement” has the meaning given in clause 5.5 of the Property Lease;

“Barclays Data Warehouse” means the database holding account level data on all Monument branded accounts;

“BIN” means the 426565, 426566 and 426567 bank identification numbers issued by Visa to the Seller and which the Seller currently uses in connection with the Business;

“Bonus Cap” means, in relation to Transferring Employees, an amount equal to the Bonus Cap Percentage multiplied by the total annual salary entitlement of such employees pro-rated to reflect the period from the beginning of the bonus accrual period in question up to and including the relevant Services Assumption Date;

“Bonus Cap Percentage” means the greater of 12 per cent. and the percentage of annual salaries paid to staff employed in the Business located at the Property by way of bonus in respect of the calendar year 2006;

“Business” means the business of the Seller consisting of the origination and administration of the Sale Accounts (including that part of the business transferred to the Seller by the Predecessor);

“Business Day” means a day (other than a Saturday or a Sunday) on which banks are open for business in London;

“Cardholder” means a person who has entered into a Cardholder Agreement;

“Cardholder Agreement” means an agreement regulated by the CCA under which a Credit Card has been or is in the course of being issued or re-issued by the Seller or a Predecessor to a Cardholder and containing the terms and conditions of the relevant Sale Account;

“Cardholder Payments” means the payments made by or on behalf of Cardholders in accordance with the terms of their Cardholder Agreements;

“Card Scheme Association” means Visa International Services Association and any other Visa entities as appropriate;

“Card Scheme Rules” means the operating rules, by-laws and regulations of the Card Scheme Association which are applicable to its credit card programme;

“Category 1 Claim” means a claim for a breach of any Category 1 Warranty and/or a Claim for breach of any of the covenants of the Seller set out in clause 4 of this Agreement;

“Category 1 Warranties” means Warranties A, B.1, B.4, B.8, B.10 and/or O and “Category 1 Warranty” means any of them;

“Category 2 Claim” means a claim for a breach of a Category 2 Warranty;

“Category 2 Warranties” means Warranties C.1, C.2, C.3, C.4, D.2, D.3, D.4, D.5, E.4, E.5, K.5 and/or N and a “ Category 2 Warranty ” means any of them;

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“Category 3 Claims” means all Warranty Claims other than (i) Category 1 Claims; and (ii) Category 2 Claims;

“CCA” means the Consumer Credit Act 1974;

“Charged-Off Account” means a Sale Account which has been charged off by the Seller in accordance with its applicable policy as at the Cut-Off Time;

“Claim” means any claim arising under this Agreement;

“Closing Master File Tape” means the TSYS master file tape prepared as at Credit Card Completion and containing account level data for the Sale Accounts only for the period from 28 February 2007 to the date of Credit Card Completion;

“Completion” means completion of the sale and purchase of the Business and the Infrastructure Assets (other than the Information Technology Infrastructure Assets) pursuant to this Agreement in accordance with its terms;

“Completion Date” means 1 June 2007 or such later date as notified by CCIA to the Seller in accordance with clause 5.14;

“Contracts” means all contracts and engagements (other than (a) the Property Lease; (b) the contracts of employment with the Transferring Employees; and (c) the Cardholder Agreements) entered into or orders made before Credit Card Completion by or on behalf of the Seller with third parties in connection with the Business which remain (in whole or in part) to be performed at Credit Card Completion including all orders and contracts for the manufacture, sale or purchase of goods or provision or supply of services or for the hire purchase, credit sale, leasing or license of goods or services, or the licensing of Intellectual Property Rights and including, in particular, the Assigned Contracts and the Material Contracts;

“Conversion Plan” means the plan developed by the parties as set out in the Transitional Services Agreement;

“Copy Records” means a copy of or relevant extracts from the books, records, documents and other information relating to the Assets, the Cardholders and the Sale Accounts in each case relating primarily to or which contains information which is material to all or any part of the Business, including as to its future operation, or to any Asset maintained or controlled by or on behalf of any Seller’s Group Company and which are in any Seller’s Group Company’s possession, custody or control or held on its behalf and does not relate to a Cardholder solely in their capacity as a customer of any Seller’s Group Company other than in their capacity as a Cardholder but excluding the Records, the Customer Data and Files, the Signing Date Account List and the sale and purchase agreement relating to the purchase of certain Sale Accounts by the Seller from Providian National Bank (together with the related documents which, together with such agreement, comprise the contractual arrangements between the Seller and Providian National Bank relating to such purchase);

“Covered Accounts” has the meaning given in clause 7.1;

“Credit Card” means a card which has been issued or re-issued for use in connection with a Sale Account;

“Credit Card Account” means the account which records the amount owed by each Cardholder under his or her Cardholder Agreement;

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“Credit Card Assets” means collectively those assets described in clauses 2.1 and 2.2 to be sold and purchased under this Agreement and includes (where the context permits) each or any of them;

“Credit Card Completion” means completion of the sale and purchase of the Credit Card Assets pursuant to this Agreement in accordance with its terms;

“Credit Card Credit Balance” means any amount owing by the Seller to a Cardholder on a Sale Account as at the Cut-Off Time;

“Credit Card Purchase Price” means the amount which equals the Purchase Price minus the Monument Assets Consideration;

“Credit Card Stock” means the stock of plastic cards owned by the Seller which are branded with the Trade Mark;

“Customer Data and Files” means collectively, all data, files and information (whether current or historic) relating to Cardholders, Sale Accounts and the operation of the Business, including all (i) applications for Credit Cards and other account opening information (whether pending or historical), including details of anti-money laundering checks; (ii) credit reports, credit records, application scores, behaviour scores, delinquency status; (iii) monthly account statements; (iv) credit and account information and history; and (v) credit bureau data captured during account origination, in each case whether stored electronically or in hard copy and whether in aggregate form or segregated by Cardholder identity, document or record type but only to the extent that such data, files and information are in any Seller’s Group Company’s possession, custody or control or held on its behalf and does not relate to a Cardholder solely in their capacity as a customer of any Seller’s Group Company other than in their capacity as a Cardholder;

“Cut-Off Time” means 23.59.59 p.m. on the date of this Agreement;

“Daily Settlement Amount” means, as from the Cut-Off Time, the amount payable each day to the Card Scheme Association in respect of the Credit Cards (including any fraudulent use of those Credit Cards);

“Data Extracts” means the computer generated files prepared as at 31 October 2006, 31 December 2006, 31 January 2007 and 28 February 2007 containing monthly account level data for the period from January 2004 to February 2007 contained on the CD-Roms initialled for identification by or on behalf of the Seller and the Purchasers;

“Data Protection Legislation” means the Data Protection Act 1998, the Privacy and Electronic Communications (EC Directive) Regulations 2003, Part 1 of the Regulation of Investigatory Powers Act 2000 and equivalent legislation in any other relevant jurisdictions;

“Data Warehouse Database” means the database to be built pursuant to the Data Segregation Plan (as that term is defined in the Transitional Services Agreement) containing the Customer Data and Files;

“Declaration of Trust” means the declaration of trust by Barclays in respect of certain Credit Card Assets in favour of Raphael Bank as CCIA’s designee in the agreed terms;

“Direct Debiting Scheme Rules” means the direct debiting scheme operated by members of the Association for Payment Clearing Services as amended from time to time or any scheme which replaces it;

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“Disagreement Notice” has the meaning given in paragraph Error! Reference source not found. of Part B of Schedule 1;

“Disclosure Documents” means the 43 files of documents as set out in the index in the agreed terms attached to the Disclosure Letter;

“Disclosure Letter” means the letter of the same date as the date of this Agreement from the Seller to the Purchasers referred to in clause 9.3;

“Domain Names” mean the list of domain names set out in Schedule 5;

“Draft Signing Statement” has the meaning given in clause 3.7;

“Due Diligence Data” means the Data Extracts, the Master File Tapes and the Pro-Forma Historic File;

“Employment Information” means in relation to each Transferring Employee, a list of their names and full or accurate details concerning his or her employee number, age or date of birth, date of commencement of employment and, if different, date of continuous employment, location, temporary or permanent or fixed term status, if fixed term status the date on which employment is to end, notice period, grade, remuneration, bonus, commission or other form of profit sharing (whether contractual or discretionary, and in case identified as such), holiday entitlement, sick pay entitlement, life assurance, medical insurance, permanent health insurance, pension membership by scheme (including but not limited to his or her membership type, employer and employee contribution rates for each scheme), entitlement under any incentive plan involving securities or which is securities based, any current disciplinary or grievance procedure taken against him or her, any court or tribunal case, claim or action brought by him or her against the Seller within the previous two years or which the Seller has reasonable grounds to believe that he or she may bring against CompuCredit UK arising out of his or employment with the Seller and any collective agreement which will have effect after his or transfer to CompuCredit UK in relation to him or her;

“Encumbrance” means any mortgage, claim, charge (fixed or floating), pledge, lien, equity, option, right to acquire, right of pre-emption, assignment, hypothecation, security interest, title retention, other similar third party right, or any agreement to create any of the foregoing;

“Estimated Purchase Price” means £388,741,750;

“Excluded Accounts” means each Credit Card Account that meets one or more of the following criteria as of the Cut-Off Time:

(a)

any account that is the subject of a dispute as to the validity, enforceability or existence of the account, or the underlying Cardholder Agreement, which dispute has either been notified to the Seller in writing or is recorded in the Seller’s records as of the Cut-Off Time;

(b)

any Charged-Off Account or any account which should have been a Charged-Off Account as at the Cut-Off Time if the Policies and Procedures had been correctly applied;

(c)

any account which is the subject of litigation, other than accounts that are in litigation solely as a result of legal collection initiated by the Seller but which are not Charged-Off Accounts;

(d)

any account the Cardholder of which does not have an address located in the United Kingdom;

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(e)

any account on which the first payment has become due and payable and the Cardholder has never made a payment;

(f)

any account which has been re-aged otherwise than in accordance with the Policies and Procedures (but excluding for these purposes any accounts which have been re-aged incorrectly as a result of a conversion from one system of record to another as set out in the second paragraph of pages 6 and 7 of the Disclosure Letter) provided that such accounts will only be excluded if the aggregate Pre-Signing Receivables on such accounts exceeds £125,000;

(g)

any test accounts opened or maintained by the Seller with respect to the Card Scheme Association system for verification or other internal purposes;

(h)

any account for which the related Obligor has pledged assets or made a cash collateral deposit as full or partial security for payment of the Pre-Signing Receivables arising in such account, which assets or deposits are held by the Seller as of Credit Card Completion;

(i)

any account, (i) the Cardholder in respect of which is dead; or (ii) the Cardholder in respect of which has filed for bankruptcy; or (iii) the Cardholder in respect of which has had an individual voluntary arrangement approved by the Seller; or (iv) which has been originated by fraud or fraudulent action, in each case on or before the Cut-Off Time; and/or

(j)

any account which is not a Tranche B Account or a Tranche C Account;

“Excluded Accounts Customer Data” means collectively, data for the period from origination to Credit Card Completion, relating to all Excluded Accounts (other than Tranche A Accounts) and Charged-Off Accounts, setting out the following information but excluding any Personal Data and instead referenced to the relevant account number: all (i) credit reports, credit records, application scores, behaviour scores, delinquency status and (ii) credit and account information and history, including all up to date credit reference agency information relating to each such account, but only to the extent that such data is in any Seller’s Group Company’s possession, custody or control or held on its behalf and does not relate to a holder of an Excluded Account or Charged-Off Account solely in their capacity as a customer of any Seller’s Group Company other than in their capacity as a cardholder of a Monument branded account;

“Final Completion” means completion of the sale and purchase of the Information Technology Infrastructure Assets pursuant to this Agreement in accordance with its terms;

“Final Completion Date” means 31 March 2008, or such earlier date as agreed in writing between the Seller and the Purchasers;

“Fixtures” has the meaning set out in clause 17.2;

“FSA” means the United Kingdom’s Financial Services Authority or its successor body from time to time;

“Goodwill” means the goodwill associated with the Business, the right of the Seller to use the Trade Mark in relation to the Business and the exclusive right of the Purchasers to represent themselves as carrying on the Business in succession to the Seller;

“Governmental Authority” means any government, regulatory authority, governmental department, agency, commission, board, tribunal, crown corporation, or court or other law, rule or regulation-making entity having jurisdiction on behalf of the United Kingdom or any part or subdivision thereof or any local authority, district or other subdivision thereof;

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“HMRC” means Her Majesty’s Revenue and Customs;

“ICTA 1988” means the Income and Corporation Taxes Act 1988;

“include” means include without limitation and “including” means including without limitation;

“Independent Accountant” means a firm of chartered accountants appointed jointly by the Seller and CCIA or, if they fail to agree an appointee within seven Business Days of either first proposing such a person by notice to the other, to be appointed on the application of either party by the President or other senior officer for the time being of the Institute of Chartered Accountants in England and Wales;

“Indemnified Party” has the meaning given in clause 13.5;

“Indemnifying Party” has the meaning given in clause 13.5;

“Information Technology Infrastructure Assets” means those assets listed in Part B of Schedule 11;

“Information Technology Infrastructure Assets Apportionment Statement” means the statement to be prepared pursuant to clause 11.10;

“Infrastructure Assets” means collectively the assets described in clause 2.3 to be sold and purchased under this Agreement and includes (where the context permits) each or any of them;

“Infrastructure Assets Apportionment Statement” means the statement to be prepared pursuant to clause 11.5;

“Infrastructure Warranties” means Warranties A.1, A.4, F.1, H.1 to H.7, I.1, I.2, I.4, J.1, J.2, J.6, J.7, J.8, J.9, J.10, J.12, J.14 to J.17, K.1 to K.3, L.1 to L.4 and insofar as they relate to the Infrastructure Assets, Warranties A.2, A.3, B.1, B.2, E.1 to E.5, G.2 to G.4 and M;

“Intellectual Property Rights” means trade marks, trade names, logos, get-up, patents, inventions, design rights, copyrights, rights of extraction relating to databases, proprietary models, rights in computer software, domain names and all other similar proprietary rights (whether registered or unregistered) which may subsist in any part of the world (but excluding Know-How) including registrations of such rights and applications and rights to apply for such registrations;

“Interchange” means the Card Scheme Association interchange fees net of reverse interchange fees payable to the Seller in respect of the Sale Accounts in its capacity as issuer of the Credit Cards;

“Key Personnel” has the meaning set out in the Transitional Services Agreement;

“Know-How” means trade secrets, confidential information, know-how, inventions, technical or commercial knowledge and manufacturing or business processes, methods and procedures;

“Legal Assignment of Assets” means the legal assignment of the Credit Card Assets described in clauses 2.1(b), (c), (d) and (e), in the agreed terms;

“Liabilities” means all liabilities, duties and obligations of every description, whether deriving from contract, common law, statute or otherwise, whether present or future, actual or contingent, ascertained or unascertained or disputed and whether owed or incurred severally or jointly and as principal or surety and “Liability” means any one of them;

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“Licence Back” means the licence of the Trade Mark to be entered into between the Seller and CCIA in the agreed terms;

“Losses” means any and all claims, actions, losses, liabilities, costs, penalties, fines, expenses (including reasonable professional fees), damages, obligations to third parties, expenditures, proceedings, judgments, awards, settlements or demands that are imposed upon or otherwise incurred, suffered or sustained by the relevant party;

“Master File Tapes” means the TSYS master file tapes prepared as at December 2006 and containing account level data for the Monument branded accounts for the month of December 2006 initialled for identification by or on behalf of the Seller and the Purchasers;

“Material Contracts” mean the Contracts listed or referred to in Part B of Schedule 8;

“Measures Letter” means the letters dated 26 February 2007 and 20 March 2007 from the Purchasers to the Seller and the benefits table attached to the email of 18:00 on 2 April 2007 from Erica Alweiss of the Purchaser to Carla Williams of the Seller;

“Monument Assets Consideration” means the amount of £2.3 million (payable as consideration for the Infrastructure Assets);

“Monument Credit Card Intellectual Property” means the (i) the Trade Mark; (ii) the rights in and to the Domain Names; and (iii) all Intellectual Property Rights owned by the Seller or any member of the Seller’s Group in the Customer Data and Files and the February Account List;

“Monument Infrastructure Intellectual Property” means (i) all Intellectual Property Rights owned by the Seller or any member of the Seller’s Group in the Records and the Assigned Contracts (or any of them); and (ii) all Intellectual Property Rights owned by the Seller or any member of the Seller’s Group and used exclusively in connection with the Business (other than the Monument Credit Card Intellectual Property);

“Monument Intellectual Property” means together the Monument Credit Card Intellectual Property and the Monument Infrastructure Intellectual Property;

“National Insurance Elections” means elections to transfer secondary Class 1 National Insurance Contributions under paragraph 3B of Schedule 1 to the Social Security Contributions and Benefits Act 1992 and agreements to permit recovery of such contributions under paragraph 3A of Schedule 1 to the Social Security Contributions and Benefits Act 1992;

“National Insurance Recovery Agreements” means agreements made pursuant to the National Insurance Contributions and Statutory Payments Act 2004 and paragraph 7 of Schedule 4 to the Social Security (Contributions) Regulations 2001 to recover primary Class 1 National Insurance Contributions on non-monetary earnings from a Relevant Employee;

“Notices of Assignment” means (i) the notice to be given by Raphael Bank of the assignment of trust interests to CCIA; (ii) the notice to be given by CCIA of the assignment of trust interests to Partridge Funding Corporation; and (iii) the notice to be given by Partridge Funding Corporation of the assignment of trust interests to Partridge Acquired Portfolio Master Business Trust in the agreed terms;

- 8 -

“Notice to Cardholders” means the notice to be given to each Cardholder as contemplated by clause 6.1;

“Notification” has the meaning given in clause 12.5(a);

“Obligor” shall mean, with respect to any Sale Account, the person or persons obligated to make payments with respect to such Sale Account, including any guarantor thereof, but excluding any merchant;

“Other Assets” means those assets listed in Part A of Schedule 11;

“ Personal Data ” has the meaning given to this term in the Data Protection Act 1998;

“ Planning Acts ” means the Town and Country Planning Act 1990, the Planning (Listed Buildings and Conservation Areas) Act 1990, the Planning (Hazardous Substances) Act 1990, the Planning (Consequential Provisions) Act 1990, the Planning and Compensation Act 1991 and the Planning and Compulsory Purchase Act 2004;

“Policies and Procedures” have the meaning given in Warranty C.4;

“Pool 1 Employees” has the meaning set out in the Transitional Services Agreement;

“Pool 1 Transferring Employees” has the meaning set out in the Transitional Services Agreement;

“Pool 2 Activity” has the meaning set out in the Transitional Services Agreement;

“Pool 2 Employees” has the meaning set out in the Transitional Services Agreement;

“Pool 2 Transferring Employees” has the meaning set out in the Transitional Services Agreement;

“Pool 3 Employees” has the meaning set out in the Transitional Services Agreement;

“Post-Signing Receivables” means any and all amounts owing by Cardholders under the Cardholder Agreements and debited to the Sale Accounts including any amounts owing for the payment of goods and services, interest, cash advances, balance transfers, late charges and any and all other fees, expenses or charges of every nature, kind and description whatsoever, in respect of the period following the Cut-Off Time;

“Predecessor” means Providian National Bank and any other prior owner of the Sale Accounts;

“Pre-Signing Receivables” means all amounts owing by the Cardholders under the Cardholder Agreements and debited to the Sale Accounts as at the Cut-Off Time including any amounts owing for the payment of goods and services, interest, cash advances, balance transfers, and any fees payable on cash advances, balance transfers or foreign currency transactions and all amounts accrued and posted in the system of record with respect to any of the foregoing up to and including the Cut-Off Time, as reflected in the Signing Statement;

“Pre-Signing Statement” means a statement drawn up by the Seller using data derived as at 28 February 2007 and adjusted to estimate the Pre-Signing Receivables as at 31 March 2007 in the same format and prepared on the same basis as the Signing Statement and delivered to the Purchasers prior to the date of this Agreement in accordance with clause 4.1, showing each of the elements that make up the Estimated Purchase Price;

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“Pro-Forma Historic File” means the file prepared by the Seller containing a list of finder identification numbers generated as at January 2004 utilising the same tranche B account criteria used for the preparation of the Data Extracts contained on the CD-Rom initialled for identification by or on behalf of the Seller and the Purchasers;

“Property” means the Portland Building, Crawley, West Sussex as is demised by the Property Lease;

“Property Lease” means the lease of the Property dated 16 August 1999 between Canadian and Portland Developments Limited (1) and Providian National Bank (2) as varied by a deed of variation dated 25 June 2004 between Portland Building Crawley Limited (1) and the Seller (2);

“Property Sublease” means the sublease of part of the Property in the agreed terms;

“Purchasers” means collectively CCIA and CompuCredit UK, or either of them, as the context indicates;

“Purchase Price” means the amount calculated in accordance with clause 3.2;

“Purchasers’ Account” means Barclays Bank, Sort Code: 20-00-00, Account Name: CompuCredit International Acquisition Corporation, Account Number: 90280690, Swift: BARCGB22, IBAN: GB97 BARC 2000 0090 2806 90, Reference: Purchase of Barclays assets;

“Purchasers’ Group” means CompuCredit Corporation, any holding company and subsidiary undertakings of CompuCredit Corporation and the subsidiary undertakings of any such holding company, from time to time, and a “Purchasers’ Group Company” means any one of them;

“Purchasers’ Solicitors” means Allen & Overy LLP of One Bishops Square, London E1 6AO;

“Purchasers’ Warranties” means the warranties set out in Schedule 3 and “Purchasers’ Warranty” means any one of them;

“Raphael Bank” means R. Raphael & Sons Plc, registered number 01288938 whose registered office is at Albany Court Yard, 47-48 Piccadilly, London W1J 0LR;

“Receivables” means collectively the Post-Signing Receivables and the Pre-Signing Receivables;

“Records” means all of the books, records, documents and other information to the extent relating exclusively to the Assets, the Cardholders and the Sale Accounts (but excluding the Customer Data and Files and February Account List) maintained or controlled by or on behalf of any Seller’s Group Company and which are in any Seller’s Group Company’s possession, custody or control or held on its behalf;

“Relevant Employees” means the Pool 1 Employees and the Pool 2 Employees and “Relevant Employee” means any one of them;

“Retained Liabilities” has the meaning given in clause 11.2;

“Sale Account” means a Credit Card Account in respect of which a credit card branded with the Trade Mark has been issued or re-issued to a Cardholder which is not either an Excluded Account or a Charged-Off Account as of the Cut-Off Time and which is identified by account number on the Signing Date Account List;

“SEC” means the United States Securities and Exchange Commission;

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“Seller’s Account” means the account, the details of which are: Barclays Bank plc, Sort Code: 20-04-15, Account Name: AFTS default, Account Number: 68088306, Swift: BARCGB2108L, IBAN GB75BARC20041568088306, Payment Reference: Sale of Monument Business;

“Seller’s Group” means the Seller, any holding company and subsidiary undertakings of the Seller and the subsidiary undertakings of any such holding company, from time to time and a “Seller’s Group Company” means any one of them;

“Seller’s Marks” means the name Barclays Bank PLC;

“Seller’s Scheme” means the retirement benefit scheme known as The Barclays Bank UK Retirement Fund;

“Seller’s Settlement Account” means account, the details of which are: Barclays Bank plc, Sort Code: 20-04-15, Account Name: AFTS default, Account Number: 68088306, Swift: BARCGB2108L, IBAN GB75BARC20041568088306, Payment Reference: Monument Settlement;

“Seller’s Solicitors” means Lovells of Atlantic House, Holborn Viaduct, London EC1A 2FG;

“Services Assumption Date” means in the case of Pool 1 Transferring Employees the Completion Date and in the case of Pool 2 Transferring Employees, either the Transitional Activities Assumption Date of the relevant Pool 2 Activity as defined in the Transitional Services Agreement or such other date as the parties may agree pursuant to clause 6.8 of the Transitional Services Agreement;

“Share Plan or Plan” means any incentive plan or arrangement operated by the Seller involving securities or which is securities-based in which any Share Plan Employee can or could participate, including share option plans, long term incentive plans, restructured share plans, SAYE plans, share incentive plans and phantom plans and “Plans” will be construed accordingly;

“Share Plan Employee” means any employee whose employment will transfer under the TUPE Regulations or otherwise in connection with the sale and purchase of the Business pursuant to this Agreement;

“Signing Date Account List” has the meaning given in clause 3.6;

“Signing Statement” means the Draft Signing Statement incorporating any amendments made in accordance with paragraph 4 of Part B of Schedule 1;

“Tax” or “Taxation” means any and all forms of tax, duty, levy or other imposition whenever and by whatever Taxation Authority imposed and whether of the United Kingdom or elsewhere, including income tax, corporation tax, capital gains tax, inheritance tax, value added tax, customs duties, excise duties, stamp duty, stamp duty land tax, stamp duty reserve tax, national insurance and social security and any interest, penalty, fine or surcharge in connection with any such taxation;

“Taxation Authority” or “Tax Authority” means HMRC and any other local, governmental, state or federal authority or body competent to impose or collect Tax;

“Trade Mark” means the Monument trade mark, registered in the name of the Seller under UK registered trade mark number 2310126 in class 36;

“Tranche A Accounts” means all accounts identified on the Data Extracts prepared as at 31 October 2006 as tranche A accounts which remain tranche A accounts as at the Cut-Off Time in accordance with the guidelines set out in Schedule 10;

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“Tranche B Accounts” means all accounts identified on the Data Extracts prepared as at 31 October 2006 as tranche B accounts and which remain tranche B accounts as at the Cut-Off Time in accordance with the guidelines set out in Schedule 10, excluding any Excluded Account or Charged-Off Account;

“Tranche B Purchase Price” means the amount equal to the Purchase Price minus the Tranche C Purchase Price;

“Tranche C Accounts” means all accounts identified on the Data Extracts prepared as at 31 October 2006 as tranche C accounts which remain tranche C accounts as at the Cut-Off Time in accordance with the guidelines set out in Schedule 10, plus all accounts identified on the Data Extracts prepared as at 31 October 2006 as a tranche A or B or D account and which have become a tranche C account as at the Cut-Off Time in accordance with the guidelines set out in Schedule 10, excluding any Excluded Account or Charged-Off Account;

“Tranche C Limit” means the amount which is equal to 35 per cent. of the Pre-Signing Receivables relating to the Tranche C Accounts as at the Cut-Off Time;

“Tranche C Purchase Price” means the amount calculated pursuant to clause 3.2(b);

“Transferring Employees” means the Pool 1 Transferring Employees and the Transferring Pool 2 Employees and “Transferring Employee” means any one of them;

“Transferring Employees’ Costs” has the meaning set out in clause 12.4(a);

“Transferring Employees’ Costs Statement” has the meaning set out in clause 12.4(c);

“Transitional Activity Assumption Date” has the meaning set out in the Transitional Services Agreement;

“Transitional Services Agreement” means the agreement between the Seller and CCIA and CompuCredit UK dated the date of this Agreement under which the Seller will provide certain services for a period after the date of this Agreement;

“TUPE Regulations” means the Transfer of Undertakings (Protection of Employment) Regulations 2006;

“Unenforceability Allegation” means an express written notice received by the Purchasers or Raphael Bank from a Cardholder within two years of the date of this Agreement containing an allegation that his or her Cardholder Agreement is unenforceable pursuant to the CCA due to any fact, matter or circumstances arising prior to the date of this Agreement;

“VAT” means value added tax;

“VAT Regulations” means the Value Added Tax Regulations 1995;

“Visa” means Visa International Services Association, Visa Europe Limited and any other Visa entity, as appropriate;

“Warranty Claim” means a claim for breach of any of the Warranties and/or a Claim for breach of any of the covenants of the Seller set out in clause 4 of this Agreement; and

“Warranties” means the warranties set out in Schedule 2 and “Warranty” means any one of them.

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1.2	In this Agreement, unless the context otherwise requires:

(a)

references to this Agreement or any other document include references to this Agreement or such other document as varied, supplemented and/or replaced in any manner from time to time;

(b)

references to any party shall, where relevant, be deemed to be references to or to include, as appropriate, their respective permitted successors, assigns or transferees;

(c)

references to recitals, clauses, schedules and sub-divisions of them are references to the recitals and clauses of, and schedules to, this Agreement and sub-divisions of them respectively;

(d)

references to any enactment include references to such enactment as re-enacted, amended or extended on or before the date of this Agreement and any subordinate legislation made from time to time under it;

(e)

references to a “person” include any individual, company, corporation, firm, partnership, joint venture, association, organisation, institution, trust or agency, whether or not having a separate legal personality;

(f)

references to time are to time in London;

(g)

headings are inserted for convenience only and shall be ignored in construing this Agreement; and

(h)

the words “subsidiary” , “subsidiary undertaking” and “holding company” have the meanings given to them by the Companies Act 1985.

1.3	Any reference in this Agreement to a document being “ in the agreed terms ” is to a document in the terms agreed between the Seller and the Purchasers and for identification purposes only signed or initialled by them or on their behalf on or before the date of this Agreement.

1.4	The recitals and schedules to this Agreement form part of it.

2.	S ALE AND PURCHASE

2.1	The Seller shall sell (and, in the case of (b), (c), (d) and (e), assign, by way of legal assignment) free from all Encumbrances and Raphael Bank as CCIA’s designee shall acquire the following Credit Card Assets:

(a)

all Sale Accounts;

(b)

the benefit of the Cardholder Agreements;

(c)

the Pre-Signing Receivables plus, for the avoidance of doubt, any accrued interest as at the Cut-Off Time relating to the Pre-Signing Receivables;

(d)

all Post-Signing Receivables;

(e)

the Customer Data and Files and the Signing Date Account List (save that the Seller will be entitled to retain a copy of all or some of the Customer Data and Files and the Signing Date Account List in so far and for such time as they may reasonably be required by either the Seller or any Seller’s Group Company for on-going regulatory compliance, accounting, auditing, litigation or tax reasons or to comply with the Seller’s obligations under the Transitional Services Agreement);

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(f)

the right to the Interchange in relation to transactions that take place after the Cut-Off Time;

(g)

the Credit Cards;

(h)

the BIN; and

(i)

the Credit Card Stock.

2.2	The Seller shall sell free from all Encumbrances and CCIA shall purchase the Goodwill, the Monument Credit Card Intellectual Property and the Excluded Accounts Customer Data.

2.3	The Seller shall sell (and, in the case of (d) and (g), assign) free from all Encumbrances and CompuCredit UK shall purchase the following Infrastructure Assets:

(a)

the Copy Records;

(b)

the Other Assets;

(c)

the Information Technology Infrastructure Assets;

(d)

the benefit (subject to the burden) of the Assigned Contracts;

(e)

the Records (save that the Seller will be entitled to retain a copy of all or some of the Records in so far and for such time as they may reasonably be required by either the Seller or any Seller’s Group Company for on-going regulatory compliance, accounting, auditing, litigation or tax reasons or to comply with the Seller’s obligations under the Transitional Services Agreement);

(f)

the Seller’s interest in the Property;

(g)

the Monument Infrastructure Intellectual Property;

(h)

the proceeds of any insurance claim relating to any of the Infrastructure Assets (excluding the Information Technology Infrastructure Assets) arising prior to the Completion Date and any insurance claim relating to any of the Information Technology Infrastructure Assets arising prior to the Final Completion Date, save where such proceeds have been used prior to Completion to restore or replace an Infrastructure Asset or have been used prior to the Final Completion to restore or replace an Information Technology Infrastructure Asset (as the case may be); and

(i)

the Data Warehouse Database.

2.4	Subject to clause 2.5, the sale and purchase of the Credit Card Assets (other than the BIN) shall take effect at Credit Card Completion and the sale and purchase of the BIN shall take effect at the time that the BIN is transferred to Raphael Bank in accordance with clause 6.2.

2.5

The legal assignment of the Credit Card Assets described in clause 2.1(b), (c), (d) and (e) shall occur on the Assignment Date, on which date the Purchasers shall execute and date the Legal Assignment of Assets (and Barclays hereby irrevocably authorises either of the Purchasers to date the Legal Assignment of Assets executed by it and delivered pursuant to clause 5.2(d) on the Assignment Date), following Notice to Cardholders having been given to the Cardholders in accordance with clause 6.1. From Credit Card Completion and until the Assignment Date, the Seller shall hold the Credit Card Assets described in clause 2.1(b), (c), (d) and (e), and all rights and benefits arising under them, in trust for Raphael Bank, as CCIA’s designee as acquirer of such Credit Card Assets, absolutely and in accordance with the Declaration of Trust.

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2.6

The sale, purchase and (in the case of the Assets described in clauses 2.3(d) and (g)) assignment of the Infrastructure Assets (excluding the Information Technology Infrastructure Assets) shall take effect on Completion and the sale and purchase of the Information Technology Infrastructure Assets shall take effect on Final Completion.

3.	P URCHASE P RICE AND P AYMENT

3.1	The total consideration payable by the Purchasers to the Seller for the Business and the Assets shall be the Purchase Price together with the Assumed Liabilities.

3.2	The Purchase Price shall be an amount equal to the sum of:

(a)

88% of the Pre-Signing Receivables relating to Tranche B Accounts (excluding the Credit Card Credit Balances relating to Tranche B Accounts) less the Credit Card Credit Balances relating to Tranche B Accounts;

(b)

21.5% of the Pre-Signing Receivables relating to Tranche C Accounts (excluding the Credit Card Credit Balances relating to Tranche C Accounts) less the Credit Card Credit Balances relating to Tranche C Accounts; and

(c)

the Monument Assets Consideration.

3.3	The Purchase Price shall be allocated between the Assets and the Assumed Liabilities in accordance with Part A of Schedule 1.

3.4	The Purchase Price other than the Monument Assets Consideration will be satisfied by:

(a)

a payment in cash in pounds sterling on the date of this Agreement by telegraphic transfer into the Seller’s Account of an amount equal to the sum of the Estimated Purchase Price, as set out in the Pre-Signing Statement delivered to the Purchasers by the Seller in accordance with clause 4.1; and

(b)

a payment pursuant to clause 3.9 (if applicable).

3.5	The Monument Assets Consideration will be settled by a payment in cash in pounds sterling on Final Completion by telegraphic transfer into the Seller’s Account of the Monument Assets Consideration.

3.6

The Seller must as soon as reasonably possible following the date of this Agreement, and in any event on or before the day which is 10 Business Days following the date of this Agreement, prepare and provide CCIA and Raphael Bank (as CCIA’s designee) with a true and complete list of Sale Accounts as at the Cut-Off Time (clearly indicating which are Tranche B Accounts and which are Tranche C Accounts) together with names, addresses and account numbers of the Cardholders, outstanding balances and delinquency status of such Sale Accounts prepared as at the Cut-Off Time which identifies the Sale Accounts in accordance with the criteria set out in Schedule 10 (the “Signing Date Account List” ). No Claim for any Excluded Account being included in the Signing Date Account List provided pursuant to this clause may be made by the Purchasers except pursuant to either (i) Part B of Schedule 1 and/or clause 3.9 or (ii) clause 7.1.

3.7

The Seller must as soon as reasonably possible following the date of this agreement, and in any event on or before the day that is 20 Business Days following the date of this Agreement prepare and deliver to the Purchasers a draft of the Signing Statement (the “ Draft Signing Statement ”) in accordance with the provisions of Part B of Schedule 1.

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3.8	The Draft Signing Statement once agreed or determined pursuant to Part B of Schedule 1:

(a)

shall constitute the Signing Statement for the purposes of this Agreement; and

(b)

shall be final and binding on the Seller and the Purchasers but without prejudice to the provisions of clause 7 in respect of Covered Accounts and reimbursement for such Covered Accounts or to any actual or potential Warranty Claim in relation to any Sale Accounts.

3.9	If and to the extent that the Credit Card Purchase Price as set out in the Signing Statement is:

(a)

less than the amount paid under clause 3.4(a), an amount equal to such shortfall plus an amount equal to interest from the date of this Agreement at the Seller’s base rate as at the date of this Agreement shall be paid by the Seller to CCIA in cash by telegraphic transfer into the Purchasers’ Account; or

(b)

more than the amount paid under clause 3.4(a), an amount equal to such excess plus an amount equal to interest from the date of this Agreement at the Seller’s base rate as at the date of this Agreement shall be paid by CCIA to the Seller in cash by telegraphic transfer into the Seller’s Account.

3.10	Any amount to be paid under clause 3.9 shall be paid within five Business Days after the Signing Statement has been finally agreed or determined in accordance with Part B of Schedule 1.

4.	P RE -C OMPLETION MATTERS

4.1	The Seller has delivered the Pre-Signing Statement to CCIA.

4.2	Pending Completion the Seller shall ensure that:

(a)

it will comply with its obligations under the Property Lease and will make an application to the Landlord of the Property Lease for its consent to assign the Property Lease to CompuCredit UK in a form reasonably acceptable to CompuCredit UK;

(b)

it will comply with its obligations under the Assigned Contracts and will comply with its material obligations under the Material Contracts which relate to the Business;

(c)

the Purchasers (and Raphael Bank as CCIA’s designee as acquirer of certain of the Credit Card Assets) and their agents and representatives are afforded reasonable access to the Infrastructure Assets, including the Property (but excluding that part of the Property located within the demise described in the Property Sublease unless (i) such reasonable access has been agreed between the parties (acting reasonably); or (ii) the relevant person seeking access is accompanied by a representative of the Seller; or (iii) is required in order for the parties to comply with their obligations under clause 7 of Part C of Schedule 6 to this Agreement);

(d)

it shall not and no member of the Seller’s Group shall:

(i)

amend any of the terms of employment of the Pool 1 Transferring Employees, including in relation to those employees’ pension arrangements, except with the prior written consent of CompuCredit UK (such consent not to be unreasonably withheld or delayed) and subject at all time to compliance with Applicable Laws; and/or

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(ii)

make any communications to the Pool 1 Transferring Employees which are in any way inconsistent with the terms of this Agreement except with the prior written consent of CompuCredit UK (such consent not to be unreasonably withheld or delayed);

(e)

the Purchasers will be kept fully and promptly informed of all material matters relating to the Business, including (i) of any litigation or proceeding, challenging the purchase, sale or assignment of any of the Assets hereunder, (ii) of any material adverse change in the financial condition of the Sale Accounts, and (iii) any material billing errors, claims, disputes or any litigation with respect to the Sale Accounts;

(f)

insurance cover in respect of the Infrastructure Assets will be maintained at all times on the same basis existing on the date of this Agreement; and

(g)

it will inform the Purchasers of any:

(i)

Pool 1 Transferring Employee who, after the date of this Agreement, makes an application to receive or begins to receive or is approved to receive or who appeals a decision to reject payment under any disability or permanent health or any similar insurance scheme funded by the Seller;

(ii)

Pool 1 Transferring Employee who has given or received notice of termination of his or her employment, become the subject of any formal or material disciplinary action or who is engaged in any formal or material grievance procedure;

(iii)

employee who has ceased to be a Pool 1 Transferring Employee but remains employed by any Seller’s Group Company; and

(iv)

claim or legal proceedings in relation to any of the Pool 1 Transferring Employees which are current, threatened or, so far as the Seller is aware, pending against any Seller’s Group Company;

(h)

it shall not and no member of the Seller’s Group shall grant any options or awards to Share Plan Employees under the Share Plans; and

(i)

it will inform the Purchaser of any National Insurance Elections, National Insurance Recovery Agreements or elections made in relation to restricted securities under Chapter 2 of Part 7 of the Income Tax (Earnings and Pensions) Act 2003 which are entered into by Share Plan Employees after the date of this Agreement in relation to options and awards granted under the Share Plans.

4.3	Pending each Pool 2 Transitional Activities Assumption Date and once the Pool 2 Transferring Employee has been selected by the Purchasers pursuant to clause 6.9 of the Transitional Service Agreement:

(a)

the Seller will inform the Purchasers of any:

(i)

Pool 2 Transferring Employee performing the relevant Pool 2 Activity who, after the date of this Agreement, makes an application to receive or begins to receive or is approved to receive or who appeals a decision to reject payment under any disability or permanent health or any similar insurance funded by the Seller;

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(ii)

Pool 2 Transferring Employee performing the relevant Pool 2 Activity who has given or received notice of termination of his or her employment, become the subject of any formal or material disciplinary action, or who is engaged in any formal or material grievance procedure; and

(iii)

employee who has ceased to be a Pool 2 Transferring Employee but remains employed by any Seller’s Group Company.

(iv)

claim or legal proceedings in relation to any Pool 2 Transferring Employee performing the relevant Pool 2 Activity of which are current, threatened or so far as the Seller is aware pending against any Seller’s Group Company; and

(b)

the Seller shall ensure that it shall not and no member of the Seller’s Group shall:

(i)

amend any of the terms of employment of the Pool 2 Transferring Employees, including in relation to those employees’ pension arrangements, except with the prior written consent of CompuCredit UK (such consent not to be unreasonably withheld or delayed) and subject at all times to compliance with applicable laws; and/or

(ii)

make any communications to the Pool 2 Transferring Employees which are in any way inconsistent with the terms of this Agreement except with the prior written consent of CompuCredit UK (such consent not to be unreasonably withheld).

4.4

Pending Completion the Seller shall use its reasonable endeavours and shall procure that each Seller’s Group Company shall use its reasonable endeavours, not to take any actions or make any omissions in relation to the Pool 1 Employees (other than any action taken pursuant to the TUPE Regulations or this Agreement) which would be reasonably likely to cause the Pool 1 Employees to cease to be employed in the Business prior to Completion except with the prior written consent of CompuCredit UK (such consent not to be unreasonably withheld or delayed), provided that this clause does not prevent the Seller dismissing any Pool 1 Employees for cause without the prior written consent of CompuCredit UK.

4.5

Pending each Pool 2 Transitional Activities Assumption Date and once the Pool 2 Transferring Employee has been selected by the Purchasers pursuant to clause 6.9 of the Transitional Service Agreement the Seller shall use its reasonable endeavours and shall procure that each Sellers’ Group Company shall use its reasonable endeavours, not to take any actions or make any omissions in relation to the Pool 2 Transferring Employees performing the relevant Pool 2 Activity (other than any action taken pursuant to the TUPE Regulations or this Agreement) which would be reasonably likely to cause the Pool 2 Transferring Employees performing the relevant Pool 2 Activity to cease to be employed in the Business prior to the relevant Pool 2 Transitional Activities Assumption Date except with the prior written consent of CompuCredit UK (such consent not to be reasonably withheld or delayed), provided that this clause does not prevent the Seller dismissing any Pool 2 Transferring Employees for cause without the prior written consent of CompuCredit UK.

4.6	Without limiting the generality of any of the provisions of clauses 4.2 and 4.4, pending Completion the Seller shall use its reasonable endeavours to preserve the Infrastructure Assets and shall promptly discharge all Liabilities and Losses relating to the Infrastructure Assets.

4.7	Without prejudice to the provisions of clauses 4.2, 4.4 and 4.6, pending Completion the Seller will ensure that none of the following matters will occur or be undertaken without the prior written consent of the Purchasers (such consent not to be unreasonably withheld or delayed):

(a)

the sale, assignment, underletting or disposal of, or the grant or termination of any rights in respect of, the Infrastructure Assets;

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(b)

the creation or issue or allowing to come into being of any Encumbrance on or over any part of the Infrastructure Assets;

(c)

the termination, material amendment or variation of any Assigned Contract or the Property Lease; or

(d)

the material departure in any way from the ordinary course of the day-to-day conduct of the Business either as regards the prior nature, scope or the manner of conducting the same, including:

(i)

entering into any contract or commitment which is material and which is not on arm’s length terms or in the ordinary course of business which impacts on the Business;

(ii)

introducing into the Business any new range or type of services;

(iii)

acting in respect of the Cardholder Agreements, Sale Accounts or Credit Card Assets in breach of the Transitional Services Agreement;

(iv)

entering or offering to enter into any contracts relating exclusively to the Business on terms which (i) do not permit assignment to CompuCredit UK without counter-party consent or cost to CompuCredit UK or (ii) in aggregate, involve consideration in excess of £250,000 per annum;

(v)

entering or making any material change to any agreement with any trade union (including the agreement with Amicus disclosed at File 23 Document I.015 of the Disclosure Documents) which has an impact on the Business or the terms and conditions of employment or benefits (including pensions benefits) of any Transferring Employee or employing or terminating the employment of any person other than in the ordinary course of business consistent with past practice or as may be required by Applicable Law or a court of competent jurisdiction; or

(vi)

changing the terms and conditions of employment of any Pool 1 Transferring Employee including, but not limited, to changes to the role and responsibilities of any Pool 1 Transferring Employee with the effect that they no longer fall within the definition of a Pool 1 Transferring Employee or otherwise changing the role and responsibilities of any other employee so as to cause that person to become a Pool 1 Transferring Employee save where this is pursuant to the Pool 1 Transferring Employee’s objection to the transfer of his/her employment to CompuCredit UK in accordance with Regulation 4 of the TUPE Regulations; or

(vii)

doing (or omitting to do, so far as it is within the power or control of the Seller or the Seller’s Group to prevent such omission), permitting or causing to be done (or omitted to be done, so far as it is within the power or control of the Seller or the Seller’s Group to prevent such omission) any act or thing which would result (or be reasonably likely to result) in any of the Infrastructure Warranties being untrue or inaccurate as if they were repeated in full at Completion, provided that the Liability of the Seller pursuant to this clause 4.5(d)(vi) shall in no circumstances be greater than it would have been had the Infrastructure Warranties been repeated in full at Completion and been untrue or inaccurate in any respect.

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4.8	Pending Final Completion the Seller shall:

(a)

preserve and maintain any Information Technology Infrastructure Assets and any related Contracts and shall promptly discharge all Liabilities and Losses relating to the Information Technology Infrastructure Assets; and

(b)

ensure that none of the following matters will occur or be undertaken without the prior written consent of the Purchasers (such consent not to be unreasonably withheld or delayed):

(i)

the sale, assignment, underletting or disposal of, or the grant or termination of any rights in respect of, the Information Technology Infrastructure Assets;

(ii)

the creation or issue or allowing to come into being of any Encumbrance on or over any part of the Information Technology Infrastructure Assets; and/or

(iii)

doing (or omitting to do, so far as it is within the power or control of the Seller or the Seller’s Group to prevent such omission), permitting or causing to be done (or omitted to be done, so far as it is within the power or control of the Seller or the Seller’s Group to prevent such omission) any act or thing which would result (or be reasonably likely to result) in any of the Infrastructure Warranties (but only to the extent they apply to the Information Technology Infrastructure Assets) being untrue or inaccurate as if they were repeated in full at Final Completion, provided that the Liability of the Seller pursuant to this clause 4.6(b)(iii) shall in no circumstances be greater than it would have been had the Infrastructure Warranties (to the extent that they apply to the Information Technology Infrastructure Assets) been repeated in full at Final Completion and been untrue or inaccurate in any respect;

(c)

save where the Pool 2 Employee is a Retained Employee, changing the terms and conditions of employment of any Pool 2 Employee including, but not limited to, changes to their role and responsibilities with the effect that they no longer fall within the definition of a Pool 2 Employee;

(d)

keep the Purchasers fully and promptly informed of all material matters relating to the Infrastructure Technology Infrastructure Assets, including of any litigation or proceeding challenging the purchase, or sale of the Infrastructure Technology Infrastructure Assets;

(e)

maintain insurance cover in respect of the Information Technology Infrastructure Assets at all time on the same basis existing on the date of this Agreement;

(f)

comply with its obligations under the Assigned Contracts insofar as they relate to the Information Technology Infrastructure Assets;

(g)

not terminate, amend or vary any Assigned Contract insofar as it relates to the Information Technology Infrastructure Assets; and

(h)

afford the Purchasers (and Raphael Bank as CCIA’s designee as acquirer of certain of the Credit Card Assets) and their agents and representatives access to the Information Technology Infrastructure Assets.

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5.	C OMPLETION

5.1	Subject to the provisions of this Agreement:

(a)

Credit Card Completion shall take place immediately following the signing of this Agreement at the offices of the Seller’s Solicitors;

(b)

Completion shall take place on the Completion Date at the offices of the Seller’s Solicitors; and

(c)

Final Completion shall take place on the Final Completion Date at the offices of the Seller’s Solicitors.

5.2	On Credit Card Completion the Seller will deliver to Raphael Bank as CCIA’s designee:

(a)

except as set out in clause 5.3, all the Credit Card Assets which are capable of passing by delivery;

(b)

the Notices of Assignment duly acknowledged by the Seller;

(c)

the Declaration of Trust duly executed by the Seller;

(d)

the Legal Assignment of Assets duly executed (but not dated) by the Seller; and

(e)

the Transitional Services Agreement duly executed by the Seller.

5.3	On and from Credit Card Completion:

(a)

the Seller shall hold to the order of Raphael Bank, as CCIA’s designee, the Customer Data and Files and the Credit Card Stock and shall afford Raphael Bank and CCIA full and unrestricted access to the Customer Data and Files; and

(b)

the Seller shall deliver to CCIA:

(i)

the assignment of the Monument Credit Card Intellectual Property in the agreed terms duly executed by the Seller;

(ii)

the Licence Back duly executed by the Seller;

(iii)

the Excluded Accounts Customer Data; and

(iv)

a signed letter addressed to Bank of America, CompuCredit Corporation and Raphael Bank in the agreed terms waiving with immediate effect certain provisions of the confidentiality agreement entered into between the Seller, Bank of America, CompuCredit Corporation and Arrow Global Limited in and during October 2006.

5.4	Within 10 Business Days after Credit Card Completion the Seller shall prepare and provide CCIA with the Closing Master File Tape which will be true, accurate and complete in all material respects.

5.5	On Completion the Seller will deliver to CompuCredit UK:

(a)

the Records duly completed and up to date in all material respects;

(b)

the Copy Records duly completed and up to date in all material respects;

(c)

all payroll records, records of National Insurance, PAYE and income tax records relating to all Pool 1 Transferring Employees duly completed and up to date in all material respects and the Employment Information relating to all Pool 1 Transferring Employees up to date as at the date which is three Business Days prior to the Completion Date;

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(d)

all the other Infrastructure Assets (excluding the Information Technology Infrastructure Assets and the BIN) which are capable of passing by delivery;

(e)

(subject to the provisions of Schedule 6), vacant possession of the Property, save for Transferring Employees and Fixtures which are to transfer from the Seller to CompuCredit UK under the terms of this Agreement;

(f)

a capital allowances election in respect of the Fixtures in the form set out in Schedule 9 duly executed by the Seller; and

(g)

the assignment of the Monument Infrastructure Intellectual Property in the agreed terms duly executed by the Seller.

On each Pool 2 Transitional Activities Assumption Date the Seller will deliver to CompuCredit UK all payroll records, records of National Insurance, PAYE and income tax records relating to all Pool 2 Transferring Employees performing the relevant Pool 2 Activity duly completed and up to date in all material respects and the Employment Information relating to the Pool 2 Transferring Employees performing the relevant Pool 2 Activity up to date as at the date which is three Business Days prior to the relevant Pool 2 Transitional Activities Assumption Date.

5.6	On Completion:

(a)

the Seller shall deliver to Raphael Bank as CCIA’s designee the Customer Data and Files duly completed and up to date in all material respects and the Credit Card Stock. For the avoidance of doubt, the Seller shall not be obliged to deliver to Raphael Bank any part of the Credit Card Stock which has been issued to Cardholders or otherwise used pursuant to the terms of the Transitional Services Agreement; and

(b)

CompuCredit UK shall deliver to the Seller a capital allowances election in the form set out in Schedule 9 duly executed by CompuCredit UK.

5.7	On Credit Card Completion, CCIA shall:

(a)

take the action set out in clause 3.4(a);

(b)

deliver or cause to be delivered to the Seller:

(i)

the Transitional Services Agreement duly executed by CCIA and CompuCredit UK;

(ii)

the assignment of the Monument Credit Card Intellectual Property in the agreed terms duly executed by CCIA;

(iii)

the Licence Back duly executed by CCIA; and

(iv)

the letter from CompuCredit Corporation to the Seller in the agreed terms; and

(c)

procure that Raphael Bank acknowledges receipt of the Legal Notice of Assignment.

5.8	On Final Completion:

(a)

the Seller will deliver to CompuCredit UK:

(i)

the Information Technology Infrastructure Assets;

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(ii)

where the Seller has original Assigned Contracts within its possession, custody or control, the original Assigned Contracts together with (where applicable) assignments or novations in the agreed terms in respect of the Assigned Contracts duly signed by the Seller and (where applicable) the counterparty to the Assigned Contract; and

(iii)

where the Seller does not have original Assigned Contracts within its possession, custody or control, a true and complete copy of such Assigned Contracts together with (where applicable) copies of the assignments or novations in the agreed terms in respect of the Assigned Contracts duly signed by the Seller and (where applicable) the counterparty to the Assigned Contract; and

(b)

CompuCredit UK shall take the actions set out in clause 3.5.

5.9

On Completion the risk of loss or damage to, and property in, the Infrastructure Assets (excluding the Information Technology Infrastructure Assets) shall pass to CompuCredit UK and on Final Completion the risk of loss or damage to, and property in, the Information Technology Infrastructure Assets shall pass to CompuCredit UK.

5.10

From the date of this Agreement, Cardholders will continue to use Credit Cards bearing the name of the Seller and the Seller hereby grants to CCIA and Raphael Bank as CCIA’s designee, a non-exclusive, non-assignable, royalty free licence to use as a trademark the Seller’s Marks on the existing Credit Cards until the Credit Cards are replaced in accordance with clause 5.11.

5.11

Within six calendar months of Credit Card Completion, CCIA will issue or will procure the issue of replacement credit cards to all Cardholders bearing the name of Raphael Bank as CCIA’s designee in place of the existing Credit Cards, provided that, if the Purchasers decide to convert the Business to using a different system of record than used at present in relation to the Sale Accounts, CCIA will issue or procure the issue of such replacement credit cards within nine calendar months of Credit Card Completion. The licence granted to Raphael Bank and CCIA under clause 5.10 will terminate on the earlier of the date that the last replacement credit card is issued under this clause 5.11 and the date which is six calendar months after Credit Card Completion (or if the proviso in the previous sentence applies, the date which is nine calendar months after Credit Card Completion). Except as permitted under the licence under clause 5.10, in the Notice to Cardholders to be sent pursuant to clause 6.1 or the Transitional Services Agreement, none of Raphael Bank, CCIA or CompuCredit UK shall be entitled to use the Seller’s Marks or the name Barclays or Barclaycard after the date of this Agreement in connection with the conduct of the Business or otherwise. Until the date on which the last replacement card is issued under this clause 5.11, Raphael Bank and CCIA will comply with clause 8.1 of the Transitional Services Agreement.

5.12

As soon as reasonably possible after the issue of replacement cards as contemplated by clause 5.11, CCIA will reimburse the Seller for the Credit Card Stock actually used by CCIA or Raphael Bank as CCIA’s designee (or by the Seller pursuant to the Transitional Services Agreement) after Credit Card Completion and prior to such replacement at a cost of 87 pence per “Classic” Credit Card, 75 pence per “Premium” Credit Card and 82 pence per “Platinum” Credit Card and the Seller shall then destroy all remaining Credit Card Stock.

5.13	The BIN will be delivered to Raphael Bank in accordance with clause 6.2.

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5.14	CCIA may elect by written notice to the Seller by no later than 20 Business Days prior to 1 June 2007 to extend the Completion Date to a date which is no later than 1 August 2007.

6.	P OST -C REDIT C ARD C OMPLETION M ATTERS

6.1

As soon as reasonably practicable after Credit Card Completion and, in any event by the date which is 30 Business Days after the Signing Date Account List is provided to CCIA in accordance with clause 3.6, CCIA will prepare, print and post (or procure the preparation, printing and posting) on behalf of CCIA, Raphael Bank and the Seller, to each Cardholder, the Notice to Cardholders (with effect from the Assignment Date) of the intended legal assignment of the benefit of the Cardholder Agreements, the Pre-Signing Receivables and the Post-Signing Receivables and such other matters with respect to the transactions contemplated by this Agreement which the Seller and CCIA have determined, in such agreed terms, to be appropriate or which are required under Applicable Law. The Seller hereby irrevocably authorises CCIA to serve such notice on each Cardholder in such agreed terms. In the event that 20 Business Days after Credit Card Completion Raphael Bank has not received notification from the Office of Fair Trading of the addition of the trading name “Monument” to Raphael Bank’s consumer credit licence CCIA may, by giving written notice to the Seller extend the period for sending notification to each Cardholder by a further period of 30 Business Days. Until the date which is three Business Days after the date on which the Notice to Cardholders is sent to all Cardholders, CCIA and Raphael Bank shall not increase the interest rate and fees applicable to unpaid balances on the Sale Accounts.

6.2

The Seller and CCIA will as soon as reasonably practicable after Credit Card Completion and, in any event, by the date which is six calendar months after Credit Card Completion (or, if the Purchasers decide to convert the Business to using a different system of record than used at present in relation to the Sale Accounts, by the date which is nine calendar months after Credit Card Completion), make arrangements for the BIN to be transferred from the Seller to Raphael Bank, such that Raphael Bank as CCIA’s designee is able to pay the Daily Settlement Amount directly to the Card Scheme Association. Until such arrangements have become effective, the Seller shall make the normal CHAPS payment of the Daily Settlement Amount from an account of the Seller, in accordance with the arrangements that apply before Credit Card Completion, and CCIA or Raphael Bank as CCIA’s designee shall pay the Daily Settlement Amount into the Seller’s Settlement Account in cleared funds by 4.00 pm each Business Day, provided that the Seller has notified CCIA and Raphael Bank as CCIA’s designee of the Daily Settlement Amount required to be paid on that day by noon.

6.3

The Seller and CCIA will as soon as reasonably practicable after Credit Card Completion and, so far as possible, by the date which is 10 Business Days after Completion, make arrangements for Cardholder Payments to be routed directly to CCIA (or such member of the Purchasers’ Group or Raphael Bank, as CCIA may direct) in accordance with the Direct Debiting Scheme Rules (in so far as it is possible to do so). Until such arrangements have become effective, the Seller shall pay the amount it receives in respect of identifiable Cardholder Payments by noon each Business Day to CCIA (or such member of the Purchasers’ Group or Raphael Bank, as the case may be), less the amount of any returned direct debits or cheque payments processed by the Seller since the previous Business Day and shall pay over any amount it receives in respect of Cardholder Payments which cannot be identified on the day of receipt as soon as reasonably practicable.

6.4

If either party is late in making a payment to the other under clauses 6.2 or 6.3, interest will (save where such late payment is caused by an act, omission, failure or default of that party’s bankers or a failure in the banking system generally) be payable at the base rate from time to time of the Seller on the amount unpaid until payment. The Seller may set off

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against the amount due to Raphael Bank as CCIA’s designee in respect of Cardholder Payments, the amount due from Raphael Bank as CCIA’s designee in respect of the Daily Settlement Amount.


6.5		(a)		For a period of 24 months after the Assignment Date, the Seller shall provide reasonable assistance to CCIA in relation to a securitisation of the Credit Card Assets. The Seller shall not be required to make the Seller’s personnel available to attend investor road shows in relation to such a securitisation and CCIA shall pay all out of pocket expenses incurred by the Seller in connection with this clause.

(b)

The Purchasers undertake to the Seller that no reference will be made in any offering circular or memorandum or other document prepared for the purposes of securitisation of the Credit Card Assets to any Seller’s Group Company providing information or accepting any responsibility for information contained in such circular, memorandum or other document.

(c)

The Seller shall not have any liability for any Losses incurred by CCIA or any other person in connection with any assistance provided pursuant to this clause 6.5 save in the case of fraud or fraudulent misrepresentation.

6.6

With effect from the date of this Agreement, the Seller shall not take any actions in its capacity as originator or acquirer of the Cardholder Agreements which may adversely affect the ability of CompuCredit UK, CCIA or Raphael Bank to exercise or enforce any rights of CompuCredit UK, CCIA or Raphael Bank under the Cardholder Agreements including failing to maintain its CCA licence, amending (or purporting to amend) the terms and conditions applicable to any Cardholder Agreement or making any other communication to the Cardholders in their capacity as Cardholders without the prior written consent of CCIA; provided that for the avoidance of doubt the Seller may take any action it is directed to take by CCIA either under this Agreement or the Transitional Services Agreement.

6.7

With effect from Credit Card Completion, and without prejudice to clause 11.1, the Seller and the Purchasers agree that Raphael Bank as CCIA’s designee, will be appointed to perform, on behalf of the Seller, all of the obligations of the Seller under the Cardholder Agreements to be discharged after Credit Card Completion (including in respect of Raphael Bank as CCIA’s designee, the Seller’s obligation to provide credit on use of a Credit Card and to honour the terms and conditions of the Cardholder Agreements).

6.8

The Seller shall continue to provide in-branch payment facilities in respect of the Sale Accounts and new Monument branded accounts at branches of its retail banking business in the UK for a period of 24 months from Credit Card Completion at a charge of 50.5 pence per payment on a Sale Account or any new Monument branded accounts which shall be payable by CCIA to the Seller. Such in-branch payment facilities shall be operated in the same manner and to the same standard as in the three months prior to the date of this Agreement, save where the Seller proposes to make a change in the way that it provides in-branch payment facilities to the holders of credit cards issued by it generally (except that such a change shall not include withdrawal of such in-branch payment facilities), it shall notify CCIA as soon as reasonably practicable and in any event within 20 Business Days prior to making such change and from the date of such change the in-branch payment facilities offered to CCIA (or Raphael Bank as CCIA’s designee) will be operated in the same manner as those offered by the Seller to the holders of credit cards issued by it. CCIA (or Raphael Bank as CCIA’s designee) may, during this period, negotiate with the Seller to provide an on-going in-branch payment facility (and such on-going in-branch payment facility may commence before the expiration of the 24 month period referred to in this clause). If the on-going in-branch payment facility does commence prior to the expiration of the 24 month period, the Seller shall have no further obligation under this clause from the date of commencement of such facility.

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7.	R EIMBURSEMENT AND P OST C LOSING P AYMENTS

7.1	In the event that at any time on or prior to:

(a)

the last day of the sixth month following Credit Card Completion CCIA notifies the Seller in writing that any Monument branded account included on the Signing Date Account List is a Monument branded account which should have been classified as an Excluded Account or was a Charged-Off Account; or

(b)

the last day of the eighth month following Credit Card Completion CCIA notifies the Seller in writing that any Monument branded account included on the Signing Date Account List is a Monument branded account which should have been classified as an Excluded Account by falling within sub-paragraph (ii) of paragraph (i) of the definition of Excluded Accounts,

and so should not have been included in the Signing Date Account List nor assigned pursuant to clause 2.1 of this Agreement and the Legal Assignment of Assets, and such Monument branded account is then agreed by the Seller and CCIA (both acting reasonably) or is otherwise determined to be an Excluded Account or a Charged-Off Account (each such account being a “ Covered Account ”) then, following such agreement or determination, CCIA may require the Seller to pay CCIA an amount equal to the Covered Account Reimbursement Amount, calculated in the manner set forth in clause 7.4.

7.2

On or before the fifteenth Business Day of every month, beginning April 2007 through the fifteenth Business Day of the month which is one month after the relevant month specified in clause 7.1(a) or 7.1(b) following Credit Card Completion, CCIA shall provide the Seller with a monthly statement setting forth the Covered Account Reimbursement Amount (which may include Covered Accounts identified in that month or in previous months, to the extent not included in a previous monthly statement) owed by the Seller to CCIA and appropriate documentation reasonably satisfactory to the Seller establishing CCIA’s right to reimbursement.

7.3

Upon payment of the Covered Account Reimbursement Amount with respect to a Covered Account, the Seller may direct CCIA in writing to close and write off such Receivables or such Covered Account or to close and sell the Receivables or such Covered Account (or to procure that such Receivables or such Covered Account are closed and written off or closed and sold), as the case may be, provided that, in the case of a sale, CCIA is not required pursuant to this clause to procure a sale other than to a person designated by the Seller nor to accept any liability to such designated purchaser with respect to such sale (and the Seller shall indemnify CCIA and Raphael Bank and hold them harmless in respect of all and any liabilities relating to or arising from such sale), to the extent Seller does not repurchase such Receivables or such Covered Account, and to cease all collection activity with respect to such Receivables or such Covered Account to the extent that the Seller and CCIA reasonably determine that maintaining and collecting on such Receivables or such Covered Account would give rise to Losses with respect to such Receivables or such Covered Account. Until such direction, CCIA shall endeavour to continue with any collection activity with respect to such Receivable or such Covered Account as would be reasonable in the ordinary course of business. The Seller may elect to require CCIA to reconvey to the Seller, at the Seller’s cost and expense, the Receivables in such Covered Account and all other Credit Card Assets relating to such Covered Account (or to procure that the Receivables in such Covered Account and all other Credit Card Assets relating to such Covered Account are

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reconveyed to the Seller, at the Seller’s cost and expense). If requested to do so by CCIA, the Seller shall be required to repurchase a Covered Account if it falls under paragraph (d) of the definition of “Excluded Accounts”.

7.4

The Covered Account Reimbursement Amount for the Receivables in each Covered Account shall be an amount equal to the sum of (i) the portion of the Purchase Price paid in connection with such Covered Account plus (ii) the Daily Settlement Amount for such Covered Account, less (iii) any collections or sale proceeds received by CCIA (or Raphael Bank as its designee) in respect of the Covered Account.

7.5

If:

(a)

the Seller is debited by the Card Scheme Association after the Cut-Off Time for a chargeback in respect of which the Seller provided a Cardholder with a credit on a Sale Account prior to the Cut-Off Time and the total amount of such debit has not been applied to the Pre-Signing Receivables in calculating the Credit Card Purchase Price pursuant to clause 3, then CCIA agrees to pay to the Seller an amount equal to (A) 88% in the case of an account treated as a tranche B account in the Signing Statement or (B) 21.5% in the case of an account treated as a tranche C account in the Signing Statement, in each case multiplied by the amount of such debit (to the extent that it has not been applied to the Pre-Signing Receivables in calculating the Credit Card Purchase Price pursuant to clause 3) by the Card Scheme Association; or

(b)

a cheque from a Cardholder in payment of amounts owed on a Sale Account, which was credited to such Sale Account prior to the Cut-Off Time, is returned unpaid by the drawee after the Cut-Off Time and the total amount of the returned cheque has not been applied to the Pre-Signing Receivables in calculating the Credit Card Purchase Price pursuant to clause 3, then CCIA agrees to pay to the Seller an amount equal to (A) 88% in the case of an account treated as a tranche B account in the Signing Statement or (B) 21.5% in the case of an account treated as a tranche C account in the Signing Statement, in each case multiplied by the amount of such returned cheque (to the extent that it has not been applied to the Pre-Signing Receivables in calculating the Credit Card Purchase Price pursuant to clause 3); or

(c)

CCIA or Raphael Bank as its designee or the Seller provides a credit on a Sale Account after the Cut-Off Time relating to a transaction which occurred prior to the Cut-Off Time pursuant to the Policies and Procedures or the policies and procedures of CompuCredit UK, as applicable, in compliance with all Applicable Laws and the by-laws, rules and regulations of the Card Scheme Association, with respect to the use of a Sale Account by a person other than the Cardholder who did not have actual, implied or apparent authority for such use and from which the Cardholder received no benefit prior to the Cut-Off Time and the total amount of such credit has not been applied to the Pre-Signing Receivables in calculating the Credit Card Purchase Price pursuant to clause 3, then the Seller agrees to pay CCIA an amount equal to (A) 88% in the case of an account treated as a tranche B account in the Signing Statement or (B) 21.5% in the case of an account treated as a tranche C account in the Signing Statement, in each case multiplied by the amount of such credit (to the extent that it has not been applied to the Pre-Signing Receivables in calculating the Credit Card Purchase Price pursuant to clause 3), provided that if such credit is reversed CCIA agrees to repay to the Seller the amount paid by the Seller with respect to such credit and if CCIA or Raphael Bank as CCIA’s designee receives an amount in recovery of such credit, CCIA agrees to repay to the Seller the amount of such recovery; or

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(d)

an amount received by the Seller prior to the Cut-Off Time and held in a suspense account at the Cut-Off Time is identified after the Cut-off Time as being a payment which should be posted to a Sale Account and the total amount of such payment has not been applied to the Pre-Signing Receivables in calculating the Credit Card Purchase Price pursuant to clause 3, then the Seller agrees to pay CCIA an amount equal to (A) 88% in the case of an account treated as a tranche B account in the Signing Statement or (B) 21.5% in the case of an account treated as a tranche C account in the Signing Statement, in each case multiplied by the amount of the payment and CCIA agrees to credit the relevant Sale Account with the total amount of the payment.

7.6	Each of the events in clause 7.5 shall be a “ Post Closing Payment Event ” and the amounts determined above may be netted together to result in either a net amount due to Seller or a net amount due to CCIA.

7.7

Any party with knowledge of any facts relating to any Post Closing Payment Event shall provide, or cause to be provided, to the other party written notice and supporting documentation (to the extent available to such party) in a monthly request. Seller or CCIA (or Raphael Bank as CCIA’s designee), as the case may be, shall, within five (5) Business Days after receipt of such monthly request, reimburse the other party, in immediately available funds, for the amount of said adjustment together with an additional amount equal to the product of (i) such reimbursed amount, multiplied by (ii) the base rate of the Seller from time to time, divided by (iii) 365, multiplied by the number of days during the period from and including the date on which such event occurs through and excluding the date of reimbursement. Notwithstanding the foregoing, the parties agree that this clause 7.7 shall be implemented fairly and equitably so as to avoid the double payment or failure to pay any amount which would result in the unjust enrichment of any party pursuant to the terms hereof. In particular, if payment of the Daily Settlement Amount or a debit or credit for a returned cheque has taken into account the amount of any debit or credit which falls within clause 7.5, the determination of amounts payable under clause 7.5 shall be calculated on the basis that the Seller and CCIA should be in the same position as if inclusion of the relevant debit or credit in the Daily Settlement Amount or debit or credit for a returned cheque had not taken place.

7.8	None of the limitations set out in Schedule 14 shall apply to a Claim for payment of the Covered Account Reimbursement Amount.

7.9	Any payments made pursuant to this clause 7 shall be deemed to be a repayment of the Purchase Price.

VAT

8.1	Save where expressly provided to the contrary, all amounts payable under this Agreement are exclusive of VAT chargeable on the supply or supplies for which such amounts (or any part of such amounts) are consideration for VAT purposes.

8.2	Where, under the terms of this Agreement, any person (the “Supplier” ) makes or is deemed to make a supply to any other person (the “Recipient” ) for VAT purposes and VAT is or becomes chargeable on such supply, the Recipient shall pay to the Supplier an amount equal to such VAT:

(a)

where the consideration for such supply consists wholly of money, at the same time as paying such consideration; or

(b)

where the consideration does not consist wholly of money, on or before the later of the date 14 days after the date on which such VAT is demanded in writing or when the supply is made, provided that the Recipient shall first have received a VAT invoice containing the details prescribed in Regulation 14 of the VAT Regulations in respect of the supply.

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8.3

The parties intend and believe that the sale of the Infrastructure Assets to CompuCredit UK and the sale of the Credit Card Assets referred to in clause 2.2 to CCIA will be chargeable to VAT at the standard rate and the sale of the Credit Card Assets referred to in clause 2.1 to Raphael Bank as CCIA’s designee shall be exempt for VAT purposes.

8.4

Where, under this Agreement, any person (the “Payer” ) is required to reimburse any other person (the “Payee” ) for any cost, fee, charge, disbursement or expense (or any proportion of it), the Payer shall also reimburse the Payee for any part of such cost, fee, charge, disbursement or expense (or proportion of it) which represents VAT, save to the extent that the Payee is entitled to recover such VAT by way of credit or repayment from HM Revenue and Customs.

8.5	Where the Payer has reimbursed the Payee for any amount under clause 8.4 and it transpires that the Payee is entitled to recover such VAT by way of credit or repayment, the Payee shall immediately repay such amount to the Payer.

9.	W ARRANTIES

9.1	The Seller warrants to the Purchasers in the terms of the Warranties as at the date of this Agreement.

9.2	The Purchasers and the Guarantor warrant to the Seller in the terms of the Purchasers’ Warranties as at the date of this Agreement.

9.3	In relation to the Warranties it is expressly agreed that:

(a)

the Category 1 Warranties are given subject to no disclosures; and

(b)

the Category 2 Warranties and the Category 3 Warranties are given subject to the matters fairly disclosed in the Disclosure Letter and the Disclosure Documents.

For these purposes “fairly disclosed” means if, on a review of the Disclosure Letter and/or the Disclosure Documents (as appropriate), a reasonable purchaser would be or would reasonably be expected to be aware of the specific fact, matter or other information and be in a position to make a reasonably informed assessment of the fact, matter or other information.

9.4

In relation to the Category 1 Warranties, the Seller expressly agrees that the actual or constructive knowledge on the part of any member of the Purchaser’s Group or any agent or adviser of any such member shall not qualify such Warranty and no such knowledge shall prejudice any Claim or operate so as to reduce any amount recoverable in respect of a breach of such Warranty. In relation to the Category 2 Warranties and the Category 3 Warranties, the Seller expressly agrees that the actual or constructive knowledge on the part of any member of the Purchasers’ Group or any agent or adviser of any such member shall not qualify such Warranty save only for matters fairly disclosed in the Disclosure Letter and the Disclosure Documents and no such knowledge shall prejudice any Claim or operate so as to reduce any amount recoverable in respect of a breach of such Warranties. In each case, it is expressly agreed that any Warranty Claim shall be determined and the damages flowing from any breach of Warranty shall also be determined without regard to any actual or constructive knowledge save only as aforesaid.

9.5	Save as expressly provided in this Agreement, each of the Warranties set out in each paragraph of Schedule 2 and each of the Purchasers’ Warranties set out in each

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paragraph of Schedule 3 shall be separate and independent and shall not be limited by reference to any other Warranty or Purchasers’ Warranty or any other provision of this Agreement.

9.6

Liability under any Warranty or any other provision of this Agreement shall not be confined to breaches discovered before Final Completion nor in any way be modified or discharged by Credit Card Completion, Completion or Final Completion and neither Credit Card Completion nor Completion nor Final Completion shall in any way constitute a waiver of any party’s rights.

9.7	For the purposes of the Warranties, where a Warranty is qualified by reference to the Seller’s knowledge or awareness then the Seller’s knowledge or awareness shall be deemed to be the actual knowledge or awareness of those persons referred to in Schedule 4.

9.8	The sole remedy of the Purchasers for any breach of Warranty shall be an action for damages and the Purchasers shall not be entitled to recover damages in tort or for misrepresentation (other than fraud or fraudulent misrepresentation).

9.9	Limitations on the Seller’s Liability for a Warranty Claim are set out in Schedule 14.

9.10

Save in the event of any fraud, fraudulent misrepresentation or wilful default on the part of the relevant Transferring Employee, the Seller agrees with CompuCredit UK and each Transferring Employee to waive any rights or claims which it may have in respect of any misrepresentation, inaccuracy or omission in or from any information or advice supplied or given by such employee in connection with the giving of the Warranties and the preparation of the Disclosure Letter. The provisions of this subparagraph:

(a)

may with the prior written consent of CompuCredit UK be enforced by any Transferring Employee against the Seller under the Contracts (Rights of Third Parties) Act 1999; and

(b)

may be varied or terminated by agreement between the Seller and CompuCredit UK (and CompuCredit UK may also release or compromise in whole or in part any liability in respect of rights or claims contemplated by this subparagraph) without the consent of any such Transferring Employee.

10.	L IMITATION ON C LAIMS

The provisions of Schedule 14 set out limitations on the Liability of the Seller and the Purchasers for Claims.

11.	A SSUMPTION OF A SSUMED L IABILITIES AND A PPORTIONMENT OF BUSINESS RESPONSIBILITY

11.1

On the terms and subject to the conditions in this Agreement, the Seller directs and CCIA agrees that it shall procure that Raphael Bank as CCIA’s designee shall, upon Credit Card Completion, assume and thereafter pay, discharge and perform in accordance with their respective terms when due on the Seller’s behalf the following Liabilities and obligations of the Seller, but only to the extent they relate exclusively to the Credit Card Assets:

(a)

all duties and obligations under the Cardholder Agreements arising on or after the Cut-Off Time, including in respect of Raphael Bank as CCIA’s designee the obligation to provide credit on use of a Credit Card and to honour the terms and conditions of the Cardholder Agreements (but without prejudice to any possible or actual Warranty Claim), and including all Liabilities arising after the Cut-Off Time under the CCA, but for the avoidance of doubt excepting all Liabilities related to

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events occurring before the Cut-Off Time (including any claims made by a Cardholder in respect of the enforceability or lawfulness of any default charges made under any relevant Sale Account before the Cut-Off Time) for which the Seller shall be solely responsible and subject to clause 11.1(b) and 11.2;

(b)

any Liability of the Seller in relation to claims by Cardholders pursuant to section 75 of the CCA arising in connection with a purchase made before or after the Cut-Off Time, provided the Seller will indemnify and hold CCIA (and/or Raphael Bank as CCIA’s designee) harmless for any Losses in accordance with clause 11.2; and

(c)

any and all fines or charges imposed at any time on or after the Cut-Off Time by any Card Scheme Association in connection with the ownership of the Sale Accounts, provided the Seller will indemnify and hold CCIA (and/or Raphael Bank as CCIA’s designee) harmless for any Losses in accordance with clause 11.2;

(d)

any charge-back or credit with respect to the account activity of the Sale Accounts after the Cut-Off Time, provided that the Seller will indemnify and hold CCIA (and/or Raphael Bank as CCIA’s designee) harmless for any Losses in accordance with clause 11.2; and

(e)

Credit Card Credit Balances subsisting at the Cut-Off Time and future Credit Card Credit Balances in each case arising under the Sale Accounts,

The Purchasers shall upon Completion assume as at the Completion Date and shall thereafter pay, discharge and perform in accordance with their respective terms when due all duties and obligations in respect of which accruals have been made as part of the Infrastructure Assets Apportionment Statement or the Information Technology Infrastructure Assets Apportionment Statement but only to the extent they relate exclusively to the Business and the Infrastructure Assets in accordance with clauses 11.4 and 11.9.

The Liabilities and obligations expressly assumed by the Purchasers pursuant to this clause 11.1 shall collectively be known as the “Assumed Liabilities” and the Purchasers shall indemnify and hold the Seller harmless against any Losses relating to any Assumed Liabilities except any Losses to the extent that such Losses fall within the scope of the indemnity provided by the Seller in clause 11.2. For the avoidance of doubt, the Assumed Liabilities shall not include any Liabilities of the Seller or any member of the Seller’s Group for Taxation relating to the Business, for any Liabilities relating to any other business of the Seller or any member of the Seller’s Group or, save as expressly set out in this clause 11.1, Liabilities arising prior to the Cut-Off Time (including in relation to any claim made by a Cardholder in respect of the enforceability or lawfulness of any default charges made under any Sale Account before the Cut-Off Time).

11.2

The Liabilities and obligations of the Seller in respect of the Business and Assets which are not Assumed Liabilities or Post Closing Payment Events pursuant to clause 7.5 and any Liabilities relating to any other business of the Seller or any member of the Seller’s Group, any Liability for which the Seller is liable for under the Infrastructure Assets Apportionment Statement or the Information Technology Infrastructure Assets Apportionment Statement and, save as expressly set out in clause 11.1, for Liabilities arising prior to the Cut-Off Time shall collectively be known as “ Retained Liabilities ”. For the avoidance of doubt, the Seller shall remain liable for and shall pay, discharge and perform in accordance with their respective terms when due all Retained Liabilities and shall indemnify and hold the Purchasers (and Raphael Bank as CCIA’s designee) harmless against any Losses relating to any Retained Liabilities and in relation to the following Liabilities:

(a)

all Liabilities in relation to duties and obligations under the Cardholder Agreements which were due to be undertaken or discharged before the Cut-Off Time, including the obligation to provide credit on use of a Credit Card and to honour the terms and conditions of the Cardholder Agreements, and including all Liabilities arising before the Cut-Off Time under the CCA;

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(b)

any Liability in relation to claims by Cardholders pursuant to section 75 of the CCA arising in connection with a purchase made before the Cut-Off Time;

(c)

any Liability in relation to charge-backs or credits (whether direct debit or otherwise) with respect to the account activity on the Sale Accounts before the Cut-Off Time;

(d)

any Liability in relation to any and all fines or charges imposed at any time in relation to acts or omissions before the Cut-Off Time by any Card Scheme Association in connection with the ownership of the Sale Accounts;

(e)

any liability in relation to any claim by a Cardholder in respect of the enforceability or lawfulness of any default charge made under any relevant Sale Account before the Cut-Off Time, provided that the Purchasers will deal with such claims under clause 11.12; and

(f)

any Liability which the Seller is responsible for pursuant to the Infrastructure Assets Apportionment Statement,

provided that to the extent that clause 7.5 applies to any Liability arising under clauses 11.2(b) or 11.2(c), such Liability shall be dealt with pursuant to that clause.

11.3

Subject to the terms of this Agreement, the Assumed Liabilities are assumed by the Purchasers (who may procure that Raphael Bank as CCIA’s designee assumes and/or discharges the Assumed Liabilities or any of them), in so far as legally permitted, subject to, and so that the Purchasers shall have and be entitled to the benefit of, the same rights, powers, remedies, claims, defences, obligations, conditions and incidents (including rights of set-off and counterclaim) as the Seller would have enjoyed had the Assumed Liabilities not been assumed by the Purchasers (or Raphael Bank if applicable).

11.4	All income, expenses and outgoings relating to the Infrastructure Assets (excluding the Information Technology Infrastructure Assets) which are recurring or periodic in nature shall be apportioned on a time basis between the Purchasers and the Seller, such that:

(a)

the Seller is entitled to the income and is responsible for the expenses and outgoings relating to the period ending immediately prior to the Completion Date (with respect to the Business and the Infrastructure Assets other than the Information Technology Infrastructure Assets); and

(b)

CompuCredit UK is entitled to the income and responsible for the expenses and outgoings relating to the period commencing on the Completion Date (with respect to the Business and the Infrastructure Assets other than the Information Technology Infrastructure Assets).

11.5	All sums to be paid by either party in accordance with clauses 11.4(a) and (b) shall be identified in a statement to be drawn up in accordance with clause 11.6 (the “ Infrastructure Assets Apportionment Statement ”).

11.6

The draft Infrastructure Assets Apportionment Statement shall be prepared by the Seller and shall identify the items to be apportioned as at the Completion in accordance with clause 11.4. The provisions of Part B of Schedule 1 shall apply mutatis mutandis to the draft Infrastructure Assets Apportionment Statement save that all references to the

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Signing Statement shall be replaced by Infrastructure Assets Apportionment Statement and all references to Credit Card Completion shall be replaced by Completion in the case of the Infrastructure Assets Apportionment Statement.

11.7

All apportionments to be made under clause 11.6 shall be paid by the Seller to the Purchasers or by the Purchasers to the Seller (as applicable) within five Business Days after the Infrastructure Assets Apportionment Statement has been finally agreed or determined in accordance with Part B of Schedule 1 in cash by telegraphic transfer into the Purchasers’ Account or into the Seller’s Account (as applicable).

11.8

Any income relating to the Infrastructure Assets received by a party to which another party is entitled following Completion shall be held on trust by that party for the other until payment in accordance with clause 11.7 or, if received after a payment has been made in accordance with clause 11.7, such income shall be paid to the other party in cash by telegraphic transfer into the Purchasers’ Account or into the Seller’s Account (as applicable) within five Business Days of the relevant party’s receipt of the relevant income. Any payment received by the Seller after Credit Card Completion relating to the Receivables shall be held on trust by the Seller and paid into the Purchasers’ Account as soon as possible and, in any event, within five Business Days of receipt.

11.9	All income, expenses and outgoings relating to the Information Technology Infrastructure Assets which are recurring or periodic in nature shall be apportioned on a time basis between the Purchasers and the Seller, such that:

(a)

the Seller is entitled to the income and is responsible for the expenses and outgoings relating to the period ending immediately prior to the Final Completion Date (with respect to the Information Technology Infrastructure Assets); and

(b)

CompuCredit UK is entitled to the income and responsible for the expenses and outgoings relating to the period commencing on the Final Completion Date (with respect to the Information Technology Infrastructure Assets.

11.10

All sums to be paid by either party in accordance with clauses 11.9(a) and (b) shall be identified in a statement to be drawn up in accordance with clause 11.11 (the “ Information Technology Infrastructure Assets Apportionment Statement ”).

11.11

The draft Information Infrastructure Assets Apportionment Statement shall be prepared by the Seller and shall identify the items to be apportioned as at the Final Completion in accordance with clause 11.9. The provisions of Part B of Schedule 1 shall apply mutatis mutandis to the draft Information Technology Infrastructure Assets Apportionment Statement save that all references to the Signing Statement shall be replaced by Information Technology Infrastructure Assets Apportionment Statement and all references to Credit Card Completion shall be replaced by Final Completion in the case of the Information Technology Infrastructure Assets Apportionment Statement.

11.12

All apportionments to be made under clause 11.9 shall be paid by the Seller to the Purchasers or by the Purchasers to the Seller (as applicable) within five Business Days after the Information Technology Infrastructure Assets Apportionment Statement has been finally agreed or determined in accordance with Part B of Schedule 1 in cash by telegraphic transfer into the Purchasers’ Account or into the Seller’s Account (as applicable).

11.13

Any income relating to the Information Technology Infrastructure Assets received by a party to which another party is entitled following Final Completion shall be held on trust by that party for the other until payment in accordance with clause 11.12 or, if received after a payment has been made in accordance with clause 11.12, such income shall be paid to the other party in cash by telegraphic transfer into the Purchasers’ Account or into the Seller’s Account (as applicable) within five Business Days of the relevant party’s receipt of the relevant income.

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11.14

All amounts paid to the Purchasers and due under any contract in respect of commissions relating to the renewal or continuation of cover of insurance products to the Cardholders where such renewal or continuation of cover relates to an insurance product sold to that Cardholder prior to Credit Card Completion, shall from Credit Card Completion be held by the Purchasers on trust and for the account of the Seller and transferred by the Purchasers to the Seller as soon as reasonably practicable and in any event within five Business Days.

11.15

All amounts paid to the Seller and due under any contract in respect of commissions relating to the renewal or continuation of cover of insurance products to the Cardholders where such renewal or continuation of cover relates to an insurance product sold to that Cardholder on or after Credit Card Completion, shall from Credit Card Completion be held by the Seller on trust and for the account of the Purchasers and transferred by the Seller to the Purchasers as soon as reasonably practicable and in any event within five Business Days.

11.16

The Purchaser and the Seller shall use their reasonable endeavours to agree within three months of Credit Card Completion a commercially reasonable method to identify payments due to the Purchasers or the Seller pursuant to clauses 11.14 or 11.15 and if the Purchasers and the Seller are unable to agree such a method within such time period, clauses 11.14 and 11.15 shall be deemed to not have created any obligation on either of the Purchasers or the Seller.

11.17

The provisions of Schedule 12 shall apply to any claims by a Cardholder in respect of the enforceability or lawfulness of any default charge made under any Sale Account before the Cut-Off Time.

12.	E MPLOYEES

12.1

The Seller and CompuCredit UK acknowledge and agree that the TUPE Regulations apply to the transaction contemplated by this Agreement and the Transitional Services Agreement and that the contract of employment of each Transferring Employee will have effect from the Services Assumption Date as if originally made between CompuCredit UK and the Transferring Employee (except in relation to pension benefits which are to be provided in accordance with the terms of Schedule 7) and that the collective agreements listed in Supplementary Section I Doc. I.40 of the Disclosure Documents shall have effect between CompuCredit UK and the relevant trade union. CompuCredit UK further acknowledges its intention to continue to recognise Amicus as provided in the procedural agreement set out in File 23 Document I.015 in the Disclosure Documents.

12.2

In connection with the transfer under clause 12.1, the parties agree that the Seller will perform and discharge all its obligations in respect of the Transferring Employees and their representatives relating to the period before the Services Assumption Date. The Seller will indemnify CompuCredit UK against all Losses arising from the Seller’s failure to perform and discharge any such obligations and against any Losses in respect of the Transferring Employees arising from or as a result of:

(a)

any act of or omission by the Seller or the Seller’s Group occurring before the Services Assumption Date save simply for the accrual of service before that date; and

(b)

any failure by the Seller or the Seller’s Group to comply with any requirement of Regulation 13 of the TUPE Regulations except to the extent that such complaint is caused by or related to a failure by CompuCredit UK to comply with Regulation 13(4) of the TUPE Regulations.

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12.3

CompuCredit UK will perform and discharge all obligations in respect of the Transferring Employees for its own account on and after the Services Assumption Date. The Purchasers will indemnify the Seller and each Seller’s Group Company from and against all Losses arising from CompuCredit UK’s failure to perform and discharge any such obligation and against all Losses arising out of or as a result of:

(a)

any act or omission by CompuCredit UK or a Purchasers’ Group Company relating to a Transferring Employee occurring on or after the Services Assumption Date;

(b)

any act of discrimination by CompuCredit UK or a Purchaser Group Company relating to a Relevant Employee prior to the Services Assumption Date or any act by CompuCredit UK or a Purchasers Group Company which causes a Relevant Employee to resign and claim constructive dismissal, as a direct consequence of that act (the “ Act ”), where both the Act and the resignation occur prior to the Services Assumption Date;

(c)

subject to clause 12.15, all emoluments and outgoings in relation to the Transferring Employees (including without limitation all salaries or wages, bonuses, PAYE, national insurance contributions, pension contributions and otherwise) arising on or after the Services Assumption Date in relation to the period after the relevant Services Assumption Date;

(d)

any claim arising out of the provision of, or proposal by, CompuCredit UK or a Purchasers’ Group Company to offer or effect any change to any benefit, term or condition or working condition of any Transferring Employee arising on or after the Services Assumption Date;

(e)

any failure by CompuCredit UK to comply with Regulation 13(4) of the TUPE Regulations in respect of the transfer of the Transferring Employees on or after the Services Assumption Date;

(f)

any statement communicated or action done in respect of any Relevant Employee by CompuCredit UK or any Purchasers’ Group Company up to and including the Services Assumption Date, which has not been discussed in advance with the Seller in accordance with the principles set out in clauses 6.1 to 6.3 of the Transitional Services Agreement;

(g)

any claim by an employee who would have been an Transferring Employee but for the termination of his employment before the Services Assumption Date by reason of his resignation in connection with any actual or proposed measure (including a proposed change or changes in that employee’s working conditions) which CompuCredit UK or a Purchasers’ Group Company has expressed an intention to take in respect of that employee or any group of employees which includes that employee

12.4

(a)

Subject to clause 12.15 and the provisions of the Transitional Services Agreement, as at the Services Assumption Date, all emoluments and outgoings under or in connection with the Transferring Employees (including without limitation salaries or wages, bonuses, PAYE, employer’s national insurance contributions and pension contributions in respect of any pensionable service or otherwise) (the “ Transferring Employees’ Costs ”) shall be apportioned pro rata in respect of the period prior to the Services Assumption Date and after the

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Services Assumption Date between the Seller and CompuCredit UK (whether or not payable prior to or after the Services Assumption Date) provided that the amount of Transferring Employees’ Costs comprising bonuses which are apportioned to the Seller shall not exceed the Bonus Cap.

(b)

Clause 12.4(a) shall be without prejudice to CompuCredit UK’s liability to pay any Transferring Employees’ Costs properly due to the Seller as “Charges” within the meaning of the Transitional Services Agreement provided that the Purchasers shall not be liable to the Seller more than once in respect of the same Transferring Employees’ Costs.

(c)

All sums to be paid by either party in accordance with clause 12.4(a) shall be identified in one or more statements to be drawn up in accordance with clause 12.4(d) (the “ Transferring Employees’ Costs Statement ”).

(d)

The draft Transferring Employees’ Costs Statement shall be prepared by the Purchasers and shall identify the items to be apportioned in accordance with clause 12.4(a). Bonuses may be included in the draft Transferring Employees’ Costs Statement only to the extent paid. The provisions of paragraphs 3 and 4 of Part B of Schedule 1 shall apply mutatis mutandis to the draft Transferring Employees’ Costs Statement save that all references to the Signing Statement shall be replaced by references to the Transferring Employees’ Costs Statement, all references to the Seller shall be replaced by references to the Purchasers, all references to the Purchasers shall be replaced by references to the Seller and all references to Credit Card Completion shall be replaced by references to the relevant Services Assumption Date (in relation to all Transferring Employees’ Costs other than bonuses) and the relevant date on which the bonus is paid (in relation to bonuses).

(e)

All apportionments to be made under clause 12.4(a) shall be paid by the Seller to the Purchasers or by the Purchasers to the Seller (as applicable) within five Business Days after the Transferring Employees’ Costs Statement has been finally agreed or determined in accordance with Part B of Schedule 1 in cash by telegraphic transfer into the Purchasers’ Account or into the Seller’s Account (as applicable).

(f)

The Purchasers will acknowledge the accrued holiday entitlement of the Transferring Employees. The Seller and the Purchasers will agree a schedule of accrued holiday entitlement prior to each Services Assumption Date (the “ Accrued Holiday Entitlement ”). The Seller will then reimburse the Purchasers the Accrued Holiday Entitlement amount by way of a deduction from that month’s Charge as defined in Schedule 5 of the Transitional Services Agreement.

12.5	If any person other than a Transferring Employee claims that as a result of this Agreement or the Transitional Services Agreement his contract of employment has transferred to CompuCredit UK (or to a Purchasers’ Group Company) pursuant to the TUPE Regulations the following process shall apply:

(a)

CompuCredit UK shall notify the Seller in writing within seven days of becoming aware of that fact (“ Notification ”);

(b)

to the extent that such person claims to be employed by CompuCredit UK or a Purchasers’ Group Company, CompuCredit UK or a Purchasers’ Group Company may at its discretion accept such person’s claim;

(c)

within 21 days of Notification, provided CompuCredit UK has not accepted such person’s claim the Seller may or may procure that a member of the Seller’s Group

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will offer employment to such person or may take at its own cost such other steps as it feels necessary to effect a written withdrawal of the claim. If such offer of employment is accepted, CompuCredit UK shall (or if applicable shall procure that CompuCredit UK’s Group Company) immediately release the person from its employment.

12.6	If a Transferring Employee claims that as a result of this Agreement his contract of employment has not transferred to CompuCredit UK (or to a Purchasers’ Group Company) pursuant to the TUPE Regulations the following process shall apply;

(a)

the Seller shall notify CompuCredit UK in writing within seven days of becoming aware of that fact ( “Notification ”);

(b)

to the extent that such person claims to be employed by the Seller or a Seller’s Group Company, the Seller or a Seller’s Group Company may at its discretion accept such person’s claim;

within 21 days of Notification, provided the Seller has not accepted such person’s claim CompuCredit UK may or may procure that a Purchasers’ Group Company will offer employment to such person or may take at its own cost such other steps as it feels necessary to effect a written withdrawal of the claim. If such offer of employment is accepted, the Seller shall (or if applicable shall procure that the Seller’s Group Company shall) immediately release the person from its employment.

12.7

If no such offer of employment pursuant to clause 12.5 has been made or procured to be made by the Seller or such offer has been made but not accepted or if such person has failed to withdraw the claim, then CompuCredit UK or CompuCredit UK’s Group Company may terminate the employment of such person within seven days of the expiry of that 28 day period from Notification.

12.8

If no such offer of employment pursuant to clause 12.6 has been made or procured to be made by CompuCredit UK or such offer has been made but not accepted or if such Transferring Employee has failed to withdraw the claim, then the Seller or the Seller’s Group Company may terminate the employment of such person within seven days of the expiry of that 28 day period from Notification.

12.9

Subject to the provisions of clause 12.5 and 12.7 being followed (or the parties acting in any other way as may be agreed between them), the Seller will indemnify CompuCredit UK against the salary and costs of the contractual benefits of that person’s employment from the relevant Services Assumption Date and the termination of that employment by CompuCredit UK’s Group and all other Losses arising out of any such claim and/or termination.

The indemnity provided in this clause 12.9 shall be limited in the following ways:

(a)

it will cease to apply in relation to any Notification which occurs six months after the Services Assumption Date;

(b)

if any liability under this clause 12.9 arises from and/or is increased due to any act or omission by CompuCredit UK and/or any CompuCredit UK Personnel and/or any Purchasers’ Group Company and which is not a claim for unfair dismissal, the indemnity shall not apply to such proportion of that liability as is attributable to the act or omission of CompuCredit UK and/or any CompuCredit UK Personnel and/or any Purchasers’ Group Company.

12.10

Subject to the provisions of clause 12.6 being followed (or the parties acting in any other way as may be agreed between them), the Purchasers will indemnify the Seller against the salary and costs of the contractual benefits of the Transferring Employee’s

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employment from the relevant Services Assumption Date and the termination of that employment by the Seller and all other Losses arising out of such claim and/or termination;

12.11

The indemnity provided in clause 12.10 shall be limited in the following ways:

(a)

it will cease to apply in relation to any Notification which occurs six months after the Services Assumption Date;

(b)

if any liability under clause 12.10 arises from and/or is increased due to any act or omission by the Seller and/or any Seller Personnel and/or any Seller’s Group Company and which is not a claim for unfair dismissal, the indemnity shall not apply to such proportion of that liability as is attributable to the act or omission of the Seller and/or any Seller Personnel and/or any Seller’s Group Company.

12.12

Prior to the Services Assumption Date the Seller shall, upon reasonable request by CompuCredit UK and subject to compliance with the Data Protection Legislation, provide CompuCredit UK with access (on reasonable notice and during normal working hours) to such relevant employment records as they may reasonably require and will allow CompuCredit UK to have copies of any such documents. It is acknowledged that the Seller will be reviewing such records prior to providing access.

12.13

It is acknowledged that in view of clause 5.5(c) and 5.6 CompuCredit UK does not require the provision of the employee liability information pursuant to Regulation 11 of the TUPE Regulations and the Purchasers will indemnify and keep indemnified the Seller against all Losses arising out of or in connection with CompuCredit UK bringing a claim under Regulation 12 of the TUPE Regulations.

12.14

On the Measures Letter, the Purchasers and the Seller agree as follows:

(a)

other than minor amendments not affecting the substantive proposals set out in the Measures Letter, the Purchasers will not deviate from their proposals as set out in the Measures Letter save with the agreement of the Seller;

(b)

paragraph 1 of Schedule 16 shall apply;

(c)

the Measures Letter relates to proposals for Transferring Employees only and, for the avoidance of doubt, will not relate to any employees which CompuCredit UK hires following the Services Assumption Date including any Key Personnel or Pool 3 Employees; and

(d)

CompuCredit UK intends to comply with its obligations to the Transferring Employees under the TUPE Regulations.

12.15

The Seller agrees to indemnify CompuCredit UK and keep CompuCredit UK fully indemnified against any and all Liabilities, including any PAYE and National Insurance contributions, relating to and arising out of the participation of the Share Plan Employees in the Share Plans. For the avoidance of doubt, the Seller will account to HM Revenue & Customs for any Secondary Class 1 National Insurance Contributions due in respect of the participation of the Share Plan Employees in the Share Plans.

13.	P OST C OMPLETION COVENANTS

13.1

Except as otherwise specifically provided in this Agreement, on and after Credit Card Completion, the Completion Date and the Final Completion Date (as applicable), the Purchasers shall (and shall procure that Raphael Bank as CCIA’s designee pursuant to clause 11.1 shall), at the Purchasers’ expense, perform such acts (including procuring the

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necessary assistance of third parties) and execute such documents as may be reasonably required after Credit Card Completion, Completion or the Final Completion (as the case may be) by the Seller to relieve and discharge the Seller from any Assumed Liabilities.

13.2

Except as otherwise specifically provided in this Agreement, on and after Credit Card Completion, the Completion Date and the Final Completion Date (as applicable), the Seller shall, at the Seller’s expense, perform such acts (including procuring the necessary assistance of third parties) and execute such documents as may be reasonably required after Credit Card Completion, Completion or the Final Completion Date (as the case may be) by the Purchasers to relieve and discharge the Purchasers from any Retained Liabilities.

13.3

The Seller and the Purchasers shall co-operate, to the extent reasonably requested by the other, in the handling and disposition of any action, suit, arbitration, proceeding, investigation or regulatory inquiry relating to any of the Assets and whether or not pending or threatened prior to Credit Card Completion (with respect to the Credit Card Assets), Completion (with respect to the Infrastructure Assets other than the Information Technology Infrastructure Assets) and Final Completion (with respect to the Information Technology Infrastructure Assets) which arise out of or which are related to any event or occurrence with respect to the Credit Card Assets prior to Credit Card Completion, the Infrastructure Assets (other than the Information Technology Infrastructure Assets) prior to Completion and the Information Technology Infrastructure Assets prior to Final Completion.

13.4

If the Seller becomes aware after Credit Card Completion or Completion (as applicable) of any claim made or likely to be made against the Seller which constitutes or is likely to constitute an Assumed Liability, the Seller shall as soon as reasonably practicable give written notice of that claim to the Purchasers and shall not admit, compromise, settle, discharge or otherwise deal with such claim without the prior consent of the Purchasers (such consent not to be unreasonably withheld or delayed).

13.5

Upon becoming aware of any action, suit or proceeding brought by any person who is not a party to this Agreement which may give rise to a claim or potential claim under which a party to this Agreement may be entitled to the benefit of an indemnity under clause 11 and/or clause 12 of this Agreement, the person having the benefit of that indemnity (the “Indemnified Party” ) shall notify the party liable under that indemnity (the “Indemnifying Party” ) by written notice of that claim, which notice shall include details of the nature and amount, or potential amount, of that claim.

13.6

Subject to paragraphs (a) to (c) below and clause 13.7, an Indemnifying Party may, at its sole cost and expense, control the defence of any such action, suit or proceeding. The Indemnified Party shall at all times have the right to participate fully in the defence of any relevant action, suit or proceeding at its own expense and the counsel chosen to conduct such defence shall be such counsel as is reasonably acceptable to the Indemnified Party, provided that:

(a)

subject to sub-clause (b) and (c) if, in the Indemnified Party’s reasonable opinion, the conduct of the relevant action, suit or proceeding (or any incidental negotiations) has materially prejudiced, or is likely to materially prejudice, the value of the Receivables or the Goodwill (in the case of CCIA) or the business of any Seller’s Group Company (in the case of the Seller) or the business of any Purchasers’ Group Company (in the case of CCIA), then the relevant Indemnified Party shall control the defence of any such action, suit or proceeding (at its sole cost);

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(b)

subject to sub-clause (c), if the conduct of the relevant action, suit or proceeding (or any incidental negotiations) has materially prejudiced, or is likely to materially prejudice, both (i) the value of the Receivables or the Goodwill of the Business or the goodwill of any business of any member of the Purchaser’s Group and (ii) the goodwill of the business of any member of the Seller’s Group, then CCIA shall control the defence of any such action, suit or proceeding (at is sole cost);

(c)

no settlement of any action, suit or proceeding may be made by any Indemnifying Party which prejudices or is likely to prejudice, the goodwill of the Indemnified Party without its prior consent (not to be unreasonably withheld, delayed or conditioned).

13.7

If an Indemnifying Party does not assume the defence of any action, suit or proceeding in accordance with its right under clause 13.6 within 40 Business Days after delivery of a notice served on it in accordance with clause 13.5 and proceed to defend such action, suit or proceeding thereafter, the Indemnified Party may assume the defence of such action, suit or proceeding at the cost and expense of the Indemnifying Party.

13.8

An Indemnified Party shall 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 such possible claim for indemnification, and each of the Indemnified Party and the Indemnifying Party will render to the other such assistance as it may reasonably require of the other to ensure prompt and adequate defence of any suit, claim or proceeding.

13.9

Each of the Indemnified Party and the Indemnifying Party shall render to the other such assistance as may be reasonably required in order to ensure the proper and adequate defence of any such action, suit or proceeding. Neither the Seller nor the Purchasers shall admit any Liability or make a settlement of any claim for which indemnity is or will be sought without the written consent of the other, which consent shall not be unreasonably withheld or delayed.

13.10

For the avoidance of doubt, the Seller (to the extent that such Records, Copy Records and any other information are in the possession or control of or held on behalf of any member of the Seller’s Group) and the Purchasers shall preserve and keep all Records, Copy Records and all other information relating to the accounting, business, financial and Tax affairs of the Business in existence on the Final Completion Date or that come into existence after the Final Completion Date but which relate to the Business prior to the Final Completion Date for such period, not less than six years:

(a)

as may be required by a Governmental Authority or Applicable Laws;

(b)

as may be reasonably necessary with respect to the prosecution or defence of any audit, suit, action, litigation or administrative arbitration or other proceeding or investigation that is then pending or threatened and which it is aware; or

(c)

that is equivalent to the period established by any applicable statute of limitations (or any extension or waiver of it) with respect to matters pertaining to Taxation.

13.11

Subject to clause 23.11, the Seller and the Purchasers (or their representatives) shall provide access to the other, and shall permit the other, at the other’s expense, to take copies of, the Records, the Copy Records and all other information relating to the accounting, business, financial and Tax affairs of the Business that the Seller or the Purchasers is obliged to preserve and keep pursuant to clause 13.10 on being given reasonable notice requesting such access or copies. In addition, but subject to clause 23.11, the Seller and the Purchasers shall procure access by the other to any employees of the Seller’s Group and any employees of the Purchasers’ Group, respectively, on being

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given reasonable notice requesting such access, as may be reasonably necessary for the purposes of any audit, suit, action, litigation or administrative arbitration or other third party proceeding or investigation by any Governmental Authority or in connection with the Seller’s or the Purchasers’ right of access to the Records and other information set out in this clause.

13.12

Each party shall promptly following receipt thereof give to the other a copy of all payments, notices, correspondence, information or enquiries in relation to the Credit Assets which it receives after Credit Card Completion and in relation to the Business or the Infrastructure Assets which it receives after Completion and which belongs to the other.

13.13

The Seller agrees with the Purchasers that the Seller shall not and shall procure that no Seller’s Group Company shall save as permitted under the Transitional Services Agreement and this Agreement in any capacity:

(a)

after Credit Card Completion sell (or purport to sell) the Signing Date Account List in whole or in part to any third party;

(b)

for a period of 3 years after Credit Card Completion: (i) provide the Signing Date Account List in whole or in part to any third party; or (ii) use the Signing Date Account List in whole or in part for the purpose of soliciting any Cardholder for any product, including any credit card, whether indirectly or indirectly; or (iii) use any of the information relating exclusively to Cardholders derived from the Customer Data and Files or the Signing Date Account List to conduct marketing activities directed solely or primarily at the Cardholders for any product including any credit card provided that this clause 13.13 shall not restrict the Seller or any Seller’s Group Company from conducting any marketing activities using any information other than derived from the Signing Date Account List or the Customer Data and Files (including information acquired from a third party or information derived from a Cardholder by reason of that Cardholder also being or becoming a customer in a capacity other than a Cardholder of any Seller’s Group Company); or

(c)

save as permitted in the Licence Back, at any time after Credit Card Completion use or permit (or purport to permit) any third party to use the name “Monument” or any other name intended or likely to be confused with such a name; or

(d)

for a period of 18 months after Completion induce or attempt to induce any person who is a Transferring Employee or Key Personnel to leave the employment of CompuCredit UK (or any member of the Purchasers’ Group who may employ any such Transferring Employee or Key Personnel from time to time) provided that this clause does not prevent the Seller or any Seller’s Group Company from recruiting any Transferring Employee or Key Personnel by means of a general advertising campaign.

13.14

Notwithstanding the provisions of clause 13.13, the Seller undertakes that as from Credit Card Completion it shall not use and shall procure that no member of the Seller’s Group shall use any Personal Data contained in or derived from the Signing Date Account List or Customer Data and Files in contravention of Data Protection Legislation without any limitation in time.

13.15

If the Seller enters into an Authorised Guarantee Agreement in connection with the assignment of the Property Lease, the Purchasers will indemnify the Seller from and against any and all Losses which the Seller incurs (directly or indirectly) in relation to the Authorised Guarantee Agreement.

13.16

The provisions of Schedule 15 shall apply in relation to Unenforceability Allegations.

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14.	C ONFIDENTIALITY

14.1	Each party shall, and shall procure that each Seller’s Group Company or, as the case may be, Purchasers’ Group Company shall, treat as confidential all information obtained as a result of entering into, performing or enforcing its rights under this Agreement which relates to:

(a)

the provisions of this Agreement;

(b)

the negotiations relating to this Agreement; or

(c)

the other parties.

This clause shall not apply in the circumstances described in clause 14.3.

14.2	Each party shall, and shall procure that each Seller’s Group Company or, as the case may be, Purchasers’ Group Company shall:

(a)

not disclose any such confidential information to any person other than any of its directors or employees who needs to know such information in order to discharge his duties;

(b)

not use any such confidential information other than for the purpose of performing its obligations or exercising its rights under this Agreement; and

(c)

procure that any person to whom any such confidential information is disclosed by it complies with the restrictions equivalent to those contained in this Agreement.

14.3	Each party (including any Seller’s Group Company or Purchasers’ Group Company) may disclose information which would otherwise be confidential:

(a)

if and to the extent required by law or for the purpose of any judicial proceedings;

(b)

if and to the extent required by existing contractual obligations in existence at the date of this Agreement;

(c)

if and to the extent required by any securities exchange or regulatory or governmental body to which that party is subject, wherever situated, including (without limitation) the FSA or SEC, whether or not the requirement for information has the force of law;

(d)

if and to the extent required to vest the full benefit of this Agreement in that party;

(e)

to its professional advisers, auditors and bankers;

(f)

if and to the extent the information has come into the public domain through no fault of that party;

(g)

to members of the Seller’s Group or, as the case may be, the Purchasers’ Group;

(h)

if and to the extent the other parties have given prior written consent to the disclosure; or

(i)

the matters dealt with in paragraph 2 of Schedule 16.

14.4	Notwithstanding clauses 14.1 to 14.3, any Purchasers’ Group Company (and/or Raphael Bank) may disclose information:

(a)

to Bank of America and CompuCredit Corporation (or any other lender, sponsor, promoter or underwriter) in respect of any securitisation or any other financing of

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any of the Credit Card Assets; provided that such information is disclosed to such person on the basis that such person complies with restrictions equivalent to those contained in this Agreement.

(b)

to Raphael Bank (as CCIA’s designee) in respect of the transfer and ongoing operation of the Sale Accounts; provided that such information is disclosed to Raphael Bank (as CCIA’s designee) on the basis that Raphael Bank (as CCIA’s designee) complies with restrictions equivalent to those contained in this Agreement;

(c)

to the Card Scheme Association in respect of the transfer and ongoing operation of the Sale Accounts;

(d)

to any relevant rating agency in respect of any securitisation of the Credit Card Assets; and

(e)

in the form of a short summary of this Agreement to the extent and only to the extent required to be disclosed in any offering circular or marketing materials relating to the securitisation of any of the Credit Card Assets by Applicable Laws or in order to comply with market standard behaviour in relation to proper disclosure.

14.5	The restrictions contained in this clause shall continue to apply after the termination of this Agreement without limit in time.

15.	A NNOUNCEMENTS

15.1	Subject to clauses 6.1 and 15.2, no announcement concerning the transactions contemplated by this Agreement shall be made by any party without the prior written consent of the other parties.

15.2	Each party may, after consultation (to the extent permissible) with the other parties, make an announcement concerning the transaction contemplated by this Agreement if required by:

(a)

Applicable Laws; or

(b)

any securities exchange or regulatory or governmental body to which that party is subject or submits, wherever situated, including (without limitation) the FSA and the SEC, whether or not the requirement has the force of law.

15.3	The restrictions contained in this clause shall continue to apply after the termination of this Agreement without limit in time.

16.	F URTHER ASSURANCE AND AVAILABILITY OF INFORMATION

16.1

If and to the extent that title to any of the Assets is not effectively vested in CCIA, Raphael Bank as CCIA’s designee or CompuCredit UK (as applicable) at Credit Card Completion, Completion or Final Completion (as applicable) in accordance with the terms of this Agreement, then the Seller shall hold them in trust for CCIA (or Raphael Bank as CCIA’s designee) until title is effectively so vested in CCIA, Raphael Bank as CCIA’s designee or CompuCredit UK (as applicable). The Seller shall, at its sole expense, perform, or use its reasonable endeavours to procure the performance of, such acts and execute and/or procure the execution of such documents as may be reasonably required by CCIA or CompuCredit UK (including, if necessary, assisting CCIA or Raphael Bank as CCIA’s designee to enforce the obligations of the Cardholder Agreements against Cardholders

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(provided that CCIA shall bear the full cost of any such enforcement action without prejudice to any relevant Warranty Claim)) on or after Credit Card Completion, Completion or Final Completion by the Purchasers (or Raphael Bank as CCIA’s designee) for vesting in the Purchasers (or Raphael Bank as CCIA’s designee) the legal and beneficial ownership of the Assets and the Business and to obtain the full benefit of the same and to assure to the Purchasers (or Raphael Bank as CCIA’s designee) the rights agreed to be granted to them under, and give full effect to, this Agreement, provided that if CCIA (or Raphael Bank as its designee) wishes to arrange for the re-signature of Cardholder Agreements following Credit Card Completion, that shall be at CCIA’s sole expense.

16.2

For the avoidance of doubt, the parties hereby acknowledge, agree and confirm for all purposes that the benefit of the Cardholder Agreements shall be assigned to Raphael Bank as CCIA’s designee subject always to clause 2.5 and to the Purchaser’s obligations under clause 11 in respect of the burden of the Cardholder Agreements and no party intends to, or shall be obliged to, novate the Cardholder Agreements on Credit Card Completion.

16.3

The Seller shall make available to the Purchasers all information in its possession or under its control which the Purchasers may from time to time reasonably require (before or within five years following Completion) which relates to the Business or the Assets and shall permit the Purchasers and their representatives to have access to and take copies of all documents or other materials containing only such information on reasonable written notice from the Purchasers during normal business hours.

16.4	The Seller and the Purchasers shall co-operate in good faith to minimise any costs and expenses payable under this clause by either party.

16.5

Without prejudice to the preceding provisions of this clause 16 each party shall use its reasonable endeavours to take, or cause to be taken, all such actions and do, or cause to be done, all things proper, necessary or advisable to give effect to the transactions contemplated by this Agreement and the documents referred to herein including, in the Seller’s case, enforcing any rights that it has against a Predecessor.

16.6

Except as otherwise provided in this Agreement or in the Transitional Services Agreement, the Seller shall take no action after Credit Card Completion that would be inconsistent with the effective transfer by the Seller to CCIA (or Raphael Bank as CCIA’s designee) of the Seller’s entire right, title and interest in and to the Credit Card Assets, shall take no action after Completion which would be inconsistent with the effective transfer by the Seller to CompuCredit UK of the Seller’s entire right, title and interest in and to the Infrastructure Assets (other than the Information Technology Infrastructure Assets) and shall take no action after Final Completion which would be inconsistent with the effective transfer by the Seller to CompuCredit UK of the Seller’s entire right, title and interest in and to the Information Technology Infrastructure Assets.

17.	P ROPERTY AND C APITAL A LLOWANCES

17.1	The provisions of Schedule 6 shall apply in relation to the Property.

17.2

£1 of the Purchase Price is apportioned to the fixtures to the Property (the “Fixtures” ). The provisions of clauses 17.2 and 17.3 are to apply to the Fixtures for the purposes of capital allowances on machinery and plant under Part 2 Chapter 14 Capital Allowances Act 2001 as the same may be amended, re-enacted or consolidated from time to time.

17.3	The Seller and the Purchasers will jointly make a valid election at Completion using the form of election in Schedule 9 in accordance with section 198 Capital Allowances Act 2001 to treat the £1 of the Purchase Price as attributed to the Fixtures as the price given

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and received from the Fixtures by the Purchasers and the Seller respectively and each will notify the appropriate officer of HMRC and its Inspector of Taxes (if different) of the election accordingly.

18.	P ENSIONS

The provisions of Schedule 7 shall apply in relation to pension arrangements.

19.	A SSIGNED C ONTRACTS

19.1	Subject to clause 19.4(c), from Final Completion:

(a)

CompuCredit UK shall be entitled to the benefit (subject to the burden) of the Assigned Contracts;

(b)

CompuCredit UK shall perform all the Seller’s obligations to be performed from Completion under each Assigned Contract; and

(c)

the Purchasers shall indemnify, and keep indemnified, the Seller on demand against all Losses which the Seller incurs as a result of a claim from a counter-party to an Assigned Contract due to CompuCredit UK’s act or omission in connection with CompuCredit UK’s performance of the Seller’s obligations under each Assigned Contract after Final Completion (including each Loss incurred as a result of defending or settling a claim alleging such a Liability).

19.2	Nothing in this Agreement shall:

(a)

require CompuCredit UK to perform any obligation falling due for performance or which should have been performed before Final Completion; or

(b)

make CompuCredit UK liable for any act, neglect, default or omission in respect of any of the Assigned Contracts prior to Final Completion or for any Losses arising from any failure to obtain the consent or agreement of any third party to the entry into of this Agreement or from any breach of any of the Assigned Contracts caused by this Agreement or its completion.

19.3

The Seller shall indemnify, and keep indemnified, CompuCredit UK on demand against all Losses which CompuCredit UK incurs as a result of the Seller’s act or omission in connection with the Seller’s performance of its obligations under each Assigned Contract before Final Completion (including each Loss incurred as a result of defending or settling a claim alleging such Liability).

19.4	If the benefit or burden of any Assigned Contract cannot effectively be assigned to CompuCredit UK except by an agreement or novation with or consent to the assignment from the person, firm or company concerned then:

(a)

this Agreement shall not constitute an assignment or an attempted assignment of the Assigned Contract if an assignment or attempted assignment would constitute a breach of the Assigned Contract;

(b)

prior to Final Completion the Purchasers and the Seller shall use reasonable endeavours to procure such assignment or novation of the Assigned Contract on, or as soon as practicable after, Completion; and

(c)

following Final Completion until the earliest of the date on which the Assigned Contract is assigned or novated or the Assigned Contract is terminated, the Seller shall hold it in trust for CompuCredit UK absolutely and CompuCredit UK shall

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perform, to the extent that it is lawfully able to do so, the Seller’s obligations under the Assigned Contract as agent or sub-contractor or otherwise and the Purchasers shall indemnify the Seller in respect of any failure on the part of CompuCredit UK to perform or properly perform those obligations. To the extent that CompuCredit UK is not lawfully able to do so, the Seller shall continue to perform the Seller’s obligations under the Assigned Contract in which case the Purchasers shall reimburse the Seller’s costs in doing so (insofar as such obligations relate to the Assigned Contract) and to provide for CompuCredit UK the benefit of the Assigned Contract (including enforcement of a right of the Seller against another party to the Assigned Contract arising out of its termination by the other party or otherwise) and the Purchasers shall indemnify and hold harmless the Seller for all Losses arising from the proper performance of the Seller’s obligations hereunder.

19.5

If the arrangements in clause 19.4(b) and 19.4(c) cannot be made in respect of the Assigned Contract prior to 30 June 2008 the Seller shall use reasonable endeavours to ensure that the Assigned Contract is terminated without Liability to the Seller or CompuCredit UK, and if it is so terminated, then neither the Seller nor CompuCredit UK has any further obligation to the other relating to the Assigned Contract.

20.	S UCCESSORS AND A SSIGNMENT

20.1	Save as provided in clause 20.2, no party to this Agreement may assign any of its rights under this Agreement to any person, without the prior written consent of the other parties.

20.2	The Purchasers (or either of them) may assign the benefit of this Agreement to any other Purchasers’ Group Company for the time being and if it does so:

(a)

the assignee may enforce the obligations on the part of the Purchasers (or the relevant one of them) under this Agreement (including the Warranties) as if it had been named in this Agreement as a Purchaser (provided that written notice of the assignment has been provided to the Seller);

(b)

if the assignee ceases to be a member of the Purchasers’ Group for the time being, CCIA shall procure that the benefit of this Agreement is re-assigned to the relevant Purchaser or assigned to another member of the Purchasers’ Group for the time being; and

(c)

the assignee shall not be entitled to receive under this Agreement any greater amount than that to which the Purchasers (or the relevant one of them) would have been entitled.

20.3	The Seller may assign the benefit of this Agreement to any other member of the Seller’s Group for the time being and if it does so:

(a)

the assignee may enforce the obligations on the part of the Seller under this Agreement (including the Purchasers’ Warranties) as if it had been named in this Agreement as the Seller (provided that written notice of the assignment has been provided to the Purchasers);

(b)

if the assignee ceases to be a member of the Seller’s Group for the time being, the Seller shall procure that the benefit of this Agreement is re-assigned to the Seller or assigned to another member of the Seller’s Group for the time being;

(c)

the assignee shall not be entitled to receive under this Agreement any greater amount than that to which the Seller would have been entitled; and

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(d)

as between the Seller and the Purchasers, the Purchasers may nevertheless enforce this Agreement against the Seller as if that assignment had not occurred.

21.	N OTICES

21.1	Any notice given under this Agreement must be given in writing and sent or delivered by hand, post, or facsimile to the other parties at the address provided that any:

(a)

notice delivered by hand shall be deemed to have been given when deposited at the appropriate address;

(b)

notice sent by post shall be deemed to have been given 48 hours after a first class registered letter is posted to the appropriate address;

(c)

notice sent by facsimile shall be deemed to have been given on transmission to the correct number; and

(d)

notice sent by e-mail shall be deemed to have been given when sent,

provided that if, in accordance with the above provisions, any such notice or other communication would otherwise be deemed to be given or made outside normal working hours (being, unless otherwise agreed, 9.00 a.m. to 5.30 p.m. on a Business Day), such notice or other communication shall be deemed to be given or made at the start of the next period of working hours on the next Business Day.

21.2	The relevant addressee, address, facsimile number and e-mail address of each party for the purposes of this Agreement are:

The Seller


For the attention of Amer Sajed, Managing Director, UK Cards

Address:		UK Cards, Barclaycard, Barclaycard House 1234 Pavilion Drive Northampton NN4 7SG
Telephone no:		+44 1604 234 234
Facsimile no:		+44 1604 256 822

cc: Mark Edwards, General Counsel, Barclaycard

Address:		Barclaycard, Barclaycard House 1234 Pavilion Drive Northampton NN4 7SG
Telephone no:		+44 1604 234 234
Facsimile no:		+44 1604 256 822

cc: The Company Secretary

Address:		Barclays Bank PLC 1 Churchill Place London E14 5HP
Telephone no:		+44 207 116 1000
Facsimile no:		+44 207 116 7665

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CompuCredit UK


For the attention of The Directors

Address:		CompuCredit UK Limited c/o Fleetside Legal Representative Services Limited One Bishops Square London E1 6A0

Telephone no:		+1 (702) 598-3738
Facsimile no:		+ 1 (702) 598-3651

cc:		Joshua C. Miller, Assistant Secretary

Address:		CompuCredit International Acquisition Corporation 101 Convention Centre Drive Suite 850-33A Las Vegas, NV 89109

Telephone No:		+1 (702) 598-3738
Facsimile No:		+ 1 (702) 598-3651

cc:		For the attention of Mark Wippell

Address:		Allen & Overy, LLP One Bishops Square London E1 6AO

Telephone no:		+44 20 3088 3000
Facsimile no:		+44 20 3088 0088

CCIA and the Guarantor


For the attention of Joshua C. Miller, Assistant Secretary

Address:		CompuCredit International Acquisition Corporation 101 Convention Centre Drive Suite 850-33A Las Vegas, NV89109

Telephone no:		+ 1 (702) 598-3738
Facsimile no:		+ 1 (702) 598-3651

cc:		The Directors

Address:		CompuCredit UK Limited c/o Fleetside Legal Representative Services Limited One Bishops Square London E1 6A0

Telephone no:		+ 1 (702) 598-3738
Facsimile no:		+ 1 (702) 598-3651

cc:		For the attention of Mark Wippell

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Address:		Allen & Overy, LLP One Bishops Square London E1 6AO

Telephone no:		+44 20 3088 3000
Facsimile no:		+44 20 3088 0088

or as otherwise notified to the other parties in writing from time to time.

22.	E NTIRE AGREEMENT AND VARIATION

22.1	This Agreement and the documents referred to in it constitute the whole and only agreement as at the date hereof between the parties with respect to the subject matter described in this Agreement.

22.2	This Agreement and the documents referred to in it supersede and extinguish any prior drafts, agreements, undertakings, representations, warranties, promises, assurances and arrangements of any nature whatsoever, whether or not in writing, relating to the subject of this Agreement.

22.3

Each party acknowledges that in entering into this Agreement on the terms set out in this Agreement, it is not relying upon any representation, warranty, promise or assurance made or given by the other parties or any other person, whether or not in writing, at any time prior to the execution of this Agreement which is not expressly set out herein.

22.4	Any variation of this Agreement shall not be binding on the parties unless set out in writing, expressed to vary this agreement and signed by authorised representatives of each of the parties.

23.	G ENERAL PROVISIONS

23.1	Time shall not be deemed to be of the essence in this Agreement.

23.2	No failure, delay or indulgence on the part of any party in exercising any power or right under this Agreement shall operate as a waiver of such power or right.

23.3

If any provision of this Agreement or any part of any such provision is held to be invalid, unlawful or unenforceable, such provision or part (as the case may be) shall be ineffective only to the extent of such invalidity, unlawfulness or unenforceability, without rendering invalid, unlawful or unenforceable or otherwise prejudicing or affecting the remainder of such provision or any other provision of this Agreement.

23.4	Nothing in this Agreement and no action taken by the parties under this Agreement shall constitute a partnership, association, joint venture or other co-operative entity between any of the parties.

23.5

This Agreement may be executed in any number of counterparts, and by the parties on separate counterparts, but shall not be effective until each party has executed at least one counterpart. Each counterpart shall constitute an original of this Agreement, but all the counterparts shall together constitute but one and the same instrument.

23.6	Save as provided herein, all payments to be made under this Agreement shall be made in full. They will be free and clear of any right of set-off and from any restriction, condition or deduction because of any counterclaim.

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23.7

If any party fails to pay any sum payable by it under this Agreement on the due date for payment, it shall pay interest on that sum for a period from and including the due date up to the date of actual payment (after as well as before judgement) at a rate of two per cent. above the base rate from time to time of the Seller. Such interest shall be payable on demand and any accrued interest shall, if not paid by the end of each month, be added to the principal sum and shall itself then bear interest in accordance with this clause until the date of actual payment.

23.8	Except as otherwise provided in this Agreement, each party shall pay its own costs and expenses in relation to the negotiation, preparation, execution and carrying into effect of this Agreement.

23.9	The provisions of clause 2.5, 5.10, 7 and 11 may, with the prior written consent of CCIA, be enforced by Raphael Bank against the Seller under the Contracts (Rights of Third Parties) Act 1999.

23.10

Except as otherwise expressly stated in this Agreement, no party who is not a party to this Agreement shall have any right under the Contracts (Rights of Third Parties) Act 1999 to enforce any terms of it.

23.11

Notwithstanding any other provision of this Agreement, once notice of a Claim has been served on a party to this Agreement, the provision of information and/or documentation in relation to such Claim by all parties shall be governed by the normal rules of disclosure in respect of actual or potential litigation.

24.	G UARANTEES

24.1	In consideration of the Seller agreeing to sell the Infrastructure Assets to CompuCredit UK at the request of CCIA, CCIA irrevocably and unconditionally:

(a)

guarantees to the Seller the full, prompt and complete performance by CompuCredit UK of all its obligations under this Agreement and the due and punctual payment on demand of all sums now or subsequently due and payable by CompuCredit UK to the Seller under or pursuant to this Agreement; and

(b)

agrees as primary obligor to indemnify the Seller on demand from and against any Losses incurred by the Seller as a result of any of the obligations of CompuCredit UK under or pursuant to this Agreement being or becoming void, voidable, unenforceable or ineffective as against CompuCredit UK for any reason whatsoever, whether or not known to the Seller, the amount of such Loss being the amount which the Seller would otherwise have been entitled to recover from CompuCredit UK.

24.2

The guarantee contained in clause 24.1 is a continuing guarantee and shall remain in force until all the obligations of CompuCredit UK under this Agreement have been fully performed and all sums payable by CompuCredit UK have been fully paid. It is independent of every other security which the Seller may at any time hold for the obligations of CompuCredit UK under this Agreement.

24.3	The obligations of CCIA shall not be affected by any act, omission, matter or thing which, but for this provision, might operate to release or otherwise exonerate CCIA from its obligations or affect such obligations, including without limitation and whether or not known to CCIA:

(a)

any variation of this Agreement or any time, indulgence, waiver or consent at any time given to CompuCredit UK or any other person;

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(b)

any compromise or release of, or abstention from obtaining, perfecting or enforcing any security or other right or remedy whatsoever from or against, CompuCredit UK or any other person;

(c)

any legal limitation, disability, incapacity or other circumstance relating to CompuCredit UK or any other person; or

(d)

any irregularity, unenforceability or invalidity of any obligations of CompuCredit UK under this Agreement, or the dissolution, amalgamation, reconstruction or insolvency of CompuCredit UK.

24.4	The guarantee contained in clause 24.1 may be enforced by the Seller without the Seller first taking any steps or proceedings against CompuCredit UK.

24.5	In consideration of the Seller agreeing to sell the Business to the Purchasers at the request of the Guarantor, the Guarantor irrevocably and unconditionally:

(a)

guarantees to the Seller the full, prompt and complete performance by each of the Purchasers of all their obligations under this Agreement and the due and punctual payment on demand of all sums now or subsequently due and payable by the Purchasers to the Seller under or pursuant to this Agreement; and

(b)

agrees as primary obligor to indemnify the Seller on demand from and against any Losses incurred by the Seller as a result of any of the obligations of either or both of the Purchasers under or pursuant to this Agreement being or becoming void, voidable, unenforceable or ineffective as against either or both of the Purchasers for any reason whatsoever, whether or not known to the Seller, the amount of such Loss being the amount which the Seller would otherwise have been entitled to recover from the Purchasers.

24.6

The guarantee contained in clause 24.5 is a continuing guarantee and, subject to clause 24.9, shall remain in force until the earlier of the dates on which (i) both the BIN has been transferred from the Seller to Raphael Bank and CCIA has issued or procured the issue of replacement credit cards to all Cardholders bearing the name of Raphael Bank as CCIA’s designee in place of the existing Credit Cards; and (ii) all the obligations of the Purchasers under this Agreement have been fully performed and all sums payable by the Purchasers have been fully paid (the “ Termination Date ”). It is independent of every other security which the Seller may at any time hold for the obligations of the Purchasers under this Agreement.

24.7

The obligations of the Guarantor shall not be affected by any act, omission, matter or thing which, but for this provision, might operate to release or otherwise exonerate the Guarantor from its obligations or affect such obligations, including without limitation and whether or not known to the Guarantor:

(a)

any variation of this Agreement or any time, indulgence, waiver or consent at any time given to either or both of the Purchasers or any other person;

(b)

any compromise or release of, or abstention from obtaining, perfecting or enforcing any security or other right or remedy whatsoever from or against, either or both of the Purchasers or any other person;

(c)

any legal limitation, disability, incapacity or other circumstance relating to either or both of the Purchasers or any other person; or

(d)

any irregularity, unenforceability or invalidity of any obligations of either or both of the Purchasers under this Agreement, or the dissolution, amalgamation, reconstruction or insolvency of either or both of the Purchasers.

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24.8	The guarantee contained in clause 24.5 may be enforced by the Seller without the Seller first taking any steps or proceedings against either or both of the Purchasers.

24.9

The guarantee contained in clause 24.5 shall terminate on the Termination Date and thereafter the Guarantor shall have no liability or obligation under and shall be fully released from any liabilities or obligations it then has or might otherwise have had under this Agreement save that such termination shall be without prejudice to any rights of the Seller in respect of any liability or obligation of the Guarantor which has arisen prior to or on the Termination Date.

25.	G OVERNING LAW , JURISDICTION AND SERVICE OF PROCESS

25.1	This Agreement shall be governed and construed in accordance with English law.

25.2

The English courts have exclusive jurisdiction to settle any dispute arising out of or in connection with this Agreement or the legal relationships established by this Agreement ( “Dispute” ). Any proceeding, suit or action arising out of or in connection with this Agreement may therefore be brought in the English Courts. Each party agrees that this jurisdiction agreement is irrevocable and that it is for the benefit of the other parties and the parties submit to the exclusive jurisdiction of the English courts.

25.3	Service of process

A document which starts or is otherwise required to be served in connection with any legal action or proceedings relating to a Dispute (“ Process Document ”) may be served in the same way as notices in accordance with clause 21 (subject to clause 25.4(b)). This sub-clause does not prevent a Process Document being served in another manner permitted by law, provided that no Process Document shall be served by facsimile or email.

25.4	Appointment of agent for service

(a)

CCIA and the Guarantor shall at all times maintain an agent for service of process in England and Wales.

(b)

CCIA and the Guarantor appoint CompuCredit UK of c/o Fleetside Legal Representative Services Limited, One Bishops Square, London, E1 6A0, or such other address as CCIA may notify the Seller in writing from time to time as its agent to accept service of any Process Document in England.

(c)

Any Process Document will be sufficiently served on CCIA or the Guarantor if delivered to the agent at its address for the time being.

(d)

Neither of CCIA or the Guarantor must revoke the authority of the agent. If the agent ceases to be able to act as such or to have an address within the jurisdiction of the English courts, CCIA or the Guarantor (as the case may be) must promptly appoint another agent (with an address for service within the jurisdiction of the English courts).

(e)

CCIA or the Guarantor (as the case may be) must notify the Seller within 10 Business Days of any change in the identity or address of its agent for service of process.

(f)

This clause 25.4 does not prevent a Process Document being served in another manner permitted by law.

- 52 -

26.	D ESIGNEE

26.1

Subject to the consent of the Seller (such consent not to be unreasonably withheld or delayed), CCIA may designate a person other than Raphael Bank to acquire the Credit Card Assets and/or to perform CCIA’s obligations under this Agreement which are expressed to be performed by Raphael Bank as CCIA’s designee.

26.2

If a person other than Raphael Bank is designated by CCIA pursuant to the terms of clause 26.1, all references to Raphael Bank in this Agreement shall be deemed to be replaced by references to such designated person from the date on which the Seller gives its consent or as otherwise agreed by CCIA and the Seller.

27.	P URCHASERS ’ L IABILITY J OINT AND S EVERAL

Where any provision of this Agreement provides that an obligation, undertaking or representation is of or made by both of the Purchasers, the liability of the Purchasers for breach of such provision is joint and several.

IN WITNESS the parties have executed this Agreement on the date set out at the beginning of this Agreement.

- 53 -


Executed by the parties

Signed by		)

Timothy Spurr as attorney for	)

B ARCLAYS B ANK PLC		)	/s/ Timothy Spurr
			Signature

Signed by		)

/s/ Jeffrey A. Howard		)
for and on behalf of		)
C OMPU C REDIT UK L IMITED		)

Signed by		)

/s/ Chason Carroll		)
for and on behalf of		)
C OMPU C REDIT I NTERNATIONAL A CQUISITION C ORPORATION		)

Signed by		)

/s/ Jay Putnam		)
for and on behalf of		)
C OMPU C REDIT S ERVICES C ORP		)

Exhibit 10.2

EXECUTION COPY

ACCOUNT OWNERSHIP AGREEMENT

Dated 4 April 2007

among

R. RAPHAEL & SONS PLC

as Account Owner,

and

COMPUCREDIT INTERNATIONAL ACQUISITION CORPORATION

as Receivables Purchaser and Servicer

LOGO

ORRICK, HERRINGTON & SUTCLIFFE

TOWER 42, LEVEL 35

25 OLD BROAD STREET

LONDON EC 2 N 1 HQ

tel +44 (0)20 7562 5000

fax +44 (0)20 7628 0078

www.orrick.com

TABLE OF CONTENTS


			Page
1.	INTERPRETATION		1

	1.1	Definitions	1

	1.2	Other Definitional Provisions	9

2.	CREDIT CARD ACCOUNTS		10

	2.1	Account Owner; Account Administration	10

	2.2	Account Terms	12

	2.3	Non-Credit Revenue on Accounts	15

	2.4	Use of Names and Credit Card Marks	15

	2.5	Credit Card System Membership	16

	2.6	Non-Exclusive Arrangement	17

	2.7	Inspections	17

	2.8	Charged-Off Accounts	17

	2.9	Transfer of Accounts to a Third Party	18

	2.10	Enhancements and Fee-Based Programs	18

	2.11	Payment Provisions	18

	2.12	VAT	19

	2.13	Change Imposed or Recommended by Credit Card System	19

	2.14	Charges Imposed by Credit Card System	19

3.	WARRANTIES		19

	3.1	Warranties of Account Owner Relating to Account Owner	19

	3.2	Warranties of Receivables Purchaser	22

	3.3	Warranties of Servicer	24

4.	COVENANTS		25

	4.1	Covenants of Account Owner and Receivables Purchaser	25

5.	TERM, EVENTS OF DEFAULT AND TERMINATION		31

	5.1	Term	31

	5.2	Events of Default	32

	5.3	Termination Rights	33

	5.4	Wind Down Period	33

	5.5	Terms Associated with Transfer of Accounts	34

-i-

TABLE OF CONTENTS

(continued)


			Page
6.	INDEMNIFICATION		34

	6.1	Account Owner’s Indemnification Obligations	34

	6.2	Servicer’s Indemnification Obligations	35

	6.3	Receivables Purchaser’s Indemnification Obligations	35

	6.4	Procedure	35

	6.5	Settlement Reserve Account	37

	6.6	Convenience Cheque Account	38

7.	CARDHOLDER DATA		39

	7.1	Cardholder Data	39

	7.2	Property of Account Owner	39

	7.3	Storage and Disclosure of Cardholder Data	39

8.	DATA PROTECTION		40

	8.1	Definitions	40

	8.2	Data Controller and Data Processors	40

	8.3	Compliance with Data Protection Act	40

	8.4	Processing of Personal Data	40

	8.5	Maintain Security	40

	8.6	Compliance with Terms of Schedule	41

	8.7	Transfer of Personal Data Outside EEA	41

9.	MISCELLANEOUS PROVISIONS		41

	9.1	Amendment	41

	9.2	Governing Law	41

	9.3	Submission	41

	9.4	Service of Process	41

	9.5	Notices	42

	9.6	Severability of Provisions	43

	9.7	Further Assurances	43

	9.8	No Waiver; Cumulative Remedies	43

	9.9	Counterparts	43

	9.10	Binding	43

-ii-

TABLE OF CONTENTS

(continued)


		Page

9.11	Third Party Rights	43

9.12	Merger and Integration	44

9.13	Headings	44

9.14	Survival	44

9.15	Acknowledgement and Agreement of Account Owner	44

9.16	Liability	44

9.17	Guarantee	45

9.18	No Partnership	46

9.19	Visa Undertaking Letter	46

-iii-

EXHIBITS


Exhibit A	Policies and Procedures	A-1
Exhibit B	Form of Receivables Purchase Agreement	B-1
Exhibit C	Form of Assignment and Assumption Agreement	C-1

SCHEDULES


Schedule I	AO Credit Card Marks	1
Schedule II	CC Credit Card Marks	1
Schedule III	Barclays Marks	1
Schedule 3.1	(d) Account Owner Authorizations, Consents, etc. of Governmental Authorities	1
Schedule 3.2	(e) Receivables Purchaser Authorizations, Consents, etc. of Governmental Authorities	1
Schedule 8.6	EU Model Clauses	1

This ACCOUNT OWNERSHIP AGREEMENT, dated 4 April 2007 between

1.	R RAPHAEL & SONS PLC, a public limited liability company incorporated in England and Wales (“ Account Owner ”); and

2.	COMPUCREDIT INTERNATIONAL ACQUISITION CORPORATION, a Nevada corporation (“ CCIA ”, “ Receivables Purchaser ” or “ Servicer ”, as applicable).

WHEREAS,

(a)

In connection with an agreement relating to the sale and purchase of Monument Business of even date herewith, between various parties, including Barclays Bank PLC (“ Barclays ”) and Receivables Purchaser (as the same may be amended, amended and restated, supplemented or otherwise modified from time to time in accordance with the terms thereof, the “Sale and Purchase Agreement” ), Barclays has sold (prior to the Assignment Date, by way of declaration of trust and from and after the Assignment Date, by way of legal assignment) and Account Owner as CCIA’s designee has acquired certain properties, rights, title, interest and privileges in and to the Accounts and related receivables outstanding thereunder;

(b)

Under the terms of a Receivables Purchase Agreement, of even date herewith, by and between Account Owner and Receivables Purchaser (as the same may be further amended, modified or supplemented from time to time, the “Receivables Purchase Agreement” ), Receivables Purchaser has agreed to purchase certain properties, rights, title, interest, privileges and obligations in and to certain receivables outstanding under Accounts acquired by Account Owner from Seller; and

(c)

On the terms and conditions described herein, Account Owner and Receivables Purchaser desire to enter into a relationship under which, among other things, Account Owner will own the Accounts (subject to the sale, under the Receivables Purchase Agreement, of the existing and accruing Receivables), issue credit cards related to the Accounts and perform certain services in respect of the Accounts, and Receivables Purchaser and Servicer will have certain obligations with respect thereto.

NOW, IT IS AGREED as follows:

1.	INTERPRETATION

1.1	Definitions

All capitalized terms used herein or in any certificate or document made or delivered pursuant hereto and not otherwise defined herein or therein shall have the meanings ascribed thereto in the Sale and Purchase Agreement or the Receivables Purchase Agreement, as the context may require; in addition, the following words and phrases shall have the following meanings:

“Account Owner” shall have the meaning specified in the Preamble.

“Account Schedule” shall mean the list of Accounts together with outstanding balances and delinquency status of such Accounts prepared as of the Cut-Off Time and delivered to the Receivables Purchaser pursuant to Clause 3.6 of the Sale and Purchase Agreement, and as amended, if applicable, to exclude any Covered Accounts sold or reconveyed to the Seller (or a third party designated by Seller) pursuant to Clause 7.3 of the Sale and Purchase Agreement.

“Accounts” shall mean the Credit Card accounts identified by name and account number on the Account Schedule, including each credit card account into which an Account has been transferred in accordance with the Policies and Procedures and each Account with respect to which a new account number has been issued under circumstances resulting from an error or a lost or stolen credit card.

“Accounts Assets” shall have the meaning specified in Clause 5.1(a) .

“Active Account” shall mean an Account (1) with respect to which there is a balance due from the Cardholder and (2) that is not a Charged Off Account and that is not an Excluded Account.

“Affiliate” shall mean, with respect to any person, corporation or entity, any other person, corporation or entity that directly or indirectly controls, is controlled by or is under common control with such person, corporation or entity. 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.

“Agreement” shall mean this Account Ownership Agreement, as the same may be amended, restated, supplemented or otherwise modified from time to time in accordance with the terms hereof.

“Anti Money Laundering Requirements” shall mean the legal and regulatory requirements relating to money laundering as set out in the Money Laundering Regulations 2003 and the Joint Money Laundering Steering Group’s revised “Prevention of Money laundering – Guidance Note for the Financial Sector 2006” (both as amended or superseded from time to time) and the policies and procedures of Account Owner intended to prevent and detect money-laundering (as amended from time to time).

“AO Credit Card Marks” shall mean such trademarks and service marks of Account Owner as used in connection with the Accounts as set forth on Schedule I .

“AO Goodwill” shall have the meaning specified in Clause 2.4(b) .

“AO Intellectual Property” shall have the meaning specified in Clause 4.1(a)(viii) .

“Approved Receivables Purchaser Terms Change Request” shall have the meaning specified in Clause 2.2(b)(iii) .

“Assignment and Assumption Agreement” shall mean the Assignment and Assumption Agreement for services to be provided by CCIS substantially in the form of Exhibit C between CCIA and CCIS and acknowledged and agreed to by the Account Owner.

“Assignment Date” shall mean the date that is 10 days after the notices referred to in Clause 6.1 of the Sale and Purchase Agreement have been posted to Cardholders in accordance with such clause.

“Average Daily Purchases” shall mean, for any calendar month, (i) the sum of the amount of purchases and cash advances on each day of such calendar month divided by (ii) the number of days in such calendar month.

“Barclays” shall mean Barclays Bank PLC and its successors in interest.

“Barclays Marks” shall mean such trademarks and servicemarks of Barclays as used in connection with the Accounts as set forth on Schedule III.

“BIN” shall have the meaning specified in the Sale and Purchase Agreement.

“BIN Transfer Date” shall mean the date the Seller transfers the BIN to Account Owner as Receivable Purchaser’s designee pursuant to Clause 6.2 of the Sale and Purchase Agreement.

“Books and Records” shall mean all books and records (other than income Tax Returns and other corporate records not specifically relating to the Accounts) to the extent relating to the Accounts, including, without limitation: applications for Accounts, acceptance certificates for prescreened offers, periodic statements, credit and collection files, file maintenance data, credit agreements, disclosure statements, credit information files, credit card slips, receipts, instruments, mailing lists, customer lists and other records relating to the Accounts and the Cardholders 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.

“Business Day” shall mean each day other than Saturday, Sunday or a day on which banking institutions in London are authorized or obligated by law, executive order or governmental decree to be closed.

“Cardholder” shall mean an applicant and/or co-applicant in whose name an Account was established or is maintained and/or who is obligated to repay the Receivables associated with such Account.

“Cardholder Agreements” shall mean all agreements between the Account Owner (or, prior to the Assignment Date, the Seller or Providian National Bank) and a Cardholder containing the terms and conditions of the related Account, as the same may be amended from time to time.

“Cardholder Data” shall mean all data, including but not limited to the Cardholder List and any Personal Data, information, text, drawings, records, documents and other materials which are embodied in any medium (including any electronic, optical, magnetic or tangible media) concerning any or all of the Cardholders:

(a)

that are supplied to the Servicer, Receivables Purchaser or any of their Affiliates by the Account Owner in order to enable those parties to provide advisory services to the Account Owner, and which are not derived from information owned by the Servicer, Receivables Purchaser or any of their Affiliates; or

(b)

that the Servicer, Receivables Purchaser or any of their Affiliates generate solely for the purposes of this agreement and which they are required to provide to the Account Owner under this Agreement.

“Cardholder List” shall mean a list containing the names and addresses of Cardholders.

“CC Credit Card Marks” shall mean such trademarks and servicemarks of CCIA or CompuCredit as may be used in connection with the Accounts as set forth on Schedule II .

“CC Goodwill” shall have the meaning specified in Clause 2.4(d) .

“CCIS” shall mean CompuCredit International Servicing LLC, a Georgia limited liability company with registered company number 07017487 and having its registered office at 245 Perimeter Center Parkway, Suite 600, Atlanta, GA 30346, USA, and its successors and permitted assigns.

“Change in Law” shall mean any amendment, modification, change, deletion or addition to, or precedential change in the interpretation of, any Requirements of Law (including without limitation, laws relating to Taxes), or the enactment or issuance of any new Requirements of Law (including without limitation, laws relating to Taxes), the imposition by any Governmental Authority of conditions or requirements for the issuance or maintenance of any licenses, consents, approvals, registrations or permits or any other change in the specified standards therefore, in each case occurring and which has an adverse effect on the ability of a Party to perform any of its obligations (including, without limitation, by causing any delay therein) under this Agreement or which causes an increase in the cost of such performance.

“Charged Off Account” shall mean an Account that has been “charged off” (i.e., written off as uncollectible or as a bad debt) in accordance with the Policies and Procedures.

“Closing Date” shall mean the date of this Agreement first written above.

“CompuCredit UK” shall mean CompuCredit UK Limited, a company incorporated in England and Wales with company number 6032187 and having its registered office at One Bishops Square, London E1 6AO.

“Consumer Credit Act” shall mean the Consumer Credit Act 1974 and all regulations in force thereunder from time to time.

“Covered Account” shall have the meaning specified in the Sale and Purchase Agreement.

“Credit Card” shall mean a credit card operated through a Credit Card System that has been issued to each Cardholder pursuant to the relevant Cardholder Agreement.

“Credit Card System” shall mean VISA Europe Services Inc., VISA International Services Association, VISA Europe Limited and any other VISA entity, as appropriate.

“Data Protection Act” shall mean the Data Protection Act 1998.

“Declaration of Trust” shall mean the declaration of trust of even date herewith made by Seller in respect of the Receivables and the other Purchased Assets in favour of Account Owner as CCIA’s designee.

“Dissolution Event” shall mean in respect of any Party:

(a)

if such Party ceases or threatens to cease to carry on business or a substantial part of its business;

(b)

if such Party is or is deemed unable to pay its debts as and when they fall due within the meaning of Section 123(1) and (2) of the Insolvency Act 1986;

(c)

if such Party has an order made or an effective resolution passed for its winding-up;

(d)

if such Party has proceedings initiated against it under any applicable liquidation, insolvency, composition, reorganisation or other similar laws (including, but not limited to, presentation of a petition for an administration order);

(e)

if an administration order shall be granted or an administrative receiver or other receiver, liquidator or other similar official shall be appointed in relation to it or in relation to the whole or any substantial part of its undertaking or assets;

(f)

if an encumbrancer shall take possession of the whole or any substantial part of its undertaking or assets;

(g)

if a distress or execution or other process shall be levied or enforced upon or sued out against the whole or any substantial part of its undertaking or assets and such possession or process (as the case may be) shall not be discharged or otherwise ceases to apply within five (5) Business Days;

(h)

if it initiates or consents to judicial proceedings relating to itself under applicable liquidation, insolvency, composition, reorganisation or other similar laws or makes a conveyance or assignment for the benefit of its creditors generally other than a solvent reorganisation which has been approved in advance of the same by the other Parties hereto (such approval not to be unreasonably withheld or delayed); or

(i)

if at any time it no longer has legal power to perform its obligations under this Agreement or to carry on its business or it becomes unlawful for such person to do the same or any of the obligations of such person are not or cease to be legal, valid and binding, in each case, to the extent that the same would have a material adverse effect;

“Excluded Account” shall have the meaning specified in the Sale and Purchase Agreement.

“FSA” shall mean the United Kingdom Financial Services Authority.

“Governmental Authority” shall mean any governmental, regulatory or self-regulatory authority, agency, court, tribunal, commission or other regulatory or self-regulatory entity, in the UK or any applicable foreign governmental state or other political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government.

“Guarantee” shall mean the Guarantee specified in Clause 9.17.

“Indemnified AO Parties” shall have the meaning specified in Clause 6.2 .

“Indemnified Party” shall have the meaning specified in Clause 6.4(a) .

“Indemnified Receivables Purchaser Parties” shall have the meaning specified in Clause 6.1 .

“Indemnifying Party” shall have the meaning specified in Clause 6.4(a) .

“Legal Assignment of Assets” shall mean the legal assignment of the Receivables and the other Purchased Assets dated the Assignment Date between Seller (as assignor), CCIA and Account Owner (as CCIA’s designee).

“Losses” shall mean any and all losses, liabilities, damages, costs and expenses, including, without limitation, any reasonable attorneys’ fees (including, without limitation, those incurred to enforce the rights hereunder against another party hereto), disbursements and court costs, in each case reasonably incurred by Account Owner, Receivables Purchaser, Servicer or any other Indemnified AO Party or Indemnified Receivables Purchaser Party, as applicable.

“Minimum Monthly Fee” shall have the meaning specified in Clause 2.1(a) .

“Monthly Fee” shall have the meaning specified in Clause 2.1(a) .

“Operating Regulations” shall mean the by-laws, rules and regulations of the Credit Card System.

“Payment Break Program” shall have the meaning specified in Clause 2.11 .

“Personal Data” shall have the meaning specified in the Data Protection Act.

“Policies and Procedures” shall mean the written policies and procedures of Account Owner relating to the manner in which Account Owner conducts the Credit Card business, and the policies and procedures relating to the processing, servicing, collection and other administration and management of the Accounts, as attached as Exhibit A to this Agreement and as amended from time to time in accordance with the terms of this Agreement.

“Post-Signing Receivables” shall have the meaning specified in the Sale and Purchase Agreement.

“Pre-Signing Receivables” shall have the meaning specified in the Sale and Purchase Agreement.

“Programme” shall mean the portfolio of Accounts and respective obligations of the Parties hereunder.

“Receivables” shall mean any and all amounts owing by Cardholders that arise or have arisen under or in connection with the Accounts, including, without limitation, all principal, outstanding purchases, cash advances, balance transfers, finance charges, annual fees and any other charges and fees assessed on the Accounts.

“Receivables Purchase Agreement” shall mean the Receivables Purchase Agreement between Account Owner, as the seller, and Receivables Purchaser, as purchaser, with provisions substantially in the form attached hereto as Exhibit B.

“Receivables Purchaser” shall mean CompuCredit International Acquisition Corporation, a Nevada corporation with registered company number E0041862007-2 and having its registered address at 101 Convention Center Drive, Las Vegas, Nevada 89109, USA.

“Receivables Purchaser Terms Change Request” shall have the meaning specified in Clause 2.2(b) .

“Regulatory Criticism” shall have the meaning specified in Clause 2.2(d) .

“Related Agreements” shall mean the Sale and Purchase Agreement, the Declaration of Trust, the Legal Assignment of Assets, the Visa Undertaking Letter and the Receivables Purchase Agreement.

“Requirements of Code” shall mean the requirements or recommendations of The Finance Leasing Association Code of Practice 2000 together with the requirements or recommendations of any additional codes of conduct or practice which the Account Owner may notify to the Receivables Purchaser during the Term of this Agreement.

“Requirements of Law” shall mean, with respect to any person, the Operating Regulations and the requirements of any national, supra-national or local law, statute, rule or regulation or judicial, governmental, or administrative order, decree or ruling or any provision of any organizational, corporate, constitutional or governing documents, applicable to the Accounts or the Account Owner in relation to the Credit Card business conducted pursuant to this Agreement or the actions of any party to this Agreement in the performance of its respective obligations hereunder or under any Related Agreements.

“Sale and Purchase Agreement” shall mean the agreement relating to the sale and purchase of Monument Business of even date herewith, between various parties including Barclays, CompuCredit UK and Receivables Purchaser (as the same may be amended, amended and restated, supplemented or otherwise modified from time to time in accordance with the terms thereof).

“Section 75 Liability” shall mean any liability of Account Owner (as creditor) from time to time to make payment to a Cardholder (as debtor) regarding an Account pursuant to Section 75 of the Consumer Credit Act.

“Seller” shall have the meaning specified in the Preamble.

“Servicer” shall mean (1) initially CCIA, and (2) after the Closing Date, upon its execution of an Assignment and Assumption Agreement with respect to the rights and duties of the Servicer hereunder, CCIS and its successors and permitted assigns.

“Services Agreement” shall mean the services between the Third Party Data Processor and Servicer or CompuCredit UK.

“Servicing Agreements” shall mean the Transfer and Servicing Agreement, the Services Agreement and the Transitional Services Agreement.

“Set-Up Fee” shall have meaning specified in Clause 2.1(a).

“Settlement Reserve Account” shall have the meaning specified in Clause 6.5(a) .

“Settlement Reserve Account Amount” shall have the meaning specified in Clause 6.5(c) .

“Tax” shall be construed so as to include any tax, levy, import, duty or other charge of a similar nature (including, without limitation, any penalty or interest payable in connection with any failure to pay or any delay in paying any of the same).

“Tax Return” shall mean any return, report or similar statement required to be filed with respect to any Taxes (including any attached schedules), including, without limitation, any information return, claim for refund, amended return or declaration of estimated Tax.

“Term” shall have the meaning set out in Clause 5.1 .

“Third Party Claim” shall have the meaning specified in Clause 6.4(a) .

“Third Party Data Processors” shall mean any third party providing any of the data processing services described in Clause 2.1(d) pursuant to a services agreement with the Servicer or CompuCredit UK, which may include but shall not be limited to TSYS.

“Transfer Right” shall have the meaning specified in Clause 2.9 .

“Transitional Services Agreement” shall mean the transitional services agreement of even date herewith between the Seller and CCIA and CompuCredit UK under which the Seller will provide certain services to CCIA for a period after the Closing Date.

“TSYS” shall mean Total Systems Services, Inc. a corporation organized under the laws of Georgia with registration number J520481 and having its registered office at 1600 First Avenue, Columbus, Georgia 31901-1804, USA.

“United Kingdom” shall mean the United Kingdom of Great Britain and Northern Ireland.

“Visa Undertaking Letter” shall mean the letter agreement dated the date hereof between VISA Europe Services Inc. and the Account Owner, CCIA, CompuCredit UK, CompuCredit Corporation and CCIS.

“Wind-Down Period” shall have the meaning specified in Clause 5.4 .

1.2	Other Definitional Provisions.

(a)

The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement; and Clause, Subclause, Schedule and Exhibit references contained in this Agreement are references to Clauses, Subclauses, Schedules and Exhibits in or to this Agreement unless otherwise specified.

(b)

the singular includes the plural, and the plural includes the singular;

(c)

“include” and “including” are not limiting;

(d)

references to any agreement or other contract includes any permitted modifications, supplements, amendments and replacements, and

(e)

the Schedules and Exhibits referred to herein shall be construed with and as an integral part of this Agreement to the same extent as if they were set out herein.

(f)

For the avoidance of doubt, for purposes of this Agreement, in the event any definition contained herein shall conflict with or be inconsistent with any definition contained in the Receivables Purchase Agreement or the Sale and Purchase Agreement, the definition contained herein shall be controlling.

2.	CREDIT CARD ACCOUNTS

2.1	Account Owner; Account Administration.

(a)

Account Owner shall issue the existing Credit Cards and new Credit Cards with respect to the existing Accounts and shall discharge its responsibilities as Account Owner as set forth herein during the Term. Receivables Purchaser agrees to purchase the Receivables each Business Day as set out in the Receivables Purchase Agreement. In consideration of the services to be provided by the Account Owner to the Receivables Purchaser pursuant to this Agreement, the Receivables Purchaser shall pay Account Owner the Set-Up Fee (as defined below) and a monthly fee (the “Monthly Fee” ) equal to the product of fifteen pence (15p) multiplied by the total number of Active Accounts on the close of business of the last day of the prior calendar month, subject to a minimum monthly payment of fifteen-thousand pounds (£15,000) (the “Minimum Monthly Fee” ). The Monthly Fee shall be payable on or before the fifteenth (15 ^th ) day of each month during the Term (and with respect to the last calendar month of the Term, the Monthly Fee shall be payable on the fifteenth day of the next calendar month), or if such day is not a Business Day, on the next succeeding Business Day, by transfer of immediately available funds to or at the direction of Account Owner. Receivables Purchaser further agrees to pay to Account Owner, within fourteen (14) days of the Closing Date, a one-off non-refundable fee of sixty-thousand pounds (£60,000) (the “Set-Up Fee” ).

(b)

Except as otherwise provided herein, Account Owner shall extend credit card loans to Cardholders in accordance with the Cardholder Agreements, the Policies and Procedures, the Requirements of Law and the Requirements of Code and shall reasonably cooperate with Receivables Purchaser and Servicer in their performance of such services required hereunder or under the Related Agreements as may reasonably be required in order to maintain the Accounts, including, e.g., the issuance of replacement Credit Cards.

(c)

Servicer shall procure that the relevant Third Party Data Processor delivers to each Cardholder a personal identification number (or PIN), or other security code for accessing personal information pertaining to the Cardholder, a Cardholder Agreement and any copy Cardholder Agreement required to be served on a

Cardholder pursuant to any Requirement of Law, any disclosure statement and such other notices or documents related to the establishment or maintenance of Accounts as are required from time to time under the Operating Regulations and applicable Requirements of Code and Requirements of Law including, without limitation the Consumer Credit Act and the Data Protection Act. Receivables Purchaser and Servicer shall each further procure that the relevant Third Party Data Processor shall promptly provide all information reasonably requested by Account Owner during the Term and for one year thereafter.

(d)

All Accounts opened and Receivables originated under the Programme after the Closing Date shall be processed and maintained by the relevant Third Party Data Processor pursuant to a system which, during the term of this Agreement, will individually identify the Accounts and all Receivables arising thereunder, and which will distinguish them clearly from any other credit card accounts owned or serviced by Account Owner. Account Owner agrees not to alter the file designation with respect to any Account during the Term without the prior written consent of Receivables Purchaser.

(e)

Servicer shall be responsible for servicing and maintaining the Accounts, processing payments thereunder and collecting or enforcing accounts payable thereunder by itself or through the relevant Third Party Data Processor, as set out in the Servicing Agreement. The parties hereto acknowledge that for a period of time after the Closing Date the Seller will provide certain services with respect to the Accounts pursuant to the Transitional Services Agreement. Furthermore, to carry out the terms of this Agreement, Servicer may enter into supplier and service contracts with third parties, including affiliates of Servicer. Servicer will exercise reasonable care in the selection of third party service contractors. It is understood, acknowledged and agreed that in such event Servicer shall remain primarily liable for its performance hereunder, whether such performance is undertaken directly or indirectly through a third party. Servicer shall make reasonably available to Account Owner and any regulatory agency having jurisdiction over Account Owner, upon advance written notice, access to the books, records, materials and facilities of such third party suppliers and service contractors.

(f)

Servicer shall procure that the relevant Third Party Data Processor carries out its obligations under the Services Agreement, including, without limitation, all activities and functions required by the Credit Card System from time to time, and the functions referred to in Clause 2.1(e) pursuant to a system which, during the Term, will individually identify the Accounts and all Receivables arising thereunder, and which will distinguish them clearly from any other credit card accounts owned or serviced by Account Owner.

(g)

Account Owner shall act as issuer of and shall issue new Credit Cards on existing Accounts within any FSA-regulated timescales. Account Owner shall, in its sole discretion on a case by case basis, issue Credit Cards only to Cardholders in compliance with the Anti Money Laundering Requirements, but shall not approach any Cardholder directly to carry out anti-money laundering procedures unless

required to do so by the Anti Money Laundering Requirements. All Credit Cards shall be and remain the sole property of Account Owner. For the avoidance of doubt and subject to Clause 5.3 , immediately upon termination or expiry of this Agreement, Account Owner shall cease to issue new Credit Cards and shall comply with the provisions of Clause 5 relating to the Wind Down Period and the transfer of the Accounts.

2.2	Account Terms

(a)

Cardholder Agreements

The terms and conditions for the Credit Cards applicable to the Accounts are set forth in the Cardholder Agreements.

(b)

Changes in Terms requested by Receivables Purchaser

Receivables Purchaser from time to time may request in writing that Account Owner make changes to the terms of the Accounts and direct Servicer to implement such changes to the terms of the Accounts, which request shall, at a minimum, describe in detail the changes so requested and the manner in which Receivables Purchaser proposes that such changes be implemented (each, a “Receivables Purchaser Terms Change Request” ). Account Owner shall, subject to its rights under Clauses 2.2(b)(i) and (ii) , direct Servicer to implement all such changes that do not violate Requirements of Law. In connection with each Receivables Purchaser Terms Change Request:

(i)

Evidence of Use by Another Financial Institution

If within ten (10) days following receipt of any Receivables Purchaser Terms Change Request Account Owner makes written demand upon Receivables Purchaser, Receivables Purchaser shall reasonably demonstrate that the terms proposed by Receivables Purchaser to be in effect upon implementation of the Receivables Purchaser Terms Change Request are then in effect for another financial institution with respect to that institution’s own credit card accounts, without publicly documented regulatory criticism relating specifically to such terms and without being subject to any pending or, to the knowledge of Receivables Purchaser, threatened litigation related thereto. If Receivables Purchaser is able to make such demonstration, then Account Owner shall, subject to its right under Clauses 2.2(b)(ii) and (iii) , direct Servicer to implement all such changes. If Receivables Purchaser is unable to make such a demonstration with respect to any Receivables Purchaser Terms Change Request, then Account Owner shall not be obligated make such changes to the terms of the Accounts and shall not be obligated to direct Servicer to implement the changes described in such Receivables Purchaser Terms Change Request.

(ii)

Violation of Requirements of Law

If Account Owner notifies Receivables Purchaser within the applicable time period set forth in Clause (iii)(B)(II) or (C) below, that it believes effecting the changes described in any Receivables Purchaser Terms Change Request would result in the violation of one or more Requirements of Law, and Receivables Purchaser notifies Account Owner that it disagrees with that belief:

(A)

Account Owner and Receivables Purchaser, as promptly as possible after receipt by Receivables Purchaser of such notice, shall jointly designate counsel reasonably satisfactory to both Account Owner and Receivables Purchaser to advise Account Owner and Receivables Purchaser with respect to the extent to which effecting such changes would, in the opinion of such counsel, result in the violation of any Requirement of Law.

(B)

If such counsel delivers an opinion substantially to the effect that such changes would result in the violation of one or more Requirements of Law, Receivables Purchaser shall pay the reasonable fees and disbursements of such counsel in rendering such opinion and Account Owner shall not be required to direct Servicer to implement the changes described in such Receivables Purchaser Terms Change Request.

(C)

If such counsel delivers an opinion substantially to the effect that such changes would not result in any violation of any Requirement of Law, Account Owner shall (1) pay the reasonable fees and disbursements of such counsel in rendering such opinion and (2) direct Servicer to implement such changes.

(D)

If such counsel does not deliver an opinion substantially to the effect that such changes would or would not result in the violation of any Requirement of Law, Receivables Purchaser and Account Owner each shall pay 50% of the fees and disbursements of such counsel.

(iii)

Obligation of Account Owner to Authorize Changes

Account Owner shall be deemed to have authorized Servicer to begin the process of implementing the changes requested by Receivables Purchaser in a Receivables Purchaser Terms Change Request, to the extent such Receivables Purchaser Terms Change Request requires action by Servicer, and shall be obligated to reasonably cooperate with Receivables Purchaser and Servicer in effecting such changes (with respect to clauses B and C below, upon written notice from Receivables Purchaser), if:

(A)

Account Owner responds in writing to Receivables Purchaser and Servicer that it approves or does not object to the changes proposed in such Receivables Purchaser Terms Change Request;

(B)

Within ten (10) Business Days after receiving such Receivables Purchaser Terms Change Request: (I) Account Owner fails to request evidence of uncriticized use of such terms by another financial institution pursuant to Clause 2.2(b)(i) ; or (II) Account Owner fails to notify Receivables Purchaser, pursuant to Clause 2.2(b)(ii) , that it believes effecting the changes described in such Receivables Purchaser Terms Change Request would result in the violation of one or more Requirements of Law; or

(C)

Within five (5) Business Days after receiving evidence from Receivables Purchaser of uncriticized use of the terms that would be in effect following such changes by another financial institution in a manner that satisfies the requirements of Clause 2.2(b)(i) , Account Owner fails to notify Receivables Purchaser, pursuant to Clause 2.2(b)(ii) , that it believes effecting the changes described in such Receivables Purchaser Terms Change Request would result in the violation of one or more Requirements of Law.

A Receivables Purchaser Terms Change Request that is the subject of any of the circumstances described in this Clause 2.2(b)(iii) is referred to herein as an “Approved Receivables Purchaser Terms Change Request” , and: (i) Account Owner shall direct Servicer to implement the changes described therein; and (ii) following receipt of such written directions, Servicer shall implement the changes described in any such Approved Receivables Purchaser Terms Change Request to the extent such change requires action by Servicer.

(iv)

Obligation of Receivables Purchaser to Pay for Terms Changes

Except as otherwise provided in Clause 2.2(b)(ii)(C) and (D) , all reasonable costs and expenses incurred in connection with effecting any Receivables Purchaser Terms Change Request shall be for the account of Receivables Purchaser and Receivables Purchaser shall reimburse Account Owner as soon as reasonably practicable after receipt of any demand for such reimbursement from Account Owner for any such cost or expense so incurred by Account Owner. Any payment of a cost or expense of Account Owner by Receivables Purchaser pursuant to this Clause 2.2(b) shall be subject to receipt by Receivables Purchaser of a written statement setting forth in reasonable detail such cost or expense and attaching receipts to the extent applicable.

(v)

Subject to Requirements of Law and as otherwise provided in this Clause 2.2(a) , Account Owner shall use commercially reasonable efforts to cooperate with the Servicer in implementing any changes to the Accounts requested by Receivables Purchaser that it is required to so implement pursuant to this Clause 2.2(b) .

(c)

Account-by-Account Changes

Servicer may implement, without the specific prior written approval of Account Owner or Receivables Purchaser, but subject to Requirements of Law, changes to individual Accounts to facilitate collections or maintenance with respect to such Accounts provided that any changes are consistent with the Policies and Procedures and Clause 3.1 of the Visa Undertaking Letter.

(d)

In the event that Account Owner receives 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 the FSA or any other Governmental Authority, or enters into an agreement with the FSA or any other Governmental Authority with jurisdiction over Account Owner with respect to the Accounts and the transaction contemplated by this Agreement ( “Regulatory Criticism” ), Account Owner shall promptly advise Receivables Purchaser in writing of the Regulatory Criticism received and shall promptly share with Receivables Purchaser relevant portions of any written documentation, or for oral communications, provide a detailed summary in writing, received from the relevant supervisory agency, to the extent not specifically prohibited by law, for the full and fair assessment and understanding of such criticism. The parties 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.

2.3	Non-Credit Revenue on Accounts

Any rebates, marketing fees or other fees or discounts, including, without limitation, interchange payments that are paid or granted by the Credit Card System to Account Owner with respect to the Accounts relating to the period from and after the Closing Date shall be paid over to Receivables Purchaser as soon as reasonably practicable (but in any event within thirty (30) days) after receipt by Account Owner.

2.4	Use of Names and Credit Card Marks

(a)

Branding; Account Owner’s Credit Card Marks

Account Owner acknowledges that, after the end of the transitional period following the Closing Date, pursuant to the Sale and Purchase Agreement, all Credit Cards issued to Cardholders will include the name of the Account Owner. Account Owner hereby authorizes Receivables Purchaser and Servicer to use the AO Credit Card Marks as and only to the extent necessary to carry out its obligations hereunder. Receivables Purchaser and Servicer hereby agree that all use of the AO Credit Card Marks shall only be in connection with the Accounts.

(b)

Rights Reserved by Account Owner

It is expressly agreed that Receivables Purchaser is not purchasing or acquiring any right, title or interest in the AO Credit Card Marks or the name, or any portion thereof, of Account Owner or its Affiliates. Receivables Purchaser acknowledges that Account Owner exclusively owns the AO Credit Card Marks and the goodwill related thereto and symbolized thereby (the “AO Goodwill” ). Receivables Purchaser shall not combine the AO Credit Card Marks with any other mark or term and shall not use the AO Credit Card Marks in any manner that could reasonably be expected to materially damage or diminish the AO Goodwill. Receivables Purchaser shall immediately upon receipt of written notice from Account Owner cease any act or practice that is not permitted by this Clause 2.4 .

(c)

Branding; Barclays Marks; CC Credit Card Marks

Account Owner acknowledges that, for the transitional period of time following the Closing Date, pursuant to the Sale and Purchase Agreement, certain of the Credit Cards will contain the Barclays Marks. Account Owner acknowledges that Credit Cards issued to Cardholders may include one or more of the CC Credit Card Marks. Servicer and Receivables Purchaser hereby authorize Account Owner to use the CC Credit Card Marks as and only to the extent necessary to carry out its obligations hereunder. Account Owner hereby agrees that all use of the Barclays Marks and the CC Credit Card Marks shall only be in connection with the Accounts.

(d)

Rights Reserved by Servicer and Receivables Purchaser

It is expressly agreed that Account Owner is not purchasing or acquiring any right, title or interest in the Barclays Marks or the CC Credit Card Marks or the name, or any portion thereof, of Servicer, Receivables Purchaser or any of their Affiliates. Account Owner acknowledges that Barclays owns the Barclays Marks and Servicer or Receivables Purchaser or one of their Affiliates exclusively owns the CC Credit Card Marks and the goodwill related thereto and symbolized thereby (the “CC Goodwill” ). Account Owner shall not combine the Barclays Marks or the CC Credit Card Marks with any other mark or term and shall not use the CC Credit Card Marks in any manner that could reasonably be expected to materially damage or diminish the CC Goodwill. Account Owner shall immediately upon receipt of written notice from Receivables Purchaser cease any act or practice that is not permitted by this Clause 2.4.

2.5	Credit Card System Membership

At all times during the Term, Account Owner shall maintain its memberships in the Credit Card System. Account Owner shall be responsible for making all reports to the Credit Card System that may be required by its memberships therein. All parties hereto shall comply with the Operating Regulations in connection with the Accounts.

2.6	Non-Exclusive Arrangement

Except as provided herein, there shall be no restriction on Account Owner’s right to issue credit cards independent of the Accounts and to perform credit card services on its own behalf or for other parties.

2.7	Inspections

(a)

During and for five years after the Term, Receivables Purchaser may, at its own expense and upon reasonable prior notice, have reasonable access to and the right to inspect and copy the Books and Records that are in Account Owner’s possession or under Account Owner’s control and copies or the originals of which are not otherwise held or maintained by Servicer. During and for five years after the Term, Account Owner shall furnish to Receivables Purchaser all such information concerning the Accounts administered by Account Owner pursuant to this Agreement as Receivables Purchaser may reasonably request, at Receivables Purchaser’s own expense, that are not in the possession or under the control of Receivables Purchaser or Servicer. Receivables Purchaser’s internal and external representatives and internal and external auditors shall have the same rights to on-site and off-site inspections and audits of Account Owner as Receivables Purchaser has, in each case at the expense of Receivables Purchaser; provided that Receivables Purchaser shall provide reasonable prior written notice to Account Owner of any internal or external representative or auditor exercising such rights.

(b)

Account Owner may, at its own expense and upon reasonable prior notice, have reasonable access to and the right to inspect and copy the books and records of Receivables Purchaser relating to the Receivables and the Accounts. Account Owner’s internal and external representatives and internal and external auditors and regulators shall have the same rights to inspections and audits of Receivables Purchaser as Account Owner has, in each case at the expense of Account Owner; provided , however , that if an Event of Default of Receivables Purchaser, as set forth in Clause 5.2 , has occurred and is continuing, Receivables Purchaser will pay the reasonable expenses charged to Account Owner by Account Owner’s regulators in connection with the inspection and audit of Receivables Purchaser by such regulators; provided further that Account Owner shall provide reasonable prior written notice to Receivables Purchaser of any internal or external representative, auditor or regulator exercising such rights.

2.8	Charged-Off Accounts

During the Term, on the tenth (10th) calendar day or, if such day is not a Business Day, the next succeeding Business Day of each calendar month, Account Owner shall automatically and without further action or consideration be deemed to, and hereby does, transfer, set over and convey to Servicer or its designee all of its right, title and interest in and to each Account that has been charged-off as uncollectible during the preceding calendar month, and, on and after each such date, Servicer shall automatically and without further action or consideration be deemed to, and hereby does, assume Account Owner’s obligations with respect to each such Account.

2.9	Transfer of Accounts to a Third Party

Account Owner hereby grants to Receivables Purchaser the right (the “ Transfer Right ”) to require Account Owner on the termination of this Agreement pursuant to Clause 5.1 or 5.3 (other than a termination due to an Event of Default caused by Servicer or Receivables Purchaser) to convey the Accounts Assets to Receivables Purchaser or its designee at Account Owner’s expense (other than for transfer fees charged by the transferee Account Owner, if any, for any legal fees of the transferee Account Owner, and for any costs related to the issuance of new credit cards). For the avoidance of doubt, neither the Receivables Purchaser nor its designee shall be obligated to pay the Account Owner any consideration in addition to the Purchase Price paid pursuant to the Sale and Purchase Agreement for the conveyance of the Accounts Assets.

2.10	Enhancements and Fee-Based Programs

During the Term, Account Owner shall offer to the Cardholders certain enhancements and fee-based programs, including without limitation, payment break, debt waiver or cancellation products, so long as (i) such offers do not violate the Requirements of Law, and (ii) such offers have been reasonably requested by Receivables Purchaser to be made, and (iii) Receivables Purchaser reimburses Account Owner for its actual costs incurred resulting from the offers and servicing of such offers. Receivables Purchaser or its designee shall be permitted to retain all revenues resulting from or related to such offers, provided that Receivables Purchaser or its designee provide all servicing and administration in connection with such offers.

Without limiting the generality of the foregoing paragraph, Account Owner will continue for existing Cardholders and Accounts, and will make available to those Cardholders and Accounts not presently participating, a payment break program under the “Payment Break” name (the “Payment Break Program” ). Servicer is responsible for fulfilling the preceding obligations on behalf of Account Owner, including, but not limited to, marketing the Payment Break Program to eligible Cardholders and providing customer service, program management, program servicing and administration of claims for all participating Accounts. Servicer shall be responsible for implementing the payment break benefits that Cardholders are entitled to under the Payment Break Program. Notwithstanding anything to the contrary elsewhere herein, Receivables Purchaser is responsible for funding refunds, if any, due to Cardholders upon cancellation of their Payment Break enrollment.

2.11	Payment Provisions

All amounts owed to Account Owner hereunder shall be paid by Receivables Purchaser to the extent permitted by law promptly in full in immediately available funds and without set-off by electronic transfer to the following account:


A/C Name:		R Raphael & Sons plc
Bank:		Lloyds TSB
Sort Code:		30-90-38
A/C No.:		01346310

If, during the Term, Receivables Purchaser is required to deduct by law, statute or other government regulation withholding tax from any amounts remitted to Account Owner, Receivables Purchaser shall use reasonable endeavours to minimize such deductions and shall provide to Account Owner copies of any applicable documentation it has and such other reasonable assistance as may be required to enable Account Owner to claim a rebate or deduction for such withholding tax.

2.12

VAT

All amounts hereunder are exclusive of Value Added Tax (VAT) and any applicable VAT shall be paid within fourteen (14) days of presentation of a valid VAT invoice. The parties intend and believe that the sale of the Receivables to Receivables Purchaser shall not be a taxable supply for VAT purposes.

2.13	Change Imposed or Recommended by Credit Card System

In the event that any additional requirements are imposed or recommended by the Credit Card System, the Parties each undertake to agree and make appropriate changes to the Cardholder Agreements or their operating procedures as soon as reasonably practicable and in any case within the timescale required by the Credit Card System.

2.14	Charges Imposed by Credit Card System

In the event that any additional charges, fees or payments, specifically applicable to the Programme or this Agreement, are imposed by the Credit Card System, Receivables Purchaser agrees and undertakes to pay or reimburse Account Owner such amounts, including legal fees of the Credit Card System for review of this Agreement, the Related Agreements and other documents.

3.	WARRANTIES

3.1	Warranties of Account Owner Relating to Account Owner

The warranties of the Account Owner under this Agreement are given subject to, and on the basis that, the warranties of Seller in the Sale and Purchase Agreement are true and correct in all material respects and that Account Owner has made no enquiries or investigations relating to the same. In the event any of the warranties of the Seller in the Sale and Purchase Agreement are not true and correct and, as a result, but for this provision a warranty of the Account Owner hereunder would fail to be true and correct in any respect, Account Owner shall have no liability for such incorrect warranty. Subject to the foregoing, Account Owner hereby warrants to, and agrees with, Receivables Purchaser and Servicer, as of the date hereof, with respect to Account Owner, and as of

each date on which Receivables and other Purchased Assets (as defined in the Receivables Purchase Agreement) are conveyed under the Receivables Purchase Agreement (or as of such other date specified in any such warranty), with respect to Account Owner and such Receivables or other Purchased Assets, as applicable, that:

(a)

Incorporation; Corporate Authority

Account Owner is a public limited company, duly incorporated and validly existing under the laws of England and Wales and has the corporate power and authority to own the Accounts and to carry on the business relating to the Accounts as contemplated by this Agreement and the Receivables Purchase Agreement, and is duly authorised to do business in each jurisdiction where the ownership or operation of the Accounts or the conduct of the business relating to the Accounts as contemplated by this Agreement and the Receivables Purchase Agreement requires such authorisation, except where the failure to be so authorised would not have a material adverse effect on the Accounts.

(b)

Capacity; Authority; Enforceability

Account Owner has all necessary power and authority to make, execute and deliver this Agreement and the Receivables Purchase Agreement and to perform all of the obligations to be performed by it hereunder and thereunder. The making, execution, delivery and performance of this Agreement and the Receivables Purchase Agreement and the consummation by Account Owner of the transactions contemplated hereby and thereby have been duly and validly authorized by all necessary corporate action of Account Owner. This Agreement and the Receivables Purchase Agreement have each been duly and validly executed and delivered by Account Owner and, assuming the due authorization, execution and delivery hereof and thereof by the other parties hereto and thereto, this Agreement and the Receivables Purchase Agreement will each constitute the valid and binding obligation of Account Owner, enforceable against Account Owner in accordance with its terms (except as such enforcement may be limited by insolvency, and other laws relating to or affecting creditors’ rights generally and by general equity principles).

(c)

No Conflict or Default

Neither the execution and delivery of this Agreement or any Related Agreement by Account Owner, nor the consummation of the transactions contemplated hereby or thereby by Account 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 Account Owner is a party or by which it is bound, except such conflicts, breaches, defaults or accelerations that would not have, individually or in the aggregate, a material adverse effect on the Accounts or (ii) violate the articles of incorporation or bylaws, or any other equivalent organizational document, of Account Owner.

(d)

Consents

Neither the execution and delivery of this Agreement or any Related Agreement by Account Owner, nor the consummation of the transactions contemplated hereby or thereby will (i) require any consent, approval, authorization, registration or filing under any law, regulation, judgment, order, writ, decree, permit, license or agreement to which Account Owner is a party, or (ii) require the consent or approval of any other party to any contract, instrument or commitment to which Account Owner is a party, in each case other than (A) authorizations, consents, orders or approvals of or registrations or declarations with any Governmental Authority or Credit Card System, which have been or will be obtained or made prior to or on the Closing Date as set forth on Schedule 3.1(d) , or (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 the Accounts. Any such authorization, consent, approval, order, registration or declaration that has been obtained, effected or given is in full force and effect. Account Owner is not subject to any agreement with any Governmental Authority that would prevent the consummation by Account Owner of the transactions contemplated by this Agreement or any Related Agreement. Account Owner is not in default under, and as far as it is aware no event has occurred that, 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, that would reasonably be expected to have a material adverse effect on the Accounts.

(e)

Litigation

There is no action, suit, proceeding, claim or other litigation, or any investigation by any Governmental Authority, pending, or, to Account Owner’s knowledge, threatened, against Account Owner that has had or would reasonably be expected to have, individually or in the aggregate, a material adverse effect on Account Owner and/or its ability to discharge its responsibilities as Account Owner.

(f)

Compliance with Laws

As of the date hereof: (i) Account Owner has not taken any action with respect to the Accounts that would cause the Accounts to fail to comply in any material respects with any applicable Requirements of Law; and (ii) Account Owner has not taken any action with respect to the Accounts that would cause the Accounts to fail to comply in any material respect with any applicable Requirements of Law. With respect to its existing business practices, Account Owner is in compliance with all Requirements of Law and its organizational documents.

(g)

Performance of Obligations

So far as Account Owner is aware, Account Owner has performed all material obligations required to be performed by it as Account Owner under the Cardholder

Agreements and has not taken any action that would cause it to be in material default under the Cardholder Agreements. As far as Account Owner is aware, no event has occurred with respect to Account Owner’s performance under the Cardholder Agreements that, with the lapse of time or action by a third party, would be reasonably likely to result in a material default by Account Owner under the Cardholder Agreements that would reasonably be expected to have a material adverse effect on the Accounts, the Receivables or the Purchased Assets.

(h)

Licenses

All licenses, approvals, authorisations and consents which are necessary in connection with the carrying on of its business and any applicable licenses under the Consumer Credit Act and the Data Protection Act have been obtained and remain in full force in all material respects.

(i)

Banking License

It is a bank duly authorised by the FSA to undertake all relevant aspects of its banking business in the United Kingdom and is a member of the Credit Card System. The Policies and Procedures and the actions of the Account Owner hereunder comply with the Operating Regulations.

3.2	Warranties of Receivables Purchaser

As of the date hereof, Receivables Purchaser hereby warrants to, and agrees with, Account Owner and Servicer as of the date hereof and as of each date on which Receivables and other Purchased Assets are assigned under the Receivables Purchase Agreement that:

(a)

Organization

Receivables Purchaser is a corporation duly incorporated and validly existing and in good standing under the laws of Nevada. Receivables Purchaser has the power and authority to perform its obligations under this Agreement, and is duly qualified to do business in each jurisdiction where the conduct of its business relating to the performance of such obligations requires such qualification, except where the failure to be so qualified would not have a material adverse effect on Receivables Purchaser.

(b)

Capacity; Authority; Enforceability

Receivables Purchaser has all necessary power and authority to make, execute and deliver this Agreement and to perform all of the obligations to be performed by it under this Agreement. The making, execution, delivery and performance of this Agreement and the Related Agreements to which it is a party and the consummation by Receivables Purchaser of the transactions contemplated hereby have been duly and validly authorized by all necessary corporate or limited liability company action of Receivables Purchaser. This Agreement and the Related

Agreements to which it is a party have been duly and validly executed and delivered by Receivables Purchaser and, assuming the due authorization, execution and delivery hereof and thereof by the other parties thereto, this Agreement and the Related Agreements to which it is a party will constitute the valid, legal and binding obligations of Receivables Purchaser, enforceable against Receivables Purchaser in accordance with their terms (except as such enforcement may be limited by bankruptcy, insolvency, and other laws relating to or affecting creditors’ rights generally and by general equity principles).

(c)

No Conflicts or Default

Neither the execution and delivery of this Agreement nor any of the Related Agreements to which it is a party by Receivables Purchaser nor the consummation of the transactions contemplated hereby or thereby by Receivables Purchaser 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 Receivables Purchaser is a party or by which Receivables Purchaser is bound, except such conflicts, breaches, defaults or accelerations that would not have, individually or in the aggregate, a material adverse effect on Receivables Purchaser or (ii) violate Receivables Purchaser’s articles of incorporation or by-laws.

(d)

Litigation

There is no action, suit, proceeding, claim or other litigation, or any investigation by any Governmental Authority, pending, or, to Receivables Purchaser’s knowledge, threatened, against Receivables Purchaser 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 Receivables Purchaser.

(e)

Consents

Neither the execution and delivery of this Agreement by Receivables Purchaser, nor the consummation of the transactions contemplated hereby, will (i) require any consent, approval, authorization, registration or filing under any law, regulation, judgment, order, writ, decree, permit, license or agreement to which Receivables Purchaser is a party, or (ii) require the consent or approval of any other party to any contract, instrument or commitment to which Receivables Purchaser is a party, in each case other than (A) authorizations, consents, orders or approvals of or registrations or declarations with any Governmental Authority or the Credit Card System, that have been or will be obtained or made prior to or on the Closing Date as set forth on Schedule 3.2(e) , or (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 Receivables Purchaser’s ability to fulfill its obligations hereunder. Any such authorization, consent, approval, order, registration or declaration that has been obtained, effected or given is in full force and effect. Receivables Purchaser is not subject to any agreement with any Governmental

Authority or the Credit Card System that would prevent the consummation by Receivables Purchaser of the transactions contemplated by this Agreement. Receivables Purchaser is not in default under, and no event has occurred that, 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, that would reasonably be expected to have a material adverse effect on Receivables Purchaser’s ability to perform its obligations hereunder.

3.3	Warranties of Servicer

As of the date hereof, Servicer hereby warrants to, and agrees with, Receivables Purchaser and Account Owner as of the date hereof and as of each date on which Receivables and other Purchased Assets are conveyed under the Receivables Purchase Agreement that:

(a)

Organization

Servicer is a corporation, duly incorporated and validly existing and in good standing under the laws of the State of Nevada. Servicer has the power and authority to service the Accounts and to carry on the business relating to such Accounts, and is duly qualified to do business in each jurisdiction where the servicing of the Accounts and Receivables or the conduct of its business relating to the Accounts and Receivables requires such qualification, except where the failure to be so qualified would not have a material adverse effect on the Accounts or Receivables.

(b)

Capacity; Authority; Enforceability

Servicer has all necessary power and authority to make, execute and deliver this Agreement and to perform all of the obligations to be performed by it under this Agreement and the Servicing Agreements to which it is a party. The making, execution, delivery and performance of this Agreement and the Servicing Agreements to which it is a party, and the consummation by Servicer of the transactions contemplated hereby and thereby have been duly and validly authorized by all necessary corporate action of Servicer. This Agreement has been duly and validly executed and delivered by Servicer and, assuming the due authorization, execution and delivery hereof by Account Owner and Receivables Purchaser, this Agreement will constitute the valid, legal and binding obligations of Servicer, enforceable against Servicer in accordance with its terms (except as such enforcement may be limited by bankruptcy, insolvency, and similar laws relating to or affecting creditors’ rights generally and by general equity principles).

(c)

No Conflicts or Default

Neither the execution and delivery of this Agreement and the Servicing Agreements to which it is a party by Servicer nor the consummation of the

transactions contemplated hereby and thereby by Servicer 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, order, judgment or decree to which Servicer is a party or by which Servicer is bound, except such conflicts, breaches, defaults or accelerations that would not have, individually or in the aggregate, a material adverse effect on Servicer or (ii) violate the articles of incorporation, by-laws, or any other equivalent organizational document of Servicer.

(d)

Litigation

There is no action, suit, proceeding, claim, or other litigation, or any investigation by any Governmental Authority, pending, or, to Servicer’s knowledge, threatened, against Servicer 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 Servicer.

COVENANTS

4.1	Covenants of Account Owner and Receivables Purchaser.

(a)

Covenants of Account Owner

Account Owner hereby covenants and agrees with Receivables Purchaser and Servicer as follows:

(i)

Corporate Existence

Subject to and on the basis that the warranties of Seller in the Sale and Purchase Agreement are true and correct in all material respects and that Account Owner has made no enquiries or investigations relating to the same (and Receivables Purchaser agrees that, in the event any of the warranties of Seller in the Sale and Purchase Agreement are not true and correct and, but for this provision, Account Owner would have any liability, Account Owner shall have no such liability), Account Owner shall maintain in full force and effect its authorisation as a bank and all licenses and permits required to perform its obligations under this Agreement, including all licenses required under the Consumer Credit Act. Account Owner shall maintain and comply in all material respects with all regulatory and administrative requirements of the FSA applicable to it, as they relate to the Accounts and this Agreement and all Requirements of Law in connection with the performance of its obligations under this Agreement, and with all laws, rules, regulations, orders, writs, judgments, injunctions, decrees and awards to which it otherwise may be subject.

(ii)

Official Records

Account Owner will maintain this Agreement and any Related Agreement to which Account Owner is a party as a part of its official records.

(iii)

Preservation of Accounts

During the term of this Agreement, unless otherwise agreed to in writing by Receivables Purchaser, from the date of this Agreement, Account Owner shall: (A) not sell, assign, transfer, pledge or encumber, or permit the encumbrance of (other than by Receivables Purchaser or Servicer), any Account or Receivable without the prior written consent of Receivables Purchaser; (B) not take any action with respect to the Accounts which shall impair any material rights of Receivables Purchaser other than in the ordinary course of business, and only to the extent such action is required to comply with Requirements of Law; and (C) promptly inform Receivables Purchaser of any litigation or proceeding with respect to the Accounts of which Account Owner becomes aware (but solely to the extent Account Owner has actual knowledge that Receivables Purchaser has not otherwise been notified of such litigation or proceeding by Servicer).

(iv)

Use of the Cardholder List

Neither Account Owner nor any of its Affiliates, will: (A) sell or otherwise provide the Cardholder List, in whole or in part, to any third party other than Servicer and the Third Party Data Processor; (B) use the Cardholder List, in whole or in part, for the purpose of soliciting any Cardholder for any product, including, without limitation, credit card and revolving loan products, whether directly or indirectly; or (C) directly solicit (including, without limitation, by mail, telemarketing or e-mail), or indirectly solicit through agents or Affiliates (including, but not limited to, agent bank arrangements with other financial institutions or entities), Cardholders for any product, including, without limitation, credit card and revolving loan products.

(v)

Policies and Procedures

To the extent such Policies and Procedures relate to Account Owner’s activities in such capacity, during the Term and for so long after the Term as it shall be required pursuant to any Requirements of Law, Account Owner shall (A) maintain and preserve a complete and accurate record of the existing Policies and Procedures in effect as of each day during the Term and provide each of Receivables Purchaser and Servicer with a current copy of the existing Policies and Procedures upon their written request, (B) make the Policies and Procedures in effect as of each day during the Term available to Receivables Purchaser and Servicer for inspection at any time during normal business hours upon reasonable advance notice ( provided , however , that the foregoing shall not require Account Owner to permit any inspection, or to disclose any information,

that in its reasonable judgment would (I) result in the disclosure of any confidential information or trade secrets of third parties or confidential information or trade secrets of itself or violate any of its obligations to any third party with respect to confidentiality so long as such failure to permit such inspection or disclose such information does not violate, or cause any other party to violate, any Requirement of Law or (II) require any disclosure by Account Owner that could, as a result of such disclosure, have the effect of causing the waiver of any attorney client privilege), and (C) prior to the effectiveness of any amendment, supplement or modification to the Policies and Procedures in any material respect during the Term, obtain the consent of Receivables Purchaser with respect to each such amendment, supplement and modification, which consent shall not be unreasonably withheld or delayed. Account Owner shall provide each of Receivables Purchaser and Servicer a copy of any amendment, supplement or modification to the Policies and Procedures promptly following the execution of such amendment, supplement or modification.

(vi)

Credit Card System Membership

Account Owner shall maintain its membership of the Credit Card System in good standing during the term of this Agreement. Account Owner shall be responsible for making all reports to the Credit Card System which may be required by its membership therein and shall comply with the Operating Regulations in connection with this Agreement.

(vii)

Intellectual Property

Account Owner will maintain its registered trademarks, service marks, logos, names or any other proprietary designations used in connection with the Accounts (collectively, the “AO Intellectual Property” ), and shall pursue any material infringements of any of the foregoing by any Person of which it becomes aware; provided that nothing in this clause (vii) shall require Account Owner to maintain any AO Intellectual Property to the extent it is no longer used in connection with the Accounts or to the extent it no longer uses such AO Intellectual Property so long as Account Owner (a) offers to assign or transfer such AO Intellectual Property to or at the direction of Receivables Purchaser at no cost to Account Owner and (b) cooperates with Receivables Purchaser or Receivables Purchaser’s designee in connection with such assignment or transfer, including any assignment or transfer to Receivables Purchaser or any Affiliate of Receivables Purchaser.

(viii)

Other Rights of Account Owner

warranties of Seller in the Sale and Purchase Agreement are not true and correct and, but for this provision, Account Owner would have any liability, Account Owner shall have no such liability), Account Owner will not take any other action or fail to take any action with respect to the Accounts that would materially adversely affect its rights as Account Owner (other than any rights of Account Owner otherwise granted pursuant to or necessary for carrying out its obligations under this Agreement).

(ix)

Notice of Breach by Account Owner

Account Owner shall notify Receivables Purchaser, in writing, as promptly as practicable following actual knowledge of or notice to Account Owner of the occurrence of any disputes with the Credit Card System and regulatory action or any event that has caused or, with the lapse of time, will cause an Event of Default of Account Owner pursuant to Clause 5.2 .

(x)

Contracts with Third Party Data Processors

Account Owner shall enter into such contractual relationships with Third Party Data Processors as shall be mutually agreed by Receivables Purchaser and Account Owner (such agreement not to be unreasonably withheld or delayed subject to Account Owner being indemnified to its reasonable satisfaction in relation thereto and appropriate back to back arrangements being agreed) as necessary or appropriate to ensure that it can perform its obligations under this Agreement and shall maintain such contractual relationships in good standing during the term of this Agreement.

(xi)

Credit Card System

Account Owner shall within twenty (20) Business Days of the date hereof provide to Receivables Purchaser copies of all of the then current Operating Regulations applicable to the Credit Card business and shall throughout the term of this Agreement upon twenty (20) Business Days of Account Owner’s receipt thereof provide to Receivables Purchaser any updates or amendments thereto. Account Owner shall promptly notify Receivables Purchaser and Servicer if it becomes aware that any of the activities of Account Owner, Receivables Purchaser or Servicer violate or could reasonably be expected to violate any of the Operating Regulations.

(xii)

Visa Undertaking Letter

Account Owner hereby agrees that it will not agree to any release, compromise or granting of an indulgence by VISA Europe Services Inc. with respect to the Visa Undertaking Letter without the prior written consent of CCIA.

(b)

Covenants of Receivables Purchaser

Receivables Purchaser hereby covenants and agrees with Account Owner and with Servicer with respect to Clause 4.1(b)(i) , as follows:

(i)

Obligations

Receivables Purchaser will perform its obligations under this Agreement in a timely manner and with due care.

(ii)

Compliance with Law

Receivables Purchaser will comply in all material respects with all Requirements of Law and requirements of the Credit Card System (of which it is reasonably aware) the failure to comply with which would materially adversely affect the rights of Account Owner as owner of the Accounts or result in the imposition of any liability or obligation on Account Owner.

(iii)

Other Rights of Account Owner

Receivables Purchaser will not take any action or fail to take any action that is required of Receivables Purchaser hereunder that would materially adversely affect the rights of Account Owner under this Agreement or as owner of the Accounts, other than in the ordinary course of business and only to the extent such action is required to comply with any applicable Requirements of Law.

(iv)

Notice of Breach by Receivables Purchaser

Receivables Purchaser shall notify Account Owner, in writing, as promptly as practicable, following actual knowledge or notice to Receivables Purchaser of any event that has caused or, with the lapse of time, will cause an Event of Default pursuant to Clause 5.2 .

(v)

Records

Receivables Purchaser shall maintain for the Term and for so long thereafter as it may be required pursuant to any Requirements of Law (and for one year after the Term) records and accounts appropriate and necessary to carry out its obligations hereunder and as reasonably standard throughout the industry for proper accounting and audit purposes.

(vi)

Licences and Approvals: Receivables Purchaser:

shall obtain all licences, approvals, authorisations and consents which are necessary to be obtained by it in connection with the performance of its obligations hereunder including, without limitation, any applicable licences under the Consumer Credit Act and notifications under the Data Protection Act;

shall maintain and, where necessary, renew all such licences, approvals, authorisations and consents throughout the term of this Agreement; and

shall produce copies of all such licences, approvals, authorisations and consents to Account Owner at such times and upon such notice as Account Owner may reasonably request.

(c)

Covenants of Servicer

Servicer hereby covenants and agrees with Account Owner and Receivables Purchaser as follows:

(i)

Obligations

Servicer will perform its obligations under this Agreement in a timely manner and with due care.

(ii)

Compliance with Law

In performing its obligations under this Agreement, Servicer will comply in all material respects with all applicable Requirements of Law. Servicer also will comply with any written guidance from the FSA that applies to the Accounts or Servicer’s obligations under this Agreement.

(iii)

Other Rights of Accounts Owner

Servicer 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, other than in the ordinary course of business and only to the extent such action is required to comply with any applicable Requirements of Law.

(iv)

Servicer shall enter into such arrangements as may be mutually agreed by Receivables Purchaser and Account Owner (such agreement not to be unreasonably withheld or delayed) to be necessary or appropriate to ensure:

management of the Accounts process;

settlement of payments as between Cardholders and Account Owner;

settlement of payments as between Account Owner and its merchant creditors; and

any other feature required to implement or operate the Accounts.

Servicer shall maintain all necessary contractual relationships in good standing during the Term and as necessary thereafter for the purposes of its surviving obligations hereunder.

(v)

Licences and Approvals: Servicer:

shall maintain and, where necessary, renew all such licences, approvals, authorisations and consents throughout the term of this Agreement; and

shall produce copies of all such licences, approvals, authorisations and consents to Account Owner at such times and upon such notice as Account Owner may reasonably request.

(vi)

Records

Servicer shall maintain for the Term and for so long thereafter as may be required by any Requirements of Law records and accounts appropriate and necessary to carry out its obligations hereunder and as reasonably standard throughout the industry for proper accounting and audit purposes.

5.	TERM, EVENTS OF DEFAULT AND TERMINATION

5.1

Term

This Agreement shall commence as of the date first set forth above and shall continue, subject to Clause 5.2 and Clause 5.3 , for a period of five (5) years (the “ Term ”). Upon the expiration of such five (5) year Term, in the absence of a written agreement of the parties to the contrary:

(a)

This Agreement shall terminate and Account Owner shall transfer the rights, title, interest, privileges and obligations of Account Owner in and to all the Accounts, whether open or closed, Credit Cards, Cardholder Agreements, Books and Records, Cardholder Lists and all other assets otherwise directly and exclusively related to the Accounts, Credit Cards, Cardholder Agreements, Books and Records, Cardholder Lists and/or Receivables (the “Accounts Assets” ) to Receivables Purchaser or Receivables Purchaser’s designee; and

(b)

Receivables Purchaser shall pay all costs associated with such transfer such that Account Owner shall incur no cost or expense other than for its own out-of-pocket administrative costs, fees and expenses, including but not limited to the fees and expenses of its legal counsel.

5.2	Events of Default

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

(a)

Failure of Performance. (i) A Party shall fail to perform a material obligation under this Agreement (other than a material obligation referred to in Clause 5.2(a)(ii) or (iii) below) and does not cure such failure to the reasonable satisfaction of Account Owner, if the defaulting Party is Servicer or Receivables Purchaser, or to the reasonable satisfaction of Receivables Purchaser if the defaulting Party is Account Owner, within twenty-two (22) Business Days after the date of the defaulting party’s receipt of written notice from another Party specifying such failure, (ii) Receivables Purchaser shall fail to maintain an amount equal to the Settlement Reserve Account Amount in the Settlement Reserve Account and does not cure such failure within one (1) Business Day after receipt of written notice of such failure, and (iii) Receivables Purchaser or Account Owner shall fail to perform a material obligation under the Receivables Purchase Agreement and does not cure such failure to the reasonable satisfaction of Account Owner, if the defaulting Party is Receivables Purchaser, or to the reasonable satisfaction of Receivables Purchaser if the defaulting Party is Account Owner, within one (1) Business Day after the date of the defaulting party’s receipt of written notice from another Party specifying such failure; provided , however , it shall not constitute an Event of Default hereunder if Receivables Purchaser fails to purchase new Receivables under the Receivables Purchase Agreement and such failure shall continue for no more than two Business Days and Account Owner makes a withdrawal from the Settlement Reserve Account to fund the purchase price for such new Receivables; provided further , however , that any such failure specified in the preceding proviso shall occur no more than twice (2 times) in any six calendar month period.

(b)

Insolvency. A Dissolution Event occurs in respect of any Party.

(c)

Account Owner is not a bank as defined for the purposes of Section 349(3)(a) of the Income and Corporation Taxes Act 1958 which is in the charge to United Kingdom corporation tax as respects all amounts regarded as interest for United Kingdom purposes received by it as an Account Owner under this Agreement.

(d)

Any licence or authorization under the Consumer Credit Act or the Data Protection Act required for the performance of its obligations under this Agreement is withdrawn, declined suspended or revoked or such Party otherwise fails to be licensed or authorised under either such Act for a period of more than five (5) Business Days.

(e)

The FSA revokes or materially and adversely restricts the authorisation of Account Owner under the Financial Services and Markets Act 2000.

(f)

Account Owner ceases to be a member of a Credit Card System.

5.3	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 by a non-defaulting Party to the other Parties upon the occurrence of an Event of Default under Clause 5.2(b)(c)(d)(e) or (f) with respect to a Party;

(b)

upon five (5) Business Days written notice by a non-defaulting Party to the other Parties upon the occurrence of an Event of Default under Clause 5.2(a)(i) with respect to a Party and immediately upon written notice by a non-defaulting Party to the other Parties upon the occurrence of an Event of Default under Clauses 5.2(a)(ii) and (iii) with respect to a Party;

(c)

immediately upon termination or expiration of the Receivables Purchase Agreement; and

(d)

upon one hundred twenty (120) days written notice to the other Parties upon the occurrence of (1) a Change In Law (or such shorter notice period as required by such Change In Law) that the performance of the Party giving such termination notice is or has been materially and adversely affected by a Change in Law or (2) a change in the requirements of the Credit Card System that the performance of the Party giving such termination notice is or has been materially and adversely affected by a change in the requirements of the Credit Card System (and for the avoidance of doubt, if either party receives notice from a third party of the proposed withdrawal of any relevant operating permission or of any such related restriction, it shall notify the other party promptly).

For the avoidance of doubt, if this Agreement is terminated due to an Event of Default by Receivables Purchaser for failure to purchase Receivables under the Receivables Purchase Agreement, then Account Owner shall have no obligation to fund any new Receivables, and shall immediately transfer all existing and/or accrued Receivables to Receivables Purchaser and Account Owner may, subject to Requirements of Law and the applicable Cardholder Agreements, in its sole discretion cancel all Credit Cards so as to avoid the creation of further Receivables.

5.4	Wind Down Period

The Parties agree that there will be a six (6) month period for winding down the servicing and administration provided by Servicer pursuant to this Agreement and converting the Accounts to an alternative account owner or credit card issuer ( “Wind Down Period” ) that, unless the Term is terminated under Clause 5.3 , will commence upon the end of the Term. 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 account owner or credit card issuer. Receivables Purchaser shall reimburse Account Owner for all reasonable out-of-pocket costs incurred by Account Owner in connection

with the implementation of a plan to convert during the Wind Down Period. In the event the Wind Down Period begins upon termination or expiration of this Agreement, the Parties shall continue to perform their obligations under this Agreement and the Related Agreements for the duration of the Wind Down Period.

5.5	Terms Associated with Transfer of Accounts

In the absence of any written agreement between Account Owner and Receivables Purchaser to the contrary, in connection with any transfer effected pursuant to this Clause 5 :

(a)

Each of Receivables Purchaser and Account Owner shall use their respective commercially reasonable efforts to preserve the goodwill of each other and to ensure a smooth and orderly transition of the Accounts and forwarding of payments that relate to the Accounts received by Account Owner to the appropriate entity following such transfer;

(b)

Account Owner shall treat any third party transferee of the Accounts Assets as an Indemnified Receivables Purchaser Party for purposes of Clause 6 , subject to the limitations set forth therein; and

(c)

Account Owner shall, upon completion of such transfer of Accounts, deliver to Receivables Purchaser or Receivables Purchaser’s designee any Books and Records in Account Owner’s possession or under its control, subject to any Requirements of Law relating to retaining duplicate books and records.

6.	INDEMNIFICATION

6.1	Account Owner’s Indemnification Obligations

Account Owner shall be liable to and shall indemnify, defend and hold Receivables Purchaser and its Affiliates and their respective officers, directors, employees and permitted assigns (collectively, the “Indemnified Receivables Purchaser Parties” ) harmless from and against any and all Losses to the extent arising from or relating to (i) any breach by Account Owner of any representation or warranty made by Account Owner hereunder; (ii) any breach by Account Owner of any covenant, agreement or undertaking expressly made by Account Owner under this Agreement; or (iii) any wrongful or negligent action or failure to act by Account Owner or any Affiliate in the performance of any obligation under this Agreement to be performed by Account Owner that results in a claim against any of the foregoing persons or entities except, in any case, to the extent such Losses arise from the Indemnified Receivables Purchaser Parties’ negligence, fraud or willful misconduct, PROVIDED ALWAYS that such breach and/or wrongful or negligent action or failure and such Losses are ascertained by a court of competent jurisdiction or agreed in a settlement approved in advance in writing by Account Owner.

6.2	Servicer’s Indemnification Obligations

Servicer shall be liable to and shall indemnify, defend and hold Account Owner and its Affiliates and their respective officers, directors, employees and permitted assigns (collectively, the “Indemnified AO Parties” ) harmless from and against any and all Losses arising from or relating to: (i) any breach by Servicer of any representation or warranty expressly made by Servicer under this Agreement; (ii) any breach by Servicer of any covenant, agreement or undertaking expressly made by Servicer under this Agreement; or (iii) any wrongful or negligent action or failure to act by Servicer in the performance of any obligation under this Agreement to be performed by Servicer that results in a claim against any of the Indemnified AO Parties except, in any case, to the extent such Losses arise from the negligence, fraud or willful misconduct of any Indemnified AO Party.

6.3	Receivables Purchaser’s Indemnification Obligations

Receivables Purchaser shall be liable to and shall indemnify, defend and hold the Indemnified AO Parties harmless from and against any and all Losses arising from or relating to: (i) any breach by Receivables Purchaser of any representation or warranty expressly made by Receivables Purchaser under this Agreement; (ii) any breach by Receivables Purchaser of any covenant, agreement or undertaking expressly made by Receivables Purchaser under this Agreement; (iii) indirectly or directly in connection with any breach of the warranties given by Seller in the Sale and Purchase Agreement; (iv) any claim of set-off by a Cardholder with respect to any Account Owner Section 75 Liability under the Consumer Credit Act provided however that any recovery by Account Owner (a) in accordance with the statutory right of indemnification from suppliers (as defined in Section 189 of the Consumer Credit Act) and (b) made pursuant to the right of “charge back” (if any) under the operating regulations of the relevant payment system in respect of the transaction giving rise to the Account Owner Section 75 Liability will be applied to reduce the loss to Account Owner for the purpose of ascertaining claims hereunder or (v) any wrongful or negligent action or failure to act by Receivables Purchaser in the performance of any obligation under this Agreement to be performed by Receivables Purchaser that results in a claim against any of the foregoing persons or entities except, in any case, to the extent such Losses arise from the negligence, fraud or willful misconduct of the Indemnified AO Parties.

6.4

Procedure

(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 will 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 Clause 6.1 , 6.2 or 6.3 . 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 hereunder will render to the other such assistance as it may reasonably require of the other 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.

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 Clause 6.4(a) of the Third Party Claim whether the Indemnifying Party elects to assume the defense of any such Third Party Claim and employ counsel, provided 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 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.

(b)

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 that the Indemnifying Party shall have no liability in respect of such settled or compromised claim, suit or action. 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.

(c)

Time Limits

Any claims for indemnity pursuant to Clause 6.1(i) , Clause 6.2(i) or Clause 6.3(i) may be made during the Term and for a period of two years following the Term. Notwithstanding the preceding sentence, any covenant, agreement, representation or warranty shall be deemed to survive the time at which it otherwise would have terminated pursuant to this Clause 6.4(c) solely for the purpose of resolving any claim with respect to which the Indemnified Party has submitted, in accordance with this Clause 6 , notice of the breach thereof or of the third party claim giving rise to such right to indemnity prior to such time.

(d)

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 Clause 6 . 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.

6.5	Settlement Reserve Account

(a)

On or before the fifth (5th) Business Day prior to the BIN Transfer Date, Receivables Purchaser shall fund and maintain for the Term, for the benefit only of Account Owner, an eligible deposit account held by Account Owner (the “Settlement Reserve Account” ) bearing a designation clearly indicating that the funds deposited therein are held for the benefit only of Account Owner. Receivables Purchaser hereby agrees to grant to Account Owner a security interest in the Settlement Reserve Account and the funds deposited therein in order to secure Receivables Purchaser’s obligation to purchase new or accrued receivables under the Receivables Purchase Agreement and/or settle claims for any Receivables not transferred thereunder.

(b)

All interest on funds on deposit in the Settlement Reserve Account shall be retained in the Settlement Reserve Account for the benefit only of Account Owner.

(c)

The amount on deposit in the Settlement Reserve Account shall be equal to (i) as of the fifth (5th) Business Day before the BIN Transfer Date, nine million pounds (UK£9,000,000) and (ii) throughout the Term for each calendar quarter thereafter, the Average Daily Purchases for the calendar month preceding such quarter multiplied by three (in each case, the “Settlement Reserve Account Amount” ) or, in each case, as determined by the Credit Card System from time to time in its sole discretion. On the first day of each calendar quarter during the Term beginning 1

April 2007, Servicer and Account Owner shall calculate and agree the Settlement Reserve Account Amount. In the event there is a deficiency in the Settlement Reserve Account, Receivables Purchaser shall, immediately on request of Account Owner, deposit the amount of such deficiency into the Settlement Reserve Account. In the event there is a surplus in the Settlement Reserve Account, such surplus shall, with the prior written approval of Account Owner, be withdrawn and paid to Receivables Purchaser.

(d)

Notwithstanding and without compromise to Account Owner’s other rights and remedies under this Agreement and/or any other Related Agreement, if on any day, Receivables Purchaser fails to pay the full purchase price due to Account Owner for the purchase of new Receivables, Account Owner shall withdraw the amount of the shortfall from the Settlement Reserve Account and apply such funds to the purchase of any new Receivables. Account Owner shall provide Receivables Purchaser written notice of any withdrawal from the Settlement Reserve Account. Within one Business Day after the Receivables Purchaser receives notice of a withdrawal from the Settlement Reserve Account by the Account Owner, Receivables Purchaser shall deposit further funds into the Settlement Reserve Account so that the amount on deposit in the Settlement Reserve Account equals the Settlement Reserve Account Amount.

(e)

Upon the termination of this Agreement and the transfer of all new and accrued Receivables to Receivables Purchaser and the settlement of any and all outstanding claims, all amounts on deposit in the Settlement Reserve Account shall be released from the security interest withdrawn and paid to Receivables Purchaser and the Settlement Reserve Account shall be closed.

(f)

Receivables Purchaser hereby grants to Account Owner during the Term and until the Settlement Reserve Account is closed pursuant to Clause 6.5(e) irrevocable authority to credit monies to and debit monies from the Settlement Reserve Account for the purposes of and as necessary under this Agreement.

6.6	Convenience Cheque Account

(a)

Receivables Purchaser shall maintain for the Term, for the benefit only of Account Owner, a current account held by Account Owner (the “ Convenience Cheque Account ”) bearing a designation clearly indicating that the funds deposited therein are held for the benefit only of Account Owner. Receivables Purchaser hereby agrees to grant to Account Owner a security interest in the Convenience Cheque Account and the funds deposited therein in order to secure Receivables Purchaser’s obligation to clear convenience cheques issued in connection with the Accounts.

(b)

All interest, if any, on funds on deposit in the Convenience Cheque Account shall be retained in the Convenience Cheque Account for the benefit of Account Owner.

(c)

Receivables Purchaser shall reimburse Account Owner on each Business Day for the full amount cleared on such Business Day as notified to Receivables Purchaser

by Account Owner in writing with respect to convenience cheques issued with respect to the Accounts. Receivables Purchaser shall reimburse Account Owner for all fees and costs levied by the bank at which the Convenience Cheque Account is held.

(d)

Upon the termination of this Agreement and the transfer of all new and accrued Receivables to Receivables Purchaser and the settlement of any and all outstanding claims, all amounts, if any, on deposit in the Convenience Cheque Account shall be released from the security interest withdrawn and paid to Receivables Purchaser and the Convenience Cheque Account shall be closed.

(e)

Receivables Purchaser hereby grants to Account Owner during the Term and until the Convenience Cheque Account is closed pursuant to Clause 6.6(d) irrevocable authority to credit monies to and debit monies from the Convenience Cheque Account for the purposes of and as necessary under this Agreement.

7.	CARDHOLDER DATA

7.1	Cardholder Data

Notwithstanding any of the provisions of this Agreement, in relation to Cardholder Data (which for the avoidance of doubt includes Personal Data) the parties acknowledge that Clauses 7 and 8 shall apply.

7.2	Property of Account Owner

The parties acknowledge that the Cardholder Data is the property of the Account Owner, and that in the course of performing their advisory services and obligations under this Agreement the Servicer, Receivables Purchaser and any of their Affiliates shall need access to the Cardholder Data.

7.3	Storage and Disclosure of Cardholder Data

The Servicer and Receivables Purchaser (and any of their Affiliates) shall only:

(a)

store, copy or use the Cardholder Data, and

(b)

disclose the Cardholder Data to:

(i)

a third party with the prior consent of the Account Owner, and

(ii)

its employees, directors, agents, subcontractors and professional advisers,

to the extent reasonably required to perform its obligations under this agreement (or in the case of professional advisers on a strict need to know basis) or as required or otherwise permitted to do so under Requirements of Law.

8.	DATA PROTECTION

8.1	Definitions

The terms process (and its derivatives), data subject, data controller , and data processor shall, where used in this clause, have the meanings given to them under the Data Protection Act.

8.2	Data Controller and Data Processors

The parties agree that in respect of any Cardholder Data that is Personal Data processed by the Servicer, Receivables Purchaser or any of their Affiliates, the Account Owner is the data controller and the Servicer, Receivables Purchaser or any of their Affiliates are data processors. Servicer and Receivables Purchaser shall ensure that each and any of their Affiliates that have access to the Cardholder Data comply with its obligations under the Data Protection Act and the provisions of Clauses 7 and 8 of this Agreement.

8.3	Compliance with Data Protection Act

Each party shall comply with its obligations under the Data Protection Act in relation to the Cardholder Data processed by the Servicer, Receivables Purchaser or any of their Affiliates in connection with the advisory services being provided by the Servicer, Receivables Purchaser or their Affiliates under this Agreement.

8.4	Processing of Personal Data

Unless the Account Owner requires otherwise in writing, the Servicer, Receivables Purchaser (and any of their Affiliates) shall only undertake processing of Personal Data in accordance with Clause 7.3.

8.5	Maintain Security

The Servicer, Receivables Purchaser (and any of their Affiliates as required) shall bring into effect and maintain appropriate technical and organisational measures to maintain security and to prevent unauthorised or unlawful access to or processing of Cardholder Data that is Personal Data and accidental loss or destruction of, or damage to such Personal Data.

8.6	Compliance with Terms of Schedule

The Account Owner and Receivables Purchaser are to comply with the terms of Schedule 8.6 with regards to any Cardholder Data that is Personal Data that has been transferred to Receivables Purchaser outside the EEA by or on behalf of the Account Owner (including by the Servicer)

8.7	Transfer of Personal Data Outside EEA

The parties have agreed that the Servicer, Receivables Purchaser or any of their Affiliates, may transfer Cardholder Data that is Personal Data to any country or territory outside the EEA provided that, and only for so long as:

(a)

in respect of any such country or territory there has been a European Community finding of adequacy pursuant to Article 25(6) of the EC Data Protection Directive in respect of that country or territory; or

(b)

the transfer falls within the scope of the Safe Harbor scheme operated by the US Department of Commerce.

9.	MISCELLANEOUS PROVISIONS

9.1

Amendment

This Agreement and the rights and obligations of the parties hereunder and thereunder may not be changed orally, but only by an instrument in writing signed by Account Owner, Servicer and Receivables Purchaser in accordance with this Clause 9.1 .

9.2	Governing Law

This agreement shall be governed by and construed in accordance with the laws of England and Wales.

9.3	Submission

For the benefit of Account Owner and the Servicer, the Receivables Purchaser agrees that the courts of England have jurisdiction to settle any disputes in connection with this Agreement and accordingly submits to the jurisdiction of the English courts.

9.4	Service of Process

Without prejudice to any other mode of service Receivables Purchaser:

(i)

irrevocably appoints CompuCredit UK as its agent for service of process in relation to any proceedings before the English courts in connection with this Agreement;

(ii)

agrees to maintain such an agent for service of process in England during the term of this Agreement;

(iii)

agrees that failure by a process agent to notify Receivables Purchaser of the process will not invalidate the proceedings concerned;

(iv)

consents to the service of process relating to any such proceedings by prepaid posting of a copy of the process to its address for the time being applying under this Agreement; and

(v)

agrees that if the appointment of any person mentioned in above ceases to be effective, Receivables Purchaser shall immediately appoint a further person in England to accept service of process on its behalf in England and, failing such appointment within five (5) days, Servicer shall be entitled to appoint such a person by notice to Account Owner.

9.5

Notices

All demands, notices and communications hereunder to any party shall be in writing and shall be deemed to have been duly given if personally delivered at or mailed by certified mail, return receipt requested, or sent via telecopy, with telephonic confirmation, or electronic transmission, receipt requested, to the notice address for such party as set forth below or, as to each party, at such other address as shall be designated by such party in a written notice to each other party:


Account Owner:		R. Raphael & Sons Plc Walton Lodge Walton Street Aylesbury, Buckinghamshire HP21 7QY Attention: Tony Pooley Phone: 44 01 296 436 661 Fax: 44 01 296 423 041

		(with a courtesy copy to Clintons 55 Drury Lane London WC2B 5RZ Attn: TAF)

Receivables Purchaser or Servicer:		CompuCredit International Acquisition Corp. 3993 Howard Hughes Parkway Suite 250, Office 269 Las Vegas, NV 98169 Attention: Joshua Miller Phone: 1 (702) 949-0162 Fax: 1 (702) 598-3651

		With a copy to:

		CompuCredit Corporation 245 Perimeter Center Parkway, Suite 600 Atlanta, Georgia 30346 Attn: General Counsel Telephone: 770-206-6200 Fax No.: 770-206-6187

9.6	Severability of Provisions

If any one or more of the covenants, agreements, provisions or terms of this Agreement shall for any reason whatsoever be held invalid, then such covenants, agreements, provisions, or terms shall be deemed severable from the remaining covenants, agreements, provisions, and terms of this Agreement and shall in no way affect the validity or enforceability of the other provisions of this Agreement.

9.7	Further Assurances

Account Owner, Servicer and Receivables Purchaser agree to do and perform, from time to time, at the expense of the requesting party, any and all acts and to execute any and all further instruments required or reasonably requested by any other party more fully to effect the purposes of this Agreement.

9.8	No Waiver; Cumulative Remedies

No failure to exercise and no delay in exercising any right, remedy, power or privilege hereunder on the part of Account Owner, Servicer or Receivables Purchaser shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. Except as provided in Clause 5, the rights, remedies, powers and privileges herein provided are cumulative and not exhaustive of any rights, remedies, powers and privileges provided by law.

9.9	Counterparts

This Agreement may be executed in two or more counterparts (and by different parties on separate counterparts), each of which shall be an original, but all of which together shall constitute one and the same instrument.

9.10

Binding

This Agreement will inure to the benefit of and be binding upon the parties hereto and their respective successors and permitted assigns.

9.11	Third Party Rights

The Parties to this Agreement do not intend that any of its terms shall be enforceable by any third party who could not be able to enforce such terms other than by virtue of the Contracts (Right of Third Parties) Act 1999.

9.12	Merger and Integration

Except as specifically stated otherwise herein, this Agreement, the Receivables Purchase Agreement and the Sale and Purchase Agreement sets forth the entire understanding of

the parties relating to the subject matter hereof, and all prior understandings, written or oral, are superseded by this Agreement. This Agreement may not be modified, amended, waived or supplemented except as provided herein.

9.13

Headings

The headings are for purposes of reference only and shall not otherwise affect the meaning or interpretation of any provision hereof.

9.14

Survival

The provisions of Clauses 6.01 , 6.02 and 6.03 shall survive termination of this Agreement.

9.15	Acknowledgement and Agreement of Account Owner

Account Owner expressly acknowledges and agrees that all of Receivable Purchaser’s right, title and interest in, to, and under this Agreement will be assigned by Receivables Purchaser to Partridge Funding Corporation, and Partridge Funding Corporation will grant a security interest therein to Deutsche Bank Trust Company Americas in its capacity as indenture trustee, and Account Owner consents to such assignments.

9.16

Liability

If any party becomes aware of a matter that could give rise to a claim for a breach of warranty under this Agreement, such party shall notify the other parties as soon as reasonably practicable and in any event within 60 days of a responsible officer of such party becoming actually aware of the facts giving rise to such claim (such notice to contain reasonable particulars of such facts and the amount of such claim), provided that failure to give such notice shall not prejudice that party’s ability to claim in respect of the breach of warranty.

Neither party shall be liable to the other party for loss of future contracts or opportunity or, except as provided in Clause 2.4 , any harm to the goodwill or reputation of the other party or indirect or consequential loss or damage, in each case, whether arising from tort, including negligence, breach of contract, under any indemnity under this Agreement, or at law or otherwise. Notwithstanding anything to the contrary contained in this Agreement, neither party excludes or limits liability for fraud or for death or personal injury resulting from a negligent act or omission of its employees, agents or subcontractors.

For the avoidance of doubt, Account Owner shall not be liable for any claim by Receivables Purchaser to the extent that such claim relates to any warranty of the Seller in the Sale and Purchase Agreement which is not true and correct.

Without prejudice to any duty it may have at common law or otherwise, each party shall use reasonable endeavours to mitigate any loss or damage which it may suffer in consequence of any breach by another party of the warranties or provisions of this Agreement.

Subject to the provisions of Clauses 5.1 and 5.3 , no party shall be entitled to rescind this Agreement after the Closing Date in any circumstances.

Notwithstanding any other provision of this Agreement, in calculating the liability of the Account Owner under this Agreement for a breach of a warranty claim, the losses suffered by the Receivables Purchaser shall be assessed on the basis that the amount of such losses are deemed to be the same amount as that which the Receivables Purchaser would have suffered had it not taken any action to securitize any of the Purchased Assets but had retained the entire legal and beneficial interest.

9.17

Guarantee

(a)

The Receivables Purchaser hereby irrevocably and unconditionally guarantees in favour of Account Owner (as principal and not merely as surety) that it shall (on demand by Account Owner) immediately discharge the liabilities of Servicer to Account Owner under the terms of this Agreement.

(b)

The guarantee set out in Clause 9.17(a) above is a continuing guarantee and will extend to the ultimate balance of sums payable by the Servicer under this Agreement, and shall remain in force and in effect until Servicer has performed and discharged all of its obligations under this Agreement regardless of any intermediate payment or discharge in whole or in part.

(c)

Receivables Purchaser’s liability under Clause 9.17(a) above shall not be affected by any act, omission, matter or thing which, but for this Clause 9.17 , would reduce, release or prejudice any of its obligations under this Clause 9.17 (without limitation and whether or not known to it) including any concession, time, indulgence or release granted by Account Owner to Servicer or by any payment or other dealing or anything else which would, but for this Guarantee, operate to discharge or reduce that liability.

(d)

The Receivables Purchaser hereby indemnifies the Account Owner immediately on demand against any cost, loss or liability suffered by Account Owner if anything causes any of Servicer’s obligations under this Agreement to be or become invalid or unenforceable or illegal.

(e)

For the avoidance of doubt, this Guarantee shall be effective only if the Receivables Purchaser and Servicer are separate legal entities.

9.18	No Partnership

Nothing in this Agreement and no action taken by the Parties under this Agreement shall constitute a partnership, association, joint venture or other co-operative entity between any of the Parties. There shall be no relationship between the Account Owner, on one hand, and the Receivables Purchaser or the Servicer, on the other hand, other than as separate business contracting on the terms of this Agreement.

9.19	Visa Undertaking Letter

Each Party to this Agreement undertakes that it will comply with its obligations under the Visa Undertaking Letter.

IN WITNESS WHEREOF, Account Owner, Servicer and Receivables Purchaser have caused this Account Ownership Agreement to be duly executed by their respective officers as of the day and year first above written.


R. RAPHAEL & SONS PLC

By:		/s/ Firoz Tejani
Name:		Firoz Tejani
Title:		Director

COMPUCREDIT INTERNATIONAL ACQUISITION CORPORATION

By:		/s/ Joshua C. Miller
Name:		Joshua C. Miller
Title:		Assistant Secretary

Exhibit 10.3

EXECUTION COPY

RECEIVABLES PURCHASE AGREEMENT

Dated 4 April 2007

between

R RAPHAEL & SONS PLC

as Account Owner

and

COMPUCREDIT INTERNATIONAL ACQUISITION CORP

As Receivables Purchaser

LOGO

ORRICK, HERRINGTON & SUTCLIFFE

TOWER 42, LEVEL 35

25 OLD BROAD STREET

LONDON EC 2 N 1 HQ

tel +44 (0)20 7562 5000

fax +44 (0)20 7628 0078

www.orrick.com

Table of Contents


1.	INTERPRETATION		1
	1.1	Definitions	1
	1.2	Other Definitional Provisions	6

2.	PURCHASE AND ASSIGNMENT OF RECEIVABLES		6
	2.1	Purchase	6

3.	CONSIDERATION AND PAYMENT		7
	3.1	Purchase Price	7
	3.2	Credit Adjustment	8

4.	WARRANTIES		8
	4.1	Warranties of Account Owner Relating to Account Owner	8
	4.2	Warranties of Account Owner Relating to the Agreement and the Receivables	11
	4.3	Warranties of Receivables Purchaser	12

5.	COVENANTS		15
	5.1	Covenants of Account Owner	15

6.	TERM AND PURCHASE TERMINATION		18
	6.1	Term	18
	6.2	Purchase Termination	18

7.	REPURCHASE OBLIGATION		18
	7.1	Reassignment of Receivables	18

8.	MISCELLANEOUS PROVISIONS		19
	8.1	Amendment	19
	8.2	Liability	19
	8.3	Governing Law	20
	8.4	Submission	20
	8.5	Service of Process	20
	8.6	Forum Convenience and Enforcement Abroad	21
	8.7	Notices	21
	8.8	Severability of Provisions	21
	8.9	Assignment	21
	8.10	Acknowledgement and Agreement of Account Owner	21
	8.11	Further Assurances	22
	8.12	No Waiver; Cumulative Remedies	22
	8.13	Counterparts	22
	8.14	Binding; Third-Party Beneficiaries	22
	8.15	Merger and Integration	22
	8.16	Headings	22
	8.17	Survival of Representations and Warranties	23

This RECEIVABLES PURCHASE AGREEMENT, is made this 4th day of April, 2007, BETWEEN:

1.	COMPUCREDIT INTERNATIONAL ACQUISITION CORPORATION (“ Receivables Purchaser ”); and

2.	R RAPHAEL & SONS PLC (“ Account Owner ”).

WHEREAS,

(a)

In connection with to an agreement relating to the sale and purchase of Monument Business, of even date herewith (as the same may be amended, amended and restated, supplemented or otherwise modified from time to time in accordance with the terms thereof, the “ Sale and Purchase Agreement ”), between various parties including Barclays Bank PLC (“ Seller ”) and Receivables Purchaser, Seller has sold (prior to the Assignment Date, by way of declaration of trust and from and after the Assignment Date, by way of legal assignment), and Account Owner, as Receivables Purchaser’s designee has acquired, certain properties, rights, title, interest and privileges in and to the Accounts (hereinafter defined) and related receivables outstanding thereunder;

(b)	Account Owner desires to sell, and Receivables Purchaser desires to purchase, on the terms and subject to the conditions set out herein, the Receivables arising under the Accounts; and

(c)

Receivables Purchaser desires to sell and assign from time to time the receivables outstanding under the Accounts to Partridge Funding Corporation, a Nevada corporation (together with its successors and permitted assigns, “ Funding ”) in connection with the issuance of certain asset backed securities.

NOW, it is hereby agreed as follows:

1.	INTERPRETATION

1.1	Definitions

All capitalised terms used herein and not otherwise defined herein, shall have the meaning ascribed thereto in the Account Ownership Agreement (as hereinafter defined); in addition, the following words and phrases shall have the following meanings:

“ Account ” shall mean each open-ended, revolving credit card account existing at the Cut-Off Time pursuant to a Cardholder Agreement between Seller and a Cardholder, which account is identified on the Account Schedule and “Account” will include all rights, remedies, benefits, interests and entitlements with respect thereto.

“ Account Owner ” shall mean R Raphael and Sons plc.

“ Account Ownership Agreement ” shall mean the Account Ownership Agreement of even date herewith, between Receivables Purchaser, as both Receivables Purchaser and Servicer, and Account Owner, as Account Owner, as amended, restated, supplemented or otherwise modified from time to time in accordance with the terms thereof.

“ Account Schedule ” shall mean the list of Accounts together with outstanding balances and delinquency status of such Accounts prepared as of the Cut-Off Time and delivered to the Receivables Purchaser by Seller pursuant to Clause 3.6 of the Sale and Purchase Agreement, and as amended, if applicable, to exclude any Covered Account sold or reconveyed to Seller (or a third party designated by the Seller) pursuant to Clause 7.3 of the Sale and Purchase Agreement.

“ Agreement ” shall mean this Receivables Purchase Agreement and all amendments hereof and supplements hereto.

“ Assignment” shall have the meaning set out in Clause 2.1

“ Assignment Date ” shall mean the date that is 10 days after the notices referred to in Clause 6.1 of the Sale and Purchase Agreement have been posted to Cardholders in accordance with such Clause.

“ Business Day ” shall mean each day other than Saturday, Sunday or a day on which banking institutions in London are authorised or obligated by law, executive order or governmental decree to be closed.

“ Cardholder ” shall mean, with respect to any Account, the person or persons obligated to make payments with respect to such Account, including any guarantor thereof, but excluding any merchant.

“ Cardholder Agreements ” shall mean all agreements between Account Owner (or, prior to the Assignment Date, the Seller or Providian National Bank) and a Cardholder containing the terms and conditions of the related Account, as the same may be amended from time to time.

“ Change in Law ” shall mean any amendment, modification, change, deletion or addition to, or precedential change in the interpretation of, any Requirements of Law (including without limitation, laws relating to Taxes), or the enactment or issuance of any new Requirements of Law (including without limitation, laws relating to Taxes), the imposition by any Governmental Authority of conditions or requirements for the issuance or maintenance of any licenses, consents, approvals, registrations or permits or any other change in the specified standards therefore, in each case occurring and which has an adverse effect on the ability of a Party to perform any of its obligations (including, without limitation, by causing any delay therein) under this Agreement or which causes an increase in the cost of such performance.

“ Collections ” shall mean all payments by or on behalf of Cardholders received in respect of the Receivables, in the form of cash, checks, SWIFT payments, wire transfers, electronic transfers, direct debits, bank giro credits, ATM transfers or any other form of payment and all other amounts specified by this Agreement as constituting Collections, including Interchange, Insurance Proceeds, and Recoveries with respect to the Receivables.

“ CompuCredit UK ” shall mean CompuCredit UK Limited, a company incorporated in England and Wales with company number 6032187 and having its registered office at One Bishops Square, London E1 6AO.

“ Credit Adjustment ” shall have the meaning set forth in Clause 3.2.

“ Credit Card Purchase Price ” shall have the meaning specified in the Sale and Purchase Agreement.

“ Credit Card System ” shall mean VISA Europe Services Inc., VISA International Service Association, VISA Europe Limited and any other VISA entity, as appropriate.

“ Cut-Off Time ” shall mean 11:59:59 P.M. London time on the date of this Agreement.

“ Declaration of Trust ” shall mean the declaration of trust of even date herewith made by Seller in respect of the Receivables and the other Purchased Assets in favour of Account Owner as Receivable Purchaser’s designee.

“ Dissolution Event ” shall mean in respect of any party if such party:

(a)

ceases or threatens to cease to carry on business or a substantial part of its business;

(b)

is or is deemed unable to pay its debts as and when they fall due within the meaning of Section 123(1) and (2) of the Insolvency Act 1986;

(c)

has an order made or an effective resolution passed for its winding-up;

(d)

has proceedings initiated against it under any applicable liquidation, insolvency, composition, reorganisation or other similar laws (including, but not limited to, presentation of a petition for an administration order);

(e)

an administration order shall be granted or an administrative receiver or other receiver, liquidator or other similar official shall be appointed in relation to it or in relation to the whole or any substantial part of its undertaking or assets;

(f)

an encumbrance shall take possession of the whole or any substantial part of its undertaking or assets;

(g)

a distress or execution or other process shall be levied or enforced upon or sued out against the whole or any substantial part of its undertaking or assets and such possession or process (as the case may be) shall not be discharged or otherwise ceases to apply within 60 (sixty) days of the commencement of such process;

(h)

it initiates or consents to judicial proceedings relating to itself under applicable liquidation, insolvency, composition, reorganisation or other similar laws or makes a conveyance or assignment for the benefit of its creditors generally other than a solvent reorganisation which has been approved in advance of the same by each other party to this Agreement (such approval not to be unreasonably withheld or delayed); or

(i)

at any time it no longer has legal power to perform its obligations under this Agreement or to carry on its business or it becomes unlawful for such person to do the same or any of the obligations of such person are not or cease to be legal, valid and binding, in each case, to the extent that the same would have a material adverse effect;

“ Encumbrance ” shall mean any security interest, mortgage, deed of trust, pledge, hypothecation, assignment, deposit arrangement, equity interest, encumbrance, lien (statutory or other), preference, participation interest, priority or other security agreement or preferential arrangement of any kind or nature whatsoever, including any conditional sale or other title retention agreement, or any financing lease having substantially the same economic effect as any of the foregoing.

“ Finance Charge Receivables ” shall mean all Receivables that constitute (i) periodic rate finance charges, (ii) cash advance fees, (iii) annual membership fees and annual service charges, (iv) late fees, and (v) overlimit fees. Collections of Finance Charge Receivables shall also include (a) Interchange and (b) all Recoveries.

“ FSA ” means the Financial Services Authority of the United Kingdom.

“ Funding ” shall mean Partridge Funding Corporation, a corporation organised and existing under the laws of the State of Nevada with registered company number E0041952007-3 and having its registered office at 3993 Howard Hughes Parkway, Suite 250 Office 215, Las Vegas, Nevada 89169, USA, and its successors and permitted assigns.

“ Governmental Authority ” shall mean any governmental, regulatory or self-regulatory authority, agency, court, tribunal, commission or other regulatory or self-regulatory entity, in the UK or any applicable foreign governmental state or other political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government.

“ Indenture ” shall mean the Master Indenture of even date herewith, among Partridge Acquired Portfolio Business Trust, the Indenture Trustee, and Receivables Purchaser, as servicer, as the same may be amended, supplemented or otherwise modified from time to time.

“ Indenture Trustee ” shall mean Deutsche Bank Trust Company Americas in its capacity as indenture trustee under the Indenture, or its successor in interest, or any successor indenture trustee appointed as provided in the Indenture.

“ Insurance Proceeds ” shall mean any amounts received pursuant to any credit insurance policies covering any Cardholder with respect to Receivables under such Cardholder’s Account.

“ Interchange ” shall mean the interchange fees paid through the Credit Card System in connection with cardholder charges for goods or services with respect to the Accounts.

“ Legal Assignment of Assets ” shall mean the legal assignment of the Receivables and the other Purchased Assets dated the Assignment Date between Seller, (as the assignor), Receivables Purchaser and Account Owner (as the Receivable Purchaser’s designee).

“ Personal Data ” shall have the meaning set forth in the United Kingdom Data Protection Act 1998.

“Post-Signing Receivables” shall have the meaning specified in the Sale and Purchase Agreement.

“Pre-Signing Receivables” shall have the meaning specified in the Sale and Purchase Agreement.

“ Principal Receivables ” shall mean all Receivables other than Finance Charge Receivables.

“ Purchase Price ” shall have the meaning set forth in Clause 3.1.

“ Purchased Assets ” shall have the meaning set forth in Clause 2.1.

“ Receivables ” shall mean all amounts payable by the Cardholders on the Accounts from time to time, including amounts payable for Principal Receivables and Finance Charge Receivables.

“ Receivables Purchaser ” shall mean CompuCredit International Acquisition Corporation, a corporation organised and existing under the laws of the State of Nevada with registered company number E0041862007-2 and having its registered address at 101 Convention Center Drive, Las Vegas, Nevada 89109, USA.

“ Recoveries ” shall mean all amounts received with respect to Receivables which have been previously charged off.

“ Requirements of Law ” shall mean, with respect to any person or entity, the Operating Regulations and the requirements of any national, supra-national or local law, statute, rule or regulation or judicial, governmental, or administrative order, decree or ruling or any provision of any organisational, corporate, constitutional or governing documents, applicable to the Accounts or the Account Owner in relation to the Credit Card business conducted pursuant to the Account Ownership Agreement or the actions of any party to this Agreement in the performance of its respective obligations hereunder or under any Related Agreements.

“ Sale and Purchase Agreement ” shall mean the Agreement Relating to the Sale and Purchase of Monument Business between Receivables Purchaser, Seller and other parties, of even date herewith.

“ Securitisation ” shall have the meaning specified in Clause 5.1(h).

“ Securitisation Materials ” shall have the meaning specified in Clause 5.1(i)(i).

“ Servicer ” shall mean the Servicer under the Account Ownership Agreement.

“ Tax ” shall be construed so as to include any tax, levy, import, duty or other charge of a similar nature (including, without limitation, any penalty or interest payable in connection with any failure to pay or any delay in paying any of the same).

“Transfer and Servicing Agreement” shall mean the Transfer and Servicing Agreement of even date herewith among Receivables Purchaser (as Servicer), Funding and the Indenture Trustee, and all amendments and supplements thereto.

“ Transfer Instruments ” shall have the meaning set forth in Clause 4.1(a)(iii).

1.2	Other Definitional Provisions

(a)

All terms defined in this Agreement shall have the defined meanings when used in any certificate, other document, or Assignment made or delivered pursuant hereto unless otherwise defined therein.

(b)

2.	PURCHASE AND ASSIGNMENT OF RECEIVABLES

2.1

Purchase

(a)

Account Owner hereby sells, transfers, assigns, sets over and otherwise conveys to Receivables Purchaser (collectively, the “Assignment” ), without recourse except as provided herein, all its right, title, and interest in, to, and under all Receivables in the Accounts at the Cut-Off Time, and thereafter created from time to time until the termination of this Agreement pursuant to Clause 6, all monies due or to become due and all amounts received or receivable with respect thereto, all Collections with respect to such Receivables and the trust over the foregoing created by Seller in favour of Account Owner pursuant to the Declaration of Trust (all of the foregoing being the “ Purchased Assets ”). Prior to the Assignment Date, such sale shall be by way of Account Owner’s interest in the trust created by the Declaration of Trust, and from and after the Assignment Date, such sale shall be by way of the Legal Assignment of Assets.

(b)

In connection with such Assignment, Account Owner agrees (i) to authorise and to cooperate with Receivables Purchaser, and Receivables Purchaser agrees to file, at the expense of Receivables Purchaser, any notices, registrations, statements or other documents (including amendments or updates thereto) with respect to the Receivables and the other Purchased Assets now existing and hereafter created, meeting the requirements of applicable law in such manner and in such jurisdictions as are necessary to perfect, and maintain the perfection of, the Assignment of such Purchased Assets from Account Owner to Receivables Purchaser and (ii) that such notices, registrations, statements or other documents shall name Account Owner, as seller, and Receivables Purchaser, as purchaser, of the Purchased Assets. Account Owner hereby authorises and ratifies all such filings or notices.

(c)

In connection with such Assignment, Account Owner and Receivables Purchaser further agree that they will, on or prior to the Closing Date, indicate in their computer files or microfiche lists that the Receivables created in connection with the Accounts have been sold to Receivables Purchaser.

(d)

The parties hereto intend that the conveyance of Account Owner’s right, title and interest in and to the Receivables and the other Purchased Assets (to the

extent that Account Owner has such rights, title and interest in the same) shall constitute a sale conveying good title, free and clear of any liens, claims, Encumbrances or rights of others arising through or under Account Owner from Account Owner to Receivables Purchaser and that the Receivables and the other Purchased Assets shall not be part of Account Owner’s estate in the event of the insolvency of Account Owner or a Dissolution Event or similar event with respect to Account Owner. It is the intention of the parties hereto that the arrangements with respect to the Receivables and the other Purchased Assets shall constitute a purchase and sale of such Receivables and the other Purchased Assets and not a loan, including for accounting purposes.

(e)

Account Owner and Receivables Purchaser agree and acknowledge that any Personal Data transferred between the parties shall only be transferred in accordance with the provisions of the Account Ownership Agreement.

(f)

In the event that any additional requirements are imposed or recommended by the Credit Card System in writing detailing such requirements, each party undertakes to comply with such requirements and to agree and make appropriate changes to the Cardholder Agreements and/or their operating procedures as soon as reasonably practicable and in any case within the timescale required by the Credit Card System.

3.	CONSIDERATION AND PAYMENT

3.1	Purchase Price

The purchase price (the “ Purchase Price ”) for the Receivables and the related Purchased Assets shall be divided into two parts. The Purchase Price for the Pre-Signing Receivables and the related Purchased Assets shall equal the Credit Card Purchase Price. The Credit Card Purchase Price shall be payable by the Receivables Purchaser on behalf of the Account Owner directly to the Seller pursuant to Clauses 3.4 and 3.9 of the Sale and Purchase Agreement. The Purchase Price for the Post-Signing Receivables arising in the Accounts on or after the Cut-Off Time, shall be an amount equal to 100% of the aggregate balance of the Principal Receivables so conveyed. The Parties acknowledge that the foregoing Purchase Price is the fair market value of the Receivables and the related Purchased Assets. The Purchase Price for the Post-Signing Receivables shall be paid by Receivables Purchaser to Account Owner or, prior to the Assignment Date, if applicable, to Seller directly, on each Business Day in immediately available funds payable by electronic transfer to the following account:


A/C Name:		R. Raphael & Sons plc
Bank:		Lloyds TSB
Sort Code:		30-93-38
A/C No.:		01346310

All amounts hereunder are exclusive of value added tax (“ VAT ”) and any applicable VAT shall be paid within fourteen (14) days of presentation of a valid VAT invoice. The parties intend and believe that the sale of the Receivables to Receivables Purchaser hereunder shall not be a taxable supply for VAT purposes.

3.2	Credit Adjustment

The Purchase Price shall be reduced on the second Business Day of each calendar month (a “ Credit Adjustment ”) with respect to any Receivable previously assigned to Receivables Purchaser by Account Owner which has since been reduced by Account Owner or the Servicer because of a rebate, refund, unauthorised charge or billing error to a Cardholder or because such Receivable was created in respect of merchandise which was refused or returned by a Cardholder. The amount of such reduction shall equal the reduction in the balance of such Receivable resulting from the occurrence of such event. In the event that a reduction pursuant to this Clause 3.2 causes the Purchase Price to be a negative number in respect of which Account Owner holds such surplus sums, Account Owner agrees that, not later than 11:00 a.m., London time or as soon as possible thereafter upon receipt of funds, on such date, Account Owner shall pay to Receivables Purchaser cash in an amount equal to the amount by which the Credit Adjustment exceeds the unadjusted Purchase Price. For the avoidance of doubt, any and all risk in relation to “charge back” ( i.e. , cancelled purchases or other transactions in which the Cardholder demands or is entitled to any rebate or refund in connection with an unauthorised charge or billing error or because such Receivable was created in respect of merchandise which was refused or returned) and fraud shall lie with Receivables Purchaser.

4.	WARRANTIES

4.1	Warranties of Account Owner Relating to Account Owner

(a)

Warranties

The warranties of the Account Owner under this Agreement are given subject to, and on the basis that, the warranties of Seller in the Sale and Purchase Agreement are true and correct in all material respects and that Account Owner has made no enquiries or investigations relating to such warranties of Seller. In the event any of the warranties of Seller in the Sale and Purchase Agreement are not true and correct and, as a result, but for this provision a warranty of the Account Owner hereunder would fail to be true and correct in any respect, Account Owner shall have no liability for such incorrect warranty. Subject to the foregoing, Account Owner hereby warrants to, and agrees with, Receivables Purchaser as of the Closing Date and as of each date that Receivables and other Purchased Assets are assigned hereunder (or as of such other date specified in such representation and warranty), with respect to the Receivables and the related Purchased Assets assigned on such date, that:

(i)

Organisation

Account Owner is duly organised, validly existing and in good standing under the laws of England and Wales and has, in all material respects, full power and authority to own the Accounts and the Purchased Assets and to operate its business relating to such Accounts and the Purchased Assets as currently owned or operated, and to execute, deliver and perform its obligations under this Agreement.

(ii)

Due Qualification

Account Owner is duly authorised to do banking business in England and Wales and has obtained all necessary licenses and approvals, in

each jurisdiction in which failure to so qualify or to obtain such licenses and approvals would have a material adverse effect on this Agreement or the transactions contemplated hereby or on the ability of Account Owner to perform its obligations under this Agreement.

(iii)

Due Authorisation

This Agreement and any other document or instrument delivered by Account Owner pursuant hereto (such other documents or instruments, collectively, the “ Transfer Instruments ”) have been duly authorised by Account Owner by all necessary action on the part of Account Owner.

(iv)

No Conflict

Neither the execution and delivery by Account Owner of this Agreement nor the performance by Account Owner of its obligations under this Agreement will conflict with, result in a material breach of or violation of any of the terms of, or constitute (with or without notice or the lapse of time or both) a default under, the organisational documents or by-laws of Account Owner, or any rule, order, statute or regulation of the FSA or of any other Governmental Authority having jurisdiction over Account Owner or the terms of any material indenture or other material agreement or instrument to which Account Owner is a party or by which it or its properties are bound (other than violations of such rules, orders, statutes, regulations, indentures, agreements and other instruments which do not affect the legality, validity or enforceability of any of such agreements or the Receivables and which, individually or in the aggregate, would not have a material adverse effect on Account Owner or the transactions contemplated by, or its ability to perform its obligations under, this Agreement).

(v)

No Proceedings

There are no actions, proceedings or investigations pending or, to the best knowledge of Account Owner, threatened, against Account Owner before the FSA or any Governmental Authority (i) asserting the invalidity of this Agreement, (ii) seeking to prevent the consummation of any of the transactions contemplated by this Agreement, (iii) seeking any determination or ruling that, in the reasonable judgment of Account Owner, would materially and adversely affect the performance by Account Owner of its obligations under this Agreement or (iv) seeking any determination or ruling that would materially and adversely affect the validity or enforceability of this Agreement which, in each case, if adversely defined would be reasonably likely to result in a material adverse effect on the transactions contemplated by, or Account Owner’s ability to perform its respective obligations under, this Agreement.

(vi)

All Consents

As far as Account Owner is aware after reasonable inquiry, no consent, approval, authorisation or order of, or filing with the FSA or any Governmental Authority is required on the part of Account Owner under the Financial Services and Markets Act 2000, the Consumer Credit Act 1974 or the Data Protection Act 1998 or otherwise in connection with the performance of the transactions contemplated by this Agreement by Account Owner except such as have been obtained or made and are in full force and effect, and those which the failure to obtain would not have a material adverse effect on this Agreement or the transactions contemplated hereby or on the ability of Account Owner to perform its obligations under this Agreement.

(vii)

Insolvency

No Dissolution Event with respect to Account Owner has occurred and the transfer of the Receivables and the related Purchased Assets by Account Owner to Receivables Purchaser has not been made in contemplation of the occurrence thereof.

(viii)

Performance of Obligations

As far as Account Owner is aware, (i) Account Owner has performed all material obligations required to be performed by it to date under the Cardholder Agreements and all actions of Account Owner prior to the Closing Date have been in compliance with the Cardholder Agreements, (ii) Account Owner is not in material default under the Cardholder Agreements, and (iii) no event has occurred with respect to Account Owner’s performance under the Cardholder Agreements which, with the lapse of time or action by a third party, is reasonably likely to result in a material default by Account Owner under any such agreements that would reasonably be expected to have a material adverse effect on the Accounts, the Receivables or the Purchased Assets.

(ix)

Operation of Business

As at the Closing Date, Account Owner has not entered into any transaction or made any commitment or agreement with Cardholders in connection with the Accounts, other than in the ordinary course of Account Owner’s business consistent with the Policies and Procedures in all material respects. Account Owner has not offered any settlement options to the Cardholders of any Accounts that were (i) contained on the Account Schedule delivered to Receivables Purchaser and (ii) less than 90 days delinquent, other than in accordance with the Policies and Procedures.

(x)

Compliance with Laws

As far as Account Owner is aware, other than in the Cardholder Agreements, Account Owner has not made any promise, agreement or commitment to any Cardholder in connection with an Account, except in the ordinary course of business and in compliance in all material respects with the Policies and Procedures in connection with collection and customer service activities.

(xi)

Effect of Law on Sales

As far as Account Owner is aware after reasonable inquiry, there is no applicable law, rule or regulation, or order or rule of any regulatory agency that would prevent Account Owner from selling the Receivables and other Purchased Assets to Receivables Purchaser as contemplated by this Agreement.

(b)

Notice of Breach

The warranties set forth in this Clause 4.1 shall survive the sale of the Purchased Assets to Receivables Purchaser. Upon discovery by either Account Owner or Receivables Purchaser of a breach of any of the foregoing warranties, the party discovering such breach shall give written notice to the other party within three (3) Business Days following such discovery, provided that failure to give such notice shall not prejudice that party’s ability to claim in respect of the breach of warranty.

4.2	Warranties of Account Owner Relating to the Agreement and the Receivables

(a)

Warranties

The warranties of the Account Owner under this Agreement are given subject to, and on the basis that, the warranties of Seller in the Sale and Purchase Agreement are true and correct in all material respects and that Account Owner has made not enquiries or investigations relating to such warranties of Seller. In the event any of the warranties of the Seller in the Sale and Purchase Agreement are not true and correct and, as a result, but for this provision a warranty of the Account Owner hereunder would fail to be true and correct in any respect, Account Owner shall have no liability for such incorrect warranty. Subject to the foregoing, Account Owner hereby warrants to, and agrees with, Receivables Purchaser as of the Cut-Off Time and as of each date that Receivables and other Purchased Assets are assigned hereunder (or as of such other date specified in such representation and warranty), with respect to the Receivables and the related Purchased Assets assigned on such date, that:

(i)

as of the date hereof, and as of the date of each assignment of Purchased Assets hereunder, this Agreement constitutes a legal, valid and binding obligation of Account Owner enforceable in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganisation, moratorium or other similar laws now or hereafter in effect, affecting the enforcement of creditors’ rights generally and except as such enforcement may be limited by general principles of equity;

(ii)

as of the date of each assignment of a Receivable to Receivables Purchaser hereunder, such Receivable has been assigned to Receivables Purchaser free and clear of any Encumbrances arising through or under Account Owner;

(iii)

as of the date of each assignment of Receivables to Receivables Purchaser hereunder, all authorisations, consents, orders or approvals of or registrations or declarations with the FSA or any other Governmental Authority required to be obtained, effected or given by Account Owner in connection with the assignment of such Receivables to Receivables Purchaser or to enable such lawful assignment pursuant to the Consumer Credit Act 1974, the Data Protection Act 1998 or any other Requirement of Law have been duly obtained, effected or given and are in full force and effect; and

(iv)

as of the date of each assignment of Purchased Assets to Receivables Purchaser hereunder, this Agreement constitutes a valid sale to Receivables Purchaser of all right, title and interest of Account Owner in such Purchased Assets (to the extent Account Owner has such right, title and interest in the same).

(b)

Notice of Breach

The warranties set forth in this Clause 4.2 shall survive the sale of the Receivables to Receivables Purchaser. Upon discovery by either Account Owner or Receivables Purchaser of a breach of any of the warranties set forth in this Clause 4.2, the party discovering such breach shall give written notice to the other party within three (3) Business Days following such discovery, provided that failure to give such notice shall not prejudice that party’s ability to claim in respect of the breach of warranty. Account Owner hereby acknowledges that Receivables Purchaser intends to rely on the warranties hereunder in connection with warranties made by Receivables Purchaser to secured parties, assignees or subsequent transferees, including but not limited in connection with transfers made by Receivables Purchaser and Funding in connection with the securitisation of the Receivables.

4.3	Warranties of Receivables Purchaser

(a)

Warranties of Receivables Purchaser

As of the date hereof, Receivables Purchaser hereby warrants to, and agrees with, Account Owner that:

(i)

Organisation

Receivables Purchaser is a corporation duly organised, validly existing and in good standing under the laws of the State of Nevada.

(ii)

Capacity; Authority; Enforceability

Receivables Purchaser has all necessary power and authority and has obtained all necessary licenses and approvals in each relevant jurisdiction to enter into this Agreement and to perform all of the obligations to be performed by it under this Agreement. This Agreement and the consummation by Receivables Purchaser of the

transactions contemplated hereby and by the Transfer Instruments have been duly and validly authorised by all necessary action on the part of Receivables Purchaser, and this Agreement has been duly executed and delivered by Receivables Purchaser and constitutes the valid and binding obligation of Receivables Purchaser and is enforceable in accordance with its terms (except as such enforceability may be limited by equitable limitations on the availability of equitable remedies and by bankruptcy and other laws affecting the rights of creditors generally).

(iii)

No Conflicts or Defaults

Neither the execution and delivery of this Agreement or the Transfer Instruments by Receivables Purchaser nor the consummation of the transactions contemplated by or the performance of its obligations under this Agreement and the Transfer Instruments by Receivables Purchaser, will (i) conflict with, result in the breach of, constitute a default under, or accelerate the performance provided by the terms of any contract, instrument or commitment to which Receivables Purchaser is a party or by which it is bound, (ii) violate the articles of incorporation or by-laws of Receivables Purchaser, (iii) require any consent or approval under any judgment, order, writ, decree, permit or license to which Receivables Purchaser is a party or by which it is bound, or (iv) require the consent or approval of any other party to any contract, instrument or commitment to which Receivables Purchaser is a party or by which it is bound. Receivables Purchaser is not subject to any agreement with any regulatory authority which would prevent the consummation by Receivables Purchaser of the transactions contemplated by this Agreement.

(iv)

Litigation

There is no claim, or any litigation, proceeding, arbitration, investigation or controversy pending, relating to Receivables Purchaser, which adversely affects or could be reasonably expected to adversely affect Receivables Purchaser’s ability to consummate the transactions contemplated hereby and, to the best of Receivables Purchaser’s knowledge, no facts exist which would provide a basis for any such claim, litigation, proceeding, arbitration, investigation or controversy.

(v)

No Consent, Etc

No consent of any person (including without limitation any stockholder or creditor of Receivables Purchaser) and no consent, license, permit or approval or authorisation or exemption by notice or report to, or registration, filing or declaration with, any Governmental Authority is required with respect to Receivables Purchaser (other than those previously obtained and delivered to Account Owner) in connection with the execution or delivery of this Agreement or the Transfer Instruments by Receivables Purchaser, the validity or enforceability of this Agreement or the Transfer Instruments against

Receivables Purchaser, the consummation by Receivables Purchaser of the transactions contemplated hereby or by the Transfer Instruments, or the performance by Receivables Purchaser of its obligations hereunder and under the Transfer Instruments.

(vi)

Insolvency

No Dissolution Event with respect to Receivables Purchaser has occurred and the execution of this Agreement by Receivables Purchaser has not been made in contemplation of the occurrence thereof.

(vii)

Performance of Obligations

As far as Receivables Purchaser is aware, (i) the Seller has performed all obligations required to be performed by it to date under the Cardholder Agreements and all actions of the Seller (and of Receivables Purchaser) prior to the Closing Date have been in compliance with the Cardholder Agreements, (ii) the Seller is not in default under the Cardholder Agreements, and (iii) no event has occurred with respect to the Seller’s performance under the Cardholder Agreements which, with the lapse of time or action by a third party, is reasonably likely to result in a material default by the Seller under any such agreements that would reasonably be expected to have a material adverse effect on the Accounts, the Receivables or the Purchased Assets.

(viii)

Operation of Business

As of the Closing Date, Receivables Purchaser has not entered into any transaction or made any commitment or agreement with Cardholders in connection with the Accounts, and has not offered any settlement options to the Cardholders of any Accounts.

(ix)

Compliance with Laws

As of the Closing Date, Receivables Purchaser has not made any promise, agreement or commitment to any Cardholder in connection with any Account.

(b)

Notice of Breach

The warranties in this Clause 4.3 shall survive the sale of the Receivables to Receivables Purchaser. Upon discovery by Receivables Purchaser or Account Owner of a breach of any of the foregoing warranties, the party discovering such breach shall give written notice to the other party within three (3) Business Days following such discovery, provided that failure to give such notice shall not prejudice that party’s ability to claim in respect of the breach of warranty.

COVENANTS

5.1	Covenants of Account Owner

Account Owner hereby covenants and agrees with Receivables Purchaser as follows:

(a)

Receivables Not to Be Evidenced by Promissory Notes or other Instruments

Except in connection with its enforcement or collection of an Account or a Receivable, Account Owner will take no action to cause any Receivable sold to Receivables Purchaser hereunder to be evidenced by any promissory note or other instrument, and if any Receivable is so evidenced as a result of any action by Account Owner it shall be deemed to be a Receivable described in Clause 7.1(a) and shall be reassigned to Account Owner in accordance with Clause 7.1(b).

(b)

Security Interests

Except for the assignments hereunder, Account Owner will not sell, pledge, assign or transfer to any other Person, or take any other action inconsistent with Receivables Purchaser’s ownership of, the Purchased Assets, or grant, create, incur, assume or suffer to exist any Encumbrance arising through or under Account Owner on, any Purchased Assets or any interest therein, and Account Owner shall not claim any ownership interest in any Purchased Assets and shall defend the right, title and interest of Receivables Purchaser in, to and under the Purchased Assets against all claims of third parties claiming through or under Account Owner.

(c)

Account Allocations

In the event that Account Owner is unable for any reason to sell the Receivables to Receivables Purchaser in accordance with the provisions of this Agreement (including by reason of the application of the provisions of Clause 6.2 or any order of any Governmental Authority), then Account Owner agrees (except as prohibited by any such order or any Requirement of Law) to allocate and pay to Receivables Purchaser, after the date of such inability, all Collections received by Account Owner with respect to Principal Receivables previously sold to Receivables Purchaser. To the extent that it is not clear to Account Owner whether Collections relate to a Principal Receivable that was sold to Receivables Purchaser or to a Principal Receivable that Account Owner is unable to sell to Receivables Purchaser, Account Owner agrees that it shall allocate payments on each Account with respect to the principal balance of such Account first to the oldest principal balance of such Account. Notwithstanding any cessation of the sale to Receivables Purchaser of additional Principal Receivables and subject to the foregoing, Principal Receivables sold to Receivables Purchaser prior to the occurrence of the event giving rise to such inability, Collections in respect of such Principal Receivables, Finance Charge Receivables, whenever created, that accrue in respect of such Principal Receivables, and Collections in respect of such Finance Charge Receivables, shall continue to be property of Receivables Purchaser.

(d)

Delivery of Collections

In the event that Account Owner receives Collections or any other amounts in respect of the Purchased Assets sold to Receivables Purchaser hereunder,

Account Owner agrees to pay to Receivables Purchaser (or to the Servicer or the Indenture Trustee if Receivables Purchaser so directs) all such Collections and other amounts as soon as practicable after receipt thereof.

(e)

Notice of Encumbrances

Account Owner shall notify Receivables Purchaser promptly after becoming aware of any Encumbrance arising through or under Account Owner on any Purchased Asset other than the conveyances hereunder.

(f)

Documentation of Transfer

Account Owner hereby authorises Receivables Purchaser to serve such notices or file such documents as are necessary or advisable to perfect and maintain the perfection of the sale of the Purchased Assets to Receivables Purchaser.

(g)

Name and Type and Jurisdiction of Organisation

Account Owner shall not change its name or its type or jurisdiction of organisation without previously having delivered to Receivables Purchaser an opinion of counsel to the effect that all actions have been taken, and all filings have been made (if any), as are necessary to continue and maintain the ownership interest of Receivables Purchaser in the Purchased Assets.

(h)

Account Owner’s Further Assistance

For a period of two years from the Closing Date, Account Owner will also cooperate with and provide reasonable assistance to Receivables Purchaser and its representatives in obtaining access to information to assist Receivables Purchaser in securitising the Purchased Assets (or any portion thereof) (a “ Securitisation ”) as Receivables Purchaser may reasonably request; provided, however, that Account Owner shall be compensated by Receivables Purchaser for reasonable out-of-pocket expenses and significant management time in connection with performing its obligations under this Clause 5.1(h); provided further, however, that the foregoing (1) shall not require Account Owner to permit any inspection, or to disclose any information, that would result in the disclosure of any confidential information or trade secrets of third parties, or confidential information or trade secrets of Account Owner or any Affiliate of Account Owner unrelated to the transactions contemplated by this Agreement or a Securitisation, or violate any obligations of Account Owner to any third party with respect to confidentiality if Account Owner shall have used its reasonable efforts to obtain the consent of such third party to such inspection or disclosure, (2) shall not require any disclosure by Account Owner that shall, as a result of such disclosure, have the effect of causing the waiver of any attorney-client privilege or (3) otherwise than as provided in Clause 5.1(a) (and subject to the limitations set forth in Clause 5.1(a)), in the case of any information provided by Account Owner for inclusion in any disclosure documents or otherwise in connection with a Securitisation, shall not result in the assumption (by contract, by law or otherwise) of any liability by Account Owner or any of its Affiliates or representatives in relation to such information or such documents. The parties agree that Account Owner shall have no obligation to prepare or provide any reports other than the reports currently

prepared by it in the ordinary course of business in accordance with the Policies and Procedures relating to the Accounts. Except as otherwise provided in this Agreement or the Related Agreements, Account Owner shall take no action after the Closing Date that would be inconsistent with or adversely affect the effective transfer by Account Owner to Receivables Purchaser hereunder of Account Owner’s entire right, title and interest in and to the Purchased Assets.

(i)

Securitisation

(i)

Account Owner shall deliver or cause to be delivered, for use by Receivables Purchaser in and in connection with the marketing, pricing or placement of any securities backed by the Purchased Assets (including, without limitation, any offering document relating thereto, including any exhibits, amendments, attachments or supplements thereto, and other materials to be delivered to investors in connection with a Securitisation (“ Securitisation Materials ”)), relevant and necessary historical information regarding the Accounts (other than sensitive or confidential information and trade secrets) that it may have that is not also available to the Servicer and related information regarding Account Owner, any of its Affiliates and Account Owner’s ultimate parent company, which Receivables Purchaser shows is reasonably necessary for such required purposes. Account Owner agrees that none of the information supplied or to be supplied by it for inclusion or incorporation into the Securitisation Materials will as of the date of the Securitisation Materials and as far as Account Owner is aware at such time, contain any untrue statement of material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not materially misleading, and Account Owner shall provide an appropriate officer’s certificate to that effect. Account Owner shall not be required to make any certification regarding the completeness of the information used in any Securitisation Materials and, in particular, Account Owner shall not make, other than as explicitly set forth in any Securitisation Materials provided by Account Owner, any certification or representation regarding the credit quality, targeting, underwriting or credit criteria or the future performance of the Accounts or the Receivables. Account Owner’s obligations hereunder shall be subject to (1) its right to review and approve in advance the use of all information provided by it pursuant to this Clause or otherwise in any Securitisation Materials and (2) its right to require the inclusion of such additional information regarding Account Owner or the Purchased Assets in any Securitisation Materials that it reasonably believes appropriate. Any Securitisation Materials proposed to be used by Receivables Purchaser shall be presented to Account Owner no less than five (5) Business Days prior to the proposed first use thereof by Receivables Purchaser, so as to allow Account Owner to review and approve such materials.

(ii)

Receivables Purchaser hereby acknowledges and agrees that no issuance of any securities under the Securitistion will be made by any public or registered offering, and all offers and sales of such securities shall be pursuant to transactions exempt from the registration

requirements of the Securities Act of 1933, as amended, the Securities Exchange Act of 1934 and the Trust Indenture Act of 1939, as amended.

(iii)

Account Owner shall have no liability or obligation under or in connection with a Securitisation except (A) with respect to any information provided by it under Clause 5.1(i) and (B) with respect to the other liabilities and obligations to be undertaken by Account Owner pursuant to this Agreement and the Related Agreements.

6.	TERM AND PURCHASE TERMINATION

6.1

Term

This Agreement shall commence as of the date of execution and delivery hereof and shall continue until (i) the termination of the Account Ownership Agreement, (ii) mutual agreement of the parties hereto, or (iii) upon ninety (90) days written notice to the other Party upon the occurrence of a Change In Law or a change in the requirements of the Credit System in respect of which the parties are unable to agree a mutually satisfactory alternate approach (or such shorter notice period as required by such Change In Law or such change in the requirements of the Credit Card System) that the performance of the Party giving such termination notice is or has been materially and adversely affected by a Change in Law or a change in the requirements of the Credit Card System in respect of which the parties are unable to agree a mutually satisfactory alternate approach.

6.2	Purchase Termination

Upon the occurrence of a Dissolution Event, Account Owner shall immediately cease to transfer Principal Receivables to Receivables Purchaser and shall promptly give notice to Receivables Purchaser of such Dissolution Event. Notwithstanding any cessation of the transfer to Receivables Purchaser of additional Principal Receivables, Principal Receivables transferred to Receivables Purchaser prior to the occurrence of such Dissolution Event, Collections in respect of such Principal Receivables, Finance Charge Receivables, whenever created, accrued in respect of such Principal Receivables, and Collections in respect of such Finance Charge Receivables shall continue to be property of Receivables Purchaser.

7.	REPURCHASE OBLIGATION

7.1	Reassignment of Receivables

(a)

In the event any warranty under Clause 4.2(a) is not true and correct in any material respect as of the date specified therein with respect to any Receivable or the related Account, Account Owner at the request of Receivables Purchaser shall accept reassignment of such Receivables on the terms and conditions set forth in Clause 7.1(b).

(b)

Account Owner shall accept reassignment from Receivables Purchaser of all Receivables in any Account in which any Receivables described in Clause 7.1(a) are outstanding, and shall pay for such reassigned Receivables by paying to Receivables Purchaser in immediately available funds prior to the

fifth (5th) succeeding Business Day, an amount equal to the unpaid principal balance of such Receivables plus an amount equal to the product of (i) such Receivables, multiplied by (ii) the weighted average LIBOR Rate for such period, divided by (iii) 365, multiplied by the number of days during the period from the date such Receivables were created to the date such Receivables were reassigned. Upon reassignment of such Receivables, Receivables Purchaser shall automatically and without further action sell, transfer, assign, set-over and otherwise convey to Account Owner, without recourse, representation or warranty, all the right, title and interest of Receivables Purchaser in and to such Receivables, all monies due or to become due and all amounts received or receivable with respect thereto, all Collections with respect thereto, and all proceeds thereof. Receivables Purchaser shall execute such documents and instruments of transfer or assignment and take such other actions as shall reasonably be requested by Account Owner to effect the transfer of such Receivables and other property pursuant to this Clause.

8.	MISCELLANEOUS PROVISIONS

8.1

Amendment

This Agreement and the rights and obligations of the parties hereunder may not be changed orally, but only by an instrument in writing signed by Account Owner and Receivables Purchaser in accordance with this Clause 8.1. This Agreement and any Transfer Instruments may be amended from time to time by Account Owner and Receivables Purchaser (i) to cure any ambiguity, (ii) to correct or supplement any provisions herein which may be inconsistent with any other provisions herein or in any such other Transfer Instruments, (iii) to add any other provisions with respect to matters or questions arising under this Agreement or any Transfer Instruments which shall not be inconsistent with the provisions of this Agreement or any Transfer Instruments, (iv) to change or modify the Purchase Price and (v) to change, modify, delete or add any other obligation of Receivables Purchaser or Account Owner.

8.2

Liability

If either party becomes aware of a matter that could give rise to a claim under this Agreement, such party shall notify the other party as soon as reasonably practicable and in any event within thirty (30) days of a responsible officer of such party becoming actually aware of the facts giving rise to such claim (such notice to contain reasonable particulars of such facts and the amount of such claim).

Without prejudice to any duty it may have at common law or otherwise, each party shall use reasonable endeavours to mitigate any loss or damage which it may suffer in consequence of any breach by the other party of the warranties or provisions of this Agreement.

Account Owner shall have no liability in respect of any claim made by Receivables Purchaser for breach of any of the warranties or other provisions of this Agreement in relation to any fact omission circumstance or occurrence which occurs, arises or comes to the attention of Account Owner after the date of this Agreement but before the Assignment Date and which occurs or arises due to circumstances beyond the reasonable control of Account Owner.

Neither party shall be liable to the other party for loss of future contracts or opportunity or any harm to the goodwill or reputation of the other party or indirect or consequential loss or damage, in each case, whether arising from tort, including negligence, breach of contract, under any indemnity under this Agreement, or at law or otherwise.

Subject to the provisions of Clause 6.1, neither party shall be entitled to rescind this Agreement after the Closing Date in any circumstances.

Notwithstanding any other provision of this Agreement, in calculating the liability of the Account Owner under this Agreement for a breach of a warranty claim, the losses suffered by the Receivables Purchaser shall be assessed on the basis that the amount of such losses are deemed to be the same amount as that which the Receivables Purchaser would have suffered had it not taken any action to securitise any of the Purchased Assets but had retained the entire legal and beneficial interest.

8.3	Governing Law

This Agreement shall be governed by and construed in accordance with the laws of England and Wales.

8.4	Submission

For the benefit of Account Owner Receivables Purchaser agrees that the courts of England have jurisdiction to settle any disputes in connection with this Agreement and accordingly submits to the jurisdiction of the English courts.

8.5	Service of Process

Without prejudice to any other mode of service Receivables Purchaser:

(i)

irrevocably appoints CompuCredit UK as its agent for service of process in relation to any proceedings before the English courts in connection with this Agreement;

(ii)

agrees to maintain such an agent for service of process in England during the term of this Agreement;

(iii)

agrees that failure by a process agent to notify Receivables Purchaser of the process will not invalidate the proceedings concerned;

(iv)

consents to the service of process relating to any such proceedings by prepaid posting of a copy of the process to its address for the time being applying under this Agreement; and

(v)

agrees that if the appointment of any person mentioned in above ceases to be effective, Receivables Purchaser shall immediately appoint a further person in England to accept service of process on its behalf in England and, failing such appointment within five (5) days, Account Owner is entitled to appoint such a person by notice to Receivables Purchaser.

8.6	Forum Convenience and Enforcement Abroad

Receivables Purchaser:

(i)

waives objection to the English courts on grounds of inconvenient forum or otherwise as regards proceedings in connection with this Agreement; and

(ii)

agrees that a judgment or order of an English court in connection with this Agreement is conclusive and binding on it and may be enforced against it in the courts of any other jurisdiction.

8.7

Notices

All demands, notices and communications hereunder shall be in writing and shall be deemed to have been duly given if personally delivered at or mailed or sent by telecopy, to (a) in the case of Receivables Purchaser, CompuCredit International Acquisition Corp., 3993 Howard Hughes Parkway, Suite 250, Office 269, Las Vegas, NV 98169, Attention: Joshua Miller, Facsimile: 1-702-598-3651 and (b) in the case of Account Owner, R Raphael & Sons Plc, Walton Lodge, Walton Street, Aylesbury, Buckinghamshire HP21 7QY, Attention: Tony Pooley, Facsimile: 44 01 296 423 041 (and a courtesy copy to Clintons, 55 Drury Lane, London WC2B 5RZ, Attention: TAF).

8.8	Severability of Provisions

8.9	Assignment

Notwithstanding anything to the contrary contained herein, other than any assignment of all or any portion of Receivables Purchaser’s right, title, and interest in, to, and under this Agreement pursuant to a Securitisation, this Agreement may not be assigned by the parties hereto; provided, however, that Receivables Purchaser shall, with the prior written consent of Account Owner, which consent shall not be unreasonably withheld, have the right to assign its right, title and interest in, to and under this Agreement to any successor by merger assuming this Agreement.

8.10	Acknowledgement and Agreement of Account Owner

Account Owner expressly acknowledges and agrees that all or any portion of Receivables Purchaser’s right, title, and interest in, to, and under this Agreement, including, without limitation, all or any portion of Receivables Purchaser’s right, title, and interest in and to the Receivables purchased pursuant to this Agreement, may be assigned by Receivables Purchaser to Funding for purposes of a securitisation, and a security interest therein may be granted to Funding or the Indenture Trustee for the benefit of noteholders and series enhancers, and Account Owner consents to such

assignments and security interests. Account Owner further agrees that notwithstanding any claim, counterclaim, right of setoff or defense which it may have against Receivables Purchaser, due to a breach by Receivables Purchaser of this Agreement or for any other reason, and notwithstanding the bankruptcy of Receivables Purchaser or any other event whatsoever, in no event shall Account Owner assert any claim on or any interest in the Purchased Assets or any proceeds thereof or take any action which would reduce or delay receipt by Funding or the Indenture Trustee of collections with respect to the Purchased Assets.

8.11	Further Assurances

Account Owner and Receivables Purchaser agree to do and perform, from time to time, any and all acts and to execute any and all further instruments required or reasonably requested by the other party, the Credit Card System or the Indenture Trustee more fully to effect the purposes of this Agreement, including, without limitation, the authorisation or execution of any notices or amendments thereto or equivalent documents relating to the Purchased Assets.

8.12	No Waiver; Cumulative Remedies

No failure to exercise and no delay in exercising, on the part of Account Owner or Receivables Purchaser, any right, remedy, power or privilege hereunder, shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exhaustive of any rights, remedies, powers and privileges provided by law.

8.13	Counterparts

8.14	Binding; Third-Party Beneficiaries

This Agreement will inure to the benefit of and be binding upon the parties hereto and their respective successors and permitted assigns. The parties to this Agreement do not intend that any other person shall have the right to enforce any term of the Agreement by virtue of the Contracts (Rights of Third Parties) Act 1999.

8.15	Merger and Integration

Except as specifically stated otherwise herein, this Agreement and the Transfer Instruments sets forth the entire understanding of the parties relating to the subject matter hereof, and all prior understandings, written or oral, are superseded by this Agreement and the Transfer Instruments. This Agreement may not be modified, amended, waived or supplemented except as provided herein.

8.16

Headings

The headings are for purposes of reference only and shall not otherwise affect the meaning or interpretation of any provision hereof.

8.17	Survival of Representations and Warranties

All representations, warranties and agreements contained in this Agreement shall remain operative and in full force and effect and shall survive assignment of the Receivables by Account Owner to Receivables Purchaser.

IN WITNESS WHEREOF, Receivables Purchaser and Account Owner have caused this Receivables Purchase Agreement to be duly executed by their respective officers as of the date first above written.


COMPUCREDIT INTERNATIONAL ACQUISITION CORP

By:		/s/ Joshua C. Miller
Name:		Joshua C. Miller
Title:		Assistant Secretary

R RAPHAEL & SONS PLC

By:		/s/ Firoz Tejani
Name:		Firoz Tejani
Title:		Director

Exhibit 10.4

EXECUTION COPY

RECEIVABLES PURCHASE AGREEMENT

Dated as of April 4, 2007

between

COMPUCREDIT INTERNATIONAL ACQUISITION CORPORATION

and

PARTRIDGE FUNDING CORPORATION


	ARTICLE I DEFINITIONS

Section 1.01.	Definitions	2
Section 1.02.	Other Definitional Provisions	9
Section 1.03.	Incorporation By Reference	9

	ARTICLE II PURCHASE AND CONVEYANCE OF RECEIVABLES

Section 2.01.	Purchase	10

	ARTICLE III CONSIDERATION AND PAYMENT

Section 3.01.	Purchase Price	11
Section 3.02.	Adjustments to Purchase Price	11
Section 3.03.	Payments to the Accounts Owner	13

	ARTICLE IV REPRESENTATIONS AND WARRANTIES

Section 4.01.	Representations and Warranties of Seller	14
Section 4.02.	Representations and Warranties of Seller Relating to the Agreement and the Receivables	15
Section 4.03.	Representations and Warranties of Purchaser	16

	ARTICLE V COVENANTS

Section 5.01.	Covenants of Seller	18
Section 5.02.	Covenants of Seller with Respect to each Partridge Receivables Purchase Agreements and the Sale and Purchase Agreement	19
Section 5.03.	Personal Data	19

	ARTICLE VI REPURCHASE OBLIGATION

Section 6.01.	Seller’s Repurchase Obligations	20
Section 6.02.	Repurchase Price	20
Section 6.03.	Reassignment of Noteholders’ Interest in Trust Portfolio	20

	ARTICLE VII TERM AND PURCHASE TERMINATION

Section 7.01.	Term	22
Section 7.02.	Purchase Termination	22

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	ARTICLE VIII MISCELLANEOUS PROVISIONS

Section 8.01.	Amendment	23
Section 8.02.	Governing Law	23
Section 8.03.	Notices	23
Section 8.04.	Severability of Provisions	23
Section 8.05.	Assignment	24
Section 8.06.	Acknowledgement and Agreement of Seller	24
Section 8.07.	Further Assurances	24
Section 8.08.	No Waiver; Cumulative Remedies	24
Section 8.09.	Counterparts	24
Section 8.10.	Binding; Third-Party Beneficiaries	24
Section 8.11.	Merger and Integration	25
Section 8.12.	Headings	25
Section 8.13.	Schedules and Exhibits	25
Section 8.14.	Survival of Representations and Warranties	25
Section 8.15.	Nonpetition Covenant	25

-ii-

RECEIVABLES PURCHASE AGREEMENT, dated as of April 4, 2007, by and between CompuCredit International Acquisition Corporation, a corporation organized and existing under the laws of the State of Nevada (together with its permitted successors and assigns, “ Seller ”) and Partridge Funding Corporation, a corporation organized and existing under the laws of the State of Nevada (together with its permitted successors and assigns, “ Purchaser ”).

W I T N E S S E T H:

WHEREAS, under the terms of an Agreement Relating to the Sale and Purchase of Partridge Business (as amended, amended and restated, supplemented or otherwise modified from time to time in accordance with the terms thereof, the “ Sale and Purchase Agreement ”), dated as of April 4, 2007, among Barclays Bank PLC, a company incorporated in England and Wales (“ Barclays Bank ”), CompuCredit UK Limited, a company incorporated in England and Wales (“ CompuCredit UK ”), CompuCredit Services Corp., a Nevada corporation, and Seller, Barclays will sell, among other items, certain credit card accounts and receivables to Seller’s designee, R. Raphael & Sons PLC, a company incorporated in England and Wales (“ Raphaels Bank ”);

WHEREAS, under the terms of a Receivables Purchase Agreement (as amended, amended and restated, supplemented or otherwise modified from time to time in accordance with the terms thereof, the “ RB Receivables Purchase Agreement ”), dated as of April 4, 2007, between Raphaels Bank and Seller, Raphaels Bank will sell and Seller will purchase from time to time certain Receivables (hereinafter defined) arising under the Accounts (hereinafter defined) existing at the Cut-Off Time (hereinafter defined) and thereafter created;

WHEREAS, Purchaser desires to purchase from the Seller, from time to time, certain Receivables arising under the Accounts existing at the Cut-Off Time and thereafter created;

WHEREAS, Seller desires to sell and assign from time to time Receivables to Purchaser upon the terms and conditions hereinafter set forth;

WHEREAS, it is contemplated that the Receivables purchased hereunder will be transferred by Purchaser to the Issuer and a security interest therein will be granted by the Issuer to the Indenture Trustee (hereinafter defined) in connection with the issuance of certain notes; and

WHEREAS, Seller agrees that all representations, warranties, covenants and agreements made by Seller herein with respect to the Accounts and Receivables shall also be for the benefit of the Issuer and the Indenture Trustee for the benefit of the holders of the Notes and any Series Enhancers.

NOW, THEREFORE, it is hereby agreed by and between Purchaser and Seller as follows:

ARTICLE I

DEFINITIONS

Section 1.01. Definitions . All capitalized terms used herein and not defined herein shall have the meaning ascribed thereto in the Indenture, the Trust Agreement or the Transfer and Servicing Agreement; in addition, the following words and phrases shall have the following meanings:

“ Account ” shall mean each VISA ^® ¹ consumer revolving credit card account conveyed by Barclays to Raphaels Bank pursuant to the Sale and Purchase Agreement and identified by name and account number on the Account Schedule, including Related Accounts and Transferred Accounts.

“ Account Owner ” shall mean (i) prior to the Conversion Date, Barclays Bank and (ii) on and after the Conversion Date, Raphaels Bank or any other entity which is the owner or issuer of the credit card relating to an Account pursuant to a Credit Card Agreement.

“ Account Ownership Agreement ” shall mean the Account Ownership Agreement dated as of April 4, 2007 between Raphaels Bank, CIAC and the Seller.

“ Account Schedule ” shall mean a computer file or microfiche list containing a true and complete list of all Accounts delivered to Purchaser by Seller on or prior to the Closing Date.

“ Agreement ” shall mean this Receivables Purchase Agreement, as it may be amended, amended and restated, supplemented, or otherwise modified from time to time.

“ Barclays Bank ” shall have the meaning set forth in the Recitals hereto.

“ Cash Advance Fees ” shall have the meaning set forth in the Credit Card Agreement applicable to each Account for cash advance fees or similar terms if such fees are provided for with respect to such Account.

“ Charged-Off Accounts ” shall mean the Accounts that are identified by name and account number on the Account Schedule as having been charged-off by Barclays Bank in accordance with its applicable policy as of the Cut-Off Time.

“ CIAC ” shall mean CompuCredit International Acquisition Corporation, a Nevada Corporation.

“ Closing Date ” shall mean April 4, 2007.

“ Closing Purchase Price ” shall have the meaning set forth in subsection 3.01(a) .

“ Collections ” shall mean, to the extent transferred to Seller pursuant to a Partridge Receivables Purchase Agreement, all payments by or on behalf of Obligors received in respect of

¹	VISA ^® is a registered trademark of VISA U.S.A., Inc.

the Receivables, in the form of cash, checks, SWIFT payments, wire transfers, direct debits, bank giro credits, electronic transfers, ATM transfers or any other form of payment and all other amounts specified by this Agreement as constituting Collections, including Interchange, Insurance Proceeds, and Recoveries with respect to the Receivables.

“ CompuCredit UK ” shall have the meaning set forth in the Recitals hereto.

“ Conversion Date” shall mean the date on which Seller provides notice to Purchaser that Raphaels Bank has issued replacement Credit Cards to all Obligors bearing the name of Raphaels Bank in place of the existing Credit Cards bearing the name of Barclays Bank.

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

“ Conveyance Papers ” shall have the meaning set forth in subsection 4.01(a)(iii) .

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

“ Credit Adjustment ” shall have the meaning set forth in Section 3.02(c) .

“ Credit Card ” shall mean the plastic VISA credit card issued by the Account Owner to each Obligor pursuant to the relevant Credit Card Agreement.

“ Credit Card Agreement ” shall mean, with respect to a revolving credit card account, the agreements between the Account Owner and the Obligor governing the terms and conditions of such account, as such agreements or statements may be amended, modified or otherwise changed from time to time and as distributed (including any amendments and revisions thereto) to holders of such Account.

“ Credit Card Guidelines ” shall mean the respective policies and procedures of the Servicer or the Account Owner as such policies and procedures relate to the Accounts and as such may be amended from time to time, (a) relating to the operation of its credit card business, which generally are applicable to its portfolio of revolving credit card accounts or, in the case of an Account Owner that has only a portion of its portfolio subject to a Partridge Receivables Purchase Agreement, applicable to such portion of its portfolio, and in each case which are consistent with prudent practice, including the policies and procedures for determining the creditworthiness of credit card customers and the extension of credit to credit card customers, and (b) relating to the maintenance of credit card accounts and collection of credit card receivables.

“ Cut-Off Time ” shall mean 11:59 p.m. London time on April 3, 2007.

“ Debtor Relief Laws ” shall mean (i) the United States Bankruptcy Code and (ii) all other applicable liquidation, conservatorship, bankruptcy, moratorium, arrangement, receivership, insolvency, reorganization, suspension of payments, adjustment of debt, marshalling of assets or similar debtor relief laws of the United States, any state or any foreign country from time to time in effect affecting the rights of creditors generally.

“ Declaration of Trust ” shall mean the declaration of trust, dated the date hereof, made by Barclays Bank in respect of the Receivables and the other Purchased Assets in favor of Raphaels Bank as CIAC’s designee.

“ Eligible Account ” shall mean a VISA consumer revolving credit card account which, as of the Cut-Off Time, has the following characteristics:

(a) is in existence, owned and maintained by the Account Owner;

(b) is not a Charged-Off Account; and

“ Eligible Receivable ” shall mean each Receivable:

(a) which has arisen in an Eligible Account;

(b) which was created in compliance in all material respects with all Requirements of Law applicable to the institution which owned such Receivable at the time of its creation and pursuant to a Credit Card Agreement which complies in all material respects with all Requirements of Law;

(c) with respect to which all material consents, licenses, approvals or authorizations of, or registrations or declarations in respect of the Financial Services and Markets Act 2000, the Consumer Credit Act 1974 and the Data Protection Act 1998 or with any Governmental Authority required to be obtained, effected or given in connection with the creation of such Receivable or the execution, delivery and performance by the Account Owner of its obligations, if any, under the related Credit Card Agreement pursuant to which such Receivable was created, have been duly obtained, effected or given and are in full force and effect;

(d) as to which, at the time of the transfer of such Receivable to Purchaser, Seller has good and marketable title thereto free and clear of all Encumbrances;

(e) which, at the time of the transfer of such Receivable to Purchaser, is the legal, valid and binding payment obligation of the Obligor thereon enforceable against such Obligor in accordance with its terms, except as such enforceability may be limited by applicable Debtor Relief Laws and except as such enforceability may be limited by general principles of equity (whether considered in a proceeding at law or in equity);

(f) which, at the time of transfer to Purchaser, has not been waived or modified except as permitted in accordance with the Credit Card Guidelines and which waiver or modification is reflected in the Account Owner’s or Servicer’s computer file of revolving credit card accounts or, with respect to terms other than pricing terms, otherwise on its books and records;

(g) which, at the time of transfer to Purchaser, is not subject to any right of rescission, setoff, counterclaim or any other defense (including defenses arising out of violations of usury laws) of the Obligor, other than defenses arising out of applicable Debtor Relief Laws and except as such enforceability may be limited by general principles of equity (whether considered in a proceeding at law or equity);

(h) as to which, at the time of transfer to Purchaser, Seller has satisfied all of its obligations under the applicable Credit Card Agreement to the applicable Obligor required to be satisfied by such time; and

(i) as to which, at the time of transfer to Purchaser, Seller has not taken any action which would impair, or omitted to take any action the omission of which would impair, the rights of Purchaser in such Receivable.

“ Excluded Account ” shall mean a credit card account which, as of the Cut-Off Time, has one or more of the following characteristics:

(a) is the subject of a dispute as to the validity, enforceability or existence of the account, or the underlying Credit Card Agreement, which dispute has either been notified to Account Owner in writing or is recorded in the Account Owner’s records as of the Cut-Off Time;

(d) is subject to litigation, other than credit card accounts that are in litigation solely as a result of legal collection initiated by the Account Owner;

(e) does not have an address located in the United Kingdom;

(f) in respect of which the first payment has become due and payable and the Obligor has never made a payment;

(g) has been re-aged other than in accordance with the Policies and Procedures (but excluding any accounts which have been re-aged incorrectly as a result of a conversion as disclosed to Seller by Barclays Bank) and the aggregate amount of outstanding Receivables related thereto as of the Cut-Off Time exceed £125,000;

(h) any test accounts opened or maintained by the Account Owner with respect to the VISA system for verification or other internal purposes;

(i) the Obligor in respect of which has pledged assets or made a cash collateral deposit as full or partial security for payment of Receivables outstanding as of the Cut-Off Time, which assets or deposits are held by the Account Owner as of the Closing Date;

(j) the Obligor in respect of which is dead or has had an individual voluntary arrangement approved by the Account Owner on or before the Cut-Off Time;

(k) has been originated by fraud or fraudulent action on or before the Cut-Off Time;

(l) is not identified on the Account Schedule as a “B” account or as a “C” account; or

(m) the Obligor in respect of which has been declared bankrupt.

“ Finance Charge Receivables ” shall mean, to the extent transferred to Seller pursuant to a Partridge Receivables Purchase Agreement, all Receivables that constitute (i) Periodic Rate Finance Charges, (ii) Cash Advance Fees, (iii) annual membership fees and annual service charges, (iv) Late Fees and (v) Overlimit Fees.

“ Governmental Authority ” shall mean any governmental, regulatory or self-regulatory entity, in the United Kingdom or in the United States of America, or any state thereof or any other foreign governmental state or other political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government.

“ Indenture ” shall mean the Master Indenture, dated as of April 4, 2007, among the Issuer, the Indenture Trustee and CIAC as Servicer, as modified or supplemented by any indenture supplement thereto.

“ Indenture Trustee ” shall mean Deutsche Bank Trust Company Americas in its capacity as indenture trustee under the Indenture, or its successor in interest, or any successor indenture trustee appointed as provided in the Indenture.

“ Insolvency Event ” shall have the meaning set forth in Section 7.02 .

“ Insurance Proceeds ” shall mean, to the extent transferred to Seller pursuant to a Partridge Receivables Purchase Agreement, any amounts received pursuant to any credit insurance policies covering any Obligor with respect to Receivables under such Obligor’s Account.

“ Interchange ” shall mean, to the extent transferred to Seller pursuant to a Partridge Receivables Purchase Agreement, all interchange fees payable to the Account Owner (net of any interchange fees paid by such Account Owner), in its capacity as credit card issuer, through VISA in connection with cardholder charges for goods or services with respect to the Accounts.

“ Issuer ” shall mean Partridge Acquired Portfolio Business Trust, a Nevada business trust.

“ Late Fees ” shall have the meaning set forth in the Credit Card Agreement applicable to each Account for late fees or similar terms if such fees are provided for with respect to such Account.

“ Obligor ” shall mean, with respect to any Account, the Person or Persons obligated to make payments with respect to such Account, including any guarantor thereof, but excluding any merchant.

“ Operating Regulations ” shall mean the by-laws, rules and regulations of Visa.

“ Overlimit Fees ” shall have the meaning set forth in the Credit Card Agreement applicable to each Account for overlimit fees or similar terms if such fees are provided for with respect to such Account.

“ Owner Trustee ” shall mean Wilmington Trust FSB, a federal savings bank, not in its individual capacity but solely as Owner Trustee under the Trust Agreement (unless otherwise specified therein), and any successor Owner Trustee thereunder.

“ Partridge Receivables Purchase Agreement ” shall mean the RB Receivables Purchase Agreement and any receivables purchase agreement, substantially in the form of such agreement, entered into between Seller and an Account Owner in the future.

“ Periodic Rate Finance Charges ” shall have the meaning set forth in the Credit Card Agreement applicable to each Account for finance charges (due to periodic rate) or any similar term.

“ Person ” shall mean any person or entity, 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, whether or not a legal entity.

“ Personal Data ” shall have the meaning given to that term in the United Kingdom Data Protection Act 1998, as amended. Personal Data shall not include the Account numbers of the Obligors.

“ Principal Receivables ” shall mean, to the extent transferred to Seller pursuant to a Partridge Receivables Purchase Agreement, all Receivables other than Finance Charge Receivables.

“ Purchase Price ” shall have the meaning set forth in subsection 3.01(a) .

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

“ Purchase Price Adjustment ” shall have the meaning set forth in subsection 3.02(a) .

“ Purchaser ” shall have the meaning set forth in the Preamble hereto.

“ Raphaels Bank ” shall have the meaning set forth in the Recitals hereto.

“ RB Receivables Purchase Agreement ” shall mean the Receivables Purchase Agreement between Raphaels Bank and Seller, dated as of April 4, 2007, as it may be further amended, amended and restated, supplemented, or otherwise modified from time to time.

“ Receivable ” shall mean any amount owing by the Obligor under an Account from time to time to the extent, but only to the extent, that such amount owing has been conveyed to Seller pursuant to a Partridge Receivables Purchase Agreement.

“ Recoveries ” shall mean, to the extent transferred to Seller pursuant to a Partridge Receivables Purchase Agreement, all amounts received with respect to Receivables which have been previously charged off.

“ Related Account ” shall mean an Account with respect to which a new credit account number has been issued by the Account Owner or Servicer under circumstances resulting from an error or a lost or stolen credit card not requiring standard application and credit evaluation procedures under the Credit Card Guidelines, provided that such Related Account can be traced or identified, by reference to or by way of an Account Schedule, as an Account into which an Account has been transferred.

“ Related Agreements ” shall mean the Sale and Purchase Agreement, the Account Ownership Agreement, each Partridge Receivables Purchase Agreement, the Trust Agreement, the Indenture and the Transfer and Servicing Agreement.

“ Repurchase Price ” shall have the meaning set forth in Section 6.02 .

“ Requirements of Law ” shall mean, with respect to any Person, the Operating Regulations and the requirements of any national, supra-national or local law, statute, rule or regulation or judicial, governmental, or administrative order, decree or ruling or any provision of any organizational, corporate, constitutional or governing documents, applicable to the Seller or the Accounts or the Account Owner in relation to the credit card business conducted pursuant to the Account Ownership Agreement or the actions of any party to this Agreement in the performance of its respective obligations hereunder or under any Related Agreements.

“ Sale and Purchase Agreement ” shall have the meaning set forth in the Recitals hereto.

“ Seller ” shall have the meaning set forth in the Preamble hereto.

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

“ Signing Statement ” shall mean a statement reflecting the net daily cash settlements of cash receipts and cash disbursements with regard to the Accounts for the period between the Valuation Date and the Closing Date to be delivered by Seller to Purchaser within twenty (20) Business Days following the Closing Date.

“ Transfer and Servicing Agreement ” shall mean the Transfer and Servicing Agreement, dated as of April 4, 2007, among CIAC, as Servicer, Purchaser, as Transferor, the Issuer and the Indenture Trustee.

“ Transferred Account ” shall mean each account (other than a Related Account) into which an Account shall be transferred, provided that such transfer was made in accordance with the Credit Card Guidelines, and further provided that such Transferred Account can be traced or identified, by reference to or by way of an Account Schedule, as an Account into which an Account has been transferred.

“ Trust Agreement ” shall mean the Partridge Acquired Portfolio Master Business Amended and Restated Trust Agreement, dated as of April 4, 2007, between Purchaser and Wilmington Trust FSB.

“ Valuation Date ” shall mean 11:59 p.m. London time on February 28, 2007.

“ UCC ” shall mean the Uniform Commercial Code as in effect in the applicable jurisdiction.

“ VISA ” shall mean Visa International Services Association, Visa Europe Limited and any other Visa entity, as appropriate, and their successors in interest.

Section 1.02. Other Definitional Provisions .

(a) All terms defined in this Agreement shall have the defined meanings when used in any certificate, other document, or Conveyance Paper made or delivered pursuant hereto unless otherwise defined therein.

(b) The words “ hereof ,” “ herein ” and “ hereunder ” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement; and Section, subsection, Schedule and Exhibit references contained in this Agreement are references to Sections, subsections, Schedules and Exhibits in or to this Agreement unless otherwise specified.

(c) Terms used herein that are defined in the New York UCC and not otherwise defined shall have the meanings set forth in the New York UCC unless the context requires otherwise.

Section 1.03. Incorporation By Reference .

Each reference herein to the Sale and Purchase Agreement, the Account Ownership Agreement, the RB Receivables Purchase Agreement, the Trust Agreement, the Indenture, the Transfer and Servicing Agreement, or any other Related Agreement, refers to such agreement as in effect on the Closing Date unless otherwise agreed to by Seller and Purchaser.

[END OF ARTICLE I]

ARTICLE II

PURCHASE AND CONVEYANCE OF RECEIVABLES

Section 2.01. Purchase .

(a) In consideration of the payment of the Purchase Price as provided herein, Seller does hereby sell, transfer, assign, set over and otherwise convey to Purchaser (collectively, the “ Conveyance ”), without recourse except as provided herein, all its right, title and interest in, to and under, whether now owned or hereafter acquired, all Receivables existing as of the Cut-Off Time arising in the Accounts (including Transferred Accounts and Related Accounts related to such Accounts), and thereafter created from time to time in such Accounts, all monies due or to become due and all amounts received or receivable with respect thereto, all Collections with respect to such Receivables, the trust over the foregoing created by Barclays Bank in favor of Raphaels Bank pursuant to the Declaration of Trust, each Partridge Receivables Purchase Agreement, the Sale and Purchase Agreement and all documents executed from time to time in connection therewith (all of the foregoing being the “ Purchased Assets ”).

(b) The Receivables existing in the Accounts as of the Cut-Off Time and thereafter arising in the Accounts on or prior to the Closing Date, and the related Purchased Assets, shall be and hereby are sold by Seller and purchased by Purchaser on the Closing Date. Receivables arising in the Accounts after the Closing Date and the related Purchased Assets shall be and hereby are sold by Seller and purchased by Purchaser on the date such Receivables arise.

(c) Seller shall record and file, at its own expense, any financing statements (and amendments with respect to such financing statements when applicable) with respect to the Purchased Assets meeting the requirements of applicable law in such manner and in such jurisdictions as are necessary to perfect, and maintain the perfection of, the Conveyance of such Purchased Assets from Seller to Purchaser.

(d) Seller shall, at its own expense, (i) on or prior to the Closing Date, indicate in its books and records that the Purchased Assets have been conveyed to Purchaser in accordance with this Agreement and (ii) on or prior to the Closing Date, deliver to Purchaser an Account Schedule. Such Account Schedule, as supplemented from time to time, shall be delivered to Purchaser. Once the books and records referenced in clause (i) of this paragraph have been indicated with respect to any Purchased Asset, Seller further agrees not to alter such indication during the remaining term of this Agreement unless and until Seller has taken such action as is necessary or advisable to cause the interest of Purchaser in the Purchased Assets to continue to be perfected and of first priority.

(e) The parties hereto intend that the conveyance of the Purchased Assets by Seller to Purchaser shall constitute an absolute sale, conveying good title, free and clear of any Encumbrances, from Seller to Purchaser. In the event, however, that it were to be determined that the transactions evidenced hereby constitute a loan and not a purchase and sale, this Agreement shall constitute a security agreement under applicable law, and Seller hereby grants to Purchaser a first priority perfected security interest in all of Seller’s right, title and interest, whether now owned or hereafter acquired, in, to and under the Purchased Assets and the proceeds thereof to secure the obligations of Seller hereunder.

[END OF ARTICLE II]

ARTICLE III

CONSIDERATION AND PAYMENT

Section 3.01. Purchase Price .

(a) The “ Closing Purchase Price ” for the Receivables and the related Purchased Assets conveyed to Purchaser under this Agreement on the Closing Date shall be payable on the Closing Date and shall be an amount equal to the sum of the amounts paid by Seller to purchase such Receivables pursuant to the Sale and Purchase Agreement. The “ Purchase Price ” for the Receivables and the related Purchased Assets to be conveyed to Purchaser under this Agreement after the Closing Date shall be an amount equal to 100% of the aggregate balance of the Principal Receivables so conveyed, adjusted to reflect such factors as Purchaser and Seller mutually agree will result in a Purchase Price determined to be the fair market value of such property. The Closing Purchase Price for the Receivables arising in the Accounts on or before the Closing Date and the related Purchased Assets shall be paid on the Closing Date, and the Purchase Price for all other Receivables and the related Purchased Assets, shall be payable on the Business Day following the day on which such Receivables and the related Purchased Assets are conveyed by Seller to Purchaser; provided , however , the Purchase Price for the Receivables arising in the Accounts after the Closing Date and on or before April 12, 2007 shall be payable as soon as Purchaser receives sufficient Collections to pay therefor but in any case by May 15, 2007. The Closing Purchase Price and the Purchase Price shall be paid in cash.

(b) Notwithstanding any other provision of this Agreement, Seller shall not be obligated to sell Receivables or other Purchased Assets to Purchaser to the extent that Seller is not paid the Closing Purchase Price or the Purchase Price therefor as provided herein.

Section 3.02. Adjustments to Purchase Price .

(a) Upon final determination of the Signing Statement, the Closing Purchase Price shall be adjusted to reflect net daily cash settlements of cash receipts and cash disbursements with regard to the Accounts for the period between the Valuation Date and the Closing Date as reflected on the Signing Statement. Seller shall pay Purchaser, or Purchaser shall pay Seller, as the case may be, the aggregate amount reflected on the Signing Statement as the adjustment to the Closing Purchase Price (the “ Purchase Price Adjustment ”). Such payment shall be remitted no later than the fifth (5 ^th ) Business Day after the Signing Statement has been agreed to by Seller and Purchaser to an account designated by the party to which payment is due.

(b) The Closing Purchase Price shall also be adjusted due to the occurrence of any of the following events:

(i) If the Account Owner is debited by VISA after the Cut-Off Time for a chargeback in respect of which the Account Owner provided an Obligor with a credit on an Account prior to the Cut-Off Time and such debit has not been included in the Closing Purchase Price or any Purchase Price Adjustment then Purchaser agrees to pay to Seller an amount equal to (a) 88%, in the case of an Account with a “B” designation on the Account Schedule and (b) 21.5%, in the case of an Account with a “C” designation on the Signing Statement, in each case multiplied by the amount of such debit by VISA.

(ii) If a check from a Obligor in payment of amounts owed on an Account, which was credited to such Account prior to the Cut-Off Time, is returned unpaid by the drawee after the Cut-Off Time and such return payment has not been included in the Closing Purchase Price or any Purchase Price Adjustment) then Purchaser agrees to pay to Seller an amount equal to (a) 88%, in the case of an Account with a “B” designation on the Signing Statement and (b) 21.5%, in the case of an Account with a “C” designation on the Signing Statement, in each case multiplied by the amount of such returned check.

(iii) If Purchaser, the Account Owner or the Servicer provides a credit on an Account pursuant to the Policies and Procedures or the policies and procedures of the Account Owner, as applicable, in compliance with all Requirements of Law, with respect to the use of an Account by a person other than the Obligor who did not have actual, implied or apparent authority for such use and from which the Obligor received no benefit prior to the Cut-Off Time, then Seller agrees to pay to Purchaser (a) 88%, in the case of an Account with a “B” designation on the Signing Statement and (b) 21.5%, in the case of an Account with a “C” designation on the Signing Statement, in each case multiplied by the amount of such credit, provided that if such credit is reversed then Purchaser agrees to repay to Seller the amount paid by Seller with respect to such credit.

(iv) If an amount received by the Account Owner prior to the Cut-Off Time and held in a suspense account at the Cut-Off Time is identified after the Cut-off Time as a payment which should have been posted to an Account, then Seller agrees to pay to Purchaser (a) 88%, in the case of an Account with a “B” designation on the Signing Statement and (b) 21.5%, in the case of an Account with a “C” designation on the Signing Statement, in each case multiplied by the amount of such credit.

Each of the amounts determined above may be netted together to result in either a net amount due to Seller or a net amount due to Purchaser. Any party with knowledge of any facts relating to any event described in this Section 3.2(b) shall provide, or cause to be provided, to the other party written notice and supporting documentation (to the extent available to such party) in a monthly request. Seller or Purchaser, as the case may be, shall, within five (5) Business Days after receipt of such monthly request, reimburse the other party, in immediately available funds, for the amount of said adjustment Notwithstanding the foregoing, the parties agree that this Section 3.2(b) shall be implemented fairly and equitably so as to avoid the double payment or failure to pay any amount which would result in the unjust enrichment of any party pursuant to the terms hereof.

(c) The Purchase Price shall be reduced on the second Business Day of each calendar month (a “ Credit Adjustment ”) with respect to any Receivable previously conveyed to Purchaser by Seller which has since been reduced by Seller or the Servicer because of a rebate, refund, unauthorized charge or billing error to an Obligor or because such Receivable was created in respect of merchandise which was refused or returned by an Obligor. The amount of such reduction shall equal the reduction in the balance of such Receivable resulting from the occurrence of such event. In the event that a reduction pursuant to this Section 3.02(d) causes the Purchase Price to be a negative number, Seller agrees that, not later than 11:00 a.m., New York City time, on such date, Seller shall pay to Purchaser cash in an amount equal to the amount by which the Credit Adjustment exceeds the unadjusted Purchase Price.

Section 3.03. Payments to the Accounts Owner . To the extent that an Account Owner has not been paid any amounts owed to it with respect to the purchase price of newly created Receivables under any Partridge Receivables Purchase Agreement, Seller hereby directs Purchaser to pay, or cause to be paid, the Purchase Price directly to the Account Owner in an amount equal to such unpaid purchase price.

[END OF ARTICLE III]

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

Section 4.01. Representations and Warranties of Seller .

(a) Representations and Warranties of Seller Relating to Seller . Seller hereby represents and warrants to, and agrees with, Purchaser as of the Closing Date that:

(i) Organization and Good Standing . Seller is a corporation duly organized and validly existing in good standing under the laws of the State of Nevada and has, in all material respects, full power and authority to own its properties and conduct its business as such properties are presently owned and such business is presently conducted, and to execute, deliver and perform its obligations under this Agreement.

(ii) Due Qualification . Seller is duly qualified to do business and is in good standing as a foreign corporation (or is exempt from such requirements) and has obtained all necessary licenses and approvals, in each jurisdiction in which failure to so qualify or to obtain such licenses and approvals would have a material adverse effect on Purchaser, the Issuer or the Noteholders.

(iii) Due Authorization . The execution, delivery and performance by Seller of this Agreement, the Sale and Purchase Agreement, each Partridge Receivables Purchase Agreement and any other document or instrument delivered pursuant hereto on the Closing Date (such other documents or instruments, collectively, the “ Conveyance Papers ”), and the consummation by Seller of the transactions provided for in this Agreement, the Sale and Purchase Agreement, each Partridge Receivables Purchase Agreement and such Conveyance Papers have been duly authorized by Seller by all necessary action on the part of Seller.

(iv) No Conflict . The execution and delivery of this Agreement, the Sale and Purchase Agreement, each Partridge Receivables Purchase Agreement and the Conveyance Papers by Seller, the performance by Seller of the transactions contemplated by this Agreement, the Sale and Purchase Agreement, each Partridge Receivables Purchase Agreement and the Conveyance Papers, and the fulfillment by Seller of the terms of this Agreement, the Sale and Purchase Agreement, each Partridge Receivables Purchase Agreement and the Conveyance Papers applicable to Seller will not conflict with, violate or result in any breach of any of the material terms and provisions of, or constitute (with or without notice or lapse of time or both) a material default under, any indenture, contract, agreement, mortgage, deed of trust, or other instrument to which Seller is a party or by which it or any of its properties are bound.

(v) No Violation . The execution, delivery and performance by Seller of this Agreement, the Sale and Purchase Agreement, each Partridge Receivables Purchase Agreement, and the Conveyance Papers and the fulfillment by Seller of the terms contemplated herein and therein applicable to Seller will not conflict with or violate any Requirements of Law applicable to Seller.

(vi) No Proceedings . There are no proceedings or investigations pending or, to the best knowledge of Seller, threatened, against Seller, before any Governmental Authority (A) asserting the invalidity of this Agreement, the Sale and Purchase Agreement, any Partridge Receivables Purchase Agreement or the Conveyance Papers, (B) seeking to prevent the consummation of any of the transactions contemplated by this Agreement, the Sale and Purchase Agreement, any Partridge Receivables Purchase Agreement or the Conveyance Papers, (C) seeking any determination or ruling that, in the reasonable judgment of Seller, would materially and adversely affect the performance by Seller of its obligations under this Agreement, the Sale and Purchase Agreement, any Partridge Receivables Purchase Agreement or the Conveyance Papers, or (D) seeking any determination or ruling that would materially and adversely affect the validity or enforceability of this Agreement, the Sale and Purchase Agreement, any Partridge Receivables Purchase Agreement or the Conveyance Papers.

(vii) All Consents . All authorizations, consents, orders or approvals of or registrations or declarations with any Governmental Authority required to be obtained, effected or given by Seller in connection with the execution and delivery by Seller of this Agreement, the Sale and Purchase Agreement, each Partridge Receivables Purchase Agreement and the Conveyance Papers and the performance by Seller of the transactions contemplated by this Agreement, the Sale and Purchase Agreement, each Partridge Receivables Purchase Agreement or the Conveyance Papers have been duly obtained, effected or given and are in full force and effect.

(viii) Insolvency . No Insolvency Event with respect to Seller has occurred and the transfer of the Purchased Assets has not been made in contemplation of the occurrence thereof.

(b) Notice of Breach . The representations and warranties set forth in subsection 4.01(a) shall survive the transfer and assignment of the Purchased Assets to Purchaser. Upon discovery by Seller or Purchaser of a breach of any of the representations and warranties set forth in subsection 4.01(a) , the party discovering such breach shall give written notice to the other party, the Issuer and the Indenture Trustee within three Business Days following such discovery; provided that the failure to give notice within three Business Days does not preclude subsequent notice.

Section 4.02. Representations and Warranties of Seller Relating to the Agreement and the Receivables .

(a) Representations and Warranties . Seller hereby represents and warrants to Purchaser as of the Closing Date (unless expressly stated otherwise) that:

(i) this Agreement constitutes a legal, valid and binding obligation of Seller enforceable against Seller in accordance with its terms, except as such enforceability may be limited by applicable Debtor Relief Laws or general principles of equity;

(ii) this Agreement constitutes a valid sale, transfer, assignment and conveyance to Purchaser of all right, title and interest of Seller in the Purchased Assets and such sale is perfected under the UCC;

(iii) each Receivable existing as of the Cut-Off Time is an Eligible Receivable and each Account existing as of the Cut-Off Time is an Eligible Account;

(iv) as of the date of transfer by Seller to Purchaser (after the Cut-Off Time) of any new Receivable, such Receivable is an Eligible Receivable;

(v) the Receivables constitute “accounts” or “payment intangibles” within the meaning of the applicable UCC;

(vi) Seller has caused or will have caused, within ten (10) days of the date of this Agreement, the filing of all appropriate financing statements in the proper filing office in the appropriate jurisdictions under applicable law in order to perfect the ownership interest of Purchaser in the Receivables described in Section 2.01; and

(vii) other than the ownership interest conveyed to Purchaser pursuant to this Agreement, Seller has not pledged, charged, assigned, sold, granted a security interest in, or otherwise conveyed any of the Receivables described in Section 2.01 . Seller has not authorized the filing of and is not aware of any financing statements against Seller that include a description of collateral covering such Receivables other than any financing statement (i) relating to the ownership interest conveyed to Purchaser hereunder, or (ii) that has been terminated.

(b) Notice of Breach . The representations and warranties set forth in subsection 4.02(a) shall survive the sale of the Purchased Assets to Purchaser. Upon discovery by either Seller or Purchaser of a breach of any of the representations and warranties set forth in subsection 4.02(a) , the party discovering such breach shall give written notice to the other party, the Issuer and the Indenture Trustee within three Business Days following such discovery; provided that the failure to give notice within three Business Days does not preclude subsequent notice. Seller hereby acknowledges that Purchaser intends to rely on the representations in Sections 4.01 and 4.02 in connection with representations made by Purchaser to its assignees, including but not limited to in connection with the transfer made by Purchase to the Issuer pursuant to the Transfer and Servicing Agreement and the security interest granted by the Issuer to the Indenture Trustee pursuant to the Indenture, and that the Indenture Trustee and the Issuer may enforce such representations directly against Seller.

Section 4.03. Representations and Warranties of Purchaser .

(a) Representations and Warranties . As of the Closing Date, Purchaser hereby represents and warrants to, and agrees with, Seller that:

(i) Organization and Good Standing . Purchaser is a corporation duly organized and validly existing under the laws of the State of Nevada and has, in all material respects, full power and authority to own its properties and conduct its business as such properties are presently owned and such business is presently conducted and to execute, deliver and perform its obligations under this Agreement.

(ii) Due Authorization . The execution and delivery by Purchaser of this Agreement and the Conveyance Papers to which Purchaser is a party and the consummation by Purchaser of the transactions provided for in this Agreement and the Conveyance Papers to which Purchaser is a party have been duly authorized by Purchaser by all necessary action on the part of Purchaser.

(iii) No Conflict . The execution and delivery by Purchaser of this Agreement and the Conveyance Papers to which Purchaser is a party, the performance by Purchaser of the transactions contemplated by this Agreement and the Conveyance Papers to which Purchaser is a party, and the fulfillment by Purchaser of the terms of this Agreement and the Conveyance Papers to which Purchaser is a party, will not conflict with, result in any breach of any of the material terms and provisions of, or constitute (with or without notice or lapse of time or both) a material default under, any indenture, contract, agreement, mortgage, deed of trust or other instrument to which Purchaser is a party or by which it or any of its properties are bound.

(iv) No Violation . The execution, delivery and performance of this Agreement and the Conveyance Papers to which Purchaser is a party by Purchaser and the fulfillment by Purchaser of the terms contemplated herein and therein applicable to Purchaser will not conflict with or violate any Requirements of Law applicable to Purchaser.

(v) No Proceedings . There are no proceedings or investigations pending or, to the best knowledge of Purchaser, threatened, against Purchaser, before any Governmental Authority (i) asserting the invalidity of this Agreement or the Conveyance Papers, (ii) seeking to prevent the consummation of any of the transactions contemplated by this Agreement or the Conveyance Papers, (iii) seeking any determination or ruling that, in the reasonable judgment of Purchaser, would materially and adversely affect the performance by Purchaser of its obligations under this Agreement or the Conveyance Papers to which Purchaser is a party or (iv) seeking any determination or ruling that would materially and adversely affect the validity or enforceability of this Agreement or the Conveyance Papers.

(vi) All Consents . All authorizations, consents, orders or approvals of or registrations or declarations with any Governmental Authority required to be obtained, effected or given by Purchaser in connection with the execution and delivery by Purchaser of this Agreement and the Conveyance Papers to which it is a party and the performance by Purchaser of the transactions contemplated by this Agreement and the Conveyance Papers to which it is a party have been duly obtained, effected or given and are in full force and effect.

(b) Notice of Breach . The representations and warranties set forth in subsection 4.03(a) shall survive the conveyance of the Purchased Assets to Purchaser. Upon discovery by Purchaser or Seller of a breach of any of the representations and warranties set forth in subsection 4.03(a) , the party discovering such breach shall give prompt written notice to the other party.

[END OF ARTICLE IV]

ARTICLE V

COVENANTS

Section 5.01. Covenants of Seller . Seller hereby covenants and agrees with Purchaser as follows:

(a) Receivables Not To Be Evidenced by Instruments or Chattel Paper . Except in connection with its enforcement or collection of a Receivable, Seller will take no action to cause any Receivable sold to Purchaser hereunder to be evidenced by any instrument or chattel paper (as defined in the applicable UCC) and if any Receivable is so evidenced as a result of any action by Seller it shall be deemed to be a Receivable described in Section 6.01 and shall be repurchased by Seller in accordance with Section 6.01 .

(b) Security Interests . Except for the Conveyances hereunder, Seller will not sell, pledge, assign or transfer to any other Person, or take any other action inconsistent with Purchaser’s ownership of the Purchased Assets or grant, create, incur, assume or suffer to exist any Encumbrance arising through or under Seller on, any Purchased Asset, whether now existing or hereafter created, and Seller shall not claim any ownership interest in any Purchased Asset and shall defend the right, title and interest of Purchaser in, to and under the Purchased Assets, whether now existing or hereafter created, against all claims of third parties claiming through or under Seller.

(c) Account Allocations . In the event that Seller is unable for any reason to sell Receivables to Purchaser in accordance with the provisions of this Agreement (including by reason of the application of the provisions of Section 7.02 or any order of any Governmental Authority), then Seller agrees (except as prohibited by any such order or any Requirement of Law) to allocate and pay to Purchaser, after the date of such inability, all Collections with respect to Principal Receivables previously sold to Purchaser. To the extent that it is not clear to Seller whether collections relate to a Principal Receivable that was sold to Purchaser or to a principal receivable that Seller is unable to sell to Purchaser, Seller agrees that it shall allocate payments on each Account with respect to the principal balance of such Account first to the oldest principal balance of such Account. Notwithstanding any cessation of the sale to Purchaser of additional Principal Receivables, Principal Receivables sold to Purchaser prior to the occurrence of the event giving rise to such inability, Collections in respect of such Principal Receivables, Finance Charge Receivables whenever created that accrue in respect of such Principal Receivables, and Collections in respect of such Finance Charge Receivables, shall continue to be property of Purchaser.

(d) Delivery of Collections . In the event that Seller receives Collections with respect to the Receivables (or any other amounts in respect of the Purchased Assets transferred in accordance with this Agreement), Seller agrees to pay to Purchaser (or to the Servicer if Purchaser so directs) all such Collections with respect to the Receivables or such other amounts as soon as practicable after receipt thereof.

(e) Notice of Encumbrances . Seller shall notify Purchaser promptly after becoming aware of any Encumbrance arising through or under it on any Receivable other than the Conveyances hereunder.

(f) Conduct of Business . Seller shall do all things necessary to remain duly organized, validly existing and in good standing as a corporation in its jurisdiction of organization and maintain all requisite authority to conduct its business in each jurisdiction in which its business is conducted.

(g) Compliance with Laws . Seller will comply with all laws, rules, regulations, orders, writs, judgments, injunctions, decrees or awards to which it or its respective properties may be subject.

(h) Sale Treatment . Seller will not account for (including for accounting purposes), or otherwise treat, the transactions contemplated by this Agreement in any manner other than as a sale of the Purchased Assets by Seller to Purchaser.

(i) No Sales, Encumbrances, Etc . Except as contemplated hereunder, Seller will not sell, assign (by operation of law or otherwise) or otherwise dispose of, or create or suffer to exist any Encumbrance arising through or under Seller upon, any of the Purchased Assets.

(j) No Change in Business or Credit Card Guidelines . Seller will not make any change in the character of its business or in any credit card guidelines it may have, which change would, in either case, impair the collectibility of any of the Receivables or have a material adverse effect on the condition (financial or otherwise), business or properties of Seller or the ability of Seller to perform its obligations hereunder.

(k) Protection of Interest in Purchased Assets . Seller shall authorize, execute and file such financing statements, amendments to financing statements, and any other documents reasonably requested by Purchaser or its successors and assigns which may be required by law to perfect the ownership interest of Purchaser in and to the Purchased Assets.

Section 5.02. Covenants of Seller with Respect to each Partridge Receivables Purchase Agreements and the Sale and Purchase Agreement . (a) Seller, in its capacity as purchaser of Receivables from Raphaels Bank or any other Account Owner pursuant to a Partridge Receivables Purchase Agreement hereby covenants that Seller will at all times enforce the covenants and agreements of Raphaels Bank or such other Account Owner in the Account Ownership Agreement and applicable Partridge Receivables Purchase Agreement.

(b) Seller also covenants that it will at all times enforce the covenants and agreements of Barclays Bank in the Sale and Purchase Agreement.

(c) Seller covenants that it will provide Purchaser with such information as Purchaser may reasonably request to enable Purchaser to determine compliance with the covenants contained in this Section.

Section 5.03. Personal Data . The parties acknowledge and agree that no Personal Data shall be transferred between the parties pursuant to or in connection with this Agreement. Any data relating to the Accounts that is processed under this Agreement shall be done in an anonymous format, without the use of Personal Data.

[END OF ARTICLE V]

ARTICLE VI

REPURCHASE OBLIGATION

Section 6.01. Seller’s Repurchase Obligations . In the event any Account is (a)(i) within six (6) months of the Closing Date, determined to be an Account that was an Excluded Account as of the Cut-Off Time or (ii) within eight (8) months of the Closing Date, determined to be an Account that was an Excluded Account as of the Cut-Off Time pursuant to clause (l) of the definition of Excluded Account, or (b) within 90 days of transfer to the Purchaser, an Account for which any representation or warranty under (i) Section 4.02(a)(iii) or (ii) Section 4.02(a)(iv) is not true and correct on the date of transfer of the related Receivable arising therein in any material respect for any related Receivable as a result of any action or failure to act by Seller to the extent such failure to be so true and correct results in such Receivable not being an Eligible Receivable (in each case, a “ Covered Account ”), Seller shall pay to Purchaser an amount equal to the Repurchase Price for all Receivables in such Covered Account, calculated in the manner set forth in Section 6.02 . Upon payment of any such Repurchase Price with respect to any such Receivables, Purchaser shall automatically and without further action sell, transfer, assign, set-over and otherwise convey to Seller, without recourse, representation or warranty, all the right, title and interest of Purchaser in and to such Receivables, all Collections related thereto, all monies and amounts due or to become due with respect thereto, all proceeds thereof, and all other Purchased Assets related thereto. Purchaser shall execute such documents and instruments of transfer or assignment and take such other actions as shall reasonably be requested by Seller to effect the conveyance of such property pursuant to this Section.

Section 6.02. Repurchase Price .

(a) The “ Repurchase Price ” for Receivables in the Covered Accounts classified as such pursuant to Sections 6.01(a) or (b)(i) shall be the amount paid by Barclays Bank for such Receivables under the Sale and Purchase Agreement. The “ Repurchase Price ” for Receivables in the Covered Accounts classified as such pursuant to Section 6.01(b)(ii) shall be an amount equal to the unpaid balance of such Receivables.

(b) Upon payment of the Repurchase Price as set forth herein, Purchaser shall deliver, or cause to be delivered, to Seller all files and books and records relating to such repurchased Receivables and the related Covered Accounts.

Section 6.03. Reassignment of Noteholders’ Interest in Trust Portfolio . In the event any representation or warranty set forth in subsection 4.01(a) or subsection 4.02(a)(i) or (ii) is not true and correct in any material respect and as a result of such breach Purchaser is required to accept a reassignment of the Receivables previously sold by Seller to Purchaser pursuant to Section 2.06 of the Transfer and Servicing Agreement, Seller shall be obligated to accept a reassignment of such Receivables from Purchaser on the terms set forth below.

Seller shall pay to Purchaser by depositing in the Collection Account established under the Indenture in immediately available funds, not later than 11:00 a.m., London time, on the fifth Business Day after the day on which Seller receives notice of such reassignment obligation, in payment for such reassignment, an amount equal to the amount specified in

Section 2.06 of the Transfer and Servicing Agreement. Upon any such reassignment of the Receivables on such date, Purchaser shall automatically and without further action sell, transfer, assign, set-over and otherwise convey to Seller, without recourse, representation or warranty, all the right, title and interest of Purchaser in and to the Receivables, all Collections related thereto, all monies and amounts due or to become due with respect thereto, all proceeds thereof, and all other Purchased Assets related thereto. Purchaser shall execute such documents and instruments of transfer or assignment and take such other actions as shall reasonably be requested by Seller to effect the conveyance of such property pursuant to this Section.

[END OF ARTICLE VI]

ARTICLE VII

TERM AND PURCHASE TERMINATION

Section 7.01. Term . This Agreement shall commence as of the date of execution and delivery hereof and shall continue until such date as may be mutually agreed by Purchaser and Seller after the termination of the Issuer as provided in Article VIII of the Trust Agreement.

Section 7.02. Purchase Termination . If Seller shall fail generally to, or admit in writing its inability to, pay its debts as they become due; or if a proceeding shall have been instituted in a court having jurisdiction in the premises seeking a decree or order for relief in respect of Seller in an involuntary case under any Debtor Relief Law, or for the appointment of a receiver, liquidator, assignee, trustee, custodian, sequestrator, conservator or other similar official of Seller or for any substantial part of Seller’s property, or for the winding-up or liquidation of Seller’s affairs and, if instituted against Seller, any such proceeding shall continue undismissed or unstayed and in effect for a period of 60 consecutive days or upon entry of any order or decree providing for such relief, or any of the actions sought in such proceeding shall occur; or if Seller shall commence a voluntary case under any Debtor Relief Law, or if Seller shall consent to the entry of an order for relief in an involuntary case under any Debtor Relief Law, or consent to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator, conservator or other similar official of, or for, any substantial part of its property, or Seller shall make any general assignment for the benefit of its creditors; or Seller shall have taken any corporate action in furtherance of any of the foregoing actions (each an “ Insolvency Event ”); then Seller shall immediately cease to sell Principal Receivables to Purchaser and shall promptly give notice to Purchaser, the Issuer and the Indenture Trustee of such Insolvency Event. Notwithstanding any cessation of the transfer to Purchaser of additional Principal Receivables, Principal Receivables transferred to Purchaser prior to the occurrence of such Insolvency Event, Collections in respect of such Principal Receivables, Finance Charge Receivables whenever created, accrued in respect of such Principal Receivables, and the Collections thereon, shall continue to be property of Purchaser.

[END OF ARTICLE VII]

ARTICLE VIII

MISCELLANEOUS PROVISIONS

Section 8.01. Amendment . This Agreement and the rights and obligations of the parties hereunder may not be changed orally, but only by an instrument in writing signed by Purchaser and Seller in accordance with this Section 8.01 . This Agreement may be amended from time to time by Purchaser and Seller (i) to cure any ambiguity, (ii) to correct or supplement any provisions herein which may be inconsistent with any other provisions herein, (iii) to add any other provisions with respect to matters or questions arising under this Agreement which shall not be inconsistent with the provisions of this Agreement, (iv) to change or modify the Purchase Price and (v) to change, modify, delete or add any other obligation of Seller or Purchaser; provided , however that no amendment pursuant to clause (iv) or (v) of this Section 8.01 shall be effective unless any rating agency rating (at the request of the Issuer) any notes issued by the Issuer has confirmed in writing to Seller and Purchaser that such amendment will not result in a reduction or withdrawal of the then-existing rating of any such notes. A copy of any amendment to this Agreement shall be sent to the rating agencies rating (at the request of the Issuer) any notes issued by the Issuer.

Section 8.02. Governing Law . THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS (OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

Section 8.03. Notices . All demands, notices and communications hereunder shall be in writing and shall be deemed to have been duly given if personally delivered at or mailed by certified mail, return receipt requested, to (a) in the case of Seller, CompuCredit International Acquisition Corp., 101 Convention Center Drive, Suite 850-33A, Las Vegas, NV 89109 (facsimile no. (702)-734-0144), (b) in the case of Purchaser, Partridge Funding Corporation, 3993 Howard Hughes Parkway, Suite 250, Office 215, Las Vegas, Nevada 89169 (facsimile no. (702) 866-2244) Attention: Rebecca Howell, with a copy to Lionel, Sawyer & Collins, 50 W. Liberty Street, Suite 1100, Reno, Nevada 89501, Attention: Colleen Dolan, Esq., (c) in the case of the Owner Trustee, Wilmington Trust FSB, 3993 Howard Hughes Parkway, Suite 250, Las Vegas, Nevada 89169, Attention: Corporate Trust Administration (facsimile no. (702) 866-2244), or (d) in the case of the Indenture Trustee, Deutsche Bank Trust Company Americas, 60 Wall Street, MSNYC 60-2606, New York, New York 10005; or, as to each party, at such other address as shall be designated by such party in a written notice to each other party.

Section 8.04. Severability of Provisions . If any one or more of the covenants, agreements, provisions or terms of this Agreement shall for any reason whatsoever be held invalid, then such covenants, agreements, provisions, or terms shall be deemed severable from the remaining covenants, agreements, provisions, and terms of this Agreement and shall in no way affect the validity or enforceability of the other provisions of this Agreement.

Section 8.05. Assignment . Notwithstanding anything to the contrary contained herein, other than as provided in Section 8.06 , this Agreement may not be assigned by the parties hereto; provided , however , that Seller shall have the right to assign its right, title and interest in, to and under this Agreement to (i) any successor by merger which assumes the obligations of this Agreement or (ii) any entity; provided that any rating agency then rating (at the request of the Issuer) any notes issued by the Issuer has confirmed in writing to Seller and Purchaser that such assignment will not result in a reduction or withdrawal of the then-existing rating of any of such notes.

Section 8.06. Acknowledgement and Agreement of Seller . Seller expressly acknowledges and agrees that all of Purchaser’s right, title, and interest in, to, and under this Agreement, including, without limitation, all of Purchaser’s right, title, and interest in and to the Purchased Assets, will be assigned by Purchaser to the Issuer, and a security interest therein will be granted by the Issuer to the Indenture Trustee, and Seller consents to such assignment and grant. Seller further agrees that notwithstanding any claim, counterclaim, right of setoff or defense which it may have against Purchaser, due to a breach by Purchaser of this Agreement or for any other reason, and notwithstanding the bankruptcy of Purchaser or any other event whatsoever, Seller’s sole remedy shall be a claim against Purchaser for money damages, and then only to the extent of funds available to Purchaser, and in no event shall Seller assert any claim on or any interest in the Purchased Assets or any proceeds thereof or take any action which would reduce or delay receipt by Purchaser or the Issuer of collections with respect to the Purchased Assets. Additionally, Seller agrees that any amounts payable by Seller to Purchaser hereunder which are to be paid by Purchaser to the Issuer shall be paid by Seller, at the written request of Purchaser, directly to the Issuer.

Section 8.07. Further Assurances . Purchaser and Seller agree to do and perform, from time to time, any and all acts and to execute any and all further instruments required or reasonably requested by the other party, the Issuer or the Indenture Trustee more fully to effect the purposes of this Agreement and the Conveyance Papers, including, without limitation, the authorization or execution of any financing statements, amendments thereto, or continuation statements or equivalent documents relating to the Purchased Assets for filing under the provisions of the UCC or other law of any applicable jurisdiction.

Section 8.08. No Waiver; Cumulative Remedies . No failure to exercise and no delay in exercising, on the part of Purchaser or Seller, any right, remedy, power or privilege hereunder, shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exhaustive of any rights, remedies, powers and privileges provided by law.

Section 8.09. Counterparts . This Agreement may be executed in two or more counterparts (and by different parties on separate counterparts), each of which shall be an original, but all of which together shall constitute one and the same instrument.

Section 8.10. Binding; Third-Party Beneficiaries . This Agreement will inure to the benefit of and be binding upon the parties hereto and their respective successors and permitted assigns. The Issuer and the Indenture Trustee shall be considered third-party beneficiaries of this Agreement.

Section 8.11. Merger and Integration . Except as specifically stated otherwise herein, this Agreement and the Conveyance Papers set forth the entire understanding of the parties relating to the subject matter hereof, and all prior understandings, written or oral, are superseded by this Agreement and the Conveyance Papers. This Agreement may not be modified, amended, waived or supplemented except as provided herein.

Section 8.12. Headings . The headings are for purposes of reference only and shall not otherwise affect the meaning or interpretation of any provision hereof.

Section 8.13. Schedules and Exhibits . The schedules and exhibits attached hereto and referred to herein shall constitute a part of this Agreement and are incorporated into this Agreement for all purposes.

Section 8.14. Survival of Representations and Warranties . All representations, warranties and agreements contained in this Agreement shall remain operative and in full force and effect and shall survive conveyance of the Purchased Assets by Purchaser to the Issuer pursuant to the Transfer and Servicing Agreement and the grant of a security interest therein by the Issuer to the Indenture Trustee pursuant to the Indenture.

Section 8.15. Nonpetition Covenant . Notwithstanding any prior termination of this Agreement, Seller shall not, prior to the date which is one year and one day after the termination of this Agreement, acquiesce, petition or otherwise invoke or cause Purchaser or the Issuer to invoke the process of any Governmental Authority for the purpose of commencing or sustaining a case against Purchaser or the Issuer under any Debtor Relief Law or appointing a receiver, conservator, liquidator, assignee, trustee, custodian, sequestrator or other similar official of Purchaser or the Issuer or any substantial part of its property or ordering the winding-up or liquidation of the affairs of Purchaser or the Issuer.

[END OF ARTICLE VIII]

IN WITNESS WHEREOF, Seller and Purchaser have caused this Receivables Purchase Agreement to be duly executed by their respective officers as of the date first above written.


COMPUCREDIT INTERNATIONAL ACQUISITION CORPORATION, as Seller

By:		/s/ Joshua C. Miller
Name:		Joshua C. Miller
Title:		Assistant Secretary

PARTRIDGE FUNDING CORPORATION, as Purchaser

By:		/s/ Rebecca Howell
Name:		Rebecca Howell
Title:		Assistant Secretary

[Signature Page to Receivables Purchase Agreement between CCIA and Partridge]

Exhibit 10.5

EXECUTION COPY

MASTER INDENTURE

Dated as of April 4, 2007

PARTRIDGE ACQUIRED PORTFOLIO BUSINESS TRUST

among

PARTRIDGE ACQUIRED PORTFOLIO BUSINESS TRUST,

as Issuer,

DEUTSCHE BANK TRUST COMPANY AMERICAS,

as Indenture Trustee,

DEUTSCHE BANK AG, LONDON BRANCH,

as Paying Agent,

and

COMPUCREDIT INTERNATIONAL ACQUISITION CORPORATION,

as Servicer

TABLE OF CONTENTS


		Page
ARTICLE I	DEFINITIONS

Section 1.01.	Definitions	5

Section 1.02.	Other Definitional Provisions	15

ARTICLE II	THE NOTES

Section 2.01.	Form Generally	17

Section 2.02.	Denominations	17

Section 2.03.	Execution, Authentication and Delivery	18

Section 2.04.	Authenticating Agent	18

Section 2.05.	Registration of Transfer and Exchange of Notes and O/C Certificates	20

Section 2.06.	Mutilated, Destroyed, Lost or Stolen Notes and O/C Certificates	21

Section 2.07.	Persons Deemed Owners	22

Section 2.08.	Appointment of Paying Agent	22

Section 2.09.	Cancellation	23

Section 2.10.	New Issuances	23

Section 2.11.	Book-Entry Notes	24

Section 2.12.	Notices to Clearing Agency or Foreign Clearing Agency	25

Section 2.13.	Definitive Notes	25

Section 2.14.	Global Note	26

Section 2.15.	Release of Collateral	26

ARTICLE III	REPRESENTATIONS AND COVENANTS OF ISSUER

Section 3.01.	Payment of Principal and Interest	26

Section 3.02.	Maintenance of Office or Agency	27

Section 3.03.	Money for Note Payments to Be Held in Trust	27

Section 3.04.	Existence	29

Section 3.05.	Protection of Trust	29

Section 3.06.	Opinions as to Trust Estate	30

Section 3.07.	Performance of Obligations; Servicing of Payment Obligations	30

Section 3.08.	Negative Covenants	31

TABLE OF CONTENTS

(continued)


		Page
Section 3.09.	Statements as to Compliance	32

Section 3.10.	Issuer’s Name, Location, etc	32

Section 3.11.	Successor Substituted	32

Section 3.12.	No Borrowing	33

Section 3.13.	Guarantees, Loans, Advances and Other Liabilities	33

Section 3.14.	Tax Treatment	33

Section 3.15.	Notice of Events of Default	34

Section 3.16.	No Other Business	34

Section 3.17.	Removal of Administrator	34

Section 3.18.	Further Instruments and Acts	34

ARTICLE IV	SATISFACTION AND DISCHARGE

Section 4.01.	Satisfaction and Discharge of this Indenture	34

Section 4.02.	Application of Trust Money	35

ARTICLE V	DEFAULTS AND REMEDIES

Section 5.01.	Early Redemption Events	36

Section 5.02.	Events of Default	36

Section 5.03.	Acceleration of Maturity; Rescission and Annulment	37

Section 5.04.	Collection of Indebtedness and Suits for Enforcement by Indenture Trustee	38

Section 5.05.	Remedies; Priorities	40

Section 5.06.	Optional Preservation of the Trust Estate	42

Section 5.07.	Limitation on Suits	42

Section 5.08.	Unconditional Rights of Noteholders or the O/C Holders to Receive Principal and Interest	43

Section 5.09.	Restoration of Rights and Remedies	43

Section 5.10.	Rights and Remedies Cumulative	43

Section 5.11.	Delay or Omission Not Waiver	44

Section 5.12.	Control by Noteholders	44

Section 5.13.	Waiver of Past Defaults	44

Section 5.14.	Undertaking for Costs	45

Section 5.15.	Waiver of Stay or Extension Laws	45

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TABLE OF CONTENTS

(continued)


		Page
Section 5.16.	Action on Notes	45

Section 5.17.	Sale of Receivables	45

ARTICLE VI	THE INDENTURE TRUSTEE

Section 6.01.	Duties of the Indenture Trustee	46

Section 6.02.	Notice of Early Redemption Event, Reinvestment Event or Event of Default	49

Section 6.03.	Certain Matters Affecting the Indenture Trustee	49

Section 6.04.	Not Responsible for Recitals or Issuance of Notes or O/C Certificates	51

Section 6.05.	Indenture Trustee May Hold Notes	51

Section 6.06.	Money Held in Trust	51

Section 6.07.	Compensation, Reimbursement and Indemnification	51

Section 6.08.	Replacement of Indenture Trustee	52

Section 6.09.	Successor Indenture Trustee by Merger	54

Section 6.10.	Appointment of Co-Indenture Trustee or Separate Indenture Trustee	54

Section 6.11.	Eligibility; Disqualification	55

Section 6.12.	Representations and Warranties of the Indenture Trustee	56

Section 6.13.	Tax Returns	56

Section 6.14.	Custody of the Trust Estate	56

Section 6.15.	Currency Indemnity	57

ARTICLE VII	NOTEHOLDERS’ LIST AND REPORTS

Section 7.01.	Issuer to Furnish Indenture Trustee Names and Addresses of Noteholders	58

Section 7.02.	Preservation of Information; Communications to Noteholders	58

ARTICLE VIII	ALLOCATION AND APPLICATION OF COLLECTIONS

Section 8.01.	Collection of Money	58

Section 8.02.	Collection Account	59

Section 8.03.	Instruction Procedures	60

Section 8.04.	Rights of Noteholders	61

Section 8.05.	Release of Trust Estate	61

-iii-

TABLE OF CONTENTS

(continued)


		Page
Section 8.06.	Opinion of Counsel.	62

Section 8.07.	Distributions and Reports to Noteholders	62

ARTICLE IX	SUPPLEMENTAL INDENTURES

Section 9.01.	Supplemental Indentures Without Consent of Noteholders	62

Section 9.02.	Supplemental Indentures With Consent of Noteholders	64

Section 9.03.	Execution of Supplemental Indentures	65

Section 9.04.	Effect of Supplemental Indenture	65

Section 9.05.	Reference in Notes and O/C Certificates to Supplemental Indentures	65

Section 9.06.	Indenture Supplements and Series Enhancers	66

ARTICLE X	TERMINATION

Section 10.01.	Termination of Indenture	66

Section 10.02.	Final Distribution	66

ARTICLE XI	MISCELLANEOUS

Section 11.01.	Compliance Certificates and Opinions etc	67

Section 11.02.	Form of Documents Delivered to Indenture Trustee	68

Section 11.03.	Acts of Noteholders	69

Section 11.04.	Notices, Etc. to Indenture Trustee and Issuer	70

Section 11.05.	Notices to Noteholders; Waiver	70

Section 11.06.	Alternate Payment and Notice Provisions	71

Section 11.07.	Effect of Headings and Table of Contents	71

Section 11.08.	Successors and Assigns	71

Section 11.09.	Separability	71

Section 11.10.	Benefits of Indenture	71

Section 11.11.	Legal Holidays	71

Section 11.12.	Governing Law	72

Section 11.13.	Counterparts	72

Section 11.14.	Recording of Indenture.	72

Section 11.15.	No Petition	72

Section 11.16.	Inspection	72

Section 11.17.	Trust Obligation	73

-iv-

TABLE OF CONTENTS

(continued)


		Page
Section 11.18.	Limitation of Liability of Owner Trustee	73

Section 11.19.	Execution of the Transfer and Servicing Agreement by the Indenture Trustee	73

SCHEDULE A

-v-

This MASTER INDENTURE, dated as of April 4, 2007 (herein, as amended, modified or supplemented from time to time as permitted hereby, called the “ Indenture ”), among PARTRIDGE ACQUIRED PORTFOLIO BUSINESS TRUST, a business trust organized and existing under the laws of the State of Nevada, COMPUCREDIT INTERNATIONAL ACQUISITION CORPORATION, a corporation organized and existing under the laws of the State of Nevada, as servicer, DEUTSCHE BANK TRUST COMPANY AMERICAS, a New York banking corporation, as indenture trustee and DEUTSCHE BANK AG, LONDON BRANCH, a corporation duly organized and existing under the law of the Federal Republic of Germany and having its principal place of business at Taunusanlage 12 in the City of Frankfurt (Main) and operating in the United Kingdom under branch number BR000005 at Winchester House, 1 Great Winchester Street, London EC2N 2DB, England, as Paying Agent. This Indenture may be supplemented at any time and from time to time by an indenture supplement in accordance with Section 2.10 hereof (an “ Indenture Supplement ,” and any Indenture Supplement together with this Indenture and amendments hereof and any supplemental indentures hereto collectively referred to as the “ Indenture ”). If a conflict exists between the terms and provisions of this Master Indenture and any Indenture Supplement, the terms and provisions of the Indenture Supplement shall be controlling with respect to the related Series.

PRELIMINARY STATEMENT

The Issuer has duly authorized the execution and delivery of this Indenture to provide for an issue of its asset backed notes to be issued in one or more Series (the “ Notes ”) and O/C Certificates as provided in this Indenture.

In connection with one or more Series of Notes issued under this Indenture, the Issuer may enter into agreements with other entities that will provide credit enhancement or other protection and benefits for the Holders of a Series of Notes or a Class of such Series of Notes and the Issuer will incur obligations under the terms of such agreement. The Issuer, through this Indenture, wishes to provide security for such obligations to the extent and as provided in the relevant Indenture Supplements. All covenants and agreements made by the Issuer herein are for the benefit and security of the Noteholders and, to the extent and as provided for in the relevant Indenture Supplements, the Series Enhancers and the O/C Holders.

The Issuer is entering into this Indenture, and the Indenture Trustee is accepting the trusts created hereby, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged. All things necessary have been done to make the Notes and the O/C Certificates, when executed by the Issuer and authenticated and delivered by the Indenture Trustee hereunder and duly issued by the Issuer, the valid obligations of the Issuer, and to make this Indenture a valid agreement of the Issuer, in accordance with their and its terms.

Simultaneously with the delivery of this Indenture the Issuer is entering into the Transfer and Servicing Agreement with Partridge Funding Corporation, a corporation organized and existing under the laws of the State of Nevada, as Transferor, the Servicer, and the Indenture Trustee, pursuant to which (a) the Transferor will convey to the Issuer all of its rights, title and interest in, to and under the Receivables and (b) the Servicer will agree to service the Receivables and make collections thereon.

GRANTING CLAUSES

To secure the due and punctual payment by the Issuer of the principal of (and premium, if any) and interest on the Notes, amounts due to Series Enhancers under the Series Enhancements as provided in the Indenture Supplements, amounts due on the O/C Certificates as provided in the Indenture Supplements, and all other amounts due and payable under this Indenture or any Indenture Supplement or under any Series Enhancement (collectively, the “ Secured Obligations ”) when and as the same shall become due and payable, whether on demand for payment or on a Payment Date, a Redemption Date, a Stated Maturity Date or by declaration of acceleration, call for redemption or otherwise, according to the terms of this Indenture, the respective Indenture Supplements and the Notes, the O/C Certificates or the Series Enhancements, the Issuer hereby Grants to the Indenture Trustee, for the benefit of the Noteholders and the O/C Holders and, to the extent and as provided for in the relevant Indenture Supplements, the Series Enhancers, all of the Issuer’s right, title and interest, whether now owned or hereafter acquired, in, to and under the following:

(i)

the Receivables existing at the Cut-Off Time, and thereafter created from time to time in the Accounts (including Transferred Accounts and Related Accounts related to such Accounts) until the termination of the Issuer, all Interchange allocable to the Issuer as provided herein and in the Indenture Supplements and Recoveries, and all rights to payment and amounts due or to become due with respect to all of the foregoing;

(ii)

all money, instruments, investment property and other property (together with all earnings, dividends, distributions, income, issues, and profits relating thereto) distributed or distributable in respect of the Receivables pursuant to the terms of the Transfer and Servicing Agreement, this Indenture and each Indenture Supplement;

(iii)

the Collection Account, the Series Accounts, all Eligible Investments and all money, investment property, instruments and other property from time to time on deposit in or credited to the Collection Account and the Series Accounts, together with all earnings, dividends, distributions, income, issues and profits relating thereto;

(iv)

all Series Enhancements;

(v)

all rights, remedies, powers, privileges and claims of the Issuer under or with respect to the Transfer and Servicing Agreement and the Receivables Purchase Agreements (whether arising pursuant to the terms of the Transfer and Servicing Agreement and the Receivables Purchase Agreements or otherwise available to the Issuer at law or in equity), including, without limitation, the rights of the Issuer to enforce the Transfer and Servicing Agreement and the Receivables Purchase Agreements, and to give or withhold any and all consents, requests, notices, directions, approvals, extensions or waivers under or with respect to the Transfer and Servicing Agreement and the Receivables Purchase Agreements to the same extent as the Issuer could but for the assignment and security interest granted hereunder;

(vi)

all accounts, chattel paper, deposit accounts, documents, general intangibles, goods, instruments, investment property, letter-of-credit rights, letters of credit, money, and oil, gas, and other minerals, consisting of, arising from, or relating to, any of the foregoing;

(vii)

all present and future claims, demands, causes and choses in action in respect of any or all of the foregoing and all payments on or under and all proceeds of every kind and nature whatsoever in respect of any or all of the foregoing, including all proceeds, products, rents, receipts or profits of the conversion, voluntary or involuntary, into cash or other property, all cash and non-cash proceeds, and other property consisting of, arising from or relating to all or any part of any of the foregoing or any proceeds thereof; and

(viii)

all proceeds of the foregoing.

The property described in the preceding sentence shall constitute the “ Trust Estate ”.

Such Grants are made in trust to secure the Notes and the O/C Certificates equally and ratably without prejudice, priority or distinction, except as expressly provided in this Indenture and the Indenture Supplements, between any Note and any other Notes and the O/C Certificates, and to secure the other Secured Obligations; provided , that unless and to the extent provided for in an Indenture Supplement for any Series, the security interest granted above in the Series Accounts and Series Enhancement for a particular Series shall be to secure the Notes and the O/C Certificate for such Series only and, to the extent provided in the Indenture Supplement for such Series, the Series Enhancers.

The Indenture Trustee, as Indenture Trustee on behalf of the Noteholders, acknowledges such Grants, accepts the trusts hereunder in accordance with the provisions hereof and agrees to perform the duties herein required.

LIMITED RECOURSE

The obligation of the Issuer to make payments of principal of (and premium, if any) and interest on the Notes and the O/C Certificates and to the Series Enhancers under the Series Enhancements is limited by recourse only to the Trust Estate and only to the extent proceeds and distributions on the Trust Estate are allocated for their benefit under the terms of this Indenture, the Indenture Supplements and the Series Enhancements.

ARTICLE I

DEFINITIONS

Section 1.01. Definitions .

Whenever used in this Indenture, the following words and phrases shall have the following meanings, and the definitions of such terms are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such terms.

“ Act ” or “ Act of Noteholder ” shall have the meaning specified in Section 11.03(a) .

“ Administration Agreement ” shall mean the Amended and Restated Administration Agreement dated as of April 4, 2007, among the Issuer, the Transferor and the Administrator, as the same may be amended or otherwise modified from time to time.

“ Administrator ” shall mean CompuCredit Corporation or any successor administrator appointed pursuant to the Administration Agreement.

“ Applicable Law ” shall have the meaning specified in Section 6.03(n) .

“ Authorized Officer ” shall mean:

(a) with respect to the Issuer, any officer of the Owner Trustee who is authorized to act for the Owner Trustee in matters relating to the Issuer and who is identified on the list of Authorized Officers, containing the specimen signature of each such Person, delivered by the Owner Trustee to the Indenture Trustee and any Paying Agent on the Initial Issuance Date (as such list may be modified or supplemented from time to time thereafter) and any officer of the Administrator who is authorized to act for the Administrator in matters relating to the Issuer and to be acted upon by the Administrator pursuant to the Administration Agreement and who is identified on the list of Authorized Officers (containing the specimen signatures of such officers) delivered by the Administrator to the Indenture Trustee and any Paying Agent on the Initial Issuance Date (as such list may be modified or supplemented from time to time thereafter);

(b) with respect to the Servicer, any Servicing Officer; and

“ Book-Entry Notes ” shall mean security entitlements to the Notes, ownership and transfers of which shall be made through book entries by a Clearing Agency or a Foreign Clearing Agency, as described in Section 2.11 .

“ Business Day ” shall mean any day other than (a) a Saturday or Sunday or (b) any other day on which banking institutions in London, England; New York, New York; Atlanta, Georgia; Las Vegas, Nevada; Wilmington, Delaware; or any other city in which the principal

executive offices of the Servicer, the Transferor, the Owner Trustee, the Indenture Trustee, Raphaels Bank or other Account Owner, as the case may be, are located, are authorized or obligated by law, executive order or governmental decree to be closed or (c) for purposes of any particular Series, any other day specified in the applicable Indenture Supplement.

“ CCIA ” shall mean CompuCredit International Acquisition Corporation, a corporation organized and existing under the laws of the State of Nevada, and its successors and permitted assigns.

“ CCIA Receivables Purchase Agreement ” shall mean the Receivables Purchase Agreement between CCIA and the Transferor, dated as of April 4, 2007, as the same may be amended, supplemented or otherwise modified from time to time.

“ Class ” shall mean, with respect to any Series, any one of the classes or tranches of Notes of that Series.

“ Clearing Agency ” shall mean an organization registered as a “clearing agency” pursuant to Section 17A of the Exchange Act and serving as a clearing agency for a Series or Class of Book-Entry Notes.

“ Clearing Agency Participant ” shall mean a broker, dealer, bank, other financial institution or other Person for whom from time to time a Clearing Agency effects book-entry transfers and pledges of securities deposited with the Clearing Agency.

“ Clearstream, Luxembourg ” shall mean Clearstream Banking, société anonyme , a professional depository incorporated under the laws of Luxembourg, and its successors.

“ Closing Date ” shall mean, with respect to any Series, the closing date specified in the related Indenture Supplement.

“ Code ” shall mean the Internal Revenue Code of 1986, as amended.

“ Collection Account ” shall have the meaning specified in Section 8.02(a) .

“ CompuCredit Corporation ” shall mean CompuCredit Corporation, a corporation organized and existing under the laws of the State of Georgia, and its successors and permitted assigns.

“ Contractual Currency ” shall have the meaning specified in Section 6.15 .

“ Corporate Trust Office ” shall mean the office of the Indenture Trustee at which at any particular time its corporate trust business shall be administered, which office at the date of the execution of the Indenture is located at 60 Wall Street, MSNYC 60-2606, New York, New York 10005, Attn: TSS – Structured Finance, or at such other address as the Indenture Trustee may designate from time to time by notice to the Issuer, the Transferor and the Servicer.

“ Default ” shall mean any event or occurrence that is, or with notice or the lapse of time or both would become, an Event of Default.

“ Definitive Notes ” shall mean, for any Class or Series, the Notes issued in fully registered, certificated form issued to the owners of such Class or Series or their nominee.

“ Depositary ” shall mean the Person specified in the applicable Indenture Supplement, in its capacity as depositary for the respective accounts of any Clearing Agency or any Foreign Clearing Agency.

“ Depository Agreement ” shall mean, if applicable with respect to any Series or Class of Book-Entry Notes, the agreement among the Transferor, the Indenture Trustee and the Clearing Agency or, if applicable, the Foreign Clearing Agency.

“ Discount Note ” shall mean a Note that provides for an amount less than the stated principal amount thereof to be due and payable upon the occurrence of an Early Redemption Event or other optional or mandatory redemption or the occurrence of an Event of Default and the acceleration of such Note.

“ Distribution Date ” shall mean, with respect to any Series, the date specified in the applicable Indenture Supplement.

“ Dollars, “$” or “U.S. $ ” shall mean (a) United States dollars or (b) denominated in United States dollars.

“ Early Redemption Event ” shall mean, with respect to any Series, any Early Redemption Event specified in the related Indenture Supplement or any Early Redemption Event as described in Section 5.01 .

“ Eligible Deposit Account ” shall mean either (a) a segregated account with an Eligible Institution or (b) a segregated trust account with the corporate trust department of a depository institution organized under the laws of the United Kingdom or the United States or any one of the states thereof, including the District of Columbia (or any domestic branch of a foreign bank), and acting as a trustee for funds deposited in such account, so long as any of the unsecured, unguaranteed senior debt securities of such depository institution shall have a credit rating from each Rating Agency in one of its generic credit rating categories that signifies investment grade.

“ Eligible Institution ” shall mean any depository institution or branch thereof (which may be the Indenture Trustee or an Affiliate), which depository institution has (i) a long-term unsecured debt rating not lower than BBB for Standard & Poor’s Ratings Services or Baa2 for Moody’s Investors Service or (ii) a certificate of deposit rating acceptable to the Rating Agencies. Notwithstanding the previous sentence, any institution the appointment of which satisfies the Rating Agency Condition shall be considered an Eligible Institution.

“ Eligible Investments ” shall mean instruments, investment property or other property, or, in the case of deposits described below, deposit accounts held in the name of the Issuer (which, for the avoidance of doubt, shall include the Collection Account and any Series Account), other than securities issued by or obligations of CompuCredit Corporation or any Affiliate thereof, subject to the exclusive custody and control of the Indenture Trustee, and which may include investments for which the Indenture Trustee or an Affiliate serves as an investment manager or advisor, which mature so that funds will be available no later than the close of business on each Transfer Date following each Monthly Period, which are denominated in pounds and which are:

(a) demand deposits, time deposits or certificates of deposit of depository institutions provided that at the time of the Issuer’s investment or contractual commitment to invest therein, the short-term debt rating of such depository institution shall be at least A-1 by Standard & Poor’s, P-1 by Moody’s and F1+ by Fitch (if rated by Fitch);

(b) commercial paper having, at the time of the Issuer’s investment or contractual commitment to invest therein, a rating of at least A-1 by Standard & Poor’s, P-1 by Moody’s and F1+ by Fitch (if rated by Fitch);

(d) money market funds having, at the time of the Issuer’s investment therein, a rating in the highest rating category of Standard & Poor’s, Moody’s and Fitch (if rated by Fitch) (including funds for which the Indenture Trustee or any of its Affiliates is investment manager or advisor); or

(e) any other investment of a type or rating that satisfies the Rating Agency Condition.

“ English Law Debenture ” shall mean the English Law Debenture dated the same date as this Indenture, among the Issuer and the Indenture Trustee, as the same may be amended or otherwise modified from time to time.

“ Euroclear Operator ” shall mean Euroclear Bank S.A./N.V., as operator of the Euroclear System, and its successor and assigns in such capacity.

“ Euroclear Participants ” shall mean the participants of the Euroclear System, for which the Euroclear System holds securities.

“ Event of Default ” shall have the meaning specified in Section 5.02 .

“ Excess Allocation Series ” shall mean a Series that, pursuant to the Indenture Supplement therefor, is entitled to receive certain excess Collections of Finance Charge Receivables, as more specifically set forth in such Indenture Supplement.

“ Exchange Act ” shall mean the Securities Exchange Act of 1934, as amended.

“ Expected Principal Payment Date ” shall mean for a Series or Class of Notes, the date, if any, specified as such in the Indenture Supplement.

“ Foreign Clearing Agency ” shall mean Clearstream and the Euroclear Operator and their successors and assigns.

“ Global Note ” shall have the meaning specified in Section 2.14 .

“ Grant ” shall mean to grant, bargain, sell, warrant, alienate, remise, demise, release, convey, assign, transfer, mortgage, pledge, grant a security interest in, create a right of set-off against, deposit, set over and confirm. A Grant of any item of the Trust Estate shall include all rights, powers and options (but none of the obligations) of the granting party thereunder, including without limitation the immediate and continuing right to claim for, collect, receive and give receipt for principal and interest payments in respect of such item of the Trust Estate, and all other monies payable thereunder, to give and receive notices and other communications, to make waivers or other agreements, to exercise all rights and options, to bring any suit in equity, action at law or other judicial or administrative proceeding in the name of the granting party or otherwise, and generally to do and receive anything that the granting party may be entitled to do or receive thereunder or with respect thereto.

“ Indenture ” shall mean this Master Indenture, dated as of April 4, 2007, among the Issuer, the Indenture Trustee and the Servicer, as the same may be amended, supplemented or otherwise modified from time to time, including, with respect to any Series or Class, the related Indenture Supplement.

“ Indenture Supplement ” shall mean, with respect to any Series, a supplement to this Indenture, executed and delivered in connection with the original issuance of the Notes of such Series under Section 2.10 , including all amendments thereof and supplements thereto.

“ Indenture Trustee ” shall mean Deutsche Bank Trust Company Americas in its capacity as indenture trustee under the Indenture, its successors in interest and any successor indenture trustee under this Indenture.

“ Independent ” shall mean, when used with respect to any specified Person, that the Person (a) is in fact independent of the Issuer, any other obligor upon the Notes, the Transferor, and any Affiliate of any of the foregoing Persons, (b) does not have any direct financial interest or any material indirect financial interest in the Issuer, any such other obligor, the Transferor or any Affiliate of any of the foregoing Persons and (c) is not connected with the Issuer, any such other obligor, the Transferor or any Affiliate of any of the foregoing Persons as an officer, employee, promoter, underwriter, trustee, partner, director or person performing similar functions.

“ Initial Issuance Date ” shall mean the Closing Date of the first Series of Notes issued to the Holders.

“ Insolvency Event ” with respect to any Person, shall occur if (i) such Person shall file a petition or commence a Proceeding (A) to take advantage of any bankruptcy, conservatorship, receivership, insolvency, or similar laws or (B) for the appointment of a trustee, conservator, receiver, liquidator, or similar official for or relating to such Person or all or substantially all of its property, (ii) such Person shall consent or fail to object to any such petition filed or Proceeding commenced against or with respect to it or all or substantially all of its property, or any such petition or Proceeding shall not have been dismissed or stayed within sixty (60) days of its filing or commencement, or a court, agency, or other supervisory authority with jurisdiction shall have decreed or ordered relief with respect to any such petition or Proceeding, (iii) such Person shall admit in writing its inability to pay its debts generally as they become due, (iv) such Person shall make an assignment for the benefit of its creditors, (v) such Person shall voluntarily suspend payment of its obligations, or (vi) such Person shall take any action in furtherance of any of the foregoing.

“ Interest-bearing Note ” shall mean a Note that bears interest at a stated or computed rate on its stated principal amount. To the extent a Note has the characteristics of both an Interest-bearing Note and a Discount Note, the provisions of this Indenture relating to both Interest-bearing Notes and Discount Notes will apply.

“ Interest Rate ” shall mean, as of any particular date of determination and with respect to any Series or Class, the interest rate or rates (or formula for determining the same) as of such date specified therefor in the related Indenture Supplement; provided , that as the context may require, the Interest Rate for a Discount Note shall be its accrual interest rate equivalent, as provided for in the Indenture Supplement for the Discount Note.

“ Investment Company Act ” shall mean the Investment Company Act of 1940, as amended.

“ Issuer ” shall mean the Partridge Acquired Portfolio Business Trust, a business trust organized and existing under the laws of the State of Nevada, and its successors and permitted assigns.

“ Issuer Order ” shall mean a written order or request signed in the name of the Issuer by an Authorized Officer and delivered to the Indenture Trustee.

“ New Issuance ” shall mean a new Series of Notes issued by the Issuer pursuant to the principal terms of the related Indenture Supplement.

“ Non-sterling Currency ” shall mean (a) a currency other than Pounds, or (b) denominated in a currency other than Pounds.

“ Note Register ” shall mean the register maintained pursuant to Section 2.05(a) in which the Notes are registered.

“ Note Registrar ” shall have the meaning specified in Section 2.05(a) .

“ Noteholder ” or “ Holder ” shall mean the Person in whose name a Note is registered in the Note Register (or the Global Note, as the case may be), or such other Person deemed to be a “Noteholder” or “Holder” in any related Indenture Supplement.

“ Notes ” shall mean all Series of Notes issued by the Issuer pursuant to the Indenture and the applicable Indenture Supplement.

“ Notice of Default ” shall mean the notice described in Section 5.02 .

“ Pounds,” “£” or “pound sterling ” shall mean the lawful currency of the United Kingdom.

“ O/C Certificate ” shall mean with respect to any Series, the certificate executed by the Issuer and authenticated by or on behalf of the Indenture Trustee, as may be specified in the related Indenture Supplement.

“ O/C Holder ” shall mean the person in whose name an O/C Certificate is registered or such other person stated to be an O/C Holder in any related Indenture Supplement.

“ Officer’s Certificate ” shall mean, unless otherwise specified in this Indenture, a certificate delivered to the Indenture Trustee or the Paying Agent signed by any Authorized Officer of the Issuer, Transferor or Servicer, as applicable, under the circumstances described in, and otherwise complying with, the applicable requirements of Section 11.01 .

“ Opinion of Counsel ” shall mean a written opinion of counsel, who may be counsel for, or an employee of, the Person providing the opinion and who shall be reasonably acceptable to the Indenture Trustee; provided , however , that any Tax Opinion or other opinion relating to federal income tax matters shall be an opinion of nationally recognized tax counsel.

“ Outstanding ” shall mean, as of the date of determination, all Notes previously authenticated and delivered under this Indenture except ,

(1) Notes previously cancelled by the Indenture Trustee or delivered to the Indenture Trustee for cancellation; and

(2) Notes for whose payment or redemption money in the necessary amount has been previously deposited with the Indenture Trustee or any Paying Agent for the Holders of such Notes; provided , that if such Notes are to be redeemed, any required notice of such redemption pursuant to this Indenture or provision for such notice satisfactory to the Indenture Trustee has been made; and

(3) Notes that have been paid under Section 2.06 or in exchange for or in lieu of which other Notes have been authenticated and delivered under this Indenture, other than any such Notes for which there shall have been presented to the Indenture Trustee proof satisfactory to it that such Notes are held by a protected purchaser;

provided , however , that in determining whether the Holders of the requisite principal amount of the Outstanding Notes have given any request, demand, authorization, direction, notice, consent or waiver under this Indenture, (a) the principal amount of a Discount Note that is Outstanding shall be the amount of its principal that would be due and payable as of the date of determination upon acceleration of its maturity under Section 5.03 , (b) the principal amount of a Foreign Currency Note shall be the Pound equivalent, determined as provided in the related Indenture Supplement, of the principal amount of such Note (or, in the case of a Foreign Currency Discount Note, the Pound equivalent, determined as provided in the related Indenture Supplement, of the amount determined as provided in (a) above), and (c) Notes owned by the Issuer, any other obligor upon the Notes, the Transferor, the Servicer or any Affiliate of any of those Persons shall be disregarded and considered not to be Outstanding, except that, in determining whether the Indenture Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Notes that a Responsible Officer of the Indenture Trustee has actual knowledge of being so owned shall be so disregarded. Notes so owned that have been pledged in good faith may be regarded as Outstanding if the

pledgee establishes to the satisfaction of the Indenture Trustee the pledgee’s right so to act for such Notes and that the pledgee is not the Issuer, any other obligor upon the Notes, the Transferor, the Servicer or an Affiliate of any of those Persons. In making any such determination, the Indenture Trustee may rely on the representations of the pledgee and shall not be required to undertake any independent investigation.

“ Owner Trustee ” shall mean Wilmington Trust FSB, not in its individual capacity but solely in its capacity as owner trustee under the Trust Agreement, its successors in interest and any successor owner trustee under the Trust Agreement.

“ Paying Agent ” shall mean any paying agent appointed pursuant to Section 2.08 and shall initially be Deutsche Bank AG, London Branch; provided , that if the Indenture Supplement for a Series so provides, a separate or additional Paying Agent(s) may be appointed with respect to such Series.

“ Payment Date ” shall have the meaning specified for each Series in its Indenture Supplement.

“ Permitted Assignee ” shall mean any person who, if it were to purchase Receivables (or interests therein) in connection with a sale under Sections 5.05 and 5.17 would not cause the Issuer to be taxable as a publicly traded partnership for federal income tax purposes.

“ Principal Terms ” shall mean, with respect to any Series, (a) the name or designation; (b) the initial principal amount (or method for calculating such amount), the Allocation Amount and the Series Allocation Percentage; (c) the Interest Rate (or method for the determination thereof) for each Class of Notes of such Series; (d) the Payment Date or Payment Dates and, for Interest-bearing Notes, the date or dates from which interest shall accrue and, for Discount Notes, the date or dates from which interest shall accrete; (e) the method for allocating Collections to Noteholders; (f) the designation of any Series Accounts and the terms governing the operation of any such Series Accounts; (g) the Servicing Fee; (h) if applicable, the Series Enhancer and terms of any form of Series Enhancements; (i) the terms on which the Notes of such Series may be exchanged for Notes of another Series, purchased by the Transferor or the Issuer or remarketed to other investors; (j) any optional or mandatory Redemption Date or Redemption Dates and the Expected Principal Payment Date and Stated Maturity Date; (k) the number of Classes of Notes of such Series and, if more than one Class, the rights and priorities of each such Class; (l) the extent to which the Notes of such Series will be issuable in temporary or permanent global form (and, in such case, the depositary for such global note or notes, the terms and conditions, if any, upon which such global note may be exchanged, in whole or in part, for Definitive Notes, and the manner in which any interest payable on a temporary or global note will be paid); (m) the priority of such Series with respect to any other Series; (n) whether such Series will be a Principal Sharing Series; (o) whether such Series will be an Excess Allocation Series; (p) the Distribution Date; and (q) any other terms of such Series.

“ Proceeding ” shall mean any suit in equity, action at law or other judicial or administrative proceeding.

“ Rating Agency ” shall mean, with respect to any Outstanding Class of Notes which has been rated, each rating agency, as specified in the applicable Indenture Supplement, selected by the Transferor to rate the Notes of such Outstanding Class.

“ Rating Agency Condition ” shall mean, with respect to any action, that each Rating Agency shall have notified the Transferor, the Servicer, the Owner Trustee and the Indenture Trustee in writing that such action will not result in a reduction or withdrawal of the then existing rating of any outstanding Series or Class with respect to which it is a Rating Agency; provided , however , that if such Series or Class has not been rated, the Rating Agency Condition with respect to any such action shall either be defined in the related Indenture Supplement or shall not apply.

“ RB Receivables Purchase Agreement ” shall mean the Receivables Purchase Agreement between R. Raphaels & Son PLC and CCIA, dated as of April 4, 2007, as the same may be amended, supplemented or otherwise modified from time to time.

“ Receivables Purchase Agreement ” shall mean, as applicable, (i) the RB Receivables Purchase Agreement, (ii) any future receivables purchase agreement substantially in the form of the agreement specified in (i) above, entered into between CCIA or the Transferor and an Account Owner; provided , that (A) the Rating Agency Condition is satisfied with respect to such future receivables purchase agreement and (B) the Issuer shall have delivered to the Indenture Trustee an Officer’s Certificate to the effect that such officer reasonably believes that the execution and delivery of such future receivables purchase agreement will not have an Adverse Effect, (iii) the CCIA Receivables Purchase Agreement and (iv) any future receivables purchase agreement substantially in the form of the agreement specified in (iii) above, entered into between a seller and the Issuer; provided , that (A) the Rating Agency Condition is satisfied with respect to such future receivables purchase agreement and (B) the Issuer shall have delivered to the Indenture Trustee an Officer’s Certificate to the effect that such officer reasonably believes that the execution and delivery of such future receivables purchase agreement will not have an Adverse Effect.

“ Record Date ” shall mean, with respect to any Distribution Date, the last day of the calendar month immediately preceding such Distribution Date, unless otherwise specified for a Series in the related Indenture Supplement.

“ Redemption Date ” shall mean, with respect to any Series, the date or dates, if any, specified in the Indenture Supplement for such Series.

“ Redemption Period ” shall mean, with respect to any Series or Class within a Series, a period during which Collections of Principal Receivables are used to redeem (in whole or in part) the Notes or a Class of Notes of such Series, which shall be the controlled redemption period, the principal redemption period, the partial redemption period, the special redemption period, the early redemption period, the optional redemption period, the limited redemption period or other redemption period, in each case, as defined with respect to such Series in the related Indenture Supplement.

“ Registered Certificates ” shall have the meaning specified in Section 2.01(b) .

“ Registered Noteholder ” shall mean the Holder of a Registered Note.

“ Registered Notes ” shall have the meaning specified in Section 2.01(a) .

“ Reinvestment Event ” shall mean, if applicable with respect to any Series, any Reinvestment Event specified in the related Indenture Supplement.

“ Responsible Officer ” shall mean any officer within the Corporate Trust Office including any Senior Vice President, Managing Director, Director, Vice President, Assistant Vice President, Secretary, Assistant Secretary, Assistant Treasurer, Associate or Trust Officer or any other officer of the Indenture Trustee customarily performing functions similar to those performed by any of the above designated officers and, in each case, having direct responsibility for the administration of this Indenture.

“ Secured Obligations ” shall have the meaning set forth in the Granting Clause hereof.

“ Securities Act ” shall mean the Securities Act of 1933, as amended.

“ Seller ” shall mean any of R. Raphael & Sons PLC, the Transferor or any such Person acting as a seller under a Receivables Purchases Agreement, in its capacity as seller under a Receivables Purchase Agreement.

“ Series ” shall mean any series of Notes and, if applicable, O/C Certificates issued pursuant to this Indenture.

“ Series Account ” shall mean any deposit, trust, escrow or similar account maintained for the benefit of the Noteholders or O/C Holder of any Series or Class or any Series Enhancer, as specified in any Indenture Supplement.

“ Series Enhancement ” shall mean the rights and benefits provided to the Issuer or the Noteholders of any Series or Class pursuant to any letter of credit, surety bond, cash collateral account, spread account, guaranteed rate agreement, maturity liquidity facility, tax protection agreement, interest rate swap agreement, interest rate cap agreement, cross currency swap agreement or other derivative agreement or other similar arrangement. Series Enhancement will also refer to any agreements, instruments or documents governing the terms of the enhancements mentioned in the previous sentence or under which they are issued, where the context makes sense. The subordination of any Series or Class to another Series or Class shall be deemed to be a Series Enhancement.

“ Series Enhancer ” shall mean the Person or Persons providing any Series Enhancement, other than (except to the extent otherwise provided with respect to any Series in the Indenture Supplement for such Series) the Noteholders or the O/C Holder of any Series or Class which is subordinated to another Series or Class.

“ Series Issuance Date ” shall mean, with respect to any Series, the date on which the Notes of such Series are to be originally issued in accordance with Section 2.10 and the related Indenture Supplement.

“ Servicer ” shall mean CCIA, in its capacity as servicer pursuant to the Transfer and Servicing Agreement, and, after any Service Transfer, the Successor Servicer.

“ Stated Maturity Date ” shall mean, for any Series or Class of Notes or any installment of principal for such Series or Class, the date specified in the Indenture Supplement for such Series or Class as the fixed date on which the principal of such Series or Class or such installment of principal is required to be paid; provided , that a date on which principal is scheduled or expected to be paid, but is not required to be paid, is not a Stated Maturity Date.

“ Tax Opinion ” shall mean, with respect to any action, an Opinion of Counsel to the effect that, for federal income tax purposes, (a) such action will not adversely affect the tax characterization as debt of the Notes of any outstanding Series or Class that was characterized as debt at the time of its issuance, (b) such action will not cause or constitute an event in which gain or loss would be recognized by any Noteholder whose Notes were characterized as debt at the time of their issuance, and (c) such action will not cause the Issuer to be deemed to be an association (or publicly traded partnership) taxable as a corporation.

“ Transfer and Servicing Agreement ” shall mean the Transfer and Servicing Agreement, dated as of April 4, 2007, among the Transferor, the Servicer, the Issuer and the Indenture Trustee, as the same may be amended, supplemented or otherwise modified from time to time.

“ Transferor ” shall mean Partridge Funding Corporation, a corporation organized and existing under the laws of the State of Nevada, and its successors and permitted assigns.

“ Transaction Documents ” shall mean, for any Series of Notes, the Nevada Certificate of Trust, the Trust Agreement, the Receivables Purchase Agreements, the Transfer and Servicing Agreement, this Indenture, the related Indenture Supplement, the Administration Agreement, the English Law Debenture and such other documents and certificates delivered in connection therewith.

“ Trust Agreement ” shall mean the Amended and Restated Trust Agreement relating to the Issuer, dated as of April 4, 2007, between the Transferor and the Owner Trustee as the same may be amended, supplemented or otherwise modified from time to time.

“ Trust Estate ” shall have the meaning set forth in the Granting Clause hereof.

Section 1.02. Other Definitional Provisions .

(a) With respect to any Series, all terms used herein and not otherwise defined herein shall have meanings ascribed to them in the Trust Agreement, the Transfer and Servicing Agreement or the related Indenture Supplement, as applicable.

(b) All terms defined in this Indenture shall have the defined meanings when used in any certificate or other document made or delivered pursuant hereto unless otherwise defined therein.

(c) As used in this Indenture and in any certificate or other document made or delivered pursuant hereto, accounting terms not defined in this Indenture or in any such certificate or other document, and accounting terms partly defined in this Indenture or in any such certificate or other document to the extent not defined, shall have the respective meanings given to them under generally accepted accounting principles or regulatory accounting

principles, as applicable and as in effect on the date of this Indenture. To the extent that the definitions of accounting terms in this Indenture or in any such certificate or other document are inconsistent with the meanings of such terms under generally accepted accounting principles or regulatory accounting principles in the United States, the definitions contained in this Indenture or in any such certificate or other document shall control.

(d) Any reference to each Rating Agency shall only apply to any specific rating agency if such rating agency is then rating any Outstanding Class of Notes.

(e) Unless otherwise specified, references to any amount as on deposit or outstanding on any particular date shall mean such amount at the close of business on such day.

(f) The words “ hereof ,” “ herein ” and “ hereunder ” and words of similar import when used in this Indenture shall refer to this Indenture as a whole and not to any particular provision or subdivision of this Indenture; references to any subsection, Section, Schedule or Exhibit are references to subsections, Sections, Schedules and Exhibits in or to this Indenture unless otherwise specified; and the term “ including ” means “ including without limitation .”

(g) Any term used herein that is defined in the New York Uniform Commercial Code and not otherwise defined herein shall have the meaning set forth in the New York Uniform Commercial Code, unless the context requires otherwise.

(h) Any reference herein to a “beneficial interest” in a security also shall mean a security entitlement with respect to such security, and any reference herein to a “beneficial owner” or “beneficial holder” of a security also shall mean the holder of a security entitlement with respect to such security.

ARTICLE II

THE NOTES

Section 2.01. Form Generally .

(a) Notes . The Notes of any Series or Class shall be issued in fully registered form without interest coupons (the “ Registered Notes ”). Such Registered Notes shall be substantially in the form of the exhibits with respect thereto attached to the applicable Indenture Supplement with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture or such Indenture Supplement, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon, as may, consistently herewith, be determined by the officers executing such Notes, as evidenced by their execution of such Notes. Any portion of the text of any Note may be set forth on the reverse thereof, with an appropriate reference thereto on the face of the Note.

The Notes shall be typewritten, word processed, printed, lithographed or engraved or produced by any combination of these methods, all as determined by the officers executing such Notes, as evidenced by their execution of such Notes. If specified in any Indenture Supplement, the Notes of any Series or Class shall be issued upon initial issuance as one or more Notes evidencing the aggregate original principal amount of such Series or Class as described in Section 2.10 .

Each Global Note will be dated the Closing Date. All Registered Notes shall be dated the date of their authentication.

(b) O/C Certificates . The O/C Certificates shall be issued in fully registered form without interest coupons (the “ Registered Certificates ”). Such Registered Certificates shall be substantially in the form of the exhibits with respect thereto attached to the Indenture Supplement with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture or such Indenture Supplement, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon, as may, consistently herewith, be determined by the officers executing such O/C Certificates, as evidenced by their execution of such O/C Certificates. Any portion of the text of any O/C Certificate may be set forth on the reverse thereof, with an appropriate reference thereto on the face of the O/C Certificate.

The O/C Certificates shall be typewritten, word processed, printed, lithographed or engraved or produced by any combination of these methods, all as determined by the officers executing such O/C Certificates, as evidenced by their execution of such O/C Certificates. If specified in any Indenture Supplement, the O/C Certificate of any Series or Class shall be issued upon initial issuance as one or more certificates evidencing the aggregate original principal amount of such Series or Class as described in Section 2.10 .

Section 2.02. Denominations .

Except as otherwise specified in the related Indenture Supplement and the Notes, each class of Notes of each Series shall be issued in fully registered form in minimum amounts of £100,000 and in integral multiples of £1,000 in excess thereof (except that one Note of each Class may be issued in a different amount, so long as such amount exceeds the applicable minimum denomination for such Class).

Section 2.03. Execution, Authentication and Delivery .

Each Note and O/C Certificate shall be executed by manual or facsimile signature on behalf of the Issuer by an Authorized Officer of the Issuer.

Notes or O/C Certificates bearing the manual or facsimile signature of an individual who was, at the time when such signature was affixed, authorized to sign on behalf of the Issuer shall not be rendered invalid, notwithstanding the fact that such individual ceased to be so authorized prior to the authentication and delivery of such Notes or O/C Certificates, as applicable, or does not hold such office at the date of issuance of such Notes or O/C Certificates, as applicable.

At any time and from time to time after the execution and delivery of this Indenture, the Issuer may deliver Notes or O/C Certificates executed by the Issuer to the Indenture Trustee for authentication and delivery, and the Indenture Trustee shall authenticate and deliver such Notes or O/C Certificates as provided in this Indenture or the related Indenture Supplement and not otherwise.

No Note or O/C Certificate shall be entitled to any benefit under this Indenture or the applicable Indenture Supplement or be valid or obligatory for any purpose, unless there appears on such Note or O/C Certificate a certificate of authentication substantially in the form provided for herein or in the related Indenture Supplement executed by or on behalf of the Indenture Trustee by the manual signature of a duly authorized signatory, and such certificate upon any Note or O/C Certificate shall be conclusive evidence, and the only evidence, that such Note or O/C Certificate has been duly authenticated and delivered hereunder.

Section 2.04. Authenticating Agent .

(a) The Indenture Trustee may appoint one or more authenticating agents with respect to the Notes and O/C Certificates which shall be authorized to act on behalf of the Indenture Trustee in authenticating the Notes and O/C Certificates in connection with the issuance, delivery, registration of transfer, exchange or repayment of the Notes or O/C Certificates. Whenever reference is made in this Indenture to the authentication of Notes or O/C Certificates by the Indenture Trustee or the Indenture Trustee’s certificate of authentication, such reference shall include authentication on behalf of the Indenture Trustee by an authenticating agent and a certificate of authentication executed on behalf of the Indenture Trustee by an authenticating agent. Each authenticating agent must be acceptable to the Issuer and the Servicer.

(b) Any institution succeeding to the corporate agency business of an authenticating agent shall continue to be an authenticating agent without the execution or filing of any power or any further act on the part of the Indenture Trustee or such authenticating agent.

(c) An authenticating agent may at any time resign by giving notice of resignation to the Indenture Trustee and to the Issuer. The Indenture Trustee may at any time terminate the agency of an authenticating agent by giving notice of termination to such

authenticating agent and to the Issuer and the Servicer. Upon receiving such a notice of resignation or upon such a termination, or in case at any time an authenticating agent shall cease to be acceptable to the Indenture Trustee or the Issuer, the Indenture Trustee may promptly appoint a successor authenticating agent. Any successor authenticating agent upon acceptance of its appointment hereunder shall become vested with all the rights, powers and duties of its predecessor hereunder, with like effect as if originally named as an authenticating agent. No successor authenticating agent shall be appointed unless acceptable to the Issuer and the Servicer.

(d) The Issuer agrees to pay to each authenticating agent from time to time reasonable compensation for its services under this Section 2.04 .

(e) The provisions of Sections 6.01 and 6.04 shall be applicable to any authenticating agent.

(f) Pursuant to an appointment made under this Section 2.04 , the Notes and O/C Certificates may have endorsed thereon, in lieu of or in addition to the Indenture Trustee’s certificate of authentication, an alternative certificate of authentication in substantially the following form:

(i) In the case of the Notes:

“This is one of the Notes described in the within-mentioned Indenture.






		as Authenticating Agent
		for the Indenture Trustee

By:
		Authorized Signatory”

(ii) In the case of the O/C Certificates:

“This is one of the O/C Certificates described in the within-mentioned Indenture.






		as Authenticating Agent
		for the Indenture Trustee

By:
		Authorized Signatory”

Section 2.05. Registration of Transfer and Exchange of Notes and O/C Certificates .

(a) The Issuer shall cause to be kept with the Indenture Trustee, a register (the “ Note Register ”) in which, subject to such reasonable regulations as it may prescribe, the registration of Notes and O/C Certificates and the registration of transfers of Notes and O/C Certificates shall be provided. A note registrar (which may be the Indenture Trustee) (in such capacity, the “ Note Registrar ”) shall provide for the registration of Registered Notes and Registered Certificates, and transfers and exchanges of Registered Notes and Registered Certificates as herein provided. The Note Registrar shall initially be the Indenture Trustee and any co-note registrar chosen by the Issuer and acceptable to the Indenture Trustee. Any reference in this Indenture to the Note Registrar shall include any co-note registrar unless the context requires otherwise.

The Indenture Trustee may revoke such appointment and remove any Note Registrar if the Indenture Trustee determines in its sole discretion that such Note Registrar failed to perform its obligations under this Indenture in any material respect. Any Note Registrar shall be permitted to resign as Note Registrar upon thirty (30) days written notice to the Issuer and the Indenture Trustee; provided , however , that such resignation shall not be effective and such Note Registrar shall continue to perform its duties as Note Registrar until the Indenture Trustee has appointed a successor Note Registrar (which may be the Indenture Trustee) reasonably acceptable to the Issuer.

Upon surrender for registration of transfer or exchange of any Registered Note or Registered Certificate at any office or agency of the Note Registrar maintained for such purpose, one or more new Registered Notes or Registered Certificates, as applicable, (of the same Series and Class) in authorized denominations of like tenor and aggregate principal amount shall be executed, authenticated and delivered, in the name of the designated transferee or transferees.

At the option of a Registered Noteholder or O/C Holder, subject to the provisions of this Section 2.05 , Registered Notes or Registered Certificates may be exchanged for other Registered Notes or Registered Certificates (of the same Series and Class), as applicable, of authorized denominations of like tenor and aggregate principal amount, upon surrender of the Registered Notes or Registered Certificates, as applicable, to be exchanged at any such office or agency.

All Notes issued upon any registration of transfer or exchange of Notes or O/C Certificates shall be the valid obligations of the Issuer, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Notes or O/C Certificates surrendered upon such registration of transfer or exchange.

The preceding provisions of this Section 2.05(a) notwithstanding, the Indenture Trustee or the Note Registrar, as the case may be, shall not be required to register the transfer of or exchange any Note or O/C Certificate for a period of fifteen (15) days preceding the due date for any payment with respect to the Note or O/C Certificate.

Whenever any Notes or O/C Certificates are so surrendered for exchange, the Issuer shall execute and the Indenture Trustee shall authenticate and deliver the Notes or O/C

Certificates which the Noteholder or O/C Holder, as applicable, making the exchange is entitled to receive. Every Note or O/C Certificate presented or surrendered for registration of transfer or exchange shall be accompanied by a written instrument of transfer in a form satisfactory to the Indenture Trustee or the Note Registrar duly executed by the Noteholder or O/C Holder, as the case may be, or the attorney-in-fact thereof duly authorized in writing.

No service charge shall be made for any registration of transfer or exchange of Notes or O/C Certificates, but the Note Registrar may require payment of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any such transfer or exchange.

All Notes or O/C Certificates surrendered for registration of transfer and exchange or for payment shall be canceled and disposed of in a manner satisfactory to the Issuer as confirmed in writing by the Issuer to the Indenture Trustee. The Indenture Trustee shall cancel and destroy any Global Note upon its exchange in full for definitive Notes and shall deliver a certificate of destruction to the Issuer. Such certificate shall also state that a certificate or certificates of a Foreign Clearing Agency referred to in the applicable Indenture Supplement was received with respect to each portion of the Global Note exchanged for definitive Notes.

The Issuer shall execute and deliver to the Indenture Trustee, Registered Notes and Registered Certificates in such amounts and at such times as are necessary to enable the Indenture Trustee to fulfill its responsibilities under this Indenture, the Notes and the O/C Certificates.

(b) The Note Registrar will maintain at its expense in New York, New York, or Nashville, Tennessee, an office or agency where Notes or O/C Certificates may be surrendered for registration of transfer or exchange.

Section 2.06. Mutilated, Destroyed, Lost or Stolen Notes and O/C Certificates .

If (a) any mutilated Note or O/C Certificate is surrendered to the Note Registrar, or the Note Registrar receives evidence to its satisfaction of the destruction, loss or theft of any Note or O/C Certificate, and (b) in case of destruction, loss or theft there is delivered to the Note Registrar such security or indemnity as may be required by it to hold the Issuer, the Transferor, the Note Registrar and the Indenture Trustee harmless, then, in the absence of notice to the Issuer, the Transferor, the Note Registrar or the Indenture Trustee that such Note or O/C Certificate has been acquired by a protected purchaser, the Issuer shall execute, and the Indenture Trustee shall authenticate and the Note Registrar shall deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Note or O/C Certificate, a replacement Note or O/C Certificate, respectively, of like tenor and aggregate principal amount, bearing a number not contemporaneously outstanding; provided , however , that if any such mutilated, destroyed, lost or stolen Note or O/C Certificate shall have become or within seven (7) days shall be due and payable, or shall have been selected or called for redemption, instead of issuing a replacement Note or O/C Certificate, the Issuer may pay such Note or O/C Certificate without surrender thereof, except that any mutilated Note or O/C Certificate shall be surrendered. If, after the delivery of such replacement Note or O/C Certificate or payment of a destroyed, lost or stolen Note or O/C Certificate pursuant to the proviso to the preceding sentence, a protected purchaser of the original Note or O/C Certificate in lieu of which such replacement Note or O/C

Certificate was issued presents for payment such original Note or O/C Certificate, the Issuer and the Indenture Trustee shall be entitled to recover such replacement Note or O/C Certificate (or such payment) from the Person to whom it was delivered or any Person taking such replacement Note or O/C Certificate from such Person to whom such replacement Note or O/C Certificate was delivered or any assignee of such Person, except a protected purchaser, and shall be entitled to recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost or expense incurred by the Issuer, the Transferor or the Indenture Trustee in connection therewith.

In connection with the issuance of any replacement Note or O/C Certificate under this Section 2.06 , the Issuer or the Note Registrar may require the payment by the Holder of such Note or the O/C Holder of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other reasonable expenses (including the reasonable fees and expenses of the Indenture Trustee or the Note Registrar) connected therewith.

Any replacement Note or O/C Certificate issued pursuant to this Section in replacement of any mutilated, destroyed, lost or stolen Note or O/C Certificate shall constitute complete and indefeasible evidence of a debt of the Issuer, as if originally issued, whether or not the destroyed, lost or stolen Note or O/C Certificate shall be found at any time, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Notes or O/C Certificates, respectively, duly issued hereunder.

The provisions of this Section 2.06 are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Notes or O/C Certificates.

Section 2.07. Persons Deemed Owners .

The Indenture Trustee, the Paying Agent, the Note Registrar, the Transferor, the Issuer and any agent of any of them may prior to due presentation of a Registered Note or Registered Certificate for registration of transfer, treat the Person in whose name any Registered Note or Registered Certificate is registered as the owner of such Registered Note or Registered Certificate for the purpose of receiving distributions pursuant to the terms of the applicable Indenture Supplement and for all other purposes whatsoever, and, in any such case, neither the Indenture Trustee, the Paying Agent, the Note Registrar, the Transferor, the Issuer nor any agent of any of them shall be affected by any notice to the contrary.

Section 2.08. Appointment of Paying Agent .

The Issuer hereby agrees that the Indenture Trustee may appoint Deutsche Bank AG, London Branch as the Paying Agent, and the Indenture Trustee hereby appoints Deutsche Bank AG, London Branch as the Paying Agent and hereby delegates all of the rights and responsibilities as Paying Agent under this Agreement to Deutsche Bank AG, London Branch.

The Paying Agent shall make distributions to Noteholders from the Collection Account or applicable Series Account pursuant to the provisions of the applicable Indenture Supplement. The Indenture Trustee shall have the revocable power to withdraw funds from the Collection Account or applicable Series Account for the purpose of providing such funds to the Paying Agent or making the distributions referred to above. The Issuer may remove the Paying

Agent if the Issuer determines in its sole discretion that the Paying Agent shall have failed to perform its obligations under this Indenture in any material respect. The Issuer reserves the right at any time to vary or terminate the appointment of a Paying Agent for the Notes, and to appoint additional or other Paying Agents, provided that it will at all times maintain the Indenture Trustee as a Paying Agent. In the event that any Paying Agent shall resign, the Issuer shall appoint a successor to act as Paying Agent. The Issuer shall cause each Paying Agent to execute and deliver to the Issuer and the Indenture Trustee an instrument as described in Section 3.03 . Any reference in this Indenture to the Paying Agent shall include any co-paying agent unless the context requires otherwise.

Section 2.09. Cancellation .

All Notes and O/C Certificates surrendered for payment, registration of transfer, exchange or redemption shall, if surrendered to any Person other than the Indenture Trustee, be delivered to the Indenture Trustee and shall be promptly cancelled by it. The Issuer may at any time deliver to the Indenture Trustee for cancellation any Notes and O/C Certificates previously authenticated and delivered hereunder which the Issuer may have acquired in any lawful manner whatsoever, and all Notes and O/C Certificates so delivered shall be promptly cancelled by the Indenture Trustee. No Notes or O/C Certificates shall be authenticated in lieu of or in exchange for any Notes or O/C Certificates cancelled as provided in this Section, except as expressly permitted by this Indenture. All cancelled Notes and O/C Certificates held by the Indenture Trustee shall be destroyed unless the Issuer shall direct prior to destruction that they be returned to the Issuer.

Section 2.10. New Issuances .

(a) Pursuant to one or more Indenture Supplements, the Issuer may from time to time direct the Indenture Trustee, on behalf of the Issuer, to issue one or more new Series of Notes or an O/C Certificate (a “ New Issuance ”). Outstanding Classes of Notes shall be equally and ratably entitled as provided herein to the benefits of this Indenture without preference, priority or distinction on account of the actual time of the authentication and delivery or Expected Principal Payment Date or Stated Maturity Date, all in accordance with the terms and provisions of this Indenture and the applicable Indenture Supplement except, with respect to any Series or Class, as provided in the related Indenture Supplement. The total principal amount of Notes that may be authenticated and delivered and Outstanding under this Indenture is not limited.

(b) On or before the Series Issuance Date relating to any new Series, the parties hereto will execute and deliver an Indenture Supplement which will specify the Principal Terms of such new Series. The terms of such Indenture Supplement may modify or amend the terms of this Indenture solely as applied to such new Series. The Indenture Trustee shall execute the Indenture Supplement and the Issuer shall execute the Notes and O/C Certificate of such Series and deliver the Notes and O/C Certificate to the Indenture Trustee for authentication and delivery. The issuance of any such Notes or O/C Certificate of any new Series (other than any Series issued pursuant to an Indenture Supplement dated as of the date hereof) shall be subject to the satisfaction of the following conditions:

(i) on or before the fifth (5 ^th ) Business Day immediately preceding the Series Issuance Date, the Issuer shall have given notice to the Indenture Trustee, the Servicer and each Rating Agency, if any, that has rated any Series or Class (unless such notice requirement is otherwise waived) of such issuance and the Series Issuance Date;

(ii) the Issuer shall have delivered to the Indenture Trustee the related Indenture Supplement, in a form satisfactory to the Indenture Trustee, executed by each party hereto (other than the Indenture Trustee) and specifying the relevant Principal Terms;

(iii) the Issuer shall have delivered to the Indenture Trustee any related Series Enhancement executed by each of the parties thereto, other than the Indenture Trustee;

(iv) the Rating Agency Condition, if applicable, shall have been satisfied with respect to such issuance;

(v) such issuance will not result in the occurrence of a Default, an Adverse Effect or an Early Redemption Event or Reinvestment Event for any Series, and the Issuer shall have delivered to the Indenture Trustee an Officer’s Certificate of the Issuer, dated the Series Issuance Date for such Series, to the effect that (1) the Issuer reasonably believes that such issuance will not, based on the facts known to the Person executing such Officer’s Certificate, have an Adverse Effect or result in the occurrence of a Default or Early Redemption Event or Reinvestment Event for any Series then Outstanding and (2) all conditions precedent to such execution, authentication and delivery have been satisfied; and

(vi) the Issuer shall have delivered to the Indenture Trustee and the Owner Trustee (with a copy to each Rating Agency, as applicable), a Tax Opinion dated the Series Issuance Date addressing the New Issuance.

Section 2.11. Book-Entry Notes .

Unless otherwise specified in any related Indenture Supplement for any Series or Class, the Notes, upon original issuance, shall be issued in the form of one or more Notes representing the Book-Entry Notes, to be delivered to the Clearing Agency or Foreign Clearing Agency on behalf of the Issuer. The Notes shall initially be registered on the Note Register in the name of the Clearing Agency or Foreign Clearing Agency or its nominee, and no owner of a security entitlement to Notes will receive a definitive note representing such owner’s security entitlement to the Notes, except as provided in Section 2.13 . Unless and until definitive, fully registered Notes (“ Definitive Notes ”) have been issued to the applicable owners of security entitlements to the Notes pursuant to Section 2.13 or as otherwise specified in any such Indenture Supplement:

(a) the provisions of this Section 2.11 shall be in full force and effect with respect to each such Series;

(b) the Issuer, the Transferor and the Indenture Trustee shall be entitled to deal with the Clearing Agency or Foreign Clearing Agency and the Clearing Agency Participants for all purposes of this Indenture (including distributions) as the authorized representatives of the owners of the security entitlements to the Notes;

(c) to the extent that the provisions of this Section 2.11 conflict with any other provisions of this Indenture, the provisions of this Section 2.11 shall control with respect to each such Series; and

(d) the rights of the respective owners of security entitlements to each such Series shall be exercised only through the Clearing Agency or Foreign Clearing Agency and the applicable Clearing Agency Participants and shall be limited to those established by law and agreements between such owners and the Clearing Agency or Foreign Clearing Agency and/or the Clearing Agency Participants. Pursuant to the Depository Agreement applicable to a Series, unless and until Definitive Notes of such Series are issued pursuant to Section 2.13 , the initial Clearing Agency shall make book-entry transfers among the Clearing Agency Participants and receive and transmit distributions of principal and interest on the related Notes to such Clearing Agency Participants.

For purposes of any provision of this Indenture requiring or permitting actions with the consent of, or at the direction of, Noteholders evidencing a specified percentage of the aggregate unpaid principal amount of Notes, such direction or consent may be given by owners (acting through the Clearing Agency and the Clearing Agency Participants) owning security entitlements to Notes evidencing the requisite percentage of principal amount of Notes.

Section 2.12. Notices to Clearing Agency or Foreign Clearing Agency .

Whenever a notice or other communication is required to be given to the Noteholders of any Series or Class with respect to which Book-Entry Notes have been issued, unless and until Definitive Notes shall have been issued to the related owners of security entitlements pursuant to Section 2.13 , the Indenture Trustee shall give all such notices and communications to the Clearing Agency or Foreign Clearing Agency, as applicable.

Section 2.13. Definitive Notes .

If Book-Entry Notes have been issued with respect to any Series or Class and (i) (a) the Issuer advises the Indenture Trustee that the Clearing Agency or Foreign Clearing Agency is no longer willing or able to discharge properly its responsibilities with respect to such Series or Class and (b) the Issuer is unable to locate and reach an agreement on satisfactory terms with a qualified successor, (ii) to the extent permitted by law, the Issuer, at its option, advises the Indenture Trustee in writing that it elects to terminate the book-entry system through the Clearing Agency or Foreign Clearing Agency with respect to such Series or Class or (iii) after the occurrence of a Servicer Default or an Event of Default, owners of security entitlements to such Series or Class representing not less than 50% of the principal amount of the Book-Entry Notes of such Series or Class advise the Indenture Trustee and the applicable Clearing Agency or Foreign Clearing Agency in writing through the applicable Clearing Agency Participants that the continuation of a book-entry system with respect to the Notes of such Series or Class is no longer in the best interests of the owners of security entitlements to such Series or Class, then the

Indenture Trustee shall notify all owners of security entitlements to such Series or Class, through the Clearing Agency or Foreign Clearing Agency, as applicable, of the occurrence of such event and of the availability of Definitive Notes to owners of security entitlements to such Series or Class. Upon surrender to the Indenture Trustee of such Notes by the Clearing Agency, accompanied by registration instructions from the applicable Clearing Agency for registration, the Issuer shall execute and the Indenture Trustee shall authenticate Definitive Notes of such Class and shall recognize the registered holders of such Definitive Notes as Noteholders under this Indenture. Neither the Issuer nor the Indenture Trustee shall be liable for any delay in delivery of such instructions, and the Issuer and the Indenture Trustee may conclusively rely on, and shall be protected in relying on, such instructions. Upon the issuance of Definitive Notes of such Series, all references herein to obligations imposed upon or to be performed by the applicable Clearing Agency or Foreign Clearing Agency shall be deemed to be imposed upon and performed by the Indenture Trustee, to the extent applicable with respect to such Definitive Notes, and the Indenture Trustee shall recognize the registered Holders of such Definitive Notes of such Series or Class as Noteholders of such Series or Class hereunder. Definitive Notes will be transferable and exchangeable at the offices of the Note Registrar.

Section 2.14. Global Note .

If specified in the related Indenture Supplement for any Series or Class, the Notes for such Series or Class will initially be issued in the form of a single temporary global Note (the “ Global Note ”), in the denomination of the entire aggregate principal amount of such Series or Class and substantially in the form set forth in the exhibit with respect thereto attached to the related Indenture Supplement. The Global Note will be executed by the Issuer and authenticated by the Indenture Trustee at the written direction of the Issuer upon the same conditions, in substantially the same manner and with the same effect as the Definitive Notes. The Global Note may be exchanged for Registered Notes in definitive form, as provided in the related Indenture Supplement.

Section 2.15. Release of Collateral .

Subject to Section 11.01 , the Indenture Trustee shall release property from the lien of this Indenture only upon receipt of an Issuer Order accompanied by an Officer’s Certificate and an Opinion of Counsel.

ARTICLE III

REPRESENTATIONS AND COVENANTS OF ISSUER

Section 3.01. Payment of Principal and Interest .

(a) The Issuer will duly and punctually pay principal (and premium, if any) and, if such Note or O/C Certificate is an Interest-bearing Note or O/C Certificate, interest, in each case in accordance with the terms of the Notes and the O/C Certificate, if any, as specified in the relevant Indenture Supplement.

(b) The Noteholders and the O/C Holder of a Series as of the Record Date in respect of a Payment Date shall be entitled to the interest (if any) accrued and payable and principal (and premium, if any) payable on such Payment Date as specified in the related

Indenture Supplement. All payment obligations under a Note or an O/C Certificate are discharged to the extent such payments are made to the Noteholder and the O/C Holder of record.

Section 3.02. Maintenance of Office or Agency .

The Issuer will maintain an office or agency within Nashville, Tennessee or New York, New York where Notes may be presented or surrendered for payment, where Notes may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Issuer in respect of the Notes and this Indenture may be served. The Issuer hereby initially appoints the Indenture Trustee located at its Corporate Trust Office to serve as its agent for the foregoing purposes. The Issuer will give prompt written notice to the Indenture Trustee, the Servicer and the Noteholders of any change in the location of any such office or agency. If at any time the Issuer shall fail to maintain any such office or agency or shall fail to furnish the Indenture Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at its office located at 648 Grassmere Park Road, Nashville, Tennessee 37211, and the Issuer hereby appoints the Indenture Trustee as its agent to receive all such presentations, surrenders, notices and demands at its office located at 648 Grassmere Park Road, Nashville, Tennessee 37211. Additionally, the Issuer requests that a copy of all such presentations, surrenders, notices and demands be sent to 3993 Howard Hughes Parkway, Suite 250, Room 215, Las Vegas, Nevada 89109.

Section 3.03. Money for Note Payments to Be Held in Trust .

As specified in Section 8.02 and in the related Indenture Supplement, all payments of amounts due and payable on the Notes or O/C Certificate, if any, which are to be made from amounts withdrawn from the Collection Account or any Series Account shall be made on behalf of the Issuer by the Indenture Trustee or by the Paying Agent, and no amounts so withdrawn from the Collection Account or any Series Account shall be paid over to or at the direction of the Issuer except as provided in this Indenture or in the related Indenture Supplement.

Whenever the Issuer shall have a Paying Agent in addition to the Indenture Trustee, it will, on or before the Business Day next preceding each Payment Date, direct in writing the Indenture Trustee to deposit with such Paying Agent no later than 4 p.m. (London time) one Business Day prior to such Payment Date an aggregate sum sufficient to pay the amounts then becoming due, such sum to be (i) held in trust for the benefit of Persons entitled thereto and (ii) invested, pursuant to an Issuer Order or at the written direction of the Servicer, as applicable, by the Paying Agent in a specific Eligible Investment in accordance with the terms of the related Indenture Supplement. For all investments made by a Paying Agent under this Section 3.03 , such Paying Agent shall be entitled to all of the rights, obligations, protections and indemnities of the Indenture Trustee under this Indenture and the related Indenture Supplement, such rights and obligations being incorporated in this paragraph by this reference.

The Issuer will cause each Paying Agent other than the Indenture Trustee to execute and deliver to the Issuer and the Indenture Trustee an instrument in which such Paying Agent shall agree with the Issuer (and if the Indenture Trustee acts as Paying Agent, it hereby so agrees), subject to the provisions of this Section 3.03 , that such Paying Agent will:

(i) hold all sums held by it for the payment of amounts due with respect to the Notes and O/C Certificates in trust for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein provided and pay such sums to such Persons as herein provided;

(ii) give the Indenture Trustee notice of any default by the Issuer (or any other obligor upon the Notes) of which it has actual knowledge in the making of any payment required to be made with respect to the Notes;

(iii) at any time during the continuance of any such default, upon the written request of the Indenture Trustee, forthwith pay to the Indenture Trustee all sums so held in trust by such Paying Agent;

(iv) immediately resign as a Paying Agent and forthwith pay to the Indenture Trustee all sums held by it in trust for the payment of Notes or the O/C Certificates if at any time it ceases to meet the standards required to be met by a Paying Agent at the time of its appointment; and

(v) comply with all applicable tax laws with respect to the withholding from any payments made by it on any Notes of any applicable withholding taxes imposed thereon and with respect to any applicable reporting requirements in connection therewith.

The Issuer may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, by Issuer Order direct any Paying Agent to pay to the Indenture Trustee all sums held in trust by such Paying Agent, such sums to be held by the Indenture Trustee upon the same trusts as those upon which such sums were held by such Paying Agent; and upon such payment by any Paying Agent to the Indenture Trustee, such Paying Agent shall be released from all further liability with respect to such money. Furthermore, neither the Indenture Trustee nor the Paying Agent shall have any responsibility or liability for any loss resulting from its being unable to perform any functions or obligations hereunder if the same results from any law, regulation or requirement (whether or not having the forces of law) of any central bank or governmental or other regulatory authority affecting it.

Subject to applicable laws with respect to escheat of funds, and after such notice required with respect to Notes not surrendered for cancellation pursuant to Section 10.02(b) is given, any money held by the Indenture Trustee or any Paying Agent in trust for the payment of any amount due with respect to any Note remaining unclaimed for two years after such amount has become due and payable shall be discharged from such trust, and the Indenture Trustee or such Paying Agent, as the case may be, shall give prompt notice of such occurrence to the Issuer and shall release such money to the Issuer on Issuer Order; and the Holder of such Note shall thereafter, as an unsecured general creditor, look only to the Issuer (and then only to the extent of the amounts so paid to the Issuer) for payment thereof, and all liability of the Indenture Trustee or such Paying Agent with respect to such trust money shall thereupon cease; provided , however , that the Indenture Trustee or such Paying Agent, before being required to make any such repayment, shall at the direction of the Issuer cause to be published once, in a newspaper published in the English language, customarily published on each Business Day and of general circulation in The City of New York, notice that such money remains unclaimed and that, after a date specified

therein, which shall not be less than thirty (30) days from the date of such publication, any unclaimed balance of such money then remaining will be repaid to the Issuer. The cost of any such notice or publication shall be paid out of funds in the Collection Account or any Series Account held for the benefit of the Noteholders. The Indenture Trustee shall also adopt and employ, at the expense of the Issuer, any other reasonable means of notification of such repayment (including, but not limited to, mailing notice of such repayment to Holders whose Notes have been called but have not been surrendered for redemption or whose right to or interest in moneys due and payable but not claimed is determinable from the records of the Indenture Trustee or of any Paying Agent, at the last address of record for each such Holder).

Section 3.04. Existence .

The Issuer will keep in full effect its existence, rights and franchises as a business trust under the laws of the State of Nevada (unless it becomes, or any successor Issuer hereunder is or becomes, organized under the laws of any other state or of the United States of America, in which case the Issuer will keep in full effect its existence, rights and franchises under the laws of such other jurisdiction) and will obtain and preserve its qualification to do business in each jurisdiction in which such qualification is or shall be necessary to protect the validity and enforceability of this Indenture, the Notes, the O/C Certificates and the Trust Estate.

Section 3.05. Protection of Trust .

The Issuer will from time to time take all actions necessary, including without limitation preparing, or causing to be prepared, authorizing, executing and delivering all such supplements and amendments hereto and all such financing statements, amendments to financing statements, continuation statements, if any, instruments of further assurance and other instruments, and will take such other action necessary or advisable to:

(a) Grant more effectively all or any portion of the Trust Estate as security for the Notes and the O/C Certificates;

(b) maintain or perfect or preserve the lien and security interest (and the priority thereof) of this Indenture or to carry out more effectively the purposes hereof;

(d) preserve and defend title to the Trust Estate and the rights therein of the Indenture Trustee, the Noteholders, the O/C Holder and Series Enhancers (if any) secured thereby against the claims of all Persons and parties.

The Issuer hereby designates the Indenture Trustee its agent and attorney-in-fact to execute any instrument required pursuant to this Section 3.05 .

The Issuer shall pay or cause to be paid any taxes levied on all or any part of the Trust Estate.

Section 3.06. Opinions as to Trust Estate .

(a) On each Series Issuance Date, the Issuer shall furnish to the Indenture Trustee an Opinion of Counsel (with a copy to each Rating Agency, as applicable) either stating that, in the opinion of such counsel, such action has been taken to perfect the lien and security interest of this Indenture, including without limitation with respect to the recording and filing of this Indenture, any indentures supplemental hereto, and any other requisite documents, and with respect to the filing of any financing statements and amendments to financing statements, as are so necessary and reciting the details of such action, or stating that, in the opinion of such counsel, no such action is necessary to maintain the perfection of such lien and security interest.

(b) On or before June 30 in each calendar year, beginning in 2008, the Issuer shall furnish to the Indenture Trustee an Opinion of Counsel either stating that, in the opinion of such counsel, such action has been taken to perfect the lien and security interest of this Indenture, including without limitation with respect to the recording, filing, re-recording and refiling of this Indenture, any indentures supplemental hereto and any other requisite documents and with respect to the filing of any financing statements and amendments to financing statements as is so necessary and reciting the details of such action or stating that in the opinion of such counsel no such action is necessary to maintain the perfection of such lien and security interest. Such Opinion of Counsel shall also describe the recording, filing, re-recording and refiling of this Indenture, any indentures supplemental hereto and any other requisite documents and the filing of any financing statements and amendments to financing statements that will, in the opinion of such counsel, be required to maintain the perfection of the lien and security interest of this Indenture until June 30 in the following calendar year.

Section 3.07. Performance of Obligations; Servicing of Payment Obligations .

(a) The Issuer will not take any action and will use its best efforts not to permit any action to be taken by others that would release any Person from any of such Person’s material covenants or obligations under any instrument or agreement included in the Trust Estate or that would result in the amendment, hypothecation, subordination, termination or discharge of, or impair the validity or effectiveness of, any such instrument or agreement, except as expressly provided in this Indenture, the Transfer and Servicing Agreement or such other instrument or agreement.

(b) The Issuer may contract with other Persons to assist it in performing its duties under this Indenture, and any performance of such duties by a Person identified to the Indenture Trustee in an Officer’s Certificate of the Issuer shall satisfy the obligations of the Issuer with respect thereto. Initially, the Issuer has contracted with the Administrator to assist the Issuer in performing its duties under this Indenture.

(c) The Issuer will punctually perform and observe all of its obligations and agreements contained in this Indenture, the Transaction Documents and in the instruments and agreements relating to the Trust Estate, including but not limited to authorizing and filing or causing to be filed all UCC financing statements and amendments to financing statements required to be filed by the terms of this Indenture in accordance with and within the time periods provided for herein.

(d) If the Issuer shall have knowledge of the occurrence of a Servicer Default under the Transfer and Servicing Agreement, the Issuer shall promptly notify the Indenture Trustee and the Rating Agencies thereof, and shall specify in such notice the action, if any, being taken with respect to such default. If a Servicer Default shall arise from the failure of the Servicer to perform any of its duties or obligations under the Transfer and Servicing Agreement with respect to the Trust Estate, the Issuer shall take all reasonable steps available to it to remedy such failure.

(e) Without derogating from the absolute nature of the assignment granted to the Indenture Trustee under this Indenture or the rights of the Indenture Trustee hereunder, the Issuer agrees (i) that it will not, without the prior written consent of the Indenture Trustee and satisfaction of the Rating Agency Condition, amend, modify, waive, supplement, terminate or surrender, or agree to any amendment, modification, supplement, termination, waiver or surrender of, the terms of any Transaction Document (except to the extent otherwise provided in the Transaction Documents), or waive timely performance or observance by the Servicer or the Transferor under the Transfer and Servicing Agreement or by a Seller under a Receivables Purchase Agreement; and (ii) that any such amendment shall not (A) increase or reduce in any manner the amount of, or accelerate or delay the timing of, distributions that are required to be made for the benefit of the Noteholders, except as provided herein or in the Transfer and Servicing Agreement, or (B) reduce the percentage of the Holders of the principal amount of Outstanding Notes that, by the terms of the Transaction Documents, is required to consent to any such amendment, without the consent of the Holders of all the Notes. If any such amendment, modification, supplement or waiver shall be so consented to by the Indenture Trustee and such Noteholders, the Issuer agrees, promptly following a request by the Indenture Trustee to do so, to execute and deliver, in its own name and at its own expense, such agreements, instruments, consents and other documents as the Indenture Trustee may deem necessary or appropriate in the circumstances.

(f) The Issuer shall deliver any Account Schedule (as defined in the Transfer and Servicing Agreement) received by it pursuant to the Transfer and Servicing Agreement to the Indenture Trustee.

Section 3.08. Negative Covenants .

So long as any Notes are outstanding, the Issuer shall not:

(a) sell, transfer, exchange, pledge or otherwise dispose of any part of the Trust Estate except as expressly permitted by the Indenture, the Receivables Purchase Agreements, the Trust Agreement or the Transfer and Servicing Agreement;

(b) claim any credit on, or make any deduction from, the principal and interest payable in respect of the Notes or the O/C Certificates (other than amounts properly withheld from payments under applicable law) or assert any claim against any present or former Noteholder by reason of the payment of any taxes levied or assessed upon any part of the Trust Estate;

(c) incur, assume or guarantee any direct or contingent indebtedness other than as contemplated by the Transaction Documents;

(d) (1) permit the validity or effectiveness of this Indenture to be impaired, or permit the lien of this Indenture to be amended, hypothecated, subordinated, terminated or discharged, or permit any Person to be released from any covenants or obligations with respect to the Notes under this Indenture except as may be expressly permitted hereby, (2) permit any Lien, charge, excise, claim, security interest, mortgage or other encumbrance (other than the lien of this Indenture) to be created on or extend to or otherwise arise upon or burden the Trust Estate or any part thereof or any interest therein or (3) permit the lien of this Indenture not to constitute a valid first priority perfected security interest in the Trust Estate; or

(e) voluntarily dissolve or liquidate in whole or in part.

Section 3.09. Statements as to Compliance

The Issuer will deliver to the Indenture Trustee, within 120 days after the end of each fiscal year of the Issuer (commencing within 120 days after the end of the fiscal year 2007), an Officer’s Certificate stating, as to the Authorized Officer signing such Officer’s Certificate, that:

(a) a review of the activities of the Issuer during the 12-month period ending at the end of such fiscal year (or in the case of the fiscal year ending December 31, 2007, the period from the Initial Issuance Date to December 31, 2007) and of performance under this Indenture has been made under such Authorized Officer’s supervision; and

(b) to the best of such Authorized Officer’s knowledge, based on such review, the Issuer has complied with all conditions and covenants under this Indenture throughout such year, or, if there has been a default in the compliance of any such condition or covenant, specifying each such default known to such Authorized Officer and the nature and status thereof.

Section 3.10. Issuer’s Name, Location, etc .

(a) The Issuer’s exact legal name is, and at all times has been, the name that appears for it on the signature page below.

(b) The Issuer has not used any trade or assumed names.

(c) The Issuer is, and at all time has been, a “registered organization” (within the meaning of Article 9 of the UCC), organized solely under the laws of the State of Nevada.

(d) The Issuer will not change its name, its type or jurisdiction of organization, or its organizational identification number unless it has given the Indenture Trustee at least thirty (30) days prior written notice of such change.

Section 3.11. Successor Substituted .

(a) Upon any consolidation or merger, or any conveyance or transfer of the properties and assets of the Issuer substantially as an entirety in accordance herewith, the Person formed by or surviving such consolidation or merger (if other than the Issuer) or the Person to which such conveyance or transfer is made shall succeed to, and be substituted for, and may exercise every right and power of, the Issuer under this Indenture with the same effect as if such Person had been named as the Issuer herein.

(b) In the event of any such conveyance or transfer, the Person named as the Issuer in the first paragraph of this Indenture or any successor which shall theretofore have become such in the manner prescribed in this Section shall be released from its obligations under this Indenture as Issuer immediately upon the effectiveness of such conveyance or transfer, provided that the Issuer shall not be released from any obligations or liabilities to the Indenture Trustee, the Noteholders or the O/C Holders arising prior to such effectiveness.

Section 3.12. No Borrowing .

The Issuer shall not issue, incur, assume, guarantee or otherwise become liable, directly or indirectly, for any indebtedness except as contemplated by the Transaction Documents, the Notes and the O/C Certificates.

Section 3.13. Guarantees, Loans, Advances and Other Liabilities .

Except as contemplated by the Trust Agreement, the Administration Agreement, the Transfer and Servicing Agreement, this Indenture or any Indenture Supplement, the Issuer shall not make any loan or advance or credit to, or guarantee (directly or indirectly or by an instrument having the effect of assuring another’s payment or performance on any obligation or capability of so doing or otherwise), endorse or otherwise become contingently liable, directly or indirectly, in connection with the obligations, stocks or dividends of, or own, purchase, repurchase or acquire (or agree contingently to do so) any stock, obligations, assets or securities of, or any other interest in, or make any capital contribution to, any other Person.

Section 3.14. Tax Treatment .

Unless otherwise specified in the applicable Indenture Supplement with respect to a particular Series, the Issuer has entered into this Indenture, and the Notes will be issued, with the intention that, for federal, state and local income and franchise tax purposes, (i) the Notes of a Series will qualify as indebtedness of the O/C Holder of such series secured by the Receivables and (ii) the Issuer shall not be treated as an association or publicly traded partnership taxable as a corporation. The Issuer, by entering into this Agreement, and each Noteholder, by the acceptance of any such Note (and each beneficial owner of a Note, by its acceptance of an interest in the applicable Note), agree to treat such Notes for federal, state and local income and franchise tax purposes as indebtedness of such O/C Holder. Each Holder of such Note agrees that it will cause any owner of a security entitlement to such Note acquiring an interest in a Note through it to comply with this Agreement as to treatment of indebtedness under applicable tax law, as described in this Section 3.14 . The parties hereto agree that they shall not cause or permit the making, as applicable, of any election under Treasury Regulation Section 301.7701-3 whereby the Issuer or any portion thereof would be treated as a corporation for federal income tax purposes and, except as required by Section 6.13 of this Indenture, shall not file tax returns or obtain any federal employer identification number for the Issuer, but shall treat the Issuer as a security device or disregarded entity for federal income tax purposes. The provisions of this Indenture shall be construed in furtherance of the foregoing intended tax treatment.

Section 3.15. Notice of Events of Default .

The Issuer agrees to give the Indenture Trustee and the Rating Agencies prompt written notice of each Event of Default hereunder and, immediately after obtaining knowledge of any of the following occurrences, written notice of each default on the part of the Servicer of its obligations under the Transfer and Servicing Agreement and each default on the part of a Seller of its obligations under any Receivables Purchase Agreement.

Section 3.16. No Other Business .

The Issuer shall not engage any business other than the purpose and powers set forth in Section 2.03 of the Trust Agreement and all activities incidental thereto.

Section 3.17. Removal of Administrator .

So long as any Notes are outstanding, the Issuer shall not remove the Administrator without cause unless the Rating Agency Condition shall have been satisfied in connection with such removal.

Section 3.18. Further Instruments and Acts .

Upon request of the Indenture Trustee, the Issuer will execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purpose of this Indenture.

ARTICLE IV

SATISFACTION AND DISCHARGE

Section 4.01. Satisfaction and Discharge of this Indenture .

This Indenture shall cease to be of further effect with respect to the Notes or the O/C Certificates except as to (a) rights of registration of transfer and exchange, (b) substitution of mutilated, destroyed, lost or stolen Notes or O/C Certificates, (c) the rights of Noteholders or the O/C Holders to receive payments of principal thereof and interest thereon, (d) Sections 3.03 , 3.08 , 3.09 , 3.11 , and 11.15 , (e) the rights and immunities of the Indenture Trustee hereunder, including the rights of the Indenture Trustee under Section 6.07 , and the obligations of the Indenture Trustee under Section 4.02 , and (f) the rights of Noteholders and the O/C Holders as beneficiaries hereof with respect to the property so deposited with the Indenture Trustee and payable to all or any of them, and the Indenture Trustee, on demand of and at the expense of the Issuer, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture with respect to the Notes when

(i) either:

(A) all Notes and O/C Certificates theretofore authenticated and delivered (other than (1) Notes and O/C Certificates which have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 2.06 , and (2) Notes for whose full payment money is held in trust by the Indenture Trustee and thereafter repaid to the Issuer or discharged from such trust, as provided in Section 3.03 ) have been delivered to the Indenture Trustee for cancellation; or

(B) all Notes and O/C Certificates not theretofore delivered to the Indenture Trustee for cancellation:

(I)

have become due and payable;

(II)

will become due and payable in full at the Stated Maturity Date for such Notes and O/C Certificates; or

(III)

are to be called for redemption within one year under arrangements satisfactory to the Indenture Trustee for the giving of notice of redemption by the Indenture Trustee in the name, and at the expense, of the Issuer;

and the Issuer, in the case of (I), (II) or (III) above, has irrevocably deposited or caused to be irrevocably deposited with the Indenture Trustee either from proceeds of another Series of Notes issued under this Indenture, collections of Principal Receivables allocated for such purpose or from other sources which do not include any amounts contributed directly or indirectly by or derived from funds of the Transferor, any Affiliate of the Transferor or an agent of the Transferor cash or direct obligations of or obligations guaranteed by the United States of America (which will mature prior to the date such amounts are payable), in trust for such purpose, in an amount sufficient to pay and discharge the entire indebtedness on such Notes and O/C Certificates not theretofore delivered to the Indenture Trustee for cancellation when due at the Expected Principal Payment Date or later Payment Date, at the Stated Maturity Date for such Class or Series of Notes or O/C Certificates or the Redemption Date (if Notes shall have been called for redemption pursuant to the applicable Indenture Supplement), as the case may be;

(ii) the Issuer has paid or caused to be paid all other sums payable hereunder by the Issuer (including to the O/C Holders); and

(iii) the Issuer has delivered to the Indenture Trustee an Officer’s Certificate of the Issuer and an Opinion of Counsel, each meeting the applicable requirements of Section 11.01(a) and each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with.

Section 4.02. Application of Trust Money .

All monies deposited with the Indenture Trustee pursuant to Section 4.01 hereof shall be held in trust and applied by it, in accordance with the provisions of the Notes and O/C Certificates, this Indenture and the applicable Indenture Supplement, to make payments, either directly or through any Paying Agent, as the Indenture Trustee may determine, to the Noteholders and the O/C Holders for the payment in respect of which such monies have been deposited with the Indenture Trustee, of all sums due and to become due thereon for principal and interest; but such monies need not be segregated from other funds except to the extent required herein or in the Transfer and Servicing Agreement or required by law.

ARTICLE V

DEFAULTS AND REMEDIES

Section 5.01. Early Redemption Events .

An “ Early Redemption Event ” with respect to any Outstanding Note or O/C Certificate of any Series or Class means any Early Redemption Event specified in the related Indenture Supplement or any one of the following events:

(a) an Insolvency Event relating to the Transferor or an Account Owner shall have occurred; or

(b) The Issuer shall have become subject to regulation by the Commission as an “investment company” under the Investment Company Act.

The occurrence of either of the events described in (a) and (b) above will cause an Early Redemption Event (or if so provided in the Indenture Supplement for a Series, a Reinvestment Event) for every Series outstanding. Upon the occurrence of any Early Redemption Event, a Redemption Period shall commence and payment on the Notes of each Series will be made in accordance with the terms of the related Indenture Supplement.

Section 5.02. Events of Default .

An “ Event of Default ” with respect to any Outstanding Note or O/C Certificate of any Series means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):

(a) default in the payment of principal of any Note of that Series when the same becomes due and payable; or

(b) default in the payment of any interest on any Note of that Series when the same becomes due and payable and such default shall continue for a period of thirty-five (35) days; or

(c) default in the performance or observance of any covenant or agreement of the Issuer made in this Indenture in respect of the Notes of that Series (other than a covenant or agreement, a default in the performance or observance of which is elsewhere in this Section specifically dealt with) (all of such covenants and agreements in this Indenture which are not expressly stated to be for the benefit of a particular Series shall be considered to be for the benefit of the Notes of all Series), or any representation or warranty of the Issuer made in this Indenture or in any certificate or other writing delivered pursuant hereto or in connection herewith proving to have been incorrect in any material respect as of the time when the same shall have been made, which default has a material adverse effect on the interests of the

Noteholders of that Series (or all Series, as applicable) and continues unremedied for sixty (60) days after the date on which written notice of such failure, requiring the same to be remedied (a “ Notice of Default ”), shall have been given, by overnight delivery or messenger delivery or by registered or certified mail, return receipt requested (i) to the Issuer by the Indenture Trustee or any Series Enhancer, or (ii) to the Issuer and the Indenture Trustee by Noteholders of any outstanding Series holding Notes evidencing not less than fifty (50) percent of the Outstanding principal amount for such Series (or all Series, as applicable); or

(d) an Insolvency Event with respect to the Issuer has occurred.

The Issuer shall deliver to the Indenture Trustee, within five (5) days after the occurrence of any Default or an Insolvency Event, written notice in the form of an Officer’s Certificate of the Issuer of such Default, its status and what action the Issuer is taking or proposes to take with respect thereto.

Section 5.03. Acceleration of Maturity; Rescission and Annulment .

(a) If an Event of Default described in paragraph (a), (b) or (c) of Section 5.02 should occur and be continuing for a Series, then in every such case the Indenture Trustee or the Holders of Notes representing not less than a majority of the Outstanding principal amount of that Series may declare all the Notes of that Series to be immediately due and payable, by a notice in writing to the Issuer (and to the Indenture Trustee if declared by Noteholders), and upon any such declaration the unpaid principal amount of the Notes of that Series, together with accrued or accreted and unpaid interest thereon through the date of acceleration, shall become immediately due and payable.

(b) If an Event of Default described in paragraph (d) of Section 5.02 should occur and be continuing, then the unpaid principal of the Notes, together with the accrued or accreted and unpaid interest thereon through the date of acceleration, shall automatically become, and shall be considered to be declared, due and payable.

(c) At any time after such declaration of acceleration of maturity has been made and before a judgment or decree for payment of the money due has been obtained by the Indenture Trustee as hereinafter in this Article V provided, the Holders of Notes representing not less than a majority of the Outstanding principal amount of the Notes of such Series, by written notice to the Issuer and the Indenture Trustee, may rescind and annul such declaration and its consequences if:

(i) the Issuer has paid or deposited with the Indenture Trustee a sum sufficient to pay:

(A) all payments of principal of and interest on the Notes of that Series and all other amounts that would then be due hereunder or upon the Notes of that Series if the Event of Default giving rise to such acceleration had not occurred; and

(B) all sums paid or advanced by the Indenture Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Indenture Trustee and its agents and outside counsel; and

(ii) all Events of Default, other than the nonpayment of the principal of the Notes of that Series that has become due solely by such acceleration, have been cured or waived as provided in Section 5.13 .

No such rescission shall affect any subsequent default or impair any right consequent to it.

Section 5.04. Collection of Indebtedness and Suits for Enforcement by Indenture Trustee .

(a) The Issuer covenants that if (i) default is made in the payment of any interest on any Note when the same becomes due and payable, and such default continues for a period of thirty-five (35) days following the date on which it became due and payable or (ii) default is made in the payment of principal of any Note, if and to the extent not previously paid when the same becomes due and payable, the Issuer will, upon demand of the Indenture Trustee, immediately pay to the Indenture Trustee for the benefit of the Noteholders the whole amount then due and payable on such Notes for principal and interest, with interest upon the overdue principal and, to the extent that payments of such interest shall be legally enforceable, upon overdue installments of interest at the applicable Interest Rate and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Indenture Trustee, its agents and outside counsel.

(b) If the Issuer fails to pay such amounts forthwith upon such demand, the Indenture Trustee, in its own name and as trustee of an express trust, may institute a Proceeding for the collection of the sums so due and unpaid, and may prosecute such Proceeding to judgment or final decree, and may enforce the same against the Issuer or other obligor upon such Notes and collect in the manner provided by law out of the Trust Estate or the property of another obligor on the Notes, wherever situated, the monies adjudged or decreed to be payable in the manner provided by law.

(c) If an Event of Default occurs and is continuing, the Indenture Trustee may, in its discretion and subject to the provisions of Section 5.03 , Section 5.05 , Section 5.12 and Section 6.01 , proceed to protect and enforce its rights and the rights of the Noteholders and the O/C Holder of the affected Series (or all Series, as applicable) under this Indenture by such appropriate Proceedings as the Indenture Trustee shall deem most effectual to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement contained in this Indenture or in aid of the exercise of any power granted in this Indenture, or to enforce any other proper remedy or legal or equitable right vested in the Indenture Trustee by this Indenture or by law.

(d) In case there shall be pending, relative to the Issuer or any other obligor upon the Notes of the affected Series or any Person having or claiming an ownership interest in the Trust Estate, Proceedings under Title 11 of the United States Code or any other applicable federal or state bankruptcy, insolvency or other similar law, now or hereafter in effect or in case a receiver, conservator, assignee, trustee in bankruptcy, liquidator, sequestrator, custodian or other similar official shall have been appointed for or taken possession of the Issuer or its property or such other obligor or Person, or in case of any other comparable judicial Proceedings relative to

the Issuer or the creditors or property of the Issuer or such other obligor or Person, the Indenture Trustee, regardless whether the principal of any Notes or O/C Certificates shall then be due and payable as therein expressed or by declaration or otherwise and regardless whether the Indenture Trustee shall have made any demand pursuant to the provisions of this Section 5.04 , shall be entitled and empowered, by intervention in such Proceedings or otherwise:

(i) to file one or more claims for the whole amount of principal and interest owing and unpaid in respect of the Notes or O/C Certificate of such Series, and to file such other papers or documents and take such actions as may be necessary or advisable in order to have the claims of the Indenture Trustee (including any claim for reasonable compensation to the Indenture Trustee and each predecessor Indenture Trustee, and their respective agents, attorneys and counsel, and for reimbursement of all expenses and liabilities incurred, and all advances made, by the Indenture Trustee and each predecessor Indenture Trustee, except as a result of negligence or bad faith) and of the Noteholders, and the O/C Holder of such Series, allowed;

(ii) unless prohibited by applicable law, to vote on behalf of the Noteholders of such Series, in any election of a trustee or a standby trustee in bankruptcy or a Person performing similar functions; and

(iii) to collect and receive any monies or other property payable or deliverable on any such claims, and to distribute all amounts received with respect to the claims of the Noteholders or O/C Holder of such Series and of the Indenture Trustee on their behalf;

and any trustee, receiver or liquidator, custodian or other similar official in any such Proceeding is hereby authorized by each of such Noteholders, and the O/C Holder to make payments to the Indenture Trustee, and, in the event that the Indenture Trustee shall consent to the making of payments directly to such Noteholders, to pay to the Indenture Trustee such amounts as shall be sufficient to cover reasonable compensation to the Indenture Trustee, each predecessor Indenture Trustee and their respective agents, attorneys and counsel, and all other expenses and liabilities incurred, and all advances made, by the Indenture Trustee and each predecessor Indenture Trustee except as a result of negligence or bad faith.

(e) Nothing herein contained shall be deemed to authorize the Indenture Trustee to authorize or consent to or vote for or accept or adopt on behalf of any Noteholder or O/C Holder any plan of reorganization, arrangement, adjustment or composition affecting the Notes or O/C Certificates or the rights of any Noteholder or O/C Holder, or to authorize the Indenture Trustee to vote in respect of the claim of any Noteholder or O/C Holder in any such proceeding except, as provided in (d)(ii) above, to vote for the election of a trustee in bankruptcy or similar Person.

(f) All rights of action and of asserting claims under this Indenture, or under any of the Notes or O/C Certificates, may be enforced by the Indenture Trustee without the possession of any of the Notes or O/C Certificates or the production thereof in any trial or other Proceedings relative thereto, and any such action or Proceedings instituted by the Indenture Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment, subject to the payment of the expenses, disbursements and compensation of the

Indenture Trustee, each predecessor Indenture Trustee and their respective agents and attorneys, shall be for the benefit of the Holders of the Notes and O/C Holder of the affected Series as provided herein.

(g) In any Proceedings brought by the Indenture Trustee (except with respect to any Proceedings involving the interpretation of any provision of this Indenture to which the Indenture Trustee shall be a party), the Indenture Trustee shall be held to represent all the Noteholders and O/C Holder of the affected Series, and it shall not be necessary to make any such Noteholder or O/C Holder party to any such Proceedings.

Section 5.05. Remedies; Priorities .

(a) If an Event of Default shall have occurred and be continuing for any Series, and the Notes of such Series have been accelerated under Section 5.03 , the Indenture Trustee shall (subject to Sections 5.06 and 11.15 ), do one or more of the following:

(i)

institute Proceedings in its own name and as trustee of an express trust for the collection of all amounts then payable on the Notes and O/C Certificate of the affected Series or under this Indenture with respect thereto, whether by declaration or otherwise, enforce any judgment obtained, and collect from the Issuer the portion of the Trust Estate allocated to such Series and from any other obligor upon such Notes monies adjudged due;

(ii)

sell all or a portion of the Issuer’s interest in the Principal Receivables, in an amount not to exceed the Allocation Amount for the accelerated Series, and the related Finance Charge Receivables, as shall constitute a part of the Trust Estate (or rights or interest therein), at one or more public or private sales called and conducted in any manner permitted by law; and

(iii)

take any other appropriate action to protect and enforce the rights and remedies of the Indenture Trustee or the Noteholders or O/C Holder of the accelerated Series hereunder;

provided , however , that the Indenture Trustee may not exercise the remedy in subparagraph (ii) above unless (A) the Holders of 100% of the Outstanding principal amount of the Notes of the accelerated Series consent thereto, (B) the Indenture Trustee determines that (the Indenture Trustee may rely upon the opinion of an Independent investment banking firm) the proceeds of such sale distributable to the Noteholders of the affected Series are sufficient to discharge in full all amounts then due and unpaid upon such Notes for principal and interest or (C) the Indenture Trustee determines that (the Indenture Trustee may rely upon the opinion of an Independent investment banking firm) the Trust Estate may not continue to provide sufficient funds for the payment of principal of and interest on the Notes as they would have become due if the Notes had not been declared due and payable, and the Indenture Trustee obtains the consent of the Holders of not less than 66 2/3% of the Outstanding principal amount of the Notes of each Class of such affected Series. In determining such sufficiency or insufficiency with respect to clauses (B) and (C), the Indenture Trustee may, but need not, obtain and rely upon an opinion of an Independent investment banking or accounting firm of national reputation as to the feasibility of such proposed action and as to the sufficiency of the Trust Estate for such purpose.

(b) If the Indenture Trustee collects any money or property for a Series pursuant to this Article V following the acceleration of the maturities of the Notes for such Series pursuant to Section 5.03 (so long as such declaration shall not have been rescinded or annulled), it shall pay out the money or property in the following order (unless otherwise provided in the related Indenture Supplement):

FIRST: to the Indenture Trustee, the Paying Agent and the Note Registrar for amounts due pursuant to Section 6.07 ;

SECOND: to Holders of Notes of such Series for amounts due and unpaid on such Notes for interest, in respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind except for preferences or priorities specified in and in accordance with the related Indenture Supplement, according to the amounts due and payable on such Notes for interest according to the terms of the related Indenture Supplement;

THIRD: to Holders of Notes of such Series for amounts due and unpaid on such Notes for principal, in respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind except for preferences or priorities specified in and in accordance with the related Indenture Supplement, according to the amounts due and payable on such Notes for principal according to the terms of the related Indenture Supplement;

FOURTH: to Holders of Notes of such Series for amounts, if any, that remain owing to such Holders of Notes of such Series after the applications of amounts described in SECOND and THIRD above, in respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind except for preferences or priorities specified in and in accordance with the related Indenture Supplement, according to the amounts remaining due and payable on such Notes according to the terms of the related Indenture Supplement;

FIFTH: to any Series Enhancer, if any, for such Series for amounts due and unpaid to such Series Enhancer under the Series Enhancement, in respect of which or for the benefit of which such money has been collected, according to the terms of the Series Enhancement;

SIXTH: to the O/C Holder, if any, for amounts due and unpaid to the O/C Holder in respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind except for preferences or priorities specified in accordance with the related Indenture Supplement, according to the amounts remaining due and payable on the O/C Certificate according to the terms of the related Indenture Supplement; and

SEVENTH: to the Issuer, free and clear of the lien of this Indenture, for distribution pursuant to the Trust Agreement.

(c) After the application of money or property referred to in Section 5.05(b) for an accelerated Series, amounts then held in the Collection Account or Series Accounts for such Series and any amounts available under the Series Enhancement for such Series shall be used to make payments to the Holders of the Notes of such Series and the Series Enhancer for such Series in accordance with the terms of this Indenture, the related Indenture Supplement and the Series Enhancement for such Series. Following the sale of the Trust Estate (or portion thereof) for a Series and the application of the proceeds of such sale to such Series and the application of the amounts then held in the Collection Account and any Series Accounts for such Series as are allocated to such Series and any amounts available under the Series Enhancement for such Series, such Series shall no longer be entitled to any allocation of Collections or other property constituting the Trust Estate under this Indenture and the Notes of such Series shall no longer be Outstanding.

(d) The Indenture Trustee may fix a record date and payment date for any payment to Noteholders pursuant to this Section. At least fifteen (15) days before such record date, the Indenture Trustee shall mail to each Noteholder a notice that states the record date, the payment date and the amount to be paid.

Section 5.06. Optional Preservation of the Trust Estate .

If the Notes of any Series have been declared to be due and payable under Section 5.03 following an Event of Default and such declaration and its consequences have not been rescinded and annulled, and the Indenture Trustee has not received directions from the Noteholders under Section 5.12 , the Indenture Trustee may, but need not, elect to maintain possession of the portion of the Trust Estate allocated to such Notes and the related O/C Certificate. It is the desire of the parties hereto and the Noteholders that there be at all times sufficient funds for the payment of principal of and interest on the Notes, and the Indenture Trustee shall take such desire into account when determining whether or not to maintain possession of the Trust Estate allocated to such Notes and the related O/C Certificate. In determining whether to maintain possession of the Trust Estate, the Indenture Trustee may, but need not, obtain and rely upon an opinion of an Independent investment banking or accounting firm of national reputation as to the feasibility of such proposed action and as to the sufficiency of the Trust Estate for such purpose.

Section 5.07. Limitation on Suits .

No Noteholder shall have any right to institute any Proceedings, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless:

(a) the Holders of not less than 25% of the aggregate Outstanding principal amount of all Series (or, with respect to any such action, suit or proceeding that does not relate to all Series, Holders of not less than 25% of the aggregate Outstanding principal amount of all Series to which such action or proceeding relates) have made written request to the Indenture Trustee to institute such proceeding in its own name as Indenture Trustee;

(b) such Noteholder or Noteholders has previously given written notice to the Indenture Trustee of a continuing Event of Default;

(c) such Noteholder or Noteholders has offered to the Indenture Trustee reasonable indemnity against the costs, expenses and liabilities to be incurred in compliance with such request;

(d) the Indenture Trustee for sixty (60) days after its receipt of such notice, request and offer of indemnity has failed to institute any such Proceeding; and

(e) no direction inconsistent with such written request has been given to the Indenture Trustee during such sixty-day period by the Holders of a majority of the Outstanding principal amount of the Notes of such Series (or all Series, as applicable);

it being understood and intended that no one or more Noteholders of the affected Series shall have any right in any manner whatsoever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other Noteholders or to obtain or to seek to obtain priority or preference over any other Noteholders or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all the Noteholders except as may otherwise be specified in any applicable Indenture Supplement.

In the event the Indenture Trustee shall receive conflicting or inconsistent requests and indemnity from two (2) or more groups of Noteholders of the affected Series or of all Series, as the case maybe, each representing less than a majority of the Outstanding principal amount of Notes under such Series, the Indenture Trustee in its sole discretion may determine what action, if any, shall be taken, notwithstanding any other provisions of this Indenture.

Section 5.08. Unconditional Rights of Noteholders or the O/C Holders to Receive Principal and Interest .

Notwithstanding any other provision in this Indenture, each Noteholder or O/C Holder shall have the right which is absolute and unconditional to receive payment of the principal (and premium, if any) of and interest in respect of such Note or O/C Certificate as such principal and interest becomes due and payable and to institute suit for the enforcement of any such payment, and such right shall not be impaired without the consent of such Noteholder or O/C Holder.

Section 5.09. Restoration of Rights and Remedies .

If the Indenture Trustee, any Noteholder or O/C Holder has instituted any Proceeding to enforce any right or remedy under this Indenture and such Proceeding has been discontinued or abandoned, or has been determined adversely to the Indenture Trustee, such Noteholder or O/C Holder, then and in every such case the Issuer, the Indenture Trustee, the Noteholder or O/C Holder shall, subject to any determination in such Proceeding, be restored severally and respectively to their former positions hereunder, and thereafter all rights and remedies of the Indenture Trustee, the Noteholders and the O/C Holders shall continue as though no such Proceeding had been instituted.

Section 5.10. Rights and Remedies Cumulative .

Except as provided in Section 5.05 , no right, remedy, power or privilege herein conferred upon or reserved to the Indenture Trustee, the Noteholders or the O/C Holders is

intended to be exclusive of any other right, remedy, power or privilege, and every right, remedy, power or privilege shall, to the extent permitted by law, be cumulative. The assertion or exercise of any right or remedy shall not preclude any other further assertion or the exercise of any other appropriate right or remedy.

Section 5.11. Delay or Omission Not Waiver .

No failure to exercise and no delay in exercising, on the part of the Indenture Trustee or of any Noteholder or other Person, any right or remedy occurring hereunder upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article V may be exercised from time to time, and as often as may be deemed expedient, by the Indenture Trustee or by the Noteholders, as the case may be.

Section 5.12. Control by Noteholders .

The Holders of a majority of the Outstanding principal amount of the Notes of any Series, if an Event of Default has occurred and is continuing for such Series, shall have the right to direct the time, method and place of conducting any Proceeding for any remedy available to the Indenture Trustee with respect to the Notes of such Series or exercising any trust or power conferred on the Indenture Trustee with respect to the Notes of such Series; provided , however , that, subject to Section 6.01 and Section 6.03(d) :

(a) the Indenture Trustee shall have the right to decline any such direction if the Indenture Trustee, after being advised by counsel, determines that the action so directed is in conflict with any rule of law or with this Indenture; and

(b) the Indenture Trustee shall have the right to decline any such direction if the Indenture Trustee in good faith shall, by a Responsible Officer of the Indenture Trustee, determine that the Proceedings so directed would be illegal or involve the Indenture Trustee in liability or be unjustly prejudicial to the Noteholders not parties to such direction.

Section 5.13. Waiver of Past Defaults .

Prior to the declaration of the acceleration of the maturity of the Notes of a Series as provided in Section 5.03 , the Holders of a majority of the Outstanding principal amount of the Notes of such Series may, on behalf of all such Noteholders, waive in writing any past default with respect to the Notes of such Series and its consequences (including an Event of Default), except a default:

(a) in the payment of the principal (or premium, if any) or interest in respect of any Note of such Series, or

(b) in respect of a covenant or provision hereof that under Section 9.02 hereof cannot be modified or amended without the consent of the Noteholder of each Outstanding Note of such Series affected.

Upon any such written waiver, such default, and any Event of Default arising therefrom, shall cease to exist and shall be deemed to have been cured for every purpose of this Indenture; provided , that no such waiver shall extend to any subsequent or other default or Event of Default or impair any right consequent thereon.

Section 5.14. Undertaking for Costs .

All parties to this Indenture agree, and each Noteholder by its acceptance thereof, each O/C Holder by its acceptance of an O/C Certificate shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Indenture Trustee for any action taken, suffered or omitted by it as Indenture Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; provided , that the provisions of this Section shall not apply to (a) any suit instituted by the Indenture Trustee, (b) any suit instituted by any Noteholder, or group of Noteholders (in compliance with Section 5.07 ), in each case holding in the aggregate more than 10% of the principal balance of the Outstanding Notes of a Series, or (c) any suit instituted by any Noteholder or O/C Holder for the enforcement of the payment of the principal of or interest on any Note or O/C Certificate on or after the date on which any of such amounts was due pursuant to the terms of such Note or O/C Certificate or the applicable Indenture Supplement (or, in the case of redemption, on or after the applicable Redemption Date).

Section 5.15. Waiver of Stay or Extension Laws .

The Issuer covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, which may adversely affect the covenants or the performance of this Indenture; and the Issuer (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Indenture Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted.

Section 5.16. Action on Notes .

The Indenture Trustee’s right to seek and recover judgment on the Notes or under the Indenture shall not be affected by the seeking or obtaining of or application for any other relief under or with respect to the Indenture. Neither the lien of the Indenture nor any rights or remedies of the Indenture Trustee or the Noteholders shall be impaired by the recovery of any judgment by the Indenture Trustee against the Issuer or by the levy of any execution under such judgment upon any portion of the Trust Estate or upon any of the assets of the Issuer. Subject to Section 5.05 , any money or property collected by the Indenture Trustee shall be applied as specified in the applicable Indenture Supplement.

Section 5.17. Sale of Receivables .

(a) If the Receivables are to be sold under the terms of Section 5.05(a)(ii) , the Indenture Trustee, or its agents, shall, unless another method of sale is directed in writing by the holders of a majority of the Outstanding principal amount of the Notes of all Series, use its best

efforts to sell, dispose or otherwise liquidate the Receivables by the solicitation of competitive bids and on terms equivalent to the best purchase offer as determined by the Indenture Trustee. The Indenture Trustee may from time to time postpone any sale by public announcement made at the time and place of such sale. The Indenture Trustee hereby expressly waives its right to any amount fixed by law as compensation for any sale.

(b) The Indenture Trustee is hereby irrevocably appointed the agent and attorney-in-fact of the Issuer in connection with any sale of Receivables pursuant to Section 5.05(a)(ii) . No purchaser or transferee at any such sale shall be bound to ascertain the Indenture Trustee’s authority, inquire into the satisfaction of any conditions precedent or see to the application of any monies.

(c) In its exercise of the foreclosure remedy pursuant to Section 5.05(a)(ii) , the Indenture Trustee shall solicit bids from Permitted Assignees, based upon the written direction of the Servicer, for the sale of Principal Receivables in an amount equal to the Allocation Amount of the accelerated Series of Notes at the time of sale and the related Finance Charge Receivables, as shall constitute a part of the Trust Estate. The Indenture Trustee shall sell such Receivables (or interests therein) to the bidder with the highest cash purchase offer. The proceeds of any such sale shall be applied in accordance with Section 5.05(b) . In connection with any such sale of Receivables or interests therein, the Indenture Trustee may contract with agents to assist in such sales.

ARTICLE VI

THE INDENTURE TRUSTEE

Section 6.01. Duties of the Indenture Trustee .

(a) If an Event of Default with respect to a Series of Notes has occurred (which has not been cured or waived) and a Responsible Officer of the Indenture Trustee shall have actual knowledge or written notice of such Event of Default, the Indenture Trustee shall, prior to the receipt of directions, if any, from the Holders of not less than 50% of the Outstanding principal amount of the Notes Outstanding of such Series, exercise the rights and powers vested in it by this Indenture and use the same degree of care and skill in their exercise as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs.

(b) Except during the continuance of an Event of Default: (i) the Indenture Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture, and no implied duties or covenants by the Indenture Trustee shall be read into this Indenture; and (ii) in the absence of bad faith or negligence on its part the Indenture Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Indenture Trustee and conforming to the requirements of this Indenture; provided , however , that the Indenture Trustee, upon receipt of any resolutions, certificates, statements, opinions, reports, documents, orders or other instruments furnished to the Indenture Trustee which are specifically required to be furnished pursuant to any provision of this Indenture, shall examine them to determine whether they substantially conform to the requirements of this Indenture or any Indenture Supplement. The Indenture Trustee shall

give prompt written notice to the Servicer, the Issuer and each Rating Agency of any material lack of conformity of any such instrument to the applicable requirements of this Indenture discovered by the Indenture Trustee which would entitle the Holders of a specified percentage of the Outstanding principal amount of the Notes of a Series or Class to take any action pursuant to this Indenture or any Indenture Supplement.

(c) In case an Early Redemption Event or Reinvestment Event with respect to a Series of Notes has occurred and is continuing and a Responsible Officer shall have actual knowledge or written notice of such Early Redemption Event or Reinvestment Event, the Indenture Trustee shall, prior to the receipt of directions, if any, from the Holders of not less than 50% of the outstanding principal amount of the Notes Outstanding of such Series, exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs.

(d) No provision of this Indenture shall be construed to relieve the Indenture Trustee from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct; provided , however , that:

(i) this paragraph (d) shall not be construed to limit the effect of paragraphs (a) or (b) of this Section 6.01 ;

(ii) the Indenture Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it shall be proven that the Indenture Trustee was negligent in ascertaining the pertinent facts;

(iii) the Indenture Trustee shall not be liable with respect to any action taken, suffered or omitted to be taken by it in good faith in accordance with this Indenture and/or the direction of the Holders of a majority of the outstanding principal amount of all Series of Notes Outstanding (or, with respect to any such action that does not relate to all Series, the Holders of a majority of the aggregate outstanding principal amount of all Series of Notes Outstanding to which such action relates) relating to the time, method and place of conducting any proceeding for any remedy available to the Indenture Trustee, or for exercising any trust or power conferred upon the Indenture Trustee, under this Indenture;

(iv) subject to the provisions of paragraphs (a) and (b) of this Section 6.01 , the Indenture Trustee shall not be required to take notice of or be deemed to have notice or knowledge of any Event of Default, Early Redemption Event, Reinvestment Event or any other default unless a Responsible Officer of the Indenture Trustee has actual knowledge or shall have received written notice thereof. In the absence of receipt of such notice, the Indenture Trustee may conclusively assume that none of such events have occurred; and

(v) subject to the provisions paragraphs (a) and (b) of this Section 6.01 , the Indenture Trustee shall have no duty (A) to see any recording, filing or depositing of this Indenture or any agreement referred to herein or any financing statement or amendments to a financing statement evidencing a security interest, or to see to the maintenance of any such recording or filing or depositing or to any rerecording, refiling or redepositing of

any thereof, (B) to see any insurance or (C) to see to the payment or discharge of any tax, assessment, or other governmental charge or any lien or encumbrance of any kind owing with respect to, assessed or levied against, any part of the Trust Estate other than from funds available in the Collection Account.

(e) No provision of this Indenture shall require the Indenture Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers if there is reasonable ground for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it, and none of the provisions contained in this Indenture shall in any event require the Indenture Trustee to perform, or be responsible for the manner of performance of, any obligations of the Servicer under the Transfer and Servicing Agreement except during such time, if any, as the Indenture Trustee shall be the successor to, and be vested with the rights, duties, powers and privileges of, the Servicer in accordance with the terms of Article VIII of the Transfer and Servicing Agreement.

(f) Every provision of this Indenture that in any way relates to the Indenture Trustee is subject to subsections (a), (b), (c), (d) and (e) of this Section 6.01 .

(g) Except as expressly provided in this Indenture, the Indenture Trustee shall have no power to vary the Trust Estate, including, without limitation, by (i) accepting any substitute payment obligation for a Receivable initially transferred to the Issuer under the Transfer and Servicing Agreement, (ii) adding any other investment, obligation or security to the Issuer or the Trust Estate or (iii) withdrawing from the Trust Estate any Receivables (except as otherwise provided in the Receivables Purchase Agreements and the Transfer and Servicing Agreement).

(h) The Indenture Trustee shall have no responsibility or liability for investment losses on Eligible Investments (other than as an obligor on any Eligible Investments on which the institution acting as Indenture Trustee is an obligor).

(i) The Indenture Trustee shall notify each Rating Agency promptly (but in no event later than two (2) Business Days) following the occurrence of any Default, Event of Default, Reinvestment Event, Early Redemption Event or potential Reinvestment Event of which a Responsible Officer of the Indenture Trustee has written notice or actual knowledge.

(j) In the event that the Paying Agent or the Note Registrar shall fail to perform any obligation, duty or agreement in the manner or on the day required to be performed by the Paying Agent or the Note Registrar, as the case may be, under this Indenture, the Indenture Trustee shall be obligated promptly upon actual knowledge of a Responsible Officer thereof to perform such obligation, duty or agreement in the manner so required.

(k) Every provision of this Indenture relating to the conduct of, affecting the liability of, or affording protection to the Indenture Trustee shall be subject to the provisions of this Section.

Section 6.02. Notice of Early Redemption Event, Reinvestment Event or Event of Default .

Upon the occurrence of any Early Redemption Event, Reinvestment Event or Event of Default of which a Responsible Officer of the Indenture Trustee has actual knowledge or has received notice thereof, the Indenture Trustee shall transmit by mail to all Noteholders as their names and addresses appear on the Note Register and the Rating Agencies, notice of such Early Redemption Event, Reinvestment Event or Event of Default hereunder known to a Responsible Officer of the Indenture Trustee within thirty (30) days after it occurs or within ten (10) Business Days after such Responsible Officer receives such notice or obtains actual knowledge, if later.

Section 6.03. Certain Matters Affecting the Indenture Trustee .

Except as otherwise provided in Section 6.01 hereof:

(a) the Indenture Trustee may conclusively rely and shall fully be protected in acting or refraining from acting in accordance with any resolution, certificate, statement, instrument, Officer’s Certificate, opinion, report, notice, request, direction, consent, order, bond, note, or other paper or document reasonably believed by it to be genuine and to have been signed or presented to it pursuant to this Indenture by the proper party or parties and shall be under no obligation to inquire as to the adequacy, accuracy or sufficiency of any such information or be under any obligation to make any calculation or verifications in respect of any such information and shall not be liable for any loss that may be occasioned thereby;

(b) whenever in the administration of this Indenture the Indenture Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Indenture Trustee (unless other evidence is specifically prescribed herein) may, in the absence of bad faith on its part, rely upon an Officer’s Certificate of the Issuer;

(c) as a condition to the taking, suffering or omitting of any action by it hereunder, the Indenture Trustee may consult with counsel and the advice of such counsel or an Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in accordance therewith;

(d) the Indenture Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture, or to honor the request or direction of any of the Noteholders pursuant to this Indenture to institute, conduct or defend any litigation hereunder in relation hereto, unless such Noteholders shall have offered to the Indenture Trustee reasonable security or indemnity against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction;

(e) the Indenture Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, note or other paper or document, believed by it to be genuine, but the Indenture Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Indenture Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Issuer and the Servicer, personally or by agent or attorney;

(f) except as provided in Section 6.14 hereof, the Indenture Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents, attorneys, custodians or nominees, and the Indenture Trustee shall not be responsible for any misconduct or negligence on the part of any agent, attorney, custodians or nominees appointed with due care by it hereunder;

(g) the Indenture Trustee shall not be liable for any actions taken, suffered or omitted by it in good faith and believed by it to be authorized or within the discretion or rights or powers conferred upon the Indenture Trustee by this Indenture;

(h) the Indenture Trustee shall not be required to make any initial or periodic examination of any documents or records related to any of the Trust Estate for the purpose of establishing the presence or absence of defects, the compliance by the Issuer with its representations and warranties or for any other purpose;

(i) whether or not therein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Indenture Trustee shall be subject to the provisions of this Section;

(j) the Indenture Trustee shall have no liability with respect to the acts or omissions of the Servicer (except and to the extent the Indenture Trustee is the Servicer), including acts or omissions in connection with the servicing, management or administration of Receivables; calculations made by the Servicer whether or not reported to the Issuer or Indenture Trustee; and deposits into or withdrawals from any accounts or funds established pursuant to the terms of this Indenture;

(k) in the event that the Indenture Trustee or an Affiliate is also acting as Paying Agent and Note Registrar, the rights, immunities, indemnities and protections afforded to the Indenture Trustee pursuant to this Article VI shall also be afforded to such Paying Agent and Note Registrar;

(l) the right of the Indenture Trustee to perform any discretionary act enumerated in this Indenture shall not be construed as a duty, and the Indenture Trustee shall not be answerable for other than its negligence or willful misconduct in the performance of such act;

(m) the Indenture Trustee shall not be required to give any bond or surety in respect of the execution of the trust created hereby or the powers granted hereunder; and

(n) in order to comply with laws, rules, regulations and executive orders in effect from time to time applicable to banking institutions, including those relating to the funding of terrorist activities and money-laundering (“Applicable Law”), the Indenture Trustee is required to obtain, verify and record certain information relating to individuals and entities which maintain a business relationship with the Indenture Trustee. Accordingly, the Issuer and the Servicer agree to provide to the Indenture Trustee upon its request from time to time such identifying information and documentation as may be available for such party in order to enable the Indenture Trustee to comply with Applicable Laws.

Section 6.04. Not Responsible for Recitals or Issuance of Notes or O/C Certificates .

The recitals contained herein and in the Notes and the O/C Certificates, except the certificate of authentication of the Indenture Trustee, shall not be taken as the statements of the Indenture Trustee, and the Indenture Trustee assumes no responsibility for their correctness. The Indenture Trustee makes no representation as to the validity or sufficiency of the Indenture, the Notes or the O/C Certificates or any related document or as to the perfection or priority of any security interest therein. The Indenture Trustee shall not be accountable for the use or application by the Issuer of the proceeds from the Notes or the O/C Certificates.

Section 6.05. Indenture Trustee May Hold Notes .

The Indenture Trustee, any Paying Agent, the Note Registrar or any other agent of the Issuer, in its individual or any other capacity, may become the owner or pledgee of Notes and subject to Section 6.11(3) , may otherwise deal with the Issuer with the same rights it would have if it were not Indenture Trustee, Paying Agent, Note Registrar or such other agent.

Section 6.06. Money Held in Trust .

Money held by the Indenture Trustee in trust hereunder need not be segregated from other funds held by the Indenture Trustee in trust hereunder except to the extent required herein or required by law. The Indenture Trustee shall be under no liability for interest on any money received by it hereunder except (i) as otherwise agreed upon in writing by the Indenture Trustee and the Issuer and (ii) as an obligor with respect to Eligible Investments on which the institution acting as Indenture Trustee is an obligor. Nothing herein shall prevent the Indenture Trustee or the Paying Agent from accepting deposits from, lending money to and generally engaging in any kind of banking or other business with any person, whether or not a party to the Transaction Documents.

Section 6.07. Compensation, Reimbursement and Indemnification .

(a) The Issuer shall pay to the Indenture Trustee from time to time reasonable compensation for all services rendered by the Indenture Trustee under this Indenture (which compensation shall not be limited by any law on compensation of a trustee of an express trust). The Issuer shall reimburse the Indenture Trustee, the Paying Agent and the Note Registrar for all reasonable out-of-pocket expenses incurred or made by it (including without limitation expenses incurred in connection with notices or other communications to the Noteholders), disbursements and advances incurred or made by the Indenture Trustee, the Paying Agent and the Note Registrar in accordance with any of the provisions of this Indenture (including but in no way limited to any expenses incurred pursuant to Section 5.04 , Section 5.05 and Section 5.06 ), any of the Transaction Documents or any Series Enhancement. Such expenses shall include the reasonable fees and out-of-pocket expenses, disbursements and advances of the Indenture Trustee’s agents, any co-trustee, the Paying Agent, counsel, agents, accountants and experts, except any such expense, disbursement or advance as may arise from its negligence or bad faith. In no event shall the Indenture Trustee or any agent of the Indenture Trustee advance any funds for the payment of principal, interest or premium on any Notes or O/C Certificates. The Issuer shall indemnify the Indenture Trustee, the Paying Agent and the Note Registrar and its officers,

directors, and employees against any and all loss, suit, claim, judgment, liability or expense (including the reasonable fees and expenses of counsel incurred by it in connection with the administration of this trust and the performance of its duties hereunder and under the Transaction Documents. The Indenture Trustee shall notify the Issuer and the Servicer promptly of any claim for which it may seek indemnity. Failure by the Indenture Trustee to so notify the Issuer and the Servicer shall not relieve the Issuer of its obligations hereunder unless such loss, liability or expense could have been avoided with such prompt notification and then only to the extent of such loss, expense or liability which could have been so avoided. The Issuer shall defend any claim against the Indenture Trustee; provided , however , the Indenture Trustee may have separate counsel and, if it does, the Issuer shall pay the fees and expenses of such counsel. Neither the Issuer nor the Servicer shall be required to reimburse any expense or indemnify against any loss, liability or expense incurred by the Indenture Trustee through the Indenture Trustee’s own willful misconduct, negligence or bad faith.

(b) The Issuer’s payment obligations to the Indenture Trustee pursuant to this Section shall survive the discharge of this Indenture; provisions of this Section regarding the reimbursement and indemnification of the Indenture Trustee shall survive the resignation and removal of the Indenture Trustee and the discharge of this Indenture. When the Indenture Trustee incurs expenses after the occurrence of an Event of Default specified in Section 5.02(d) with respect to the Issuer, the expenses are intended to constitute expenses of administration under Title 11 of the United States Code or any other applicable federal or state bankruptcy, insolvency or similar law.

(c) Notwithstanding anything herein to the contrary, the Indenture Trustee’s right to enforce any of the Issuer’s payment obligations pursuant to this Section 6.07 shall be subject to the provisions of Section 11.15 .

(d) Anything in this Indenture to the contrary notwithstanding, in no event shall the Indenture Trustee be liable for special, indirect or consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if the Indenture Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.

Section 6.08. Replacement of Indenture Trustee .

(a) No resignation or removal of the Indenture Trustee and no appointment of a successor Indenture Trustee shall become effective until the acceptance of appointment by the successor Indenture Trustee pursuant to this Section 6.08 . The Indenture Trustee or any of its agents may resign at any time by giving thirty (30) days prior written notice to the Issuer. The Holders of a majority of the Outstanding principal amount of the Notes may remove the Indenture Trustee and any or all of its agents by so notifying the Indenture Trustee and may appoint a successor Indenture Trustee. The Issuer shall remove the Indenture Trustee by giving thirty (30) days prior written notice to the Indenture Trustee if:

(i) the Indenture Trustee fails to comply with Section 6.11 ;

(ii) the Indenture Trustee shall consent to the appointment of a conservator or receiver or liquidator in any insolvency, readjustment of debt, marshalling of assets and liabilities or similar proceedings of or relating to the Indenture Trustee or all or

substantially all of its property, or a decree or order of a court or agency or supervisory authority having jurisdiction in the premises for the appointment of a conservator or receiver or liquidator in any insolvency, readjustment of debt, marshalling of assets and liabilities or similar proceedings, or for the winding-up or liquidation of its affairs, shall have been entered against the Indenture Trustee; or the Indenture Trustee shall admit in writing its inability to pay its debts generally as they become due, file a petition to take advantage of any applicable insolvency or reorganization statute, make an assignment for the benefit of its creditors or voluntarily suspend payment of its obligations; or

(iii) the Indenture Trustee otherwise becomes incapable of acting.

If the Indenture Trustee resigns or is removed or if a vacancy exists in the office of Indenture Trustee for any reason (the Indenture Trustee in such event being referred to herein as the retiring Indenture Trustee), the Issuer shall promptly appoint a successor Indenture Trustee, which successor shall be reasonably satisfactory to the Servicer.

(b) Any resignation or removal of the Indenture Trustee and appointment of successor indenture trustee pursuant to any of the provisions of this Section shall not become effective until acceptance of appointment by the successor indenture trustee as provided in this Section 6.08(b) .

(i) Any successor indenture trustee appointed as provided herein shall execute, acknowledge and deliver to the Issuer, to the Servicer and to its predecessor indenture trustee an instrument accepting such appointment hereunder, and thereupon the resignation or removal of the predecessor indenture trustee shall become effective and such successor indenture trustee, without any further act, deed or conveyance, shall become fully vested with all the rights, powers, duties and obligations of its predecessor hereunder, with like effect as if originally named as Indenture Trustee herein. The predecessor indenture trustee shall deliver to the successor indenture trustee all documents or copies thereof and statements and all money and other property held by it hereunder; and the Issuer and the predecessor indenture trustee shall execute and deliver such instruments and do such other things as may reasonably be required for fully and certainly vesting and confirming in the successor indenture trustee all such rights, powers, duties and obligations.

(ii) No successor indenture trustee shall accept appointment as provided in this Section unless at the time of such acceptance such successor indenture trustee shall be eligible under the provisions of Section 6.11.

(iii) Other than pursuant to Section 6.08(c) , notwithstanding any other provisions herein, the appointment of a successor indenture trustee shall not be effective unless the Rating Agency Condition shall have been satisfied.

(iv) Upon acceptance of appointment by a successor indenture trustee as provided in this Section, such successor indenture trustee shall provide notice of such succession hereunder to all Noteholders and the O/C Holder, and the Servicer shall provide such notice to each Rating Agency and each Series Enhancer.

(c) If a successor Indenture Trustee does not take office within thirty (30) days after the retiring Indenture Trustee resigns or is removed, the retiring Indenture Trustee, the Issuer or the Holders of a majority of the outstanding principal amount of the Outstanding Notes may petition any court of competent jurisdiction for the appointment of a successor Indenture Trustee.

(d) If the Indenture Trustee ceases to be eligible in accordance with Section 6.11 , any Noteholder may petition any court of competent jurisdiction for the removal of the Indenture Trustee and the appointment of a successor Indenture Trustee.

(e) Notwithstanding the replacement of the Indenture Trustee pursuant to this Section, the Servicer’s obligations under Section 6.07 shall continue for the benefit of the retiring Indenture Trustee. No Indenture Trustee under this Indenture shall be liable for any action or omission of any successor indenture trustee.

Section 6.09. Successor Indenture Trustee by Merger .

If the Indenture Trustee consolidates with, merges or converts into, or transfers all or substantially all its corporate trust business or assets to, another corporation or banking association, the resulting, surviving or transferee corporation or banking association without any further act shall be the successor Indenture Trustee; provided , that such corporation or banking association shall be otherwise qualified and eligible under Section 6.11 .

In case at the time such successor by merger, conversion, consolidation or transfer to the Indenture Trustee shall succeed to the trusts created by this Indenture any of the Notes or O/C Certificates shall have been authenticated but not delivered, any such successor to the Indenture Trustee may adopt the certificate of authentication of any predecessor indenture trustee and deliver such Notes or O/C Certificates so authenticated; and in case at that time any of the Notes or O/C Certificates shall not have been authenticated, any successor to the Indenture Trustee may authenticate such Notes or O/C Certificates in the name of the successor to the Indenture Trustee; and in all such cases such certificates shall have the full force which it is anywhere provided in the Notes or O/C Certificates or in this Indenture that the certificate of the Indenture Trustee shall have.

Section 6.10. Appointment of Co-Indenture Trustee or Separate Indenture Trustee .

(a) Notwithstanding any other provisions of this Indenture, at any time, for the purpose of meeting any legal requirement of any jurisdiction in which any part of the Trust Estate may at the time be located, the Indenture Trustee shall have the power and may execute and deliver all instruments to appoint one or more Persons to act as a co-trustee or co-trustees, or separate trustee or separate trustees, of all or any part of the Trust Estate, and to vest in such Person or Persons, in such capacity and for the benefit of the Noteholders and the O/C Holders, such title to the Trust Estate, or any part hereof, and, subject to the other provisions of this Section, such powers, duties, obligations, rights and trusts as the Indenture Trustee may consider necessary or desirable. No co-trustee or separate trustee hereunder shall be required to meet the terms of eligibility as a successor trustee under Section 6.11 and no notice to Noteholders or the O/C Holders of the appointment of any co-trustee or separate trustee shall be required under Section 6.08 hereof.

(b) Every separate trustee and co-trustee shall, to the extent permitted by law, be appointed and act subject to the following provisions and conditions:

(i) all rights, powers, duties and obligations conferred or imposed upon the Indenture Trustee shall be conferred or imposed upon and exercised or performed by the Indenture Trustee and such separate trustee or co-trustee jointly (it being understood that such separate trustee or co-trustee is not authorized to act separately without the Indenture Trustee joining in such act), except to the extent that under any law of any jurisdiction in which any particular act or acts are to be performed the Indenture Trustee shall be incompetent or unqualified to perform such act or acts, in which event such rights, powers, duties and obligations (including the holding of title to the Trust Estate or any portion thereof in any such jurisdiction) shall be exercised and performed singly by such separate trustee or co-trustee, but solely at the direction of the Indenture Trustee;

(ii) no trustee hereunder shall be personally liable by reason of any act or omission of any other trustee hereunder; and

(iii) the Indenture Trustee may at any time accept the resignation of or remove any separate trustee or co-trustee.

(c) Any notice, request or other writing given to the Indenture Trustee shall be deemed to have been given to each of the then separate trustees and co-trustees, as effectively as if given to each of them. Every instrument appointing any separate trustee or co-trustee shall refer to this Indenture and the conditions of this Article VI . Each separate trustee and co-trustee, upon its acceptance of the trusts conferred, shall be vested with the estates or property specified in its instrument of appointment, either jointly with the Indenture Trustee or separately, as may be provided therein, subject to all the provisions of this Indenture, specifically including every provision of this Indenture relating to the conduct of, affecting the liability of, or affording protection to, the Indenture Trustee. Every such instrument shall be filed with the Indenture Trustee.

(d) Any separate trustee or co-trustee may at any time constitute the Indenture Trustee its agent or attorney-in-fact with full power and authority, to the extent not prohibited by law, to do any lawful act under or in respect of this Indenture on its behalf and in its name. If any separate trustee or co-trustee shall die, become incapable of acting, resign or be removed, all of its estates, properties, rights, remedies and trusts shall vest in and be exercised by the Indenture Trustee, to the extent permitted by law, without the appointment of a new or successor trustee.

Section 6.11. Eligibility; Disqualification .

The Indenture Trustee shall have a combined capital and surplus of at least $50,000,000 as set forth in its most recent published annual report of condition and its long-term unsecured debt shall be rated at least Baa3 by Moody’s and at least BBB- by Standard & Poor’s. The Indenture Trustee (1) shall meet the requirements of Section 26(a)(1) of the Investment

Company Act, (2) shall not be an Affiliate of the Issuer, the Servicer, or any Seller and (3) shall not offer or provide credit or credit enhancement to the Issuer. In case at any time the Indenture Trustee shall cease to be eligible in accordance with the provisions of this Section, the Indenture Trustee shall resign immediately in the manner and with the effect specified in Section 6.08 .

Section 6.12. Representations and Warranties of the Indenture Trustee .

The Indenture Trustee represents and warrants that:

(i) the Indenture Trustee is duly organized and validly existing under the laws of the jurisdiction of its organization;

(ii) the Indenture Trustee has full power and authority to deliver and perform this Indenture and has taken all necessary action to authorize the execution, delivery and performance by it of this Indenture, each Indenture Supplement and each other Transaction Document to which it is a party;

(iii) each of this Indenture and each other Transaction Document to which it is a party has been duly executed and delivered by the Indenture Trustee and constitutes its legal, valid and binding obligation in accordance with its terms; and

(iv) the Indenture Trustee meets the eligibility requirements set forth in Section 6.11 .

Section 6.13. Tax Returns . In the event the Issuer shall be required to file tax returns, the Servicer shall prepare or shall cause to be prepared such tax returns and shall provide such tax returns to the Owner Trustee (on behalf of the Issuer) for signature at lease five (5) days before such tax returns are due to be filed. The Servicer, in accordance with the terms of each Indenture Supplement, shall also prepare or shall cause to be prepared all tax information required by law to be distributed to Noteholders and the O/C Holders and shall deliver such information to the Owner Trustee (on behalf of the Issuer) at least five (5) days prior to the date it is required by law to be distributed to Noteholders and the O/C Holders. The Issuer will cause the Owner Trustee, upon written request, to furnish the Servicer with all such information known to the Owner Trustee as may be reasonably requested and required in connection with the preparation of all tax returns of the Issuer. The Owner Trustee (on behalf of the Issuer) shall, upon request, execute such returns. In no event shall the Owner Trustee be personally liable for any liabilities, costs or expenses of the Issuer, any Noteholder or any O/C Holder arising under any tax law, including without limitation, federal, state or local income or excise taxes or any other tax imposed on or measured by income (or any interest or penalty with respect thereto arising from a failure to comply therewith).

Section 6.14. Custody of the Trust Estate .

The Indenture Trustee shall hold such of the Trust Estate (and any other collateral that may granted to the Indenture Trustee) as consists of instruments, certificated securities, negotiable documents, money, goods, or tangible chattel paper in the State of New York. The Indenture Trustee shall hold such of the Trust Estate (and any other collateral that may granted to the Indenture Trustee) as constitutes investment property (other than certificated securities) through a securities intermediary, which securities intermediary shall agree with the Indenture

Trustee and the Issuer that (I) such investment property shall at all times be credited to a securities account of the Indenture Trustee, (II) such securities intermediary shall treat the Indenture Trustee as entitled to exercise the rights that comprise each financial asset credited to such securities account, (III) all property credited to such securities account shall be treated as a financial asset, (IV) such securities intermediary shall comply with entitlement orders originated by the Indenture Trustee without the further consent of any other person or entity, (V) such securities intermediary will not agree with any person or entity other than the Indenture Trustee to comply with entitlement orders originated by any person or entity other than the Indenture Trustee, (VI) such securities account and the property credited thereto shall not be subject to any lien, security interest, claim, encumbrance or right of set-off in favor of such securities intermediary or anyone claiming through it (other than the Indenture Trustee), (VII) such agreement shall be governed by the laws of the State of New York, and (VIII) the State of New York shall be the “securities intermediary’s jurisdiction” of such securities intermediary for purposes of the UCC. The Indenture Trustee shall hold such of the Trust Estate (and any other collateral that may be granted to the Indenture Trustee) as constitutes a deposit account through a bank, which bank shall agree in writing with the Indenture Trustee and the Issuer that (i) such bank shall comply with instructions originated by the Indenture Trustee directing disposition of the funds in the deposit account without further consent of any other person or entity, (ii) such bank will not agree with any person or entity other than the Indenture Trustee to comply with instructions originated by any person or entity other than the Indenture Trustee, (iii) such deposit account and the property credited thereto shall not be subject to any lien, security interest, claim, encumbrance or right of set-off in favor of such bank or anyone claiming through it (other than the Indenture Trustee), (iv) such agreement shall be governed by the laws of the State of New York, and (v) the State of New York shall be the “bank’s jurisdiction” of such bank for purposes of Article 9 of the UCC. Terms used in this Section 6.14 that are defined in the New York Uniform Commercial Code and not otherwise defined herein shall have the meaning set forth in the New York Uniform Commercial Code. Except as permitted by this Section 6.14 and Section 8.02 , the Indenture Trustee shall not hold any part of the Trust Estate through an agent or a nominee. The provisions of this Section 6.14 are subject to the provisions of Section 8.02 .

Section 6.15. Currency Indemnity .

If the Indenture Trustee or, where applicable, the Paying Agent, is required in accordance with the Master Indenture or the Indenture Supplement to make a payment in a designated currency (the “Contractual Currency”) but an amount is received or recovered in a currency other than the Contractual Currency (whether as a result of, or of the enforcement of, a judgment or order of a court of any jurisdiction, in the winding up or dissolution of the obligor or otherwise), then such amount will only be paid to the extent of the Contractual Currency amount purchasable with the amount so received or recovered in that other currency on the date of that receipt or recovery (or, if it is not practicable to make that purchase on that date, on the first date on which it is practicable to do so). If that Contractual Currency amount is less than the Contractual Currency amount expressed to be due, the Issuer will indemnify the Indenture Trustee or, where applicable, the Paying Agent, against any loss sustained by it as a result. In any event, the Issuer will indemnify the receipt against the cost of making any such purchase.

ARTICLE VII

NOTEHOLDERS’ LIST AND REPORTS

Section 7.01. Issuer to Furnish Indenture Trustee Names and Addresses of Noteholders .

The Issuer will furnish or cause to be furnished to the Indenture Trustee (a) not more than five (5) days after the earlier of (i) each Record Date and (ii) three (3) months after the last Record Date, a list, in such form as the Indenture Trustee may reasonably require, of the names, addresses and taxpayer identification numbers of the Holders of Notes and the O/C Holders as they appear on the Note Register as of the most recent Record Date, and (b) at such other times as the Indenture Trustee may request in writing, within thirty (30) days after receipt by the Issuer of any such request, a list of similar form and content as of a date not more than ten (10) days prior to the time such list is furnished; provided , however , that so long as the Indenture Trustee is the Note Registrar, no such list shall be required to be furnished.

Section 7.02. Preservation of Information; Communications to Noteholders .

(a) The Indenture Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of the Noteholders and the O/C Holders contained in the most recent list furnished to the Indenture Trustee as provided in Section 7.01 and the names, addresses and taxpayer identification numbers of the Noteholders and the O/C Holders received by the Indenture Trustee in its capacity as Note Registrar. The Indenture Trustee may destroy any list furnished to it as provided in Section 7.01 hereof upon receipt of a new list so furnished.

(b) Noteholders and the O/C Holders may communicate with other Noteholders or the O/C Holders, as the case may be, with respect to their rights under this Indenture, under the Notes or the O/C Certificates, as applicable.

ARTICLE VIII

ALLOCATION AND APPLICATION OF COLLECTIONS

Section 8.01. Collection of Money .

Except as otherwise expressly provided herein and in the related Indenture Supplement, the Indenture Trustee may demand payment or delivery of, and shall receive and collect, directly and without intervention or assistance of any fiscal agent or other intermediary, all money and other property payable to or receivable by the Indenture Trustee pursuant to this Indenture. The Indenture Trustee shall hold all such money and property received by it in trust for the Noteholders and the O/C Holders and shall apply it as provided in this Indenture. Except as otherwise expressly provided in this Indenture, if any default occurs in the making of any payment or performance under any Transaction Document, the Indenture Trustee may, and upon the request of the Holders of a majority of the outstanding principal amount of the Notes Outstanding shall, take such action as may be appropriate to enforce such payment or performance, including the institution and prosecution of appropriate Proceedings. Any such action shall be without prejudice to any right to claim an Early Redemption Event, Reinvestment Event or an Event of Default under this Indenture and to proceed thereafter as provided in Article V hereof.

Section 8.02. Collection Account .

(a) The Servicer, for the benefit of the Noteholders, shall establish and maintain in the name of the Issuer with the Indenture Trustee an Eligible Deposit Account bearing a designation clearly indicating that the funds and other property credited thereto are held for the benefit of the Noteholders (the “ Collection Account ”). The Indenture Trustee hereby delegates all of its rights and responsibilities under this Section 8.02 to Deutsche Bank AG, London Branch, as agent of the Indenture Trustee, and Deutsche Bank AG, London Branch accepts such rights and responsibilities and shall, on behalf of the Indenture Trustee, possess all right, title and interest in all money, instruments, investment property and other property from time to time credited to or on deposit in the Collection Account and in all proceeds, earnings, income, revenue, dividends and distributions thereof. This delegation shall not relieve the Indenture Trustee of its liability and responsibilities with respect to such duties.

(b) The Collection Account shall be under the sole dominion and control of the Indenture Trustee for the benefit of the Noteholders. Except as expressly provided in this Indenture and the Transfer and Servicing Agreement, the Servicer agrees that it shall have no right of setoff or banker’s lien against, and no right to otherwise deduct from, any funds and other property held in the Collection Account for any amount owed to it by the Indenture Trustee, the Paying Agent, the Issuer, any Noteholder, any O/C Holder or any Series Enhancer. If, at any time, the Collection Account ceases to be an Eligible Deposit Account, the Indenture Trustee (or the Servicer on its behalf) shall within ten (10) Business Days (or such longer period, not to exceed thirty (30) calendar days, as to which each Rating Agency may consent) establish a new Collection Account meeting the conditions specified above, transfer any money, instruments, investment property and other property to such new Collection Account and from the date such new Collection Account is established, it shall be the “Collection Account.” Pursuant to the authority granted to the Servicer under the Transfer and Servicing Agreement, the Servicer shall have the power, revocable by the Indenture Trustee, to make withdrawals and payments from the Collection Account and to instruct the Indenture Trustee and the Paying Agents to make withdrawals and payments from the Collection Account for the purposes of carrying out the Servicer’s or the Indenture Trustee’s duties hereunder and under the Transfer and Servicing Agreement. The Servicer agrees to provide the Indenture Trustee or, where applicable, the Paying Agent, with the relevant and necessary information that it may require in sufficient time to allow the Indenture Trustee or, where applicable, the Paying Agent to perform its duties and the Indenture Trustee or, where applicable, the Paying Agent, is hereby authorized to rely and act upon such instructions or information as it shall receive. The Servicer shall reduce deposits into the Collection Account payable by the Issuer on any date on which Collections are deposited into the Collection Account to the extent the Issuer is entitled to receive funds from the Collection Account on such Deposit Date and shall pay such funds to the Issuer, free and clear of the lien of this Indenture.

(c) Funds on deposit in the Collection Account (other than investment earnings and amounts deposited pursuant to Section 2.06 of the Transfer and Servicing Agreement or Section 10.02 of this Indenture) shall at the written direction of the Servicer be invested by the Indenture Trustee in Eligible Investments selected by the Servicer. The Indenture Trustee or, where applicable, the Paying Agent, shall be entitled to assume that all conditions to the making of any payment out of amounts standing to the credit of any of the Collection Account or any Series Account which is specified in either of the Master Indenture or the related

Indenture Supplement are satisfied unless it has actual notice to the contrary. In the absence of written directions from the Servicer, all funds shall remain uninvested. All such Eligible Investments shall be held by Deutsche Bank AG London Branch, on behalf of the Indenture Trustee for the benefit of the Noteholders. Investments of funds representing Collections collected during any Monthly Period shall be invested in Eligible Investments that will mature so that such funds will be available no later than the close of business on each Transfer Date following such Monthly Period in amounts sufficient to the extent of such funds to make the required distributions on the following Distribution Date. No such Eligible Investment shall be disposed of prior to its maturity; provided , however , that the Indenture Trustee may sell, liquidate or dispose of any such Eligible Investment before its maturity, at the written direction of the Servicer, if such sale, liquidation or disposal would not result in a loss of all or part of the principal portion of such Eligible Investment or if, prior to the maturity of such Eligible Investment, a default occurs in the payment of principal, interest or any other amount with respect to such Eligible Investment. Unless directed by the Servicer, funds deposited in the Collection Account on a Transfer Date with respect to the immediately succeeding Distribution Date are not required to be invested overnight. On each Distribution Date, all interest and other investment earnings (net of losses and investment expenses) on funds on deposit in the Collection Account shall be treated as Collections of Finance Charge Receivables with respect to the last day of the related Monthly Period except as otherwise specified in any Indenture Supplement. Neither the Indenture Trustee nor Deutsche Bank AG, London Branch shall bear any responsibility or liability for any losses resulting from investment or reinvestment of any funds in accordance with this Section nor for the selection of Eligible Investments in accordance with the provisions of this Indenture (other than Eligible Investments on which the institution acting as Indenture Trustee or Deutsche Bank AG, London Branch is an obligor). In addition, neither the Indenture Trustee nor Deutsche Bank AG, London Branch shall have any liability in respect of the losses incurred as a result of the liquidation of any Eligible Investment prior to its stated maturity or the failure of the Servicer to provide timely written investment direction.

(d) The Servicer shall notify the Paying Agent of any payment to be credited to any Series Account or the Collection Account as soon as practicable, and in any event not later than 3:00 p.m. (London time) one Business Day before payment into any Series Account or the Collection Account. The Paying Agent shall be obligated to make payments from the Collection Account or any Series Account only to the extent such amounts are deposited therein.

Section 8.03. Instruction Procedures

All amounts shall be received by the Paying Agent not later than 9 a.m. (London time) on the applicable Distribution Date. The Servicer shall deliver payment instructions, as set forth below, not later than 9 a.m. (London time) on such Distribution Date. The Servicer may only give, and the Indenture Trustee or, where applicable, the Paying Agent shall only be entitled to comply with, any instruction for a withdrawal from the Collection Account or any Series Account if those instructions:

(a) are in writing, duly completed in the form of Schedule A hereto, or in such other form as the Indenture Trustee or, where applicable, the Paying Agent may from time to time approve (such approval not to be unreasonably withheld or delayed), and are signed by an authorized signatory of the Servicer; and

(b) specify the person or the entity (as applicable) to whom the payment is to be made.

Each instruction provided to the Paying Agent by the Servicer shall be copied by the Servicer at the same time to the Indenture Trustee, but no failure of the Servicer to provide such copy shall affect the authority of the Paying Agent to act on such instruction.

Section 8.04. Rights of Noteholders .

As set forth in the Granting Clauses, the Trust Estate secures the obligation of the Issuer to pay the Holders of the Notes, and the O/C Holder of each Series principal (and premium, if any) and interest and, if applicable, to pay the Series Enhancers for Series amounts payable under the Series Enhancement for each such Series and the other amounts payable pursuant to this Indenture and the related Indenture Supplement. Except as specifically set forth in the Indenture Supplement with respect thereto, the Notes and the O/C Certificate of any Series or Class shall not have rights to payment from any Series Account or Series Enhancement allocated for the benefit of any other Series or Class.

Section 8.05. Release of Trust Estate .

(a) The Indenture Trustee may, and when required by the provisions of this Indenture shall, execute instruments to release property from the lien of this Indenture, or convey the Indenture Trustee’s interest in the same, in a manner and under circumstances which are not inconsistent with the provisions of this Indenture. No party relying upon an instrument executed by the Indenture Trustee as provided in this Article VIII shall be bound to ascertain the Indenture Trustee’s authority, inquire into the satisfaction of any conditions precedent or see to the application of any monies.

(b) The Indenture Trustee upon Issuer Order shall authorize the Servicer to execute in the name and on behalf of the Indenture Trustee instruments of satisfaction or cancellation, or of partial or full release or discharge, and other comparable instruments with respect to the Receivables (and the Indenture Trustee shall execute any such documents on request of the Servicer), subject to the obligations of the Servicer under the Transfer and Servicing Agreement.

(c) Upon Issuer Order, the Indenture Trustee shall, at such time as there are no Notes or O/C Certificates outstanding, release and transfer, without recourse, any remaining portion of the Trust Estate (other than any cash held for the payment of the Notes and the O/C Certificates pursuant to Section 4.02 ) from the lien of this Indenture and release to the Issuer or any other Person entitled thereto any funds and other property then credited to the Collection Account and any other account established pursuant to Section 8.02 or an Indenture Supplement. The Indenture Trustee shall release property from the lien of this Indenture pursuant to this Section only upon receipt of an Issuer Order accompanied by an Officer’s Certificate of the Issuer and an Opinion of Counsel.

(d) On the date when any Receivable becomes a Defaulted Receivable, there shall automatically be released from the lien of this Indenture, without further action, such Defaulted Receivable and any related Finance Charge Receivables, all Interchange allocable to such Defaulted Receivable, all Insurance Proceeds allocable to such Defaulted Receivable, all

rights to payment and amounts due or to become due with respect to all of the foregoing, and all proceeds thereof. All Recoveries and other amounts collected by the Issuer, the Transferor or the Servicer with respect to the such Defaulted Receivables shall be paid to the Issuer, shall be deposited in the Collection Account, shall be subject to the lien of this Indenture, and shall be applied as provided herein.

Section 8.06. Opinion of Counsel .

The Indenture Trustee shall receive at least seven (7) days notice when requested by the Issuer to take any action pursuant to Section 8.05(a) , accompanied by copies of any instruments involved, and the Indenture Trustee shall also receive, as a condition to such action, an Opinion of Counsel, in form and substance reasonably satisfactory to the Indenture Trustee, stating the legal effect of any such action, outlining the steps required to complete the same, and concluding that all conditions precedent to the taking of such action have been complied with and such action will not materially and adversely impair the security for the Notes or the rights of the Noteholders or the O/C Holder in contravention of the provisions of this Indenture; provided , however , that such Opinion of Counsel shall not be required to express an opinion as to the fair value of the Trust Estate. The Indenture Trustee and counsel rendering any such opinion may rely, without independent investigation, on the accuracy and validity of any certificate or other instrument delivered to the Indenture Trustee in connection with any such action.

Section 8.07. Distributions and Reports to Noteholders .

Distributions shall be made to, and reports shall be provided to, Noteholders as set forth herein, in the Transfer and Servicing Agreement and the applicable Indenture Supplement. The identity of the Noteholders with respect to distributions and reports shall be determined as of the immediately preceding Record Date.

ARTICLE IX

SUPPLEMENTAL INDENTURES

Section 9.01. Supplemental Indentures Without Consent of Noteholders .

(a) Without the consent of the Holders of any Notes or any O/C Holder but with prior notice to each Rating Agency with respect to the Notes of all Series rated by such Rating Agency, the Issuer, the Servicer and the Indenture Trustee, when authorized by an Issuer Order, at any time and from time to time, may enter into one or more indentures supplemental hereto, in form satisfactory to the Indenture Trustee, for any of the following purposes:

(i) to correct or amplify the description of any property at any time subject to the lien of this Indenture, or better to assure, convey and confirm unto the Indenture Trustee any property subject or required to be subjected to the lien of this Indenture, or to subject to the lien of this Indenture additional property;

(ii) to evidence the succession, in compliance with the applicable provisions hereof, of another Person to the Issuer, and the assumption by any such successor of the covenants of the Issuer contained herein, in the Notes and in the O/C Certificates;

(iii) to add to the covenants of the Issuer, for the benefit of the Holders of the Notes and the O/C Holders, or to surrender any right or power herein conferred upon the Issuer;

(iv) to convey, transfer, assign, mortgage or pledge any property to the Indenture Trustee;

(v) to cure any ambiguity, to correct or supplement any provision herein or in any supplemental indenture that may be inconsistent with any other provision herein or in any supplemental indenture or to make any other provisions with respect to matters or questions arising under this Indenture or in any supplemental indenture; provided , that such action shall not adversely affect the interests of the Holders of any Series or Class of Outstanding Notes or the O/C Holders; or

(vi) to evidence and provide for the acceptance of the appointment hereunder by a successor indenture trustee with respect to the Notes and O/C Certificates and to add to or change any of the provisions of this Indenture as shall be necessary to facilitate the administration of the trusts hereunder by more than one indenture trustee, pursuant to the requirements of Article VI .

The Indenture Trustee is hereby authorized to join in the execution of any such supplemental indenture and to make any further appropriate agreements and stipulations that may be therein contained.

(b) The Issuer, the Servicer and the Indenture Trustee, when authorized by an Issuer Order, may, also without the consent of any Noteholders of any Outstanding Notes but with prior written notice to each Rating Agency with respect to the affected Series or Class, if any, and upon satisfaction of the Rating Agency Condition with respect to the Notes of all such Series or Classes rated by such Rating Agency, if applicable, enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to, or changing in any manner or eliminating any of the provisions of, this Indenture or of modifying in any manner the rights of the Holders of the Notes or the O/C Holders under this Indenture; provided , however , that (i) the Issuer shall have delivered to the Indenture Trustee an Officer’s Certificate, dated the date of any such action, stating that the Issuer reasonably believes that such action will not have an Adverse Effect and (ii) if there is a Rating Agency with respect to the affected Series or Class of Notes, a Tax Opinion shall have been delivered to each applicable Rating Agency. Additionally, notwithstanding the preceding sentence, the Issuer and the Indenture Trustee, when authorized by an Issuer Order, may, without the consent of any Noteholders or the O/C Holder of any Series then Outstanding or the Series Enhancers for any Series, enter into an indenture or indentures supplemental hereto to add, modify or eliminate such provisions as may be necessary or advisable in order to enable all or any portion of the Issuer to avoid the imposition of state or local income or franchise taxes imposed on the Issuer’s property or its income; provided, however, that (i) the Issuer delivers to the Indenture Trustee an Officer’s Certificate to the effect that the proposed amendments meet the requirements set forth in this Section 9.01(b), (ii) the Rating Agency Condition will have been satisfied and (iii) such amendment does not affect the rights, duties or obligations of the Indenture Trustee hereunder without its consent.

Section 9.02. Supplemental Indentures With Consent of Noteholders .

The Issuer, the Servicer and the Indenture Trustee, when authorized by an Issuer Order, also may, with the consent of the Holders of not less than a majority of the Outstanding principal amount of the Notes of each adversely affected Series or Class, as applicable, of Notes Outstanding, by Act of such Holders delivered to the Issuer and the Indenture Trustee, and, to the extent that any such affected Series or Class is rated by a Rating Agency, upon satisfaction of the Rating Agency Condition, enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to, changing in any manner or eliminating any of the provisions of this Indenture or of modifying in any manner the rights of such Noteholders and the related O/C Holder under this Indenture; provided , however , that no such supplemental indenture shall, without the consent of the Holder of each Outstanding Note or the O/C Holder affected thereby:

(a) change the date of payment of any installment of principal of or interest on any Note, or reduce the principal amount thereof, the Interest Rate specified thereon or the redemption price with respect thereto, change the provisions of this Indenture relating to the application of collections on, or the proceeds of the sale of, all or any portion of the Trust Estate to payment of principal of or interest on the Notes, or change any place of payment where, or the coin or currency in which, any Note or any interest thereon is payable or impair the right to institute suit for the enforcement of the provisions of this Indenture requiring the application of funds available therefor, as provided in Article V , to the payment of any such amount due on the Notes on or after the respective due dates thereof (or, in the case of redemption, the Redemption Date);

(b) reduce the percentage of the Outstanding principal amount of the Notes of any Series or all Series of Notes Outstanding, the consent of the Holders of which is required for any such supplemental indenture, or the consent of the Holders of which is required for any waiver of compliance with the provisions of this Indenture or defaults hereunder and their consequences as provided for in this Indenture;

(c) reduce the percentage of the Outstanding principal amount of any Notes, the consent of the Holders of which is required to direct the Indenture Trustee to sell or liquidate the Trust Estate if the proceeds of such sale would be insufficient to pay the principal amount and accrued but unpaid interest on the Outstanding Notes of such Series;

(d) modify any of the provisions of this Indenture in such manner as to affect the calculation of the amount of any payment of interest or principal due on any Note on any Payment Date (including the calculation of any of the individual components of such calculation) or to affect the rights of the Holders of Notes to the benefit of any provisions for the mandatory redemption of the Notes contained herein;

(e) modify or alter the provisions of this Indenture prohibiting the voting of Notes held by the Issuer, any other obligor on the Notes, the Transferor or any Affiliate thereof; or

(f) permit the creation of any Lien ranking prior to or on a parity with the lien of this Indenture with respect to any part of the Trust Estate or, except as otherwise permitted or contemplated herein, terminate the Lien of this Indenture on any part of the Trust Estate or deprive the Holder of any Note of the security provided by the Lien of this Indenture.

The Indenture Trustee may in its discretion determine whether or not any Notes would be affected by any supplemental indenture and any such determination shall be conclusive upon the Holders of all Notes, whether theretofore or thereafter authenticated and delivered hereunder. The Indenture Trustee shall not be liable for any such determination made in good faith.

It shall not be necessary for any Act of Noteholders under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof.

Promptly after the execution by the Issuer, the Servicer, and the Indenture Trustee of any supplemental indenture pursuant to this Section, the Indenture Trustee shall mail to the Holders of the Notes to which such amendment or supplemental indenture relates written notice setting forth in general terms the substance of such supplemental indenture. Any failure of the Indenture Trustee to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such supplemental indenture.

Section 9.03. Execution of Supplemental Indentures .

In executing, or permitting the additional trusts created by, any supplemental indenture permitted by this Article IX or the modification thereby of the trusts created by this Indenture, the Indenture Trustee shall be entitled to receive, and subject to Sections 6.01 and 6.02 , shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture. The Indenture Trustee may, but shall not be obligated to, enter into any such supplemental indenture that affects the Indenture Trustee’s (as such or in its individual capacity) own rights, duties, liabilities, benefits, protections, privileges or immunities under this Indenture or otherwise.

Section 9.04. Effect of Supplemental Indenture .

Upon the execution of any supplemental indenture under this Article IX , this Indenture shall be modified and amended in accordance therewith with respect to the Notes and the O/C Certificates affected thereby, and the respective rights, limitations of rights, obligations, duties, liabilities and immunities under this Indenture of the Indenture Trustee, the Issuer, the Servicer and the Holders of the Notes and the O/C Holders shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modifications and amendments, and the terms and conditions of any such supplemental indenture shall be deemed to be a part of this Indenture for any and all purposes.

Section 9.05. Reference in Notes and O/C Certificates to Supplemental Indentures .

Notes and O/C Certificates authenticated and delivered after the execution of any supplemental indenture pursuant to this Article IX may, and if required by the Indenture Trustee shall, bear a notation in form approved by the Indenture Trustee as to any matter provided for in such supplemental indenture. If the Issuer shall so determine, new Notes and O/C Certificates so modified as to conform, in the opinion of the Indenture Trustee and the Issuer, to any such

supplemental indenture may be prepared and executed by the Issuer and authenticated and delivered by the Indenture Trustee in exchange for the Outstanding Notes and outstanding O/C Certificates.

Section 9.06. Indenture Supplements and Series Enhancers .

(a) Notwithstanding anything in this Article IX to the contrary, no amendment may be made to this Indenture or any Indenture Supplement that would adversely affect in any material respect the interests of any Series Enhancer without the consent of such Series Enhancer.

(b) Any Indenture Supplement executed in accordance with the provisions of Section 2.10 shall not be considered an amendment or supplemental indenture for the purposes of this Article IX .

ARTICLE X

TERMINATION

Section 10.01. Termination of Indenture .

The Issuer and the respective obligations and responsibilities of the Issuer, the Servicer and the Indenture Trustee created hereby (other than the obligation of the Indenture Trustee to make payments to Noteholders as hereinafter set forth) shall terminate, except with respect to the duties described in Section 10.02(b) as provided in the Trust Agreement.

Section 10.02. Final Distribution .

(a) The Servicer shall give the Indenture Trustee at least thirty (30) days prior written notice of the Payment Date on which the Noteholders of any Series or Class or the related O/C Holder may surrender their Notes or O/C Certificate, as applicable, for payment of the final distribution on and cancellation of such Notes or O/C Certificate (or, in the event of a final distribution resulting from the application of Section 2.06 or Section 8.01 of the Transfer and Servicing Agreement, notice of such Payment Date promptly after the Servicer has determined that a final distribution will occur, if such determination is made less than thirty (30) days prior to such Payment Date). Such notice shall be accompanied by an Officer’s Certificate of the Servicer setting forth the information specified in Section 3.05 of the Transfer and Servicing Agreement covering the period during the then-current calendar year through the date of such notice. Not later than the fifth (5th) day of the month in which the final distribution in respect of such Series or Class is payable to Noteholders, the Indenture Trustee shall provide notice to Noteholders of such Series or Class specifying (i) the date upon which final payment of such Series or Class will be made upon presentation and surrender of Notes of such Series or Class at the office or offices therein designated, (ii) the amount of any such final payment and (iii) that the Record Date otherwise applicable to such Payment Date is not applicable, payments being made only upon presentation and surrender of such Notes at the office or offices therein specified. The Indenture Trustee shall give such notice to the Note Registrar and the Paying Agent at the time such notice is given to Noteholders.

(b) Notwithstanding a final distribution to the Noteholders of any Series or Class (or the termination of the Issuer), except as otherwise provided in this paragraph, all funds then on deposit in the Collection Account and any Series Account allocated to such Noteholders shall continue to be held in trust for the benefit of such Noteholders and the Paying Agent or the Indenture Trustee shall pay such funds to such Noteholders upon surrender of their Notes (and any excess shall be paid in accordance with the terms of the Indenture Supplement and Series Enhancement, if any, for such Series or Class). In the event that all such Noteholders shall not surrender their Notes for cancellation within six (6) months after the date specified in the notice from the Indenture Trustee described in paragraph (a), the Indenture Trustee shall give a second notice to the remaining such Noteholders to surrender their Notes for cancellation and receive the final distribution with respect thereto. If within one (1) year after the second notice all such Notes shall not have been surrendered for cancellation, the Indenture Trustee may take appropriate steps, or may appoint an agent to take appropriate steps, to contact the remaining such Noteholders concerning surrender of their Notes pursuant to and as described in Section 3.03 . The Indenture Trustee and the Paying Agent shall pay to the Issuer any monies held by them for the payment of principal or interest that remains unclaimed for two (2) years pursuant to and as described in Section 3.03 . After payment to the Issuer, Noteholders entitled to the money must look to the Issuer for payment as general creditors unless an applicable abandoned property law designates another Person.

ARTICLE XI

MISCELLANEOUS

Section 11.01. Compliance Certificates and Opinions etc .

(a) Upon any application or request by the Issuer to the Indenture Trustee to take any action under any provision of this Indenture, the Issuer shall furnish to the Indenture Trustee (x) an Officer’s Certificate of the Issuer stating that all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with, and (y) an Opinion of Counsel stating that in the opinion of such counsel all such conditions precedent, if any, have been complied with, except that, in the case of any such application or request as to which the furnishing of such documents is specifically required by any provision of this Indenture, no additional certificate or opinion need be furnished.

Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include:

(i) a statement that each signatory of such certificate or opinion has read or has caused to be read such covenant or condition and the definitions herein relating thereto;

(ii) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

(iii) a statement that, in the opinion of each such signatory, such signatory has made such examination or investigation as is necessary to enable such signatory to express an informed opinion as to whether or not such covenant or condition has been complied with; and

(iv) a statement as to whether, in the opinion of each such signatory, such condition or covenant has been complied with.

(b) (i) Prior to the deposit of any property constituting part of the Trust Estate or other property or securities with the Indenture Trustee that is to be made the basis for the release of any property or securities subject to the lien of this Indenture, the Issuer shall, in addition to any obligation imposed in Section 11.01(a) or elsewhere in this Indenture, furnish to the Indenture Trustee an Officer’s Certificate of the Issuer certifying or stating the opinion of each person signing such certificate as to the fair value (within ninety (90) days of such deposit) to the Issuer of such property constituting part of the Trust Estate or other property or securities to be so deposited.

(ii) Other than the release of any Defaulted Receivables or Ineligible Receivables, whenever any property or securities are to be released from the lien of this Indenture, the Issuer shall also furnish to the Indenture Trustee an Officer’s Certificate of the Issuer certifying or stating the opinion of each person signing such certificate as to the fair value (within ninety (90) days of such release) of the property or securities proposed to be released and stating that in the opinion of such person the proposed release will not impair the security under this Indenture in contravention of the provisions hereof.

(iii) Notwithstanding Section 2.15 , this Section 11.01 or any other provision of this Indenture, the Issuer may (or may direct the Servicer to) (A) collect, liquidate, sell or otherwise dispose of Receivables as and to the extent permitted or required by the Transaction Documents and (B) make cash payments out of the Series Accounts as and to the extent permitted or required by the Transaction Documents.

Section 11.02. Form of Documents Delivered to Indenture Trustee .

In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents.

Any certificate or opinion of an Authorized Officer of the Issuer may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such Authorized Officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which such Authorized Officer’s certificate or opinion is based are erroneous. Any such certificate of an Authorized Officer or Opinion of Counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Servicer, the Transferor, a Seller, the Issuer or the Administrator, stating that the information with respect to such factual matters is in the possession of the Servicer, the Transferor, such Seller, the Issuer or the Administrator, unless such Authorized Officer or counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous.

Where any Person is required to make, give or execute two (2) or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument.

Whenever in this Indenture, in connection with any application or certificate or report to the Indenture Trustee, it is provided that the Issuer shall deliver any document as a condition of the granting of such application, or as evidence of the Issuer’s compliance with any term hereof, it is intended that the truth and accuracy, at the time of the granting of such application or at the effective date of such certificate or report (as the case may be), of the facts and opinions stated in such document shall in such case be conditions precedent to the right of the Issuer to have such application granted or to the sufficiency of such certificate or report. The foregoing shall not, however, be construed to affect the Indenture Trustee’s right to rely upon the truth and accuracy of any statement or opinion contained in any such document as provided in Article VI .

Section 11.03. Acts of Noteholders .

(a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Noteholders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Noteholders in person or by an agent duly appointed in writing and satisfying any requisite percentages as to minimum number or Pound value of Outstanding principal amount represented by such Noteholders; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Indenture Trustee, and, where it is hereby expressly required, to the Issuer. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the “ Act ” of the Noteholders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and conclusive in favor of the Indenture Trustee and the Issuer, if made in the manner provided in this Section 11.03 .

(b) The fact and date of the execution by any Person of any such instrument or writing may be proved in any manner which the Indenture Trustee deems sufficient.

(d) Any request, demand, authorization, direction, notice, consent, waiver or other action by the Holder of any Notes shall bind the Holder (and any transferee thereof) of every Note issued upon the registration thereof, in exchange therefor or in lieu thereof, in respect of anything done, omitted or suffered to be done by the Indenture Trustee or the Issuer in reliance thereon, whether or not notation of such action is made upon such Note.

Section 11.04. Notices, Etc. to Indenture Trustee and Issuer .

Any request, demand, authorization, direction, notice, consent, waiver or Act of Noteholders or other documents provided or permitted by the Indenture to be made upon, given or furnished to, or filed with:

(a) the Indenture Trustee shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing to a Responsible Officer, by facsimile transmission or by other means acceptable to the Indenture Trustee to or with the Indenture Trustee at its Corporate Trust Office with a copy to: Deutsche Bank AG, London Branch (attention: TSS-SFS ABS/MBS Group), Winchester House, 1 Great Winchester Street, London EC2N 2DB, United Kingdom; or

(b) the Paying Agent shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing to Deutsche Bank AG, London Branch (attention: TSS-SFS ABS/MBS Group), Winchester House, 1 Great Winchester Street, London EC2N 2DB, United Kingdom; or

(c) the Issuer shall be sufficient for every purpose hereunder if in writing and mailed, first-class postage prepaid, to the Issuer addressed to it at Wilmington Trust FSB, 3993 Howard Hughes Parkway, Suite 250, Las Vegas, Nevada 89169 or at any other address previously furnished in writing to the Indenture Trustee by the Issuer. The Issuer shall promptly transmit any notice received by it from the Noteholders to the Indenture Trustee.

Section 11.05. Notices to Noteholders; Waiver .

Where this Indenture provides for notice to Noteholders or the O/C Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided, and in the case of Global Notes, notice may be given to the Noteholders through the Clearing Agency), if in writing and mailed by first-class mail postage prepaid or national overnight courier service to each Noteholder or O/C Holder, as applicable, affected by such event, at its address as it appears on the Note Register, not later than the latest date, and not earlier than the earliest date, prescribed for the giving of such notice. In any case where notice to Noteholders or the O/C Holders is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Noteholder or O/C Holder shall affect the sufficiency of such notice with respect to other Noteholders or the O/C Holders and any notice which is mailed in the manner herein provided shall conclusively be presumed to have been duly given.

Where this Indenture provides for notice in any manner, such notice may be waived in writing by any Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Noteholders or the O/C Holders shall be filed with the Indenture Trustee but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.

In the event that, by reason of the suspension of regular mail service, it shall be impractical to mail notice of any event to Noteholders or the O/C Holders when such notice is required to be given pursuant to any provision of this Indenture, then any manner of giving such notice as shall be satisfactory to the Indenture Trustee shall be deemed to be a sufficient giving of such notice.

Where this Indenture provides for notice to any Rating Agency, failure to give such notice shall not affect any other rights or obligations created hereunder and shall not under any circumstances constitute a Default, an Event of Default, an Early Redemption Event or a Reinvestment Event.

Section 11.06. Alternate Payment and Notice Provisions .

Notwithstanding any provision of this Indenture or any of the Notes or O/C Certificates to the contrary, the Issuer, with the consent of the Indenture Trustee, may enter into any agreement with any Holder of a Note or O/C Holder providing for a method of payment, or notice by the Indenture Trustee or any Paying Agent to such Holder or O/C Holder that is different from the methods provided for in this Indenture for such payments or notices. The Issuer will furnish to the Indenture Trustee a copy of each such agreement and the Indenture Trustee will cause payments to be made and notices to be given in accordance with such agreements.

Section 11.07. Effect of Headings and Table of Contents .

The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof.

Section 11.08. Successors and Assigns .

All covenants and agreements in this Indenture by the Issuer and the Servicer shall bind their respective successors and assigns, whether so expressed or not. All covenants and agreements of the Indenture Trustee in this Indenture shall bind its successors, co-trustees and agents. The parties hereby acknowledge and agree that all of the Servicer’s rights and obligations under this Agreement may be assigned by the Servicer to CompuCredit International Servicing LLC pursuant to the terms and conditions set forth in the Transfer and Servicing Agreement.

Section 11.09. Separability .

In case any provision in this Indenture or in the Notes shall be invalid, illegal or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

Section 11.10. Benefits of Indenture .

Nothing in this Indenture or in the Notes, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder, and the Noteholders and the O/C Holders any benefit or any legal or equitable right, remedy or claim under this Indenture.

Section 11.11. Legal Holidays .

In any case where the date on which any payment is due shall not be a Business Day, then (notwithstanding any other provision of the Notes or this Indenture) payment need not be made on such date, but may be made on the next succeeding Business Day with the same force and effect as if made on the date on which nominally due, and no additional interest (other than as specified in this Indenture or any Indenture Supplement) shall accrue for the period from and after any such nominal date.

Section 11.12. Governing Law .

THIS INDENTURE AND EACH NOTE AND O/C CERTIFICATE SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS (OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW) AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

Section 11.13. Counterparts .

This Indenture may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.

Section 11.14. Recording of Indenture .

If this Indenture is subject to recording in any appropriate public recording offices, such recording is to be effected by the Issuer and at its expense accompanied by an Opinion of Counsel (which shall be counsel reasonably acceptable to the Indenture Trustee) to the effect that such recording is necessary either for the protection of the Noteholders or any other Person secured hereunder or for the enforcement of any right or remedy granted to the Indenture Trustee under this Indenture.

Section 11.15. No Petition .

The Indenture Trustee (as such and in its individual capacity), the Owner Trustee (as such and in its individual capacity), the Servicer, each Noteholder and owner of a security entitlement to a Note, by accepting a Note or a security entitlement thereto, and each O/C Holder, by accepting an O/C Certificate, hereby covenant and agree that they will not at any time institute against the Issuer or the Transferor, or join in instituting against the Issuer or the Transferor, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or other proceedings under any United States federal or state bankruptcy or similar law.

Section 11.16. Inspection .

The Issuer agrees that, on reasonable prior notice, it will permit any representative of the Indenture Trustee, during the Issuer’s normal business hours, to examine all the books of account, records, reports, and other papers of the Issuer, to make copies and extracts therefrom, to cause such books to be audited by Independent certified public accountants, and to discuss the Issuer’s affairs, finances and accounts with the Issuer’s officers, employees, and Independent certified public accountants, all at such reasonable times and as often as may be reasonably requested. The Indenture Trustee shall, and shall cause its representatives, to hold in confidence all such information except to the extent disclosure may be required by law (and all reasonable applications for confidential treatment are unavailing) and except to the extent that the Indenture Trustee may reasonably determine that such disclosure is consistent with its obligations hereunder or is required by the UCC.

Section 11.17. Trust Obligation .

No recourse may be taken, directly or indirectly, with respect to the obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the Notes or the O/C Certificates or under this Indenture or any certificate or other writing delivered in connection herewith or therewith, against (i) the Indenture Trustee or the Owner Trustee in its individual capacity, (ii) any owner of a beneficial interest in the Issuer or (iii) any partner, owner, beneficiary, agent, officer, director, employee or agent of the Indenture Trustee or the Owner Trustee in their individual capacities, any holder of a beneficial interest in the Issuer, the Owner Trustee or the Indenture Trustee or of any successor or assign of the Indenture Trustee or the Owner Trustee in their individual capacities, except as any such Person may have expressly agreed (it being understood that the Owner Trustee has no such obligations in its individual capacity) and except that any such partner, owner or beneficiary shall be fully liable, to the extent provided by applicable law, for any unpaid consideration for stock, unpaid capital contribution or failure to pay any installment or call owing to such entity. For all purposes of this Indenture, in the performance of any duties or obligations hereunder, the Owner Trustee (as such or in its individual capacity) shall be subject to, and entitled to the benefits of, the terms and provisions of the Trust Agreement.

Section 11.18. Limitation of Liability of Owner Trustee .

It is expressly understood and agreed by the parties hereto that (a) this Indenture is executed and delivered by Wilmington Trust FSB, not individually or personally but solely as owner trustee of the Issuer, in the exercise of the powers and authority conferred and vested in it under the Trust Agreement, (b) each of the representations, undertakings and agreements herein made on the part of the Issuer is made and intended not as personal representations, undertakings and agreements by Wilmington Trust FSB but is made and intended for the purpose of binding only the Issuer and (c) under no circumstances shall Wilmington Trust FSB be personally liable for the payment of any indebtedness or expenses of the Issuer or be liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by the Issuer under this Indenture or the other Transaction Documents to which the Issuer is a party.

Section 11.19. Execution of the Transfer and Servicing Agreement by the Indenture Trustee .

The execution by the Indenture Trustee of the Transfer and Servicing Agreement is hereby ratified and approved.

IN WITNESS WHEREOF, the Issuer, the Servicer and the Indenture Trustee have caused this Indenture to be duly executed by their respective officers thereunto duly authorized, all as of the date first above written.


PARTRIDGE ACQUIRED PORTFOLIO BUSINESS TRUST, as Issuer

By:		WILMINGTON TRUST FSB,
		not in its individual capacity, but solely as Owner Trustee

By:		/s/ Jim Lawler
Name:		Jim Lawler
Title:		Vice President

DEUTSCHE BANK TRUST COMPANY AMERICAS as Indenture Trustee

By:		/s/ Michele HY Voon
Name:		Michele HY Voon
Title:		Attorney-in-fact

By:		/s/ Dorit Ritter-Haddad
Name:		Dorit Ritter-Haddad
Title:		Attorney-in-fact

COMPUCREDIT INTERNATIONAL ACQUISITION CORPORATION as Servicer

By:		/s/ Joshua C. Miller
Name:		Joshua C. Miller
Title:		Assistant Secretary

[Signature Page to Master Indenture]


DEUTSCHE BANK AG, LONDON BRANCH,
as Paying Agent

By:		/s/ Darren Levene
Name:		Darren Levene
Title:		Vice President

By:		/s/ Clive Rakestrow
Name:		Clive Rakestrow
Title:		Vice President

[Signature Page to Master Indenture]

Schedule A

Form of Instructions to Account Bank

To:	Deutsche Bank AG, London Branch

Winchester House

1 Great Winchester Street

London EC2N 2DB

[Date]

Dear Sirs

Account No: [•]

Account Bank Agreement

We hereby irrevocably instruct you to make the following transfer:

Bank Account to be debited: [Name and number]

Amount of transfer: [ ]

Bank Account to be credited:

(a)	Account name:

(b)

Bank:

(c)	Account Number:

(d)	Sort Code:

Reference:

Transfer Date:

Yours faithfully,

On behalf of

[Company]

cc: Trustee

Exhibit 10.6

EXECUTION COPY

PARTRIDGE ACQUIRED PORTFOLIO BUSINESS TRUST

Issuer

COMPUCREDIT INTERNATIONAL ACQUISITION CORPORATION

Servicer

DEUTSCHE BANK AG, LONDON BRANCH

Paying Agent

and

DEUTSCHE BANK TRUST COMPANY AMERICAS

Indenture Trustee

SERIES 2007-ONE INDENTURE SUPPLEMENT

Dated as of April 4, 2007

TABLE OF CONTENTS


		Page
	ARTICLE I
	Creation of the Series 2007-One Notes

Section 1.01.	Designation.	1

	ARTICLE II
	Definitions

Section 2.01.	Definitions	2

	ARTICLE III
	Servicing Fee

Section 3.01.	Servicing Compensation	18

	ARTICLE IV
	Allocation and Application of Collections

Section 4.01.	Collections and Allocations	19
Section 4.02.	Determination of Monthly Interest	19
Section 4.03.	Daily Application of Collections	22
Section 4.04.	Required Coverage Amount	23
Section 4.05.	Application of Available Collections	23
Section 4.06.	Defaulted Amounts; Reduction Amounts	28
Section 4.07.	Determination of LIBOR	29
Section 4.08.	VFN Increases	29

	ARTICLE V
	Distributions; Reports to Series 2007-One Noteholders

Section 5.01.	Distributions	31
Section 5.02.	Reports and Statements to Series 2007-One Noteholders	33

	ARTICLE VI
	Series 2007-One Redemption Events; Voting

Section 6.01.	Series 2007-One Redemption Events	34

	ARTICLE VII
	Redemption of Series 2007-One Notes; Series Termination

Section 7.01.	Administrative Redemption; Final Distributions	36
Section 7.02.	Series Termination	36

-i-

TABLE OF CONTENTS

(continued)


		Page
	ARTICLE VIII
	Redemption of Series 2007-One Notes; Final Distributions

Section 8.01.	Sale of Receivables or Redemption of the Series 2007-One Notes and the O/C Certificate pursuant to Sections 5.05 and 5.17 of the Indenture and Sections 7.01 and 8.01 of this Indenture Supplement	37

	ARTICLE IX
	Miscellaneous Provisions

Section 9.01.	Ratification of Indenture	39
Section 9.02.	Counterparts	39
Section 9.03.	Governing Law	39
Section 9.04.	Successors and Assigns	39
Section 9.05.	Tax Matters	39
Section 9.06.	Covenant of O/C Holder	44
Section 9.07.	Transfer of the Variable Funding Notes and the O/C Certificate	44
Section 9.08.	Event of Default	44
Section 9.09.	Disclosure of Tax Treatment	45
Section 9.10.	Limitation of Liability	45

-ii-


EXHIBITS

EXHIBIT A-1		Form of Class A-1 Note

EXHIBIT A-2		Form of Class A-2 Note

EXHIBIT A-3		Form of Class A-3 Note

EXHIBIT A-4		Form of Class A-4 Note

EXHIBIT B		Form of Class B Note

EXHIBIT C		Form of Variable Funding Note

EXHIBIT D		Form of O/C Certificate

EXHIBIT E		Form of Monthly Servicing Statement

EXHIBIT F		Investment Letter

EXHIBIT G		Permitted Transferees

-iii-

SERIES 2007-ONE INDENTURE SUPPLEMENT, dated as of April 4, 2007 (this “ Indenture Supplement ”), among PARTRIDGE ACQUIRED PORTFOLIO BUSINESS TRUST, a Nevada business trust (herein, the “ Issuer ”), COMPUCREDIT INTERNATIONAL ACQUISITION CORPORATION, a Nevada corporation (the “ Servicer ”), DEUTSCHE BANK AG, LONDON BRANCH, a corporation duly organized and existing under the law of the Federal Republic of Germany and having its principal place of business at Taunusanlage 12 in the City of Frankfurt (Main) and operating in the United Kingdom under branch number BR000005, not in its individual capacity, but solely as paying agent (herein, together with its successors in the trusts thereunder as provided in the Indenture referred to below, the “ Paying Agent ”) under the Master Indenture, DEUTSCHE BANK TRUST COMPANY AMERICAS, a New York State chartered bank, not in its individual capacity, but solely as indenture trustee (herein, together with its successors in the trusts thereunder as provided in the Indenture referred to below, the “ Indenture Trustee ”) under the Master Indenture, dated as of April 4, 2007 (as amended from time to time, the “ Indenture ”), among the Issuer, the Servicer and the Indenture Trustee (the Indenture, together with this Indenture Supplement, the “ Agreement ”).

Pursuant to Section 2.10 of the Indenture, the Issuer may issue one or more Series of Notes. The Principal Terms of this Series are set forth in this Indenture Supplement to the Indenture.

ARTICLE I

Creation of the Series 2007-One Notes

Section 1.01. Designation.

(a) There is hereby created and designated a Series of Notes to be issued pursuant to the Agreement to be known as “PARTRIDGE ACQUIRED PORTFOLIO BUSINESS TRUST, Series 2007-One Notes” or the “Series 2007-One Notes.” The Series 2007-One Notes shall be issued as follows: the “Class A-1 Notes,” the “Class A-2 Notes,” the “Class A-3 Notes,” “the Class A-4 Notes,” the “Class B Notes” and the “Variable Funding Notes.” An O/C Certificate will also be issued pursuant to the Agreement as part of Series 2007-One and will be entitled to receive the amounts specified hereunder. The Series 2007-One Notes and the O/C Certificate will be issued in definitive form.

(b) Series 2007-One shall not be subordinated to any other Series. The Series 2007-One Notes shall be due and payable on the Stated Maturity Date.

[END OF ARTICLE I]

ARTICLE II

Definitions

Section 2.01. Definitions .

(a) Whenever used in this Indenture Supplement, the following words and phrases shall have the following meanings, and the definitions of such terms are applicable to the singular as well as the plural forms of such terms and the masculine as well as the feminine and neuter genders of such terms.

“ Account Owner ” shall mean R. Raphael & Sons PLC, a public limited liability company incorporated in England and Wales, or any other entity which is the issuer of the credit card relating to an Account pursuant to a Credit Card Agreement.

“ Account Ownership Fee ” shall have the meaning specified in the Transfer and Servicing Agreement.

“ Administrative Redemption ” shall have the meaning specified in subsection 7.01(a) .

“ Administration Fee ” shall mean one-twelfth of the product of (i) 0.01%, (ii) the Series Allocation Percentage and (iii)(A) the sum of the amount of Receivables (including any Ineligible Receivables to the extent not repurchased pursuant to the Transfer and Servicing Agreement) on each day of the related Monthly Period divided by (B) the number of days in such Monthly Period.

“ Allocation Amount ” shall mean the sum of the Class A Allocation Amount, the Class B Allocation Amount, the VFN Allocation Amount and the O/C Allocation Amount.

“ Available Finance Charge Collections ” shall mean an amount equal to, with respect to any Monthly Period, the product of (i) the Series Allocation Percentage for such Monthly Period and (ii) Collections of Finance Charge Receivables with respect to such Monthly Period; provided , however , for purposes of this definition, the initial Monthly Period will commence as of the Cut-Off Time and end on April 30, 2007.

“ Available Principal Collections ” shall mean an amount equal to, with respect to any Monthly Period, (i) the product of (a) the Series Allocation Percentage for such Monthly Period and (b) Collections of Principal Receivables with respect to such Monthly Period, plus (ii) any other amounts which pursuant to subsection 4.05(a) are to be treated as Available Principal Collections for such Monthly Period minus (iii) Collections of Principal Receivables applied pursuant to Section 4.03 for such Monthly Period; provided , however , for purposes of this definition, the initial Monthly Period will commence as of the Cut-Off Time and end on April 30, 2007.

“ Backup Servicer ” shall mean a credit card servicer in the United Kingdom designated by the Servicer after the Closing Date in a notice to the Indenture Trustee and consented to by the Required Investors, and its successors and assigns.

“ Backup Servicing Fee ” shall mean the fee designated by the Servicer and consented to by the Required Investors on the date the Backup Servicer is designated.

“ Business Day ” shall have the meaning specified in the Transfer and Servicing Agreement.

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

“ Class A Initial Principal Balance ” shall mean the amount specified in Item 1 on Schedule I.

“ Class A Noteholder ” shall mean the Person in whose name any Class A Note is registered in the Note Register.

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

“ Class A Principal Balance ” shall mean the sum of the Class A-1 Principal Balance, the Class A-2 Principal Balance, the Class A-3 Principal Balance and the Class A-4 Principal Balance.

“ Class A Reduction Amounts ” shall mean, with respect to any Distribution Date, the sum of the aggregate amounts by which each of the Class A-1 Allocation Amount, the Class A-2 Allocation Amount, the Class A-3 Allocation Amount and the Class A-4 Allocation Amount have been reduced on all prior Distribution Dates pursuant to Section 4.06 .

“ Class A Series Default Amount ” shall mean, with respect to any Monthly Period, the product of (i) the Series Default Amount for such Monthly Period and (ii) a fraction, the numerator of which is the Class A Allocation Amount and the denominator of which is the Allocation Amount as of the last day of such Monthly Period.

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

“ Class A-1 Allocation Amount ” shall mean, on any date of determination, an amount equal to (i) the Class A-1 Initial Principal Balance, minus (ii) the total amount of principal payments made on the Class A-1 Notes prior to such date, minus (iii) the excess, if any, of the Class A-1 Reduction Amount over the portion of such Class A-1 Reduction Amount reimbursed pursuant to subsection 4.05(a)(vii) prior to such date; provided that the Class A-1 Allocation Amount shall not be less than zero.

“ Class A-1 Initial Principal Balance ” shall mean the amount specified in Item 2 on Schedule I.

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

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

“ Class A-1 Note Rate ” shall mean, with respect to any Interest Period, a per annum rate equal to the sum of (i) the percentage specified in Item 3 on Schedule I plus (ii) LIBOR as determined on the related LIBOR Determination Date with respect to such Interest Period.

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

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

“ Class A-1 Principal Balance ” shall mean, on any date of determination, an amount equal to (i) the Class A-1 Initial Principal Balance, minus (ii) the aggregate amount of principal payments made to the Class A-1 Noteholders on or prior to such date.

“ Class A-1 Reduction Amount ” shall mean, with respect to any Distribution Date, the aggregate amount by which the Class A-1 Allocation Amount has been reduced on all prior Distribution Dates pursuant to Section 4.06 .

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

“ Class A-2 Allocation Amount ” shall mean, on any date of determination, an amount equal to (i) the Class A-2 Initial Principal Balance, minus (ii) the total amount of principal payments made on the Class A-2 Notes prior to such date, minus (iii) the excess, if any, of the Class A-2 Reduction Amount over the portion of such Class A-2 Reduction Amount reimbursed pursuant to subsection 4.05(a)(vii) prior to such date; provided that the Class A-2 Allocation Amount shall not be less than zero.

“ Class A-2 Initial Principal Balance ” shall mean the amount specified in Item 4 on Schedule I.

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

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

“ Class A-2 Note Rate ” shall mean, with respect to any Interest Period, a per annum rate equal to the sum of (i) the percentage specified in Item 5 on Schedule I plus (ii) LIBOR as determined on the related LIBOR Determination Date with respect to such Interest Period.

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

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

“ Class A-2 Principal Balance ” shall mean, on any date of determination, an amount equal to (i) the Class A-2 Initial Principal Balance, minus (ii) the aggregate amount of principal payments made to the Class A-2 Noteholders on or prior to such date.

“ Class A-2 Reduction Amount ” shall mean, with respect to any Distribution Date, the aggregate amount by which the Class A-2 Allocation Amount has been reduced on all prior Distribution Dates pursuant to Section 4.06 .

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

“ Class A-3 Allocation Amount ” shall mean, on any date of determination, an amount equal to (i) the Class A-3 Initial Principal Balance, minus (ii) the total amount of principal payments made on the Class A-3 Notes prior to such date, minus (iii) the excess, if any, of the Class A-3 Reduction Amount over the portion of such Class A-3 Reduction Amount reimbursed pursuant to subsection 4.05(a)(vii) prior to such date; provided that the Class A-3 Allocation Amount shall not be less than zero.

“ Class A-3 Initial Principal Balance ” shall mean the amount specified in Item 6 of Schedule I.

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

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

“ Class A-3 Note Rate ” shall mean, with respect to any Interest Period, a per annum rate equal to the sum of (i) the percentage specified in Item 7 of Schedule I plus (ii) LIBOR as determined on the related LIBOR Determination Date with respect to such Interest Period.

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

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

“ Class A-3 Principal Balance ” shall mean, on any date of determination, an amount equal to (i) the Class A-3 Initial Principal Balance, minus (ii) the aggregate amount of principal payments made to the Class A-3 Noteholders on or prior to such date.

“ Class A-3 Reduction Amount ” shall mean, with respect to any Distribution Date, the aggregate amount by which the Class A-3 Allocation Amount has been reduced on all prior Distribution Dates pursuant to Section 4.06 .

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

“ Class A-4 Allocation Amount ” shall mean, on any date of determination, an amount equal to (i) the Class A-4 Initial Principal Balance, minus (ii) the total amount of principal payments made on the Class A-4 Notes prior to such date, minus (iii) the excess, if any, of the Class A-4 Reduction Amount over the portion of such Class A-4 Reduction Amount reimbursed pursuant to subsection 4.05(a)(vii) prior to such date; provided that the Class A-4 Allocation Amount shall not be less than zero.

“ Class A-4 Initial Principal Balance ” shall mean the amount specified in Item 8 of Schedule I.

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

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

“ Class A-4 Note Rate ” shall mean, with respect to any Interest Period, a per annum rate equal to the sum of (i) the percentage specified in Item 9 of Schedule I plus (ii) LIBOR as determined on the related LIBOR Determination Date with respect to such Interest Period.

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

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

“ Class A-4 Principal Balance ” shall mean, on any date of determination, an amount equal to (i) the Class A-4 Initial Principal Balance, minus (ii) the aggregate amount of principal payments made to the Class A-4 Noteholders on or prior to such date.

“ Class A-4 Reduction Amount ” shall mean, with respect to any Distribution Date, the aggregate amount by which the Class A-4 Allocation Amount has been reduced on all prior Distribution Dates pursuant to Section 4.06 .

“ Class B Additional Interest ” shall have the meaning specified in subsection 4.02(e) .

“ Class B Allocation Amount ” shall mean, on any date of determination, an amount equal to (i) the Class B Initial Principal Balance, minus (ii) the total amount of principal payments made on the Class B Notes prior to such date, minus (iii) the excess, if any, of the Class B Reduction Amount over the portion of such Class B Reduction Amount reimbursed pursuant to subsection 4.05(a)(x) prior to such date; provided that the Class B Allocation Amount shall not be less than zero.

“ Class B Initial Principal Balance ” shall mean the amount specified in Item 10 of Schedule I.

“ Class B Interest Shortfall ” shall have the meaning specified in subsection 4.02(e) .

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

“ Class B Note Rate ” shall mean, with respect to any Interest Period, a per annum rate equal to the sum of (i) the percentage specified in Item 11 of Schedule I plus (ii) LIBOR as determined on the related LIBOR Determination Date with respect to such Interest Period.

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

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

“ Class B Principal Balance ” shall mean, on any date of determination, an amount equal to (i) the Class B Initial Principal Balance, minus (ii) the aggregate amount of principal payments made to the Class B Noteholders on or prior to such date.

“ Class B Reduction Amount ” shall mean, with respect to any Distribution Date, the aggregate amount by which the Class B Allocation Amount has been reduced on all prior Distribution Dates pursuant to Section 4.06 .

“ Class B Series Default Amount ” shall mean, with respect to any Monthly Period, the product of (i) the Series Default Amount for such Monthly Period and (ii) a fraction, the numerator of which is the Class B Allocation Amount and the denominator of which is the Allocation Amount as of the last day of such Monthly Period.

“ Class B Subordinated Principal Percentage ” shall mean an amount equal to the percentage equivalent of a fraction (1) the numerator of which is the O/C Allocation Amount as of the last day of the prior Monthly Period and (2) the denominator of which is the Allocation Amount as of the last day of the prior Monthly Period.

“ Closing Date ” shall mean April 4, 2007.

“ Cut-Off Time ” shall mean 11:59 P.M, London time on April 3, 2007.

“ Defaulted Amount ” shall mean, with respect to Series 2007-One, with respect to any Monthly Period, an amount (which shall not be less than zero) equal to (a) the amount of Principal Receivables which became Defaulted Receivables in such Monthly Period, plus (b) (without duplication, if any, with respect to clause (a)) the amount of any Principal Receivables which are identified as not being Eligible Receivables during such Monthly Period, plus (c) the amount of Principal Receivables that have been adjusted downward pursuant to subsection 3.07(a) in the Transfer and Servicing Agreement.

“ Deposit Date ” shall mean each day on which the Servicer deposits Collections into the Collection Account.

“ Distribution Date ” shall mean May 17, 2007 and the seventeenth day of each calendar month thereafter, or if such seventeenth day is not a Business Day, the next succeeding Business Day.

“ Early Redemption Event ” shall mean any Early Redemption Event specified in Section 5.01 of the Indenture and any Series 2007-One Redemption Event.

“ Early Redemption Period ” shall mean the period commencing at the close of business on the Business Day immediately preceding the day on which an Early Redemption Event is deemed to have occurred and ending on the earlier to occur of (i) the payment in full of the Class A Principal Balance and the Class B Principal Balance, the VFN Principal Balance and the reduction of the O/C Allocation Amount to zero or (ii) the Stated Maturity Date.

“ Equity Lockout Period ” shall mean the period from the Closing Date to and including the January 2008 Distribution Date.

“ ER Subordinated Principal Percentage Trigger ” shall mean (1) 17.0% if the Six Month Average Charge-Off Rate is less than 15.0%, (2) 21.0% if the Six Month Average Charge-Off Rate is greater than or equal to 15.0% but less than 20.0%, (3) 25.0% if the Six Month Average Charge-Off Rate is greater than or equal to 20.0% but less than 25.0% and (4) 29.0% if the Six Month Average Charge-Off Rate is greater than or equal to 25.0%.

“ Increase Amount ” shall mean the amount remitted by the VFN Holders to fund an increase in the principal balance of the Variable Funding Note pursuant to subsection 4.08(a) .

“ Increase Date ” shall have the meaning specified in subsection 4.08(a) .

“ Initial Allocation Amount ” shall mean the sum of the Class A Initial Principal Balance, the Class B Initial Principal Balance and the O/C Initial Outstanding Amount.

“ Initial Subordinated Principal Percentage ” shall mean the percentage specified in Item 12 of Schedule I.

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

“ Investment Letter ” shall have the meaning specified in subsection 9.05(c) .

“ LIBOR ” shall mean (i) with respect to the first LIBOR Determination Date, 5.53100% and (ii) thereafter, the definition specified in Section 4.07 .

“ LIBOR Determination Date ” shall mean the first day of each Interest Period.

“ Monthly Account Owner Fee ” shall mean an amount equal to the product of the Account Ownership Fee and the Series Allocation Percentage.

“ Monthly Backup Servicing Fee ” shall have the meaning specified in subsection 3.01(b) .

“ Monthly Fees ” shall mean the sum of the Monthly Backup Servicing Fee, to the extent not previously paid, the Monthly Account Owner Fee, the Monthly Servicing Fee and the Administration Fee.

“ Monthly Period ” shall mean, with respect to each Distribution Date, the preceding calendar month; provided , however , that the initial Monthly Period shall mean the period from and including the Closing Date to and including April 30, 2007.

“ Monthly Servicing Fee ” shall have the meaning specified in subsection 3.01(a) .

“ Monthly Servicing Statement ” shall have the meaning specified in subsection 5.02(a)(i) .

“ Net Purchase Requirement ” shall mean, with respect to any Business Day, (i) the purchase price for Receivables required to be paid by the Issuer with respect to such Business Day, plus (ii) any adjustments to the purchase price of Receivables required to be paid by the Issuer with respect to such Business Day minus (iii) the amount of Collections of Receivables on such Business Day and any prior Business Days which are allocable to all Series and available for the purchase of new Receivables with respect to such Business Day, plus (iv) the aggregate amount of any Net Purchase Requirements which were not previously funded by the VFN Holder.

“ Net Yield ” shall mean an amount equal to, with respect to any Monthly Period, the annualized percentage equivalent of a fraction, (i) the numerator of which is (a) the amount of Collections of Finance Charge Receivables with respect to such Monthly Period minus (b) the Defaulted Amount for such Monthly Period and (ii) the denominator of which is the amount of Principal Receivables as of the last day of the prior Monthly Period (or with respect to the first Monthly Period, the aggregate amount of Principal Receivables as of the Closing Date).

“ Note Assignment ” shall have the meaning specified in subsection 9.05(e) .

“ Note Purchase Agreement ” shall mean, as applicable, (i) with respect to the Class A-1 Notes, the Class A-1 Note Purchase Agreement, dated as of April 4, 2007, among the Servicer, the Issuer, the Transferor, Kitty Hawk Funding Corporation as a Class A-1 Conduit Investor, and Bank of America, N.A., as Administrator and as a Class A-1 Alternate Investor (as defined in such Note Purchase Agreement), and the other financial institutions from time to time parties thereto as Class A-1 Investors and all amendments thereto, (ii) with respect to the Class A-2 Notes, the Class A-2 Note Purchase Agreement, dated as of April 4, 2007, among the Servicer, the Issuer, the Transferor, Kitty Hawk Funding Corporation as a Class A-2 Conduit Investor, and Bank of America, N.A., as Administrator and as a Class A-2 Alternate Investor (as defined in such Note Purchase Agreement), and the other financial institutions from time to time parties thereto as Class A-2 Investors and all amendments thereto, (iii) with respect to the Class A-3 Notes, the Class A-3 Note Purchase Agreement, dated as of April 4, 2007, among the Servicer, the Issuer, the Transferor, Kitty Hawk Funding Corporation as a Class A-3 Conduit Investor, and Bank of America, N.A., as Administrator and as a Class A-3 Alternate Investor (as defined in such Note Purchase Agreement), and the other financial institutions from time to time parties thereto as Class A-3 Investors and all amendments thereto, (iv) with respect to the Class A-4 Notes, the Class A-4 Note Purchase Agreement, dated as of April 4, 2007, among the Servicer, the Issuer, the Transferor, Kitty Hawk Funding Corporation as a Class A-4 Conduit Investor, and Bank of America, N.A., as Administrator and as a Class A-4 Alternate Investor (as defined in such Note Purchase Agreement), and the other financial institutions from time to time parties thereto as Class A-4 Investors and all amendments thereto, and (v) with respect to the Class B Notes, the Class B Note Purchase Agreement, dated as of April 4, 2007, among the Servicer, the Issuer, the Transferor, Blue Ridge Investments, L.L.C., as a Class B Investor, and the other financial institutions from time to time parties thereto as Class B Investors and all amendments thereto.

“ O/C Allocation Amount ” shall mean, on any date of determination, an amount equal to (i) the O/C Initial Outstanding Amount, minus (ii) the total amount of payments made to the O/C Holder prior to such date other than payments made pursuant to subsection 4.05(a)(xvii) , minus (iii) the total amount by which the O/C Allocation Amount has been reduced pursuant to Section 4.06 on all prior Distribution Dates; provided that the O/C Allocation Amount shall not be less than zero.

“ O/C and VFN Series Default Amount ” shall mean, with respect to any Monthly Period, the product of (i) the Series Default Amount for such Monthly Period and (ii) a fraction, the numerator of which is the sum of the O/C Allocation Amount and the VFN Allocation Amount and the denominator of which is the Allocation Amount, each as of the last day of such Monthly Period.

“ O/C Certificate ” shall mean the certificate issued by the Issuer representing the right to receive all amounts distributed hereunder in respect of the O/C Allocation Amount, substantially in the form of Exhibit D .

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

“ O/C Initial Outstanding Amount ” shall mean the amount specified in Item 13 of Schedule I.

“ O/C Outstanding Amount ” shall mean, on any date of determination, an amount equal to (i) the O/C Initial Outstanding Amount, minus (ii) the aggregate amount of principal payments made to the O/C Holder on or prior to such date.

“ O/C Reallocation Event ” shall mean the occurrence of any of the following events:

(a) By the last day of the January 2008 Monthly Period, the Transferor has not used commercially reasonable efforts to obtain a Backup Servicer; or

(b) At any time on or after the last day of the March 2009 Monthly Period, the Transferor has not effectuated a Term Financing; provided , however , that any such O/C Reallocation Event shall be deemed cured if the Transferor has, to the reasonable satisfaction of the Required Investors, used commercially reasonable efforts to effectuate a Term Financing notwithstanding that a Term Financing has not occurred.

“ O/C Reallocation Period ” shall mean the period commencing upon the occurrence of an O/C Reallocation Event and ending on the earliest to occur of (i) the date such O/C Reallocation Event has been cured (or, in the case of an O/C Reallocation Event described in clause (b) of such definition, deemed cured pursuant to the proviso thereof), (ii) the date the Special Reinvestment Period commences, (iii) the date the Early Redemption Period commences or (iv) the date the Scheduled Redemption Period commences.

“ Permitted Transferee ” shall mean (i) Kitty Hawk Funding Corporation as Class A Conduit Investor (as defined in the Note Purchase Agreement), (ii) Bank of America, N.A. as Administrator (as defined in the Note Purchase Agreement) and as Class A Alternate Investor (as defined in the Note Purchase Agreement), (iii) any Conduit Assignee (as defined in the Note Purchase Agreement) designated by the Funding Agent, provided that no more than three Conduit Assignees may hold an interest in the Class A Notes at any time, (iv) any other Class A Alternate Investor or Class A Investor, in each case to which the Transferor and the Servicer has given its written consent, (v) Blue Ridge Investments, L.L.C., and (vi) each investor identified on Exhibit G hereto.

“ Principal Balance ” shall mean, as applicable, the Class A-1 Principal Balance, the Class A-2 Principal Balance, the Class A-3 Principal Balance, the Class A-4 Principal Balance, the Class B Principal Balance or the VFN Principal Balance.

“ Principal Payment Rate ” shall mean, with respect to any Monthly Period, a fraction, the numerator of which is the amount of Collections of Principal Receivables for such Monthly Period and the denominator of which is the amount of Principal Receivables as of the last day of the prior Monthly Period (or with respect to the first Monthly Period, the aggregate amount of Principal Receivables as of the Closing Date).

“ Private Holder ” shall mean each holder of a right to receive interest or principal in respect of any direct or indirect interest in the Issuer, including any financial instrument or contract the value of which is determined in whole or in part by reference to the Issuer (including the assets of the Issuer, income of the Issuer or distributions made by the Issuer), but excluding

any interest in the Issuer represented by any Series or Class of Notes or any other interest as to which the Transferor has provided to the Indenture Trustee an Opinion of Counsel to the effect that such Series, Class or other interest will be treated as debt or otherwise not as an equity interest in either the Issuer or the Receivables for federal income tax purposes, in each case, provided such interest is not convertible or exchangeable into an interest in the Issuer or the Issuer’s income or equivalent value. Notwithstanding the immediately preceding sentence, (i) “Private Holder” shall also include any other Person that the Transferor and the Servicer determine is, may be or may become a “partner” within the meaning of Section 1.7704 1(h)(1)(ii) (including by reason of Section 1.7704-1(h)(3)) of the United States Treasury Regulations. “Private Holders” shall include the Class A Noteholders (and any holder of an interest in Class A Notes), the Class B Noteholders (and any holder of an interest in the Class B Notes), the VFN Holders, the Holders of the Trust Certificate, the Transferor Certificates or any interest in either, the Servicer and the O/C Holder. Any person holding more than one interest in the Issuer each of which separately would cause such Person to be a Private Holder shall be treated as a single Private Holder. Each holder of an interest in a Private Holder which is a partnership, S corporation or a grantor trust under the Code shall be treated as a Private Holder unless excepted with the consent of the Servicer and the Transferor (which consent shall be based on an Opinion of Counsel generally to the effect that the action taken pursuant to the consent will not cause the Issuer to become a publicly traded partnership treated as a corporation).

“ Program Expenses ” shall mean an amount equal to one-twelfth the product of (i) the Series Allocation Percentage and (ii) the fees and expenses of the Indenture Trustee and the Owner Trustee as specified in each of the related fee agreements with such parties.

“ Program Indemnification ” shall mean an amount equal to one-twelfth the product of (i) the Series Allocation Percentage and (ii) any indemnity obligation of the Issuer to the Indenture Trustee and the Owner Trustee, provided that the aggregate amount of such indemnity obligation to all such parties shall not exceed in the aggregate $100,000 prior to an Event of Default and $300,000 after an Event of Default in any one-year period beginning on the Closing Date and on each anniversary thereof.

“ Qualified Securitization Pledge ” shall mean, with respect to any Noteholder that is a Securitization Vehicle, a bona fide pledge by such Securitization Vehicle of its right, title and interest in and to its Notes pursuant to its program collateral or security agreement with a collateral agent or trustee for such Securitization Vehicle’s creditors and/or liquidity providers to secure obligations owing by such Securitization Vehicle to such creditors or liquidity providers.

“ Rating Agency Condition ” shall mean, with respect to Series 2007-One, the written consent of the Required Investors.

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

“ Redemption Amount ” shall mean, with respect to any Distribution Date, after giving effect to any deposits and distributions otherwise to be made on such Distribution Date,

the sum of (i) the Class A-1 Principal Balance on such Distribution Date, plus (ii) the amount due pursuant to subsection 4.05(a)(ii) for such Distribution Date, plus (iii) the Class A-2 Principal Balance on such Distribution Date, plus (iv) the amount due pursuant to subsection 4.05(a)(iii) for such Distribution Date, plus (v) the Class A-3 Principal Balance on such Distribution Date, plus (vi) the amount due pursuant to subsection 4.05(a)(iv) for such Distribution Date, plus (vii) the Class A-4 Principal Balance on such Distribution Date, plus (viii) the amount due pursuant to subsection 4.05(a)(v) for such Distribution Date, plus (ix) the Class B Principal Balance on such Distribution Date, plus (x) the amount due pursuant to subsection 4.05(a)(viii) for such Distribution Date, plus (xi) the VFN Principal Balance on such Distribution Date, plus (xii) the amount due pursuant to subsection 4.05(a)(xii) for such Distribution Date, plus (xiii) the Monthly Fees for such Distribution Date, plus (xiv) the Program Expenses for such Distribution Date.

“ Reduction Amount ” shall have the meaning specified in Section 4.06 .

“ Reinvestment Period ” shall mean the period commencing on the Closing Date and ending on the earliest to occur of the day on which the Scheduled Redemption Period, a Special Reinvestment Period or the Early Redemption Period commences; provided , however , that prior to the commencement of the Scheduled Redemption Period or the Early Redemption Period, a Reinvestment Period may resume at the close of business on the last day of the Monthly Period in which (i) the Senior Subordinated Principal Percentage is equal to or greater than the SR Subordinated Principal Percentage Trigger, (ii) the Senior Subordinated Principal Floor Percentage is equal to or greater than 4.00%, (iii) at any time after the Equity Lockout Period ends, the average of the Net Yield for the immediately preceding three Monthly Periods is greater than -1.0%, and (iv) the average of the Principal Payment Rate for the immediately preceding three Monthly Periods is greater than 2.00%.

“ Required Class A Coverage Amount ” shall have the meaning specified in Section 4.04 .

“ Required Class B Coverage Amount ” shall have the meaning specified in Section 4.04 .

“ Required Investors ” shall mean the Class A Noteholders holding 66 ^2/3 % or more of the Class A Notes until the Class A Notes have been paid in full, and, thereafter, the majority of the Class B Noteholders holding 66 ^2/3 % or more of the Class B Notes.

“ Reuters Screen LIBOR01 Page ” shall mean the display page currently so designated on the Reuters Monitor Money Rates Services (or any other page as may replace that page on that service for the purpose of displaying comparable rates or prices).

“ Scheduled Redemption Date ” shall mean the close of business on the last day of February 2012.

“ Scheduled Redemption Period ” shall mean (if the commencement of the Early Redemption Period has not occurred earlier) the period commencing on the Scheduled Redemption Date and ending on the earliest to occur of (i) the commencement of the Early Redemption Period, (ii) the payment in full of the Class A Principal Balance and the Class B Principal Balance and the reduction of the VFN Principal Balance and the O/C Outstanding Amount to zero, or (iii) the Stated Maturity Date.

“ Securitization Vehicle ” shall mean (i) any party identified as a “Conduit Investor” in a Note Purchase Agreement; and (ii) each collateralized loan obligation fund, structured fund or other similar fund that is required, under its principal organizational documents or under the principal documents pursuant to which such fund or vehicle obtains a substantial amount of its funding or capital, to pledge all or a substantial part of its assets (including, without limitation, its Notes) to its related collateral agent or trustee to secure obligations owing by such Securitization Vehicle to such Securitization Vehicle’s creditors or liquidity providers.

“ Senior Subordinated Principal Floor Percentage ” shall mean with respect to any Distribution Date, the percentage equivalent of a fraction (a) the numerator of which is the sum of (1) the Class B Allocation Amount and (2) the O/C Allocation Amount, each as of the last day of the prior Monthly Period and (b) the denominator of which is the Initial Allocation Amount.

“ Senior Subordinated Principal Percentage ” shall mean an amount equal to, with respect to any date of determination, the percentage equivalent of a fraction, (a) the numerator of which is the sum of (x) the Class B Allocation Amount and (y) the O/C Allocation Amount, each as of the last day of the prior Monthly Period and (b) the denominator of which is the Allocation Amount as of the last day of the prior Monthly Period.

“ Series Allocation Percentage ” shall mean, with respect to any Monthly Period, an amount equal to the percentage equivalent of a fraction, not to exceed 100%, the numerator of which is the Allocation Amount as of the last day of the immediately preceding Monthly Period (or with respect to the first Monthly Period, the Allocation Amount as of the Closing Date) and the denominator of which is the greater of (i) the aggregate amount of Principal Receivables as of the last day of the prior Monthly Period (or with respect to the first Monthly Period, the aggregate amount of Principal Receivables as of the Closing Date) and (ii) the sum of the numerators used to calculate the series allocation percentages for all outstanding Series on the date of determination; provided , however , that with respect to any Monthly Period in which one or more Increase Dates occur or dates on which the VFN Principal Balance is reduced, the Series Allocation Percentage shall be, for the period from and after any such Increase Date or date on which such VFN Principal Balance is reduced, to but excluding the next Increase Date or date on which such VFN Principal Balance is reduced, or if no other Increase Date or reduction of such VFN Principal Balance occurs during such Monthly Period, to and including the last day of such Monthly Period, the percentage equivalent of a fraction of the numerator of which is the Allocation Amount on such Increase Date or date of reduction and the denominator of which shall be the amount as determined above but as of such Increase Date or date of reduction.

“ Series Default Amount ” shall mean, with respect to any Monthly Period, an amount equal to the product of (i) the Defaulted Amount for such Monthly Period and (ii) the Series Allocation Percentage for such Monthly Period.

“ Series 2007-One ” shall mean the Series the terms of which are specified in this Indenture Supplement.

“ Series 2007-One Notes ” shall mean the Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the Class A-4 Notes, the Class B Notes and the Variable Funding Notes.

“ Series 2007-One Noteholders ” shall mean the Class A-1 Noteholders, the Class A-2 Noteholders, the Class A-3 Noteholders, the Class A-4 Noteholders, the Class B Noteholders, and the VFN Holders.

“ Series 2007-One Redemption Event ” shall have the meaning set forth in Section 6.01 .

“ Servicing Fee Rate ” shall mean the percentage rate per annum specified in Item 14 of Schedule I.

“ Six Month Average Charge-Off Rate ” shall mean, with respect to any Distribution Date, the average for the immediately preceding six Monthly Periods of an amount, expressed as a percentage, equal to the product of (1) the amount of Principal Receivables that became Defaulted Receivables in such Monthly Period divided by the aggregate amount of Principal Receivables on the first day of such Monthly Period and (2) 12; provided , however , that the Six Month Average Charge-Off Rate for any Monthly Period during the Equity Lockout Period shall not be calculated and is assumed to be greater than 25%.

“ Special Reinvestment Period ” shall mean (if the commencement of the Scheduled Redemption Period or the Early Redemption Period has not occurred earlier) the period, if any, beginning at the close of business on the earliest of the last day of the Monthly Period in which (i) the Senior Subordinated Principal Percentage (after application of all collections on the Distribution Date on which it is calculated) is less than the SR Subordinated Principal Percentage Trigger but greater than or equal to the ER Subordinated Principal Percentage Trigger, (ii) the Senior Subordinated Principal Floor Percentage is less than 4.00%, (iii) at any time after the Equity Lockout Period ends, the average of the Net Yield for the immediately preceding three Monthly Periods is equal to or less than -1.0% or (iv) the average of the Principal Payment Rate for the immediately preceding three Monthly Periods is equal to or less than 2.00%, and ending on the earliest to occur of the day on which (a) a Reinvestment Period resumes, (b) the Early Redemption Period commences or (c) the Scheduled Redemption Period commences.

“ SR Subordinated Principal Percentage Trigger ” shall mean (1) 19.0% if the Six Month Average Charge-Off Rate is less than 15.0%, (2) 23.0% if the Six Month Average Charge-Off Rate is greater than or equal to 15.0% but less than 20.0%, (3) 27.0% if the Six Month Average Charge-Off Rate is greater than or equal to 20.0% but less than 25.0% and (4) 31.0% if the Six Month Average Charge-Off Rate is greater than or equal to 25.0%.

“ Stated Maturity Date ” shall mean April 17, 2014.

“ Target Senior Subordinated Principal Percentage Level ” shall mean (1) 23.0% if the Six Month Average Charge-Off Rate is less than 15.0%, (2) 27.0% if the Six Month Average Charge-Off Rate is greater than or equal to 15.0% but less than 20.0%, (3) 31.0% if the Six Month Average Charge-Off Rate is greater than or equal to 20.0% but less than 25.0% and (4) 35.0% if the Six Month Average Charge-Off Rate is greater than or equal to 25.0%.

“ Term Financing ” shall mean the repayment in full of the Class A Notes and the Class B Notes with the proceeds of an unregistered securities offering of notes rated “Aaa” through “Ba2” by Moody’s or its equivalent to be issued by the Issuer.

“ Transfer ” shall have the meaning specified in subsection 9.05(g) .

“ Trust Administrator ” shall mean CompuCredit Corporation, a Georgia corporation.

“ Trust Partnership ” shall have the meaning specified in subsection 9.05(h) .

“ Variable Funding Note ” shall mean any one of the Variable Funding Notes executed by the Issuer and authenticated by or on behalf of the Indenture Trustee, substantially in the form of Exhibit C .

“ VFN Additional Interest ” shall have the meaning specified in subsection 4.02(f) .

“ VFN Allocation Amount ” shall mean, as of any date of determination, an amount equal to (i) the VFN Initial Principal Balance, plus (ii) the total amount of Increase Amounts on or prior to such date, minus (iii) the total amount of principal payments made on the Variable Funding Notes prior to such date, minus (iv) the excess, if any, of the VFN Reduction Amount over the portion of such VFN Reduction Amount reimbursed pursuant to Section 4.05(a)(xiv) prior to such date; provided the VFN Allocation Amount shall not be less than zero.

“ VFN Average Principal Balance ” shall mean, for any period, the sum of the VFN Principal Balances for each day in such period divided by the actual number of days in such period.

“ VFN Holder ” shall mean the Person in whose name a Variable Funding Note is registered in the Note Register.

“ VFN Initial Principal Balance ” shall mean $0.00.

“ VFN Interest Shortfall ” shall have the meaning specified in subsection 4.02(f) .

“ VFN Monthly Interest ” shall have the meaning specified in subsection 4.02(f) .

“ VFN Principal Balance ” shall mean, on any date of determination, an amount equal to (i) the VFN Initial Principal Balance, plus (ii) the amount of Increase Amounts on or prior to such date minus (iii) the aggregate amount of principal payments made to the VFN Holders on or prior to such date.

“ VFN Rate ” shall mean a per annum rate of 1.00% in excess of LIBOR as determined on the related LIBOR Determination Date with respect to such Interest Period.

“ VFN Reduction Amount ” shall mean, with respect to any Distribution Date, the aggregate amount by which the VFN Allocation Amount has been reduced on all prior Distribution Dates pursuant to Section 4.06 .

(b) Each capitalized term defined herein shall relate to Series 2007-One and no other Series issued by the Issuer, unless the context otherwise requires. All capitalized terms used herein and not otherwise defined herein have the meanings ascribed to them in the Indenture or the Transfer and Servicing Agreement (including by way of reference to other documents). In the event that any term or provision contained herein shall conflict with or be inconsistent with any term or provision contained in the Indenture or the Transfer and Servicing Agreement, the terms and provisions of this Indenture Supplement shall govern.

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

[END OF ARTICLE II]

ARTICLE III

Servicing Fee

Section 3.01. Servicing Compensation .

(a) The share of the Servicing Fee allocable to the Allocation Amount with respect to any Distribution Date (the “ Monthly Servicing Fee ”) shall be equal to one-twelfth of the product of (i) the Servicing Fee Rate, (ii) the Series Allocation Percentage and (iii)(A) the sum of the amount of Receivables (including any Ineligible Receivables to the extent not repurchased pursuant to the Transfer and Servicing Agreement) on each day of the related Monthly Period divided by (B) the number of days in such Monthly Period.

(b) As full compensation for its backup servicing activities and as reimbursement for any expense incurred by it in connection therewith, upon the effective date of its designation as Backup Servicer under this Indenture Supplement, the Backup Servicer shall be entitled to receive the Backup Servicing Fee with respect to each Monthly Period, payable monthly on the related Distribution Date. The share of the Backup Servicing Fee allocable to the Allocation Amount with respect to any Distribution Date (the “ Monthly Backup Servicing Fee ”) shall be equal to one-twelfth of the product of (i) the Backup Servicing Fee, (ii) the Series Allocation Percentage, and (iii) the amount of Principal Receivables on the last day of the related Monthly Period; provided , that if the Backup Servicer is appointed on any day other than the first day of a Monthly Period, the Monthly Backup Servicing Fee for such Monthly Period shall be pro-rated according to the number of days remaining in such Monthly Period.

[END OF ARTICLE III]

ARTICLE IV

Allocation and Application of Collections

Section 4.01. Collections and Allocations .

(a) Allocations . Prior to the close of business on each Deposit Date, Collections of Finance Charge Receivables and Principal Receivables allocated to Series 2007-One pursuant to Section 4.01 of the Transfer and Servicing Agreement shall be allocated as set forth in this Article.

(b) Allocations of Collections to the Series 2007-One Noteholders .

(i) Allocations of Finance Charge Receivables . The Servicer shall, prior to the close of business on any Deposit Date, allocate to Series 2007-One and retain in the Collection Account for application as provided herein an amount equal to the product of (A) the Series Allocation Percentage and (B) the aggregate amount of Collections of Finance Charge Receivables received by the Servicer and deposited to the Collection Account with respect to such Deposit Date.

(ii) Allocations of Principal Receivables . The Servicer shall, prior to the close of business on any Deposit Date, allocate to Series 2007-One and retain in the Collection Account for application as provided herein an amount equal to the product of (A) the Series Allocation Percentage and (B) the aggregate amount of Collections of Principal Receivables received by the Servicer and deposited to the Collection Account with respect to such Deposit Date.

Section 4.02. Determination of Monthly Interest .

(a) The amount of monthly interest distributable from the Collection Account with respect to the Class A-1 Notes on any Distribution Date (“ Class A-1 Monthly Interest ”) shall be an amount equal to the product of (i) a fraction, the numerator of which is the actual number of days in the related Interest Period and the denominator of which is 365, (ii) the Class A-1 Note Rate in effect with respect to the related Interest Period, and (iii) the Class A-1 Principal Balance as of the close of business on the last day of the related Monthly Period.

On the Determination Date preceding each Distribution Date, the Servicer shall determine the excess, if any (the “ Class A-1 Interest Shortfall ”), of (x) the Class A-1 Monthly Interest for such Distribution Date over (y) the aggregate amount of funds allocated and available to pay such Class A-1 Monthly Interest on such Distribution Date. If the Class A-1 Interest Shortfall with respect to any Distribution Date is greater than zero, on each subsequent Distribution Date until such Class A-1 Interest Shortfall is fully paid, an additional amount (“ Class A-1 Additional Interest ”) equal to the product of (i) (A) a fraction, the numerator of which is the actual number of days in the related Interest Period and the denominator of which is 365, times (B) the Class A-1 Note Rate and (ii) such Class A-1 Interest Shortfall (or the portion thereof which has not been paid on the Class A-1 Notes) shall be payable as provided herein with respect to the Class A-1 Notes. Notwithstanding anything to the contrary herein, Class A-1 Additional Interest shall be payable or distributed on the Class A-1 Notes only to the extent permitted by applicable law.

(b) The amount of monthly interest distributable from the Collection Account with respect to the Class A-2 Notes on any Distribution Date (“ Class A-2 Monthly Interest ”) shall be an amount equal to the product of (i) a fraction, the numerator of which is the actual number of days in the related Interest Period and the denominator of which is 365, (ii) the Class A-2 Note Rate in effect with respect to the related Interest Period, and (iii) the Class A-2 Principal Balance as of the close of business on the last day of the related Monthly Period.

On the Determination Date preceding each Distribution Date, the Servicer shall determine the excess, if any (the “ Class A-2 Interest Shortfall ”), of (x) the Class A-2 Monthly Interest for such Distribution Date over (y) the aggregate amount of funds allocated and available to pay such Class A-2 Monthly Interest on such Distribution Date. If the Class A-2 Interest Shortfall with respect to any Distribution Date is greater than zero, on each subsequent Distribution Date until such Class A-2 Interest Shortfall is fully paid, an additional amount (“ Class A-2 Additional Interest ”) equal to the product of (i) (A) a fraction, the numerator of which is the actual number of days in the related Interest Period and the denominator of which is 365, times (B) the Class A-2 Note Rate and (ii) such Class A-2 Interest Shortfall (or the portion thereof which has not been paid on the Class A-2 Notes) shall be payable as provided herein with respect to the Class A-2 Notes. Notwithstanding anything to the contrary herein, Class A-2 Additional Interest shall be payable or distributed on the Class A-2 Notes only to the extent permitted by applicable law.

(c) The amount of monthly interest distributable from the Collection Account with respect to the Class A-3 Notes on any Distribution Date (“ Class A-3 Monthly Interest ”) shall be an amount equal to the product of (i) a fraction, the numerator of which is the actual number of days in the related Interest Period and the denominator of which is 365, (ii) the Class A-3 Note Rate in effect with respect to the related Interest Period, and (iii) the Class A-3 Principal Balance as of the close of business on the last day of the related Monthly Period.

On the Determination Date preceding each Distribution Date, the Servicer shall determine the excess, if any (the “ Class A-3 Interest Shortfall ”), of (x) the Class A-3 Monthly Interest for such Distribution Date over (y) the aggregate amount of funds allocated and available to pay such Class A-3 Monthly Interest on such Distribution Date. If the Class A-3 Interest Shortfall with respect to any Distribution Date is greater than zero, on each subsequent Distribution Date until such Class A-3 Interest Shortfall is fully paid, an additional amount (“ Class A-3 Additional Interest ”) equal to the product of (i) (A) a fraction, the numerator of which is the actual number of days in the related Interest Period and the denominator of which is 365, times (B) the Class A-3 Note Rate and (ii) such Class A-3 Interest Shortfall (or the portion thereof which has not been paid on the Class A-3 Notes) shall be payable as provided herein with respect to the Class A-3 Notes. Notwithstanding anything to the contrary herein, Class A-3 Additional Interest shall be payable or distributed on the Class A-3 Notes only to the extent permitted by applicable law.

(d) The amount of monthly interest distributable from the Collection Account with respect to the Class A-4 Notes on any Distribution Date (“ Class A-4 Monthly Interest ”) shall be an amount equal to the product of (i) a fraction, the numerator of which is the actual number of days in the related Interest Period and the denominator of which is 365, (ii) the Class A-4 Note Rate in effect with respect to the related Interest Period, and (iii) the Class A-4 Principal Balance as of the close of business on the last day of the related Monthly Period.

On the Determination Date preceding each Distribution Date, the Servicer shall determine the excess, if any (the “ Class A-4 Interest Shortfall ”), of (x) the Class A-4 Monthly Interest for such Distribution Date over (y) the aggregate amount of funds allocated and available to pay such Class A-4 Monthly Interest on such Distribution Date. If the Class A-4 Interest Shortfall with respect to any Distribution Date is greater than zero, on each subsequent Distribution Date until such Class A-4 Interest Shortfall is fully paid, an additional amount (“ Class A-4 Additional Interest ”) equal to the product of (i) (A) a fraction, the numerator of which is the actual number of days in the related Interest Period and the denominator of which is 365, times (B) the Class A-4 Note Rate and (ii) such Class A-4 Interest Shortfall (or the portion thereof which has not been paid on the Class A-4 Notes) shall be payable as provided herein with respect to the Class A-4 Notes. Notwithstanding anything to the contrary herein, Class A-4 Additional Interest shall be payable or distributed on the Class A-4 Notes only to the extent permitted by applicable law.

(e) The amount of monthly interest distributable from the Collection Account with respect to the Class B Notes on any Distribution Date (“ Class B Monthly Interest ”) shall be an amount equal to the product of (i) a fraction, the numerator of which is the actual number of days in the related Interest Period and the denominator of which is 365, (ii) the Class B Note Rate in effect with respect to the related Interest Period, and (iii) the Class B Principal Balance as of the close of business on the last day of the related Monthly Period.

On the Determination Date preceding each Distribution Date, the Servicer shall determine the excess, if any (the “ Class B Interest Shortfall ”), of (x) the Class B Monthly Interest for such Distribution Date over (y) the aggregate amount of funds allocated and available to pay such Class B Monthly Interest on such Distribution Date. If the Class B Interest Shortfall with respect to any Distribution Date is greater than zero, on each subsequent Distribution Date until such Class B Interest Shortfall is fully paid, an additional amount (“ Class B Additional Interest ”) equal to the product of (i) (A) a fraction, the numerator of which is the actual number of days in the related Interest Period and the denominator of which is 365, times (B) the Class B Note Rate and (ii) such Class B Interest Shortfall (or the portion thereof which has not been paid on the Class B Notes) shall be payable as provided herein with respect to the Class B Notes. Notwithstanding anything to the contrary herein, Class B Additional Interest shall be payable or distributed on the Class B Notes only to the extent permitted by applicable law.

(f) The amount of monthly interest distributable from the Collection Account with respect to the Variable Funding Notes on any Distribution Date (“ VFN Monthly Interest ”) shall be an amount equal to the product of (i) a fraction, the numerator of which is the actual number of days in the related Interest Period and the denominator of which is 365, and (ii) the VFN Rate, and (iii) the VFN Average Principal Balance with respect to the immediately related Monthly Period.

On the Determination Date preceding each Distribution Date, the Servicer shall determine the excess, if any (the “ VFN Interest Shortfall ”), of (x) the VFN Monthly Interest for such Distribution Date over (y) the aggregate amount of funds allocated and available to pay

such VFN Monthly Interest on such Distribution Date. If the VFN Interest Shortfall with respect to any Distribution Date is greater than zero, on each subsequent Distribution Date until such VFN Interest Shortfall is fully paid, an additional amount (“ VFN Additional Interest ”) equal to the product of (i) (A) a fraction, the numerator of which is the actual number of days in the related Interest Period and the denominator of which is 365, times (B) the VFN Rate and (ii) such VFN Interest Shortfall (or the portion thereof which has not been paid on the Variable Funding Notes) shall be payable as provided herein with respect to the Variable Funding Notes. Notwithstanding anything to the contrary herein, VFN Additional Interest shall be payable or distributed on the Variable Funding Notes only to the extent permitted by applicable law.

(g) The Servicer shall calculate the monthly interest, interest shortfall and additional interest amounts in accordance with this Section 4.02 and reflect such amounts on the Monthly Servicing Statement.

Section 4.03. Daily Application of Collections .

(a) The Servicer shall with respect to each Business Day in a Monthly Period, (x) prior to depositing Collections available to be deposited on such Business Day into the Collection Account, apply Collections of Receivables available on such Business Day, and (y) to the extent amounts in clause (x) are insufficient to fund the purchase price and reimburse the VFN Principal Balance as described below, release or direct the Indenture Trustee to release Collections of Principal Receivables on deposit in the Collection Account on such Business Day and allocated to Series 2007-One, in the following order of priority:

(i) to the extent an Account Owner or a seller under a Receivables Purchase Agreement has not been paid, in accordance with the applicable Receivables Purchase Agreement, amounts due to such Account Owner or seller with respect to the purchase price of newly created Principal Receivables that have been transferred to the Issuer and adjustments thereto in accordance with the provisions of the applicable Receivables Purchase Agreement, to such Account Owner or seller, an amount equal to the sum of (A) the amount of all newly created Principal Receivables which are required to be purchased by the Issuer on such Business Day plus (B) any adjustments to the purchase price of Principal Receivables which are required to be paid by the Issuer on such Business Day plus (C) the amount of all Principal Receivables created on a prior Business Day during such Monthly Period the purchase price of which was not paid by the Issuer on a prior Business Day pursuant to this Section 4.03 or pursuant to the funding of an Increase Amount and for which such Account Owner or seller has not received payment of the purchase price thereof; and

(ii) to the VFN Holders, an amount, to the extent available, equal to the VFN Principal Balance.

(b) Notwithstanding any provision to the contrary herein, during the Scheduled Redemption Period or the Early Redemption Period, amounts on deposit in the Collection Account shall not be released under this Section 4.03.

Section 4.04. Required Coverage Amount . With respect to each Distribution Date, the Servicer shall determine, no later than the Determination Date, (a) the amount (the “ Required Coverage Amount ”), if any, by which the aggregate amount required pursuant to subsections 4.05(a)(i) through (v) for such Distribution Date exceeds the Available Finance Charge Collections for such Distribution Date available to pay such amounts and (b) the amount (the “ Required Class B Coverage Amount ”), if any, by which the aggregate amount required pursuant to subsection 4.05(a)(viii) for such Distribution Date exceeds the Available Finance Charge Collections for such Distribution Date available to pay such amounts.

Section 4.05. Application of Available Collections .

(a) The Servicer shall apply, or shall cause the Indenture Trustee or the Paying Agent to apply by written instruction to the Indenture Trustee or the Paying Agent, on each Distribution Date, Available Finance Charge Collections with respect to each related Monthly Period in the following order of priority:

(i) an amount equal to the sum of the Program Expenses and the Monthly Fees due for the related Distribution Date, and past due for any prior Distribution Date, will be paid pro rata to the Indenture Trustee, the Owner Trustee, the Trust Administrator, the Servicer, the Account Owner and the Backup Servicer;

(ii) an amount equal to Class A-1 Monthly Interest for the related Distribution Date plus an amount equal to any Class A-1 Interest Shortfall not distributed on a prior Distribution Date plus the amount of any Class A-1 Additional Interest for such Distribution Date plus any Class A-1 Additional Interest previously due but not distributed to Class A-1 Noteholders on a prior Distribution Date, shall be distributed to the Class A-1 Noteholders;

(iii) an amount equal to Class A-2 Monthly Interest for the related Distribution Date plus an amount equal to any Class A-2 Interest Shortfall not distributed on a prior Distribution Date plus the amount of any Class A-2 Additional Interest for such Distribution Date plus any Class A-2 Additional Interest previously due but not distributed to Class A-2 Noteholders on a prior Distribution Date, shall be distributed to the Class A-2 Noteholders;

(iv) an amount equal to Class A-3 Monthly Interest for the related Distribution Date plus an amount equal to any Class A-3 Interest Shortfall not distributed on a prior Distribution Date plus the amount of any Class A-3 Additional Interest for such Distribution Date plus any Class A-3 Additional Interest previously due but not distributed to Class A-3 Noteholders on a prior Distribution Date, shall be distributed to the Class A-3 Noteholders;

(v) an amount equal to Class A-4 Monthly Interest for the related Distribution Date plus an amount equal to any Class A-4 Interest Shortfall not distributed on a prior Distribution Date plus the amount of any Class A-4 Additional Interest for such Distribution Date plus any Class A-4 Additional Interest previously due but not distributed to Class A-4 Noteholders on a prior Distribution Date, shall be distributed to the Class A-4 Noteholders;

(vi) an amount equal to the Class A Series Default Amount for the related Distribution Date shall be treated as Available Principal Collections for such Distribution Date;

(vii) an amount equal to the Class A Reduction Amounts which have not been previously reimbursed shall be treated as Available Principal Collections for such Distribution Date;

(viii) an amount equal to Class B Monthly Interest for the related Distribution Date plus the amount of any Class B Interest Shortfall not distributed on a prior Distribution Date plus the amount of any Class B Additional Interest for such Distribution Date plus any Class B Additional Interest previously due but not distributed to Class B Noteholders on a prior Distribution Date, shall be distributed to the Class B Noteholders;

(ix) an amount equal to the Class B Series Default Amount for the related Distribution Date shall be treated as Available Principal Collections for such Distribution Date;

(x) an amount equal to the Class B Reduction Amounts which have not been previously reimbursed shall be treated as Available Principal Collections for such Distribution Date;

(xi) if an Event of Default and acceleration of the maturity of the Series 2007-One Notes pursuant to Section 5.03 of the Indenture has occurred on or prior to such Distribution Date, an amount up to the Class A Principal Balance and the Class B Principal Balance less the amount of Available Principal Collections allocated to Series 2007-One on such Distribution Date, shall be treated as a portion of Available Principal Collections for such Distribution Date;

(xii) an amount equal to VFN Monthly Interest for the related Distribution Date plus the amount of any VFN Interest Shortfall not distributed on a prior Distribution Date plus the amount of any VFN Additional Interest for such Distribution Date plus any VFN Additional Interest previously due but not distributed to the VFN Holders on a prior Distribution Date, shall be distributed to the VFN Holders;

(xiii) an amount equal to the O/C and VFN Series Default Amount for the related Distribution Date shall be treated as Available Principal Collections for such Distribution Date;

(xiv) an amount equal to the VFN Reduction Amounts which have not been previously reimbursed shall be treated as Available Principal Collections for such Distribution Date;

(xv) if an Early Redemption Event has occurred on or prior to such Distribution Date, the balance of such Available Finance Charge Collections shall be treated as Available Principal Collections;

(xvi) an amount equal to the Program Indemnification for the related Distribution Date shall be distributed to the Indenture Trustee and the Owner Trustee; and

(xvii) the balance of such Available Finance Charge Collections shall be paid to the O/C Holder; provided , however , that during the Equity Lockout Period and the O/C Reallocation Period, the balance of such Available Finance Charge Collections shall be treated as Available Principal Collections.

(b) The Servicer shall apply, or shall cause the Indenture Trustee to apply by written instruction to the Indenture Trustee, on each Distribution Date, Available Principal Collections with respect to each related Monthly Period after application pursuant to Section 4.03 in the following order of priority:

(i) subject to Section 4.03 , an amount equal to the Required Coverage Amount shall be applied on the related Distribution Date by the Servicer to fund the Required Coverage Amount, if any, in the priority set forth in subsections 4.05(a)(i) through (vii) ;

(ii) during the Equity Lockout Period, an amount, to the extent available, up to the Allocation Amount as of the close of business on the last day of the related Monthly Period, shall be distributed to the Holders of the Class A Notes and the Class B Notes and the O/C Holder as follows:

(A) the maximum of (1) an amount not to exceed the amount by which the Class A Allocation Amount exceeds the product of (x) 100% minus the Target Senior Subordinated Principal Percentage Level and (y) the aggregate amount of Principal Receivables as of the last day of the related Monthly Period or (2) 77% of the Available Principal Collections (not exceeding the Class A Allocation Amount), shall be distributed pro rata to the Holders of Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes and the Class A-4 Notes (based on the Class A-1 Allocation Amount, the Class A-2 Allocation Amount, the Class A-3 Allocation Amount and the Class A-4 Allocation Amount, respectively, as the close of business on the last day of the related Monthly Period) until the Principal Balance of each such Class is paid in full;

(B) the balance shall be first applied to fund the Required Class B Coverage Amount, and any remaining amount shall be applied pro rata to the Holders of the Class B Notes until the Class B Principal Balance is paid in full and the remaining amount will be distributed to the O/C Holder until the O/C Outstanding Amount is paid in full;

(iii) during a Reinvestment Period commencing after the Equity Lockout Period, an amount, to the extent available, up to the Allocation Amount as of the close of business on the last day of the related Monthly Period, shall be distributed to the Holders of the Class A Notes, the Class B Notes and the O/C Certificate as follows:

(A) an amount not to exceed the amount by which the Class A Allocation Amount exceeds the product of (x) 100% minus the Target Senior Subordinated Principal Percentage Level and (y) the aggregate amount of Principal Receivables as of the last day of the related Monthly Period, shall be distributed pro rata to the Holders of Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes and the Class A-4 Notes (based on the Class A-1 Allocation Amount, the Class A-2 Allocation Amount, the Class A-3 Allocation Amount and the Class A-4 Allocation Amount, respectively, as of the close of business on the last day of the related Monthly Period) until the Principal Balance of each such Class is paid in full;

(B) the balance shall be applied first to pay any unpaid Required Class B Coverage Amount and second the balance shall be distributed pro rata to the holders of the Class B Notes and the O/C Holder (based on the Class B Allocation Amount and the O/C Allocation Amount, respectively, as of the close of business on the last day of the related Monthly Period); provided , however , that at all times during an O/C Reallocation Period, 100% of the amount allocated to the O/C Holder will be distributed pro rata to the Class A Noteholders and the Class B Noteholders (based on the Class A Allocation Amount and the Class B Allocation Amount, respectively, as of the close of business on the last day of the related Monthly Period) until the Class A Principal Balance and the Class B Principal Balance are paid in full, and the remaining amount will be distributed to the O/C Holder until the O/C Outstanding amount is paid in full; and provided , further , that at all other times other than during an O/C Reallocation Period, 100% of the amount allocated to the Class B Notes and 75% of the amount allocated to the O/C Holder shall be distributed to the Class B Noteholders until the Class B Principal Balance is paid in full and the remaining amount will be distributed to the O/C Holder until the O/C Outstanding Amount is paid in full;

(iv) during a Special Reinvestment Period, an amount, to the extent available, up to the Allocation Amount as of the close of business on the last day of the related Monthly Period, shall be distributed in the following order of priority:

(A) pro rata to the Holders of the Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes and the Class A-4 Notes (based on the Class A-1 Allocation Amount, the Class A-2 Allocation Amount, the Class A-3 Allocation Amount and the Class A-4 Allocation Amount, respectively, as of the close of business on the last day of the related Monthly Period) until the Principal Balance of each such Class is paid in full;

(B) for each Distribution Date beginning on the Distribution Date on which the Class A Principal Balance has been paid in full, to the Holders of the Class B Notes first to pay any unpaid Required Class B Coverage Amount, and second to pay principal until the Class B Principal Balance is paid in full; and

(C) for each Distribution Date beginning on the Distribution Date on which the Class B Principal Balance has been paid in full, to the O/C Holder until the O/C Outstanding Amount is paid in full;

(v) during a Scheduled Redemption Period, an amount, to the extent available, up to the Allocation Amount as of the close of business on the last day of the related Monthly Period, shall be distributed in the following order of priority:

(C) for each Distribution Date beginning on the Distribution Date on which the Class B Principal Balance has been paid in full, to the VFN Holders until the VFN Principal Balance is paid in full; and

(D) for each Distribution Date beginning on the Distribution Date on which the VFN Principal Balance has been paid in full, to the O/C Holder until the O/C Outstanding Amount is paid in full;

(vi) during the Early Redemption Period, an amount, to the extent available, up to the Allocation Amount as of the close of business on the last day of the related Monthly Period, shall be distributed in the following order of priority:

(A) to the Class A-1 Noteholders until the Class A-1 Principal Balance has been paid in full;

(B) for each Distribution Date beginning on the Distribution Date on which the Class A-1 Principal Balance has been paid in full, to the Class A-2 Noteholders until the Class A-2 Principal Balance has been paid in full;

(C) for each Distribution Date beginning on the Distribution Date on which the Class A-2 Principal Balance has been paid in full, to the Class A-3 Noteholders until the Class A-3 Principal Balance has been paid in full;

(D) for each Distribution Date beginning on the Distribution Date on which the Class A-3 Principal Balance has been paid in full, to the Class A-4 Noteholders until the Class A-4 Principal Balance has been paid in full;

(E) for each Distribution Date beginning on the Distribution Date on which the Class A-4 Principal Balance has been paid in full, to the Class B Noteholders first to pay any unpaid Required Class B Coverage Amount, and second to pay principal until the Class B Principal Balance has been paid in full;

(F) for each Distribution Date beginning on the Distribution Date on which the Class B Principal Balance has been paid in full, to the VFN Holders until the VFN Principal Balance has been paid in full; and

(G) for each Distribution Date beginning on the Distribution Date on which the VFN Principal Balance has been paid in full, to the O/C Holder until the O/C Outstanding Amount is paid in full;

(vii) the balance of such Available Principal Collections shall be paid to the O/C Holder.

Section 4.06. Defaulted Amounts; Reduction Amounts . On each Determination Date, the Servicer shall calculate the Series Default Amount, if any, for the related Distribution Date. If, on any Distribution Date, the Series Default Amount for the related Monthly Period exceeds the amount of Available Finance Charge Collections available to be distributed pursuant to subsections 4.05(a)(vi) , (ix) and (xiii) with respect to such Monthly Period, the Allocation Amount shall be reduced by the amount of such excess, but not by more than the Series Default Amount for such Distribution Date (a “ Reduction Amount ”). The Reduction Amount will also include, and the Allocation Amount shall be reduced by the amount of, Reallocated Principal Collections.

(a) Reduction Amounts will first be applied to reduce the O/C Allocation Amount. If such reduction would cause the O/C Allocation Amount to be a negative number (without giving effect to the proviso in the definition of O/C Allocation Amount), the O/C Allocation Amount will be reduced to zero and the VFN Allocation Amount shall be reduced by the amount the O/C Allocation Amount would have been reduced below zero;

(b) If such reduction of the VFN Allocation Amount would cause the VFN Allocation Amount to be a negative number (without giving effect to the proviso in the definition of VFN Allocation Amount), the VFN Allocation Amount will be reduced to zero and the Class B Allocation Amount shall be reduced by the amount by which the VFN Allocation Amount would have been reduced below zero;

(c) If such reduction of the Class B Allocation Amount would cause the Class B Allocation Amount to be a negative number (without giving effect to the proviso in the definition of Class B Allocation Amount), the Class B Allocation Amount will be reduced to zero and the Class A-4 Allocation Amount shall be reduced by the amount by which the Class B Allocation Amount would have been reduced below zero;

(d) If such reduction of the Class A-4 Allocation Amount would cause the Class A-4 Allocation Amount to be a negative number (without giving effect to the proviso in the definition of Class A-4 Allocation Amount), the Class A-4 Allocation Amount will be reduced to zero and the Class A-3 Allocation Amount shall be reduced by the amount by which the Class A-4 Allocation Amount would have been reduced below zero;

(e) If such reduction of the Class A-3 Allocation Amount would cause the Class A-3 Allocation Amount to be a negative number (without giving effect to the proviso in the definition of Class A-3 Allocation Amount), the Class A-3 Allocation Amount will be reduced to zero and the Class A-2 Allocation Amount shall be reduced by the amount by which the Class A-3 Allocation Amount would have been reduced below zero; and

(f) If such reduction of the Class A-2 Allocation Amount would cause the Class A-2 Allocation Amount to be a negative number (without giving effect to the proviso in the definition of Class A-2 Allocation Amount), the Class A-2 Allocation Amount will be reduced to zero and the Class A-1 Allocation Amount shall be reduced, but not below zero, by the amount by which the Class A-2 Allocation Amount would have been reduced below zero.

The Allocation Amount shall be increased on any Distribution Date by the amount of Available Finance Charge Collections with respect to the related Monthly Period which are allocated and available for that purpose pursuant to subsections 4.05(a)(vii) , (x) and (xiv). Such increases of the Allocation Amount shall be applied to increase the Class A-1 Allocation Amount, the Class A-2 Allocation Amount, the Class A-3 Allocation Amount, the Class A-4 Allocation Amount, the Class B Allocation Amount and the VFN Allocation Amount, in that order, in each case up to the amount of all prior Reduction Amounts for such Class.

Section 4.07. Determination of LIBOR .

(a) On each LIBOR Determination Date, the Paying Agent shall determine LIBOR (“ LIBOR ”) on the basis of the rate for deposits in Pounds Sterling for a one-month period which appears on Reuters Screen LIBOR01 Page as of 11:00 a.m., London time, on such date. If such rate does not appear on Reuters Screen LIBOR01 Page, the rate for that LIBOR Determination Date shall be determined on the basis of the rates at which deposits in Pounds Sterling are offered by at least two major banks, selected by the Servicer and provided to the Paying Agent by written instruction, at approximately 11:00 a.m., London time, on that day to prime banks in the London interbank market for a one-month period. The Paying Agent shall request the principal London office of each of such two major banks to provide a quotation of its rate. If at least two (2) such quotations are provided, the rate for that LIBOR Determination Date shall be the arithmetic mean of the quotations. If fewer than two quotations are provided as requested, the rate for that LIBOR Determination Date will be the arithmetic mean of the rates quoted by major banks in London, selected by the Servicer and provided to the Paying Agent by written instruction, at approximately 11:00 a.m., London time, on that day for loans in Pounds Sterling to leading European banks for a one-month period.

(b) On each LIBOR Determination Date, the Paying Agent shall notify the Servicer and the Transferor of LIBOR for the following Interest Period.

Section 4.08. VFN Increases .

(a) The VFN Holders agree, by their acceptance of the Variable Funding Notes, to fund increases to the principal balance of the Variable Funding Notes on any Business Day (an

“ Increase Date ”) in an aggregate amount equal to the Net Purchase Requirement with respect to such Business Day. The Servicer shall no later than 11:00 a.m. on such Business Day notify the VFN Holders and the Transferor of the amount of any additional funds that are required to fund the Net Purchase Requirement.

(b) After giving effect to all remittances made by or on behalf of the VFN Holders with respect to the Net Purchase Requirement pursuant to subsection 4.08(a) , the Indenture Trustee, on the written instruction of the Servicer, shall promptly annotate the Note Register to reflect the Increase Amount with respect to each Variable Funding Note.

[END OF ARTICLE IV]

ARTICLE V

Distributions; Reports to Series 2007-One Noteholders

Section 5.01. Distributions .

(a) On each Distribution Date, the Paying Agent, in accordance with the Monthly Servicing Statement, shall distribute to the Class A-1 Noteholders of record on the preceding Record Date (other than as provided in Section 10.02 of the Indenture), such amounts held by the Indenture Trustee that are allocated and available on such Distribution Date to pay interest on the Class A-1 Notes pursuant to this Indenture Supplement.

(b) On each Distribution Date, the Paying Agent, in accordance with the Monthly Servicing Statement, shall distribute to the Class A-1 Noteholders of record on the preceding Record Date (other than as provided in Section 10.02 of the Indenture) such amounts held by the Indenture Trustee that are allocated and available on such Distribution Date to pay principal on the Class A-1 Notes, as applicable, pursuant to this Indenture Supplement up to a maximum amount on any such date equal to the Class A-1 Principal Balance.

(c) On each Distribution Date, the Paying Agent, in accordance with the Monthly Servicing Statement, shall distribute to the Class A-2 Noteholders of record on the preceding Record Date (other than as provided in Section 10.02 of the Indenture), such amounts held by the Indenture Trustee that are allocated and available on such Distribution Date to pay interest on the Class A-2 Notes pursuant to this Indenture Supplement.

(d) On each Distribution Date, the Paying Agent, in accordance with the Monthly Servicing Statement, shall distribute to the Class A-2 Noteholders of record on the preceding Record Date (other than as provided in Section 10.02 of the Indenture) such amounts held by the Indenture Trustee that are allocated and available on such Distribution Date to pay principal on the Class A-2 Notes, as applicable, pursuant to this Indenture Supplement up to a maximum amount on any such date equal to the Class A-2 Principal Balance.

(e) On each Distribution Date, the Paying Agent, in accordance with the Monthly Servicing Statement, shall distribute to the Class A-3 Noteholders of record on the preceding Record Date (other than as provided in Section 10.02 of the Indenture), such amounts held by the Indenture Trustee that are allocated and available on such Distribution Date to pay interest on the Class A-3 Notes pursuant to this Indenture Supplement.

(f) On each Distribution Date, the Paying Agent, in accordance with the Monthly Servicing Statement, shall distribute to the Class A-3 Noteholders of record on the preceding Record Date (other than as provided in Section 10.02 of the Indenture) such amounts held by the Indenture Trustee that are allocated and available on such Distribution Date to pay principal on the Class A-3 Notes, as applicable, pursuant to this Indenture Supplement up to a maximum amount on any such date equal to the Class A-3 Principal Balance.

(g) On each Distribution Date, the Paying Agent, in accordance with the Monthly Servicing Statement, shall distribute to the Class A-4 Noteholders of record on the preceding Record Date (other than as provided in Section 10.02 of the Indenture), such amounts held by the Indenture Trustee that are allocated and available on such Distribution Date to pay interest on the Class A-4 Notes pursuant to this Indenture Supplement.

(h) On each Distribution Date, the Paying Agent, in accordance with the Monthly Servicing Statement, shall distribute to the Class A-4 Noteholders of record on the preceding Record Date (other than as provided in Section 10.02 of the Indenture) such amounts held by the Indenture Trustee that are allocated and available on such Distribution Date to pay principal on the Class A-4 Notes, as applicable, pursuant to this Indenture Supplement up to a maximum amount on any such date equal to the Class A-4 Principal Balance.

(i) On each Distribution Date, the Paying Agent, in accordance with the Monthly Servicing Statement, shall distribute to the Class B Noteholders of record on the preceding Record Date (other than as provided in Section 10.02 of the Indenture), such amounts held by the Indenture Trustee that are allocated and available on such Distribution Date to pay interest on the Class B Notes pursuant to this Indenture Supplement.

(j) On each Distribution Date, the Paying Agent, in accordance with the Monthly Servicing Statement, shall distribute to the Class B Noteholders of record on the preceding Record Date (other than as provided in Section 10.02 of the Indenture) such amounts held by the Indenture Trustee that are allocated and available on such Distribution Date to pay principal on the Class B Notes, as applicable, pursuant to this Indenture Supplement up to a maximum amount on any such date equal to the Class B Principal Balance.

(k) On each Distribution Date, the Paying Agent, in accordance with the Monthly Servicing Statement, shall distribute to the VFN Holders of record on the preceding Record Date (other than as provided in Section 10.02 of the Indenture), such amounts held by the Indenture Trustee that are allocated and available on such Distribution Date to pay interest on the Variable Funding Notes pursuant to this Indenture Supplement.

(l) On each Distribution Date, the Paying Agent, in accordance with the Monthly Servicing Statement, shall distribute to the VFN Holders of record on the preceding Record Date (other than as provided in Section 10.02 of the Indenture) such amounts held by the Indenture Trustee that are allocated and available on such Distribution Date to pay principal on the Variable Funding Notes, as applicable, pursuant to this Indenture Supplement up to a maximum amount on any such date equal to the VFN Principal Balance.

(m) On each Distribution Date, the Paying Agent, in accordance with the Monthly Servicing Statement, shall distribute to the O/C Holder of record on the preceding Record Date (other than as provided in Section 10.02 of the Indenture) such amounts held by the Indenture Trustee that are allocated and available to the O/C Holder.

(n) The distributions to be made pursuant to this Section 5.01 are subject to the provisions of Section 2.06 of the Transfer and Servicing Agreement, Sections 5.05 and 10.02 of the Indenture and Section 8.01 .

(o) Except as provided in Section 10.02 of the Indenture with respect to a final distribution, distributions to Class A Noteholders, Class B Noteholders, the VFN Holders and the O/C Holder hereunder shall be made by (i) wire transfer in immediately available funds and (ii) without presentation or surrender of any Series 2007-One Note or the O/C Certificate or the making of any notation thereon.

Section 5.02. Reports and Statements to Series 2007-One Noteholders .

(a) Not later than each Determination Date, the Servicer shall deliver to the Transferor, the Issuer, the Indenture Trustee and the Paying Agent (i) a statement substantially in the form of Exhibit E prepared by the Servicer (the “ Monthly Servicing Statement ”), (ii) a certificate of a Servicing Officer substantially in the form attached thereto, and (iii) the payment instructions attached as Schedule A to the Indenture.

(b) A copy of each statement or certificate provided pursuant to subsection 5.02(a) shall be delivered by the Servicer to each Series 2007-One Noteholder and, upon written request to the Servicer, to any owner of a security entitlement thereto.

(c) On or before January 31 of each calendar year, beginning with calendar year 2008, the Paying Agent, on behalf of the Indenture Trustee, shall furnish or cause to be furnished to each Person who at any time during the preceding calendar year was a Series 2007-One Noteholder, a statement prepared by the Servicer containing the information which is required to be contained in the statement to Series 2007-One Noteholders, as set forth in subsection 5.02(a) aggregated for such calendar year or the applicable portion thereof during which such Person was a Series 2007-One Noteholder, together with other information as is required to be provided by an issuer of indebtedness under the Code. Such obligation of the Paying Agent shall be deemed to have been satisfied to the extent that substantially comparable information shall be provided by the Paying Agent pursuant to any requirements of the Code as from time to time in effect.

[END OF ARTICLE V]

ARTICLE VI

Series 2007-One Redemption Events; Voting

Section 6.01. Series 2007-One Redemption Events . If any one of the following events shall occur with respect to Series 2007-One:

(a)(i) the Transferor or the Servicer shall fail to make any payment or deposit required to be made by it by the terms of the Transfer and Servicing Agreement, the Indenture or this Indenture Supplement on or before the date occurring two (2) Business Days after the date such payment or deposit is required to be made therein or herein or (ii) the Issuer, other than as described in subsection 6.01(e) , or the Servicer shall fail to observe or perform any other covenants or agreements required by the Transfer and Servicing Agreement, the Indenture or this Indenture Supplement to be observed or performed by it, which failure has a material adverse effect on the Series 2007-One Noteholders and which continues unremedied for a period of ten (10) days after the date on which written notice of such failure, requiring the same to be remedied, shall have been given to the Transferor and the Servicer by the Indenture Trustee, or to the Transferor, the Servicer and the Indenture Trustee by the Required Investors;

(b) any representation or warranty made by (i) the Transferor in the Transfer and Servicing Agreement or (ii) the Issuer in the Indenture or this Indenture Supplement, shall prove to have been incorrect in any material respect when made or when delivered, which continues to be incorrect for a period of sixty (60) days after the date on which written notice of such failure, requiring the same to be remedied, shall have been given to the Transferor and the Issuer by the Indenture Trustee, or to the Transferor, the Issuer and the Indenture Trustee by the Required Investors, and as a result of which the interests of the Series 2007-One Noteholders are materially and adversely affected for such period; provided , however , that an Early Redemption Event pursuant to this subsection 6.01(b) shall not be deemed to have occurred hereunder if the Transferor has accepted reassignment of the related Receivable, or all of such Receivables, if applicable, during such period in accordance with the provisions of the Transfer and Servicing Agreement;

(d) the Indenture Trustee shall, for any reason, fail to have a valid and perfected first priority security interest in such of the Receivables as shall constitute a material portion of the Trust Estate;

(e) the Issuer shall fail to pay the Class A-1 Monthly Interest to the Class A-1 Noteholders, the Class A-2 Monthly Interest to the Class A-2 Noteholders, the Class A-3 Monthly Interest to the Class A-3 Noteholders or the Class A-4 Monthly Interest to the Class A-4 Noteholders for any Monthly Period on or before the date occurring five (5) Business Days after the related Distribution Date;

(f)(i) the Account Owner shall cease, or become unable, for any reason, to transfer Eligible Receivables as provided in the RB Receivables Purchase Agreement; (ii) CIAC

shall cease, or become unable, for any reason, to transfer Eligible Receivables as provided in the CIAC Receivables Purchase Agreement; (iii) the Transferor shall cease, or become unable, for any reason, to transfer Eligible Receivables as provided in the Transfer and Servicing Agreement; or (iv) the Account Owner shall cease to settle newly generated Receivables under applicable VISA credit card agreements;

(g) any draw on the Variable Funding Notes is not funded within three (3) Business Days of the day such funding is required to be made;

(h) the Senior Subordinated Principal Percentage shall be less than the ER Subordinated Principal Percentage Trigger as of the last day of the prior Monthly Period;

(i) the Class B Subordinated Principal Percentage shall be less than 14.0% as of the last day of the prior Monthly Period;

(j) at any time after the Equity Lockout Period, the three-month average Net Yield shall be less than -6.00%;

(k) commencing with the 18th Distribution Date following the Closing Date, the Class B Notes remain outstanding and the twelve-month average Net Yield shall be less than 0.00%;

(l) any reduction of the Class A Allocation Amount or the Class B Allocation Amount as a result of the application of a Reduction Amount; or

(m) the occurrence of an Event of Default with respect to Series 2007-One and acceleration of the maturity of the Series 2007-One Notes in accordance with Section 5.03 of the Indenture;

(n) (i) a transfer of any direct or indirect interest in Partridge Funding Corporation that shall cause outstanding interest in Partridge Funding Corporation held by CompuCredit Corporation to be less than the lesser of (1) £25,000,000 or (2) 60% of the O/C Outstanding Amount prior to such Transfer, or (ii) a Transfer of any direct or indirect interest in the O/C Certificate that shall cause the O/C Outstanding Amount held by Partridge Funding Corporation to be less than the lesser of (1) £25,000,000 or (2) 60% of the O/C Outstanding Amount prior to such Transfer;

then, in the case of any event described in subparagraph (a), (b), (l) or (n) after the applicable grace period, if any, set forth in such subparagraphs, the Indenture Trustee may, and at the written direction of the Required Investors shall, by notice then given in writing to the Issuer, the Transferor and the Servicer, declare that a “Series Redemption Event” with respect to Series 2007-One (a “ Series 2007-One Redemption Event ”) has occurred as of the date of such notice, and, in the case of any event described in subparagraph (c), (d), (e), (f), (g), (h), (i), (j), (k) or (m) a Series 2007-One Redemption Event shall occur without any notice or other action on the part of the Indenture Trustee or the Series 2007-One Noteholders immediately upon the occurrence of such event.

[END OF ARTICLE VI]

ARTICLE VII

Redemption of Series 2007-One Notes; Series Termination

Section 7.01. Administrative Redemption; Final Distributions .

(a) On any day occurring on or after the date on which the Allocation Amount is reduced to 10% or less of the Initial Allocation Amount, the Issuer shall have the option to purchase the Series 2007-One Notes (an “ Administrative Redemption ”) at a purchase price equal to (i) if such day is a Distribution Date, the Redemption Amount for such Distribution Date or (ii) if such day is not a Distribution Date, the Redemption Amount for the Distribution Date first following such day.

(b) The Issuer shall give the Servicer, the Transferor and the Indenture Trustee at least 30 days prior written notice of the date on which it intends to exercise such Administrative Redemption. The Issuer shall deposit the Redemption Amount into the Collection Account on the Business Day prior to the day of such Administrative Redemption. Such Administrative Redemption is subject to payment in full of the Redemption Amount. The Redemption Amount shall be distributed as set forth in subsection 8.01(b) and the holders of the Series 2007-One Notes shall transfer such Notes to the Issuer.

Section 7.02. Series Termination . On the Stated Maturity Date, the right of the Series 2007-One Noteholders to receive payments from the Issuer will be limited solely to the right to receive payments pursuant to Section 5.05 of the Indenture.

[END OF ARTICLE VII]

ARTICLE VIII

Redemption of Series 2007-One Notes; Final Distributions

Section 8.01. Sale of Receivables or Redemption of the Series 2007-One Notes and the O/C Certificate pursuant to Sections 5.05 and 5.17 of the Indenture and Sections 7.01 and 8.01 of this Indenture Supplement .

(a) The amount to be paid by the Transferor with respect to Series 2007-One in connection with a reassignment of Receivables to the Transferor pursuant to Section 2.06 of the Transfer and Servicing Agreement shall equal the Redemption Amount for the first Distribution Date following the Monthly Period in which the reassignment obligation arises under the Transfer and Servicing Agreement.

(b) With respect to the Redemption Amount deposited into the Collection Account pursuant to Section 7.01 or subsection 8.01(a) or any amounts allocable to the Series 2007-One Notes and the O/C Certificate deposited into the Collection Account pursuant to Sections 5.05 and 5.17 of the Indenture, the Indenture Trustee shall, in accordance with the written direction of the Servicer, not later than 9:00 a.m., London time, on the related Distribution Date, make deposits or distributions of the following amounts (in the priority set forth below and, in each case after giving effect to any deposits and distributions otherwise to be made on such date) in same day funds: (i) the Monthly Fees on such Distribution Date will be distributed pro rata to the Trust Administrator, the Owner Trustee, the Indenture Trustee, the Servicer, the Backup Servicer and the Account Owner; (ii) (x) the Class A-1 Principal Balance on such Distribution Date will be distributed to the Paying Agent for payment to the Class A-1 Noteholders, and (y) an amount equal to the sum of (A) the Class A-1 Monthly Interest for such Distribution Date and (B) any Class A-1 Additional Interest not distributed on a prior Distribution Date will be distributed to the Paying Agent for payment to the Class A-1 Noteholders; (iii) (x) the Class A-2 Principal Balance on such Distribution Date will be distributed to the Paying Agent for payment to the Class A-2 Noteholders, and (y) an amount equal to the sum of (A) the Class A-2 Monthly Interest for such Distribution Date and (B) any Class A-2 Additional Interest not distributed on a prior Distribution Date will be distributed to the Paying Agent for payment to the Class A-2 Noteholders; (iv) (x) the Class A-3 Principal Balance on such Distribution Date will be distributed to the Paying Agent for payment to the Class A-3 Noteholders, and (y) an amount equal to the sum of (A) the Class A-3 Monthly Interest for such Distribution Date and (B) any Class A-3 Additional Interest not distributed on a prior Distribution Date will be distributed to the Paying Agent for payment to the Class A-3 Noteholders; (v) (x) the Class A-4 Principal Balance on such Distribution Date will be distributed to the Paying Agent for payment to the Class A-4 Noteholders, and (y) an amount equal to the sum of (A) the Class A-4 Monthly Interest for such Distribution Date and (B) any Class A-4 Additional Interest not distributed on a prior Distribution Date will be distributed to the Paying Agent for payment to the Class A-4 Noteholders; (vi) (x) the Class B Principal Balance on such Distribution Date will be distributed to the Paying Agent for payment to the Class B Noteholders, and (y) an amount equal to the sum of (A) the Class B Monthly Interest for such Distribution Date and (B) any Class B Additional Interest not distributed on a prior

Distribution Date will be distributed to the Paying Agent for payment to the Class B Noteholders; (vii) (x) the VFN Principal Balance on such Distribution Date will be distributed to the Paying Agent for payment to the VFN Holders and (y) an amount equal to the sum of (A) the VFN Monthly Interest for such Distribution Date and (B) any VFN Additional Interest not distributed on a prior Distribution Date will be distributed to the Paying Agent for payment to the VFN Holders; and (viii) the O/C Outstanding Amount on such Distribution Date will be distributed to the Paying Agent for payment to the O/C Holder.

(c) Notwithstanding anything to the contrary in this Indenture Supplement or the Indenture, all amounts distributed to the Paying Agent pursuant to subsection 8.01(b) for payment to the Series 2007-One Noteholders shall be deemed distributed in full to the Series 2007-One Noteholders on the date on which such funds are distributed to the Paying Agent pursuant to this Section.

[END OF ARTICLE VIII]

ARTICLE IX

Miscellaneous Provisions

Section 9.01. Ratification of Indenture . As supplemented by this Indenture Supplement, the Indenture is in all respects ratified and confirmed and the Indenture as so supplemented by this Indenture Supplement shall be read, taken and construed as one and the same instrument.

Section 9.02. Counterparts . This Indenture Supplement may be executed in two or more counterparts, and by different parties on separate counterparts, each of which shall be an original or facsimile, but all of which shall constitute one and the same instrument.

Section 9.03. Governing Law . THIS INDENTURE SUPPLEMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS (OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW) AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

Section 9.04. Successors and Assigns . This Indenture Supplement shall be binding upon and inure to the benefit of the parties hereto and their respective permitted successors and assigns.

Section 9.05. Tax Matters .

(a) Notwithstanding anything to the contrary herein, each of the Paying Agent, Servicer or Indenture Trustee shall be entitled to withhold any amount that it reasonably determines in its sole discretion is required to be withheld pursuant to Section 1446 of the Code and any related treasury regulations and such amount shall be deemed to have been paid for all purposes of the Indenture.

(b) Each of the Class A Noteholders and each of the Class B Noteholders agrees that prior to the date on which the first interest payment hereunder is due thereto, it will provide to the Transferor and the Indenture Trustee (i) a duly completed copy of United States Internal Revenue Service Form W-9 or successor applicable or required forms, and (ii) such other forms and information as may be reasonably required to confirm the availability of any applicable exemption from United States federal, state or local withholding taxes. For the avoidance of doubt, the foregoing requirement is intended to, and the parties hereto agree that it shall, preclude any Transfer of a Note to a person who is not a “U.S. person” for federal income tax purposes. Each Class A Noteholder and each Class B Noteholder agrees to provide to the Transferor and the Indenture Trustee, like additional subsequent duly completed forms (subject to like consent) satisfactory to the Transferor and the Indenture Trustee on or before the date that any such form expires or becomes obsolete, or upon the occurrence of any event requiring an amendment, resubmission or change in the most recent form previously delivered by it, and to provide such extensions or renewals as may be reasonably requested by the Servicer or the Indenture Trustee.

Each Class A Noteholder and each Class B Noteholder certifies, represents and warrants that as of the date of this Agreement, or in the case of such a Class A Noteholder or Class B Noteholder which is an assignee as of the date of such Note Assignment, that it is and will remain the sole beneficial owner of its interest in the Notes for U.S. federal income tax purposes and that it is entitled (x) to receive payments under this Indenture Supplement without deduction or withholding of any United States federal income taxes and (y) to an exemption from United States backup withholding tax. Each such Class A Noteholder and each such Class B Noteholder represents and warrants that it shall pay any taxes imposed on such Class A Noteholder or Class B Noteholder attributable to its interest in the Class A Notes or the Class B Notes, as applicable.

(c) Each Class A Noteholder and each Class B Noteholder agrees with the Transferor and the Servicer that: (a) such Class A Noteholder or such Class B Noteholder will deliver to the Transferor on or before the Closing Date or the effective date of any participation or Note Assignment a letter (an “ Investment Letter ”) in the form of Exhibit F , executed by such Class A Noteholders, Class B Noteholders or assignee Class A Noteholder or assignee Class B Noteholder, as applicable, in the case of a Note Assignment, or by the Participant, in the case of a participation, with respect to the purchase by such Class A Noteholder, Class B Noteholder or Participant of a portion of an interest relating to the Class A Notes or the Class B Notes, as applicable, and (b) all of the statements made by such Class A Noteholder, Class B Noteholder or Participant, as applicable, in its Investment Letter shall be true and correct as of the date made.

(d) Each Class A Noteholder and each Class B Noteholder by its holding of an interest in the Class A Notes or the Class B Notes, as applicable, hereby severally represents, warrants and covenants, and each Class A Noteholder and each Class B Noteholder that acquires an interest in the Class A Notes or the Class B Notes, as applicable, by Note Assignment shall be deemed to have severally represented, warranted and covenanted upon such Note Assignment that: (i) such Class A Noteholder or such Class B Noteholder has not acquired and shall not sell, trade or transfer any interest in the Class A Notes or Class B Notes, as applicable, nor cause any interest in the Class A Notes or the Class B Notes, as applicable, to be marketed, on or through either (A) an “established securities market (or the substantial equivalent thereof)” within the meaning of Section 7704(b)(1) of the Code (including an interdealer quotation system that regularly disseminates firm buy or sell quotations by identified brokers or dealers by electronic means or otherwise) or (B) a “secondary market (or the substantial equivalent thereof)” within the meaning of Section 7704(b)(2) of the Code (including a market wherein interests in the Class A Notes or the Class B Notes, as applicable, are regularly quoted by any person making a market in such interests and a market wherein any person regularly makes available bid or offer quotes with respect to interests in the Class A Notes or the Class B Notes, as applicable, and stands ready to effect buy or sell transactions at the quoted prices for itself or on behalf of others), and (ii) unless the Transferor and the Servicer consent otherwise, such Class A Noteholder or Class B Noteholder, as applicable, (A) is properly classified as, and shall remain classified as, a “corporation” as described in Section 7701(a)(3) of the Code and (B) is not, and shall not become, an “S corporation” as described in Section 1361 of the Code. Each Class A Noteholder and each Class B Noteholder represents, warrants and covenants that it shall (A) cause each of its Participants otherwise permitted hereunder to make representations, warranties and covenants similar to the foregoing for the benefit of the Servicer, the Transferor and the Issuer at the time such Participant becomes a Participant and (B) forward a copy of such representations, warranties and covenants to the Indenture Trustee. In the event of any breach of the

representation, warranty and covenant of a Class A Noteholder, Class B Noteholder or its Participant that such Class A Noteholder or Class B Noteholder or Participant shall remain classified as a corporation other than an S corporation, such Class A Noteholder or Class B Noteholder shall notify the Transferor and the Servicer promptly upon such Class A Noteholder’s or Class B Noteholder’s becoming aware of such breach, and thereupon the Class A Noteholder or Class B Noteholder hereby agrees to use reasonable efforts to procure a replacement investor which is acceptable to the Transferor and the Servicer not so affected to replace such affected Class A Noteholder or Class B Noteholder, as applicable. In any such event, the Transferor or the Servicer shall also have the right to procure a replacement investor. Each affected Class A Noteholder or Class B Noteholder hereby agrees to take all actions necessary to permit a replacement investor to succeed to its rights and obligations hereunder. Each Class A Noteholder or Class B Noteholder which has a Participant which has breached its representation, warranty and covenant that it shall remain classified as a corporation other than an S corporation hereby agrees (without limiting the right of the Transferor or the Servicer to procure a replacement investor for such Class A Noteholder or Class B Noteholder, as applicable, as provided above in this paragraph) to notify the Transferor and the Servicer of such breach promptly upon such Class A Noteholder’s or Class B Noteholder’s becoming aware thereof and to use reasonable efforts to procure a replacement Participant, as applicable, not so affected which is acceptable to the Transferor and the Servicer to replace any such Participant.

(e) Subject to the provisions of subsection (g), each Class A Noteholder or Class B Noteholder may at any time sell, assign or otherwise transfer, to the extent of such Class A Noteholder’s or Class B Noteholder’s interest in the Class A Notes or Class B Notes, as applicable (each, a “ Note Assignment ”), all or part of its interest in the Class A Notes or Class B Notes, as applicable, to any Permitted Transferee without the consent of the Servicer and the Transferor, or to any Person to which the Servicer and the Transferor may consent, which consent shall not be unreasonably withheld; provided that such withholding shall be deemed reasonable if following such proposed Note Assignment the number of Private Holders would exceed 80 or the Issuer would otherwise be in jeopardy of being treated as taxable as a publicly traded partnership pursuant to Section 7704 of the Code (it being understood and agreed that the Indenture Trustee shall have no obligation to monitor the foregoing), all or part of its interest in the Class A Notes or Class B Notes, as applicable; provided , however , that any Note Assignment shall be void unless (i) the minimum amount of such Note Assignment shall be £5,000,000, (ii) such assignee Class A Noteholder or Class B Noteholder, as applicable, shall comply with this Section 9.05 and shall have delivered to the Indenture Trustee, prior to the effectiveness of such Note Assignment, a copy of an agreement under which such assignee Class A Noteholder or Class B Noteholder, as applicable, has made the representations, warranties and covenants required to be made pursuant to this Section 9.05 , (iii) following the Note Assignment there shall not be in the aggregate either more than 33 record owners, beneficial owners of an interest in or Participants holding an interest in the Class A Notes or the Class B Notes and (iv) such proposed assignee shall provide the forms described in clauses (i) and (ii) of subsection 9.05(b) in the manner described therein. In connection with any Note Assignment to a Person other than a Permitted Transferee, the assignor Class A Noteholder or Class B Noteholder, as applicable, shall request in writing to the Indenture Trustee (who shall promptly deliver it to the Servicer and the Transferor) for the consent of the Servicer and the Transferor (the Servicer and the Transferor shall respond to any such request within ten Business Days after its receipt and the Servicer shall withhold such consent only as described in this paragraph) it being understood that the obtaining of such consent is a condition to the effectiveness of the Note Assignment in such case.

(f) Subject to the provisions of subsection (g), any Class A Noteholder or Class B Noteholder may at any time grant a participation in all or part (but not less than £5,000,000) of its interest in Class A Notes or Class B Notes, as applicable, to (i) any Permitted Transferee without the consent of the Servicer and the Transferor, or (ii) any Person to whom the Servicer and the Transferor may consent (each such Person, a “ Participant ”), which consent shall not be unreasonably withheld; provided that such withholding shall be deemed reasonable if following such proposed participation the number of Private Holders would exceed 80 or the Issuer would otherwise be in jeopardy of being treated as taxable as a publicly traded partnership pursuant to section 7704 of the Code it being understood and agreed that the Indenture Trustee shall have no obligation to monitor the foregoing); provided , however , that such participation shall be void, unless (i) such Participant complies with the applicable provisions of this Section 9.05 , (ii) such Class A Noteholder or such Class B Noteholder, as applicable, delivers to the Indenture Trustee, prior to the effectiveness of its participation, a copy of an agreement under which such Participant has made the representations, warranties and covenants required to be made pursuant to this Section and (iii) there shall not be in the aggregate either more than 33 record owners, beneficial owners of an interest in or Participants holding an interest in the Class A Notes or the Class B Notes after giving effect to such participation. In connection with the granting of any such participation to any Person other than a Permitted Transferee, the granting Class A Noteholder or Class B Noteholder, as applicable, shall provide a written request to the Indenture Trustee (who shall promptly deliver it to the Servicer and the Transferor) for the consent of the Servicer and the Transferor to the granting of the specified interest to any identified prospective Participant. The Servicer and the Transferor shall respond to any such request within ten Business Days after its receipt, it being understood that the obtaining of such consent is a condition to the effectiveness of a participation in such case. Each Class A Noteholder and each Class B Noteholder hereby acknowledges and agrees that any such participation will not alter or affect in any way whatsoever such Class A Noteholder’s or Class B Noteholder’s direct obligations hereunder and that the Transferor and the Servicer shall have no obligation to have any communication or relationship whatsoever with any Participant of such Class A Noteholder or Class B Noteholder, as applicable, in order to enforce the obligations of such Class A Noteholder or Class B Noteholder, as applicable, hereunder. Each Class A Noteholder and each Class B Noteholder shall promptly notify the Indenture Trustee (which shall promptly notify the Transferor and the Servicer) in writing of the identity and interest of each Participant upon any such disposition. As a condition of granting any participation, the Class A Noteholder or Class B Noteholder, as applicable, hereby agrees to deliver to the Servicer and the Transferor a certification of the proposed Participant pursuant to which the Participant certifies, represents and warrants that (i) such Participant is entitled to (x) receive payments with respect to its participation without deduction or withholding of any United States federal income taxes and (y) an exemption from United States backup withholding tax, (ii) prior to the date on which the first interest payment is due to the Participant, such Class A Noteholder or Class B Noteholder will provide to the Transferor and Indenture Trustee, the forms described in clauses (i) and (ii) of subsection 9.05(b) as though the Participant were a Class A Noteholder or Class B Noteholder, as applicable, (iii) such Class A Noteholder or such Class B Noteholder, as applicable, similarly will provide subsequent forms as described in subsection 9.05(b) with respect to such Participant as though it were a Class A Noteholder or Class B Noteholder, as applicable, (iv) such

Participant is and will remain the beneficial owner of the Participated Notes for U.S. federal income tax purposes, and (v) without diminution of any tax gross-up pursuant to the Note Purchase Agreement, such Participant will pay any taxes imposed on its participation interest in the Class A Notes or the Class B Notes, as applicable.

(g) Except (i) as provided in subsections (e) and (f) above, (ii) in connection with any pledge to any Federal Reserve Bank to secure any obligation of a Class A Noteholder or a Class B Noteholder, or (iii) in connection with a Qualified Securitization Pledge, no Class A Noteholder or Class B Noteholder may sell, transfer, assign, exchange, participate or otherwise convey or pledge, hypothecate, rehypothecate, or otherwise grant a security interest in or dispose of or transfer in any manner (each, a “ Transfer ”) any direct or indirect interest in a Class A Note or Class B Note, as applicable, and each such Noteholder further acknowledges and agrees that any purported Transfer in violation of this subsection shall be null and void ab initio.

(h) To the extent that any Class A Conduit Investor or any Conduit Assignee or any Class B Investor (in each case as defined in the Note Purchase Agreement) cannot represent that it is a “corporation” as described in Section 7701(a)(3) of the Code pursuant to subsection (d) and the Note Purchase Agreement, the Transferor and Servicer will be deemed to consent to the holding of an interest in a Class A Note or Class B Note by such Class A Conduit Investor or any Conduit Assignee or a Class B Investor pursuant to such subsection if such Class A Noteholder or Class B Noteholder represents, warrants and covenants that, (i) for U.S. federal income tax purposes, (A) the Class A Noteholder or Class B Noteholder is and will remain (1) a domestic partnership as described in Section 7701(a)(2) and (a)(4) of the Code or (2) disregarded as an entity separate from its owner, which owner (a) is and will remain properly classified as a “domestic corporation” as described in section 7701(a)(3) and (a)(4) of the Code and (b) is not and will not become an “S” corporation as described in section 1361 of the Code; and (B) such Class A Noteholder or Class B Noteholder (or, in the event the Class A Noteholder or Class B Noteholder is disregarded as an entity separate from its owner, such owner) is and will remain properly treated as the owner of the Class A Note or Class B Note, respectively; (ii) if, for federal income tax purposes, the Class A Note or Class B Note is treated as an equity interest in a partnership (a “ Trust Partnership ”) and such Class A Noteholder or Class B Noteholder, respectively is treated as a partnership, (A) no purpose of the Class A Noteholder’s or Class B Noteholder’s ownership of the Class A Note or Class B Note, respectively, is to permit any Trust Partnership to satisfy the 100-partner limitation in Treasury Regulation section 1.7704 1(h)(1)(ii); (B) not more than 50% of the value of each and every beneficial owner’s interest in such Class A Noteholder or Class B Noteholder, respectively, is or, at any time, will be attributable to the aggregate value of the Class A Note or Class B Note and any other interests in any Trust Partnership held by such Class A Noteholder or Class B Noteholder, respectively; and (C) no more than one (1) person will be treated as a “partner” in any Trust Partnership under Treasury Regulation section 1.7704-1(h)(3) solely by reason of such Class A Noteholder’s or Class B Noteholder’s ownership of the Class A Note or Class B Note, respectively. Each such Class A Noteholder and Class B Noteholder represents, warrants and covenants that it shall (i) cause each of its Participants otherwise permitted hereunder and under the Note Purchase Agreement to make representations, warranties and covenants as required by this Section 9.05 (including, pursuant to subsection (d) hereof, the representation that such Participant is a “corporation” as described in Section 7701(a)(3) of the Code) and the Note Purchase Agreement for the benefit of the Servicer, the Transferor and the Trust at the time such Participant became a

Participant and (ii) forward a copy of such representations, warranties and covenants to the Indenture Trustee. In the event of any breach of the representation, warranty and covenant of a Class A Conduit Investor or any Conduit Assignee or Class B Investor that is set forth in clauses (i) and (ii) of the first sentence of this paragraph, or of its Participant that such Participant shall remain classified as a corporation other than an S corporation, such Class A Noteholder or Class B Noteholder shall notify the Transferor and the Servicer promptly upon such Class A Noteholder’s or Class B Noteholder’s becoming aware of such breach, and thereupon the Class A Noteholder or Class B Noteholder hereby agrees to use reasonable efforts to procure a replacement investor not so affected which is a Permitted Assignee or is otherwise reasonably acceptable to the Transferor and the Servicer to replace such affected Class A Noteholder or Class B Noteholder. In any such event, the Transferor and Servicer shall also have the right to procure a replacement investor; provided , however that the foregoing right of the Transferor and Servicer with respect to the Class A Notes shall be subject to the Class A Noteholder not having promptly procured a replacement investor pursuant to and meeting the requirements of the preceding sentence. Each affected Class A Noteholder and Class B Noteholder hereby agrees to take all actions necessary to permit a replacement investor to succeed to its rights and obligations hereunder. Each Class A Noteholder or Class B Noteholder which has a Participant which has breached its representation, warranty and covenant that it shall remain classified as a corporation other than an S corporation hereby agrees (without limiting the right of the Transferor or the Servicer to procure a replacement investor for such Class A Noteholder or Class B Noteholder, respectively, as provided above in this paragraph) to notify the Transferor and the Servicer of such breach promptly upon such Class A Noteholder’s or Class B Noteholder’s becoming aware thereof and to use reasonable efforts to procure a replacement Participant, as applicable, not so affected which is a Permitted Assignee or is otherwise acceptable to the Transferor and the Servicer to replace any such Participant. Such Class A Noteholder and Class B Noteholder will provide such continuing assurances, comfort, evidence and information in support of and in connection with the continuing truth of the representations and compliance with the covenants and agreements set forth in this paragraph (h) as the Transferor and the Servicer may reasonably request from time to time.

Section 9.06. Covenant of O/C Holder . The O/C Holder hereby acknowledges and agrees to comply with Section 3.14 of the Indenture and Sections 2.06 and 5.06 of the Trust Agreement.

Section 9.07. Transfer of the Variable Funding Notes and the O/C Certificate . Notwithstanding anything to the contrary in this Indenture Supplement, no interest in a Variable Funding Note or the O/C Certificate may be directly or indirectly sold, conveyed, assigned, hypothecated, pledged, participated, exchanged or otherwise transferred (i) except to a Person who is a “United States person” for United States federal income tax purposes, and (ii) without the consent of the Required Investors, and any Transfer in violation of these requirements shall be null and void ab initio .

Section 9.08. Event of Default . For purposes of Section 5.02(b) of the Indenture, a failure to pay any interest on the Variable Funding Note when the same becomes due and payable shall not constitute an Event of Default.

Section 9.09. Disclosure of Tax Treatment . Notwithstanding any other express or implied agreement to the contrary, each of the Issuer, the O/C Holder and the Series 2007-One Noteholders are hereby deemed to agree that they (or their employees, representatives, or other agents), may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of any transaction relating to the Issuer, the O/C Holder or the Series 2007-One Notes.

Section 9.10. Limitation of Liability . It is expressly understood and agreed by the parties hereto that (a) this Indenture Supplement is executed and delivered by Wilmington Trust FSB, not individually or personally but solely as trustee of the Issuer, in the exercise of the powers and authority conferred and vested in it under the Trust Agreement, (b) each of the representations, undertakings and agreements herein made on the part of the Issuer is made and intended not as personal representations, undertakings and agreements by Wilmington Trust FSB but is made and intended for the purpose of binding only the Issuer and (c) under no circumstances shall Wilmington Trust FSB be personally liable for the payment of any indebtedness or expenses of the Issuer or be liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by the Issuer under this Indenture Supplement or the other Transaction Documents to which the Issuer is a party.

Section 9.11. Rights of the Indenture Trustee and the Paying Agent . Each of the Paying Agent and the Indenture Trustee shall be entitled to all of the same rights, protections, immunities and indemnities set forth in the Indenture.

[END OF ARTICLE IX]

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the undersigned have caused this Indenture Supplement to be duly executed and delivered by their respective duly authorized officers on the date first above written.


PARTRIDGE ACQUIRED PORTFOLIO BUSINESS TRUST, as Issuer

By:		WILMINGTON TRUST FSB, not in its individual capacity, but solely as Owner Trustee

By:		/s/ Jim Lawler
Name:		Jim Lawler
Title:		Vice President

DEUTSCHE BANK AG, LONDON BRANCH, as Paying Agent

By:		/s/ Darren Levene
Name:		Darren Levene
Title:		Vice President

By:		/s/ Clive Rakestrow
Name:		Clive Rakestrow
Title:		Vice President

DEUTSCHE BANK TRUST COMPANY AMERICAS, as Indenture Trustee

By:		/s/ Michele HY Voon
Name:		Michele HY Voon
Title:		Attorney-in-fact

By:		/s/ Dorit Ritter-Haddad
Name:		Dorit Ritter-Haddad
Title:		Attorney-in-fact

[Signature Page to Indenture Supplement]


COMPUCREDIT INTERNATIONAL ACQUISITION CORPORATION, as Servicer

By:		/s/ Joshua C. Miller
Name:		Joshua C. Miller
Title:		Assistant Secretary

The undersigned agrees to be bound by the provisions of Section 9.07 of this Indenture Supplement:


PARTRIDGE FUNDING CORPORATION, as O/C Holder

By:		/s/ Rebecca Howell
Name:		Rebecca Howell
Title:		Assistant Secretary

[Signature Page to Indenture Supplement]

Exhibit 10.7

EXECUTION COPY

TRANSFER AND SERVICING AGREEMENT

Dated as of April 4, 2007

PARTRIDGE ACQUIRED PORTFOLIO

BUSINESS TRUST

among

PARTRIDGE FUNDING CORPORATION,

as Transferor,

COMPUCREDIT INTERNATIONAL ACQUISITION CORPORATION,

as Servicer,

PARTRIDGE ACQUIRED PORTFOLIO

BUSINESS TRUST,

as Issuer

and

DEUTSCHE BANK TRUST COMPANY AMERICAS,

as Indenture Trustee

TABLE OF CONTENTS


		Page
ARTICLE I
DEFINITIONS

Section 1.01.	Definitions	1

Section 1.02.	Other Definitional Provisions	12

ARTICLE II
CONVEYANCE OF RECEIVABLES

Section 2.01.	Conveyance of Receivables	14

Section 2.02.	Acceptance by Issuer	15

Section 2.03.	Representations and Warranties of the Transferor Relating to the Transferor	16

Section 2.04.	Representations and Warranties of the Transferor Relating to this Agreement and the Receivables	17

Section 2.05.	Reassignment of Ineligible Receivables	18

Section 2.06.	Reassignment of Trust Portfolio	19

Section 2.07.	Covenants of the Transferor	20

Section 2.08.	Covenants of the Transferor with Respect to the Applicable Receivables Purchase Agreements	23

Section 2.09.	Account Allocations	23

Section 2.10.	Defaulted Receivables	24

Section 2.11.	Account Owner Compensation	24

ARTICLE III
ADMINISTRATION AND SERVICING OF RECEIVABLES

Section 3.01.	Acceptance of Appointment and Other Matters Relating to the Servicer	26

Section 3.02.	Servicing Compensation	27

Section 3.03.	Representations, Warranties and Covenants of the Servicer	27

Section 3.04.	Reports and Records for the Owner Trustee and the Indenture Trustee	30

Section 3.05.	Annual Certificate of Servicer	30

Section 3.06.	Annual Servicing Report of Independent Public Accountants; Copies of Reports Available	31

Section 3.07.	Adjustments	31

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TABLE OF CONTENTS

(continued)


		Page
ARTICLE IV
COLLECTIONS AND ALLOCATIONS

Section 4.01.	Collections and Allocations	33

Section 4.02.	Shared Principal Collections	34

Section 4.03.	Excess Finance Charge Collections	34

ARTICLE V
OTHER MATTERS RELATING TO THE TRANSFEROR

Section 5.01.	Liability of the Transferor	35

Section 5.02.	Merger or Consolidation of, or Assumption of the Obligations of, the Transferor	35

Section 5.03.	Limitations on Liability of the Transferor	36

ARTICLE VI
OTHER MATTERS RELATING TO THE SERVICER

Section 6.01.	Liability of the Servicer	37

Section 6.02.	Merger or Consolidation of, or Assumption of the Obligations of, the Servicer	37

Section 6.03.	Limitation on Liability of the Servicer and Others	37

Section 6.04.	Servicer Indemnification of the Issuer, the Owner Trustee and the Indenture Trustee	38

Section 6.05.	Resignation of the Servicer	38

Section 6.06.	Access to Certain Documentation and Information Regarding the Receivables	39

Section 6.07.	Delegation of Duties	39

Section 6.08.	Examination of Records	40

ARTICLE VII
INSOLVENCY EVENTS

Section 7.01.	Rights upon the Occurrence of an Insolvency Event	41

ARTICLE VIII
SERVICER DEFAULTS

Section 8.01.	Servicer Defaults	42

Section 8.02.	Indenture Trustee To Act; Appointment of Successor	44

Section 8.03.	Notification to Noteholders	46

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TABLE OF CONTENTS

(continued)


		Page
ARTICLE IX
TERMINATION

Section 9.01.	Termination of Agreement	47

ARTICLE X
MISCELLANEOUS PROVISIONS

Section 10.01.	Amendment; Waiver of Past Defaults	48

Section 10.02.	Protection of Right, Title and Interest of Issuer	49

Section 10.03.	GOVERNING LAW	50

Section 10.04.	Notices	50

Section 10.05.	Severability of Provisions	52

Section 10.06.	Further Assurances	52

Section 10.07.	Nonpetition Covenant	52

Section 10.08.	No Waiver; Cumulative Remedies	53

Section 10.09.	Counterparts	53

Section 10.10.	Third-Party Beneficiaries	53

Section 10.11.	Merger and Integration	53

Section 10.12.	Headings	53

Section 10.13.	Limitation of Liability of Owner Trustee	53

Section 10.14.	Personal Data	54

-iii-

TRANSFER AND SERVICING AGREEMENT, dated as of April 4, 2007, among PARTRIDGE FUNDING CORPORATION, a Nevada corporation, as Transferor, COMPUCREDIT INTERNATIONAL ACQUISITION CORPORATION, a Nevada corporation, as Servicer, PARTRIDGE ACQUIRED PORTFOLIO BUSINESS TRUST, a Nevada business trust, as Issuer, and DEUTSCHE BANK TRUST COMPANY AMERICAS, a New York banking corporation, as Indenture Trustee.

In consideration of the mutual agreements herein contained, each party agrees as follows for the benefit of the other parties, the Noteholders, any O/C Holder and any Series Enhancer to the extent provided herein, in the Indenture and in any Indenture Supplement:

ARTICLE I

DEFINITIONS

Section 1.01. Definitions . Whenever used in this Agreement, the following words and phrases shall have the following meanings, and the definitions of such terms are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such terms.

“ Account ” shall mean each VISA ^® ¹ consumer revolving credit card account which is (a) in existence at the Cut-Off Time and is identified in the Account Schedule, (b) each Related Account, or (c) each Transferred Account, but shall exclude, after the applicable removal date, any Account in which all the Receivables are reassigned to an Account Owner or a seller pursuant to a Receivables Purchase Agreement.

“ Account Owner ” shall mean (i) prior to the Conversion Date, Barclays Bank PLC and (ii) on and after the Conversion Date, Raphaels Bank or any other entity which is the owner or issuer of the credit card relating to an Account pursuant to a Credit Card Agreement.

“ Account Ownership Agreement ” shall mean the Account Ownership Agreement dated as of April 4, 2007 between Raphaels Bank and CCIA.

“ Account Ownership Fee ” shall mean, with respect to any Monthly Period, the greater of (i) the Minimum Monthly Fee, and (ii) an amount equal to £0.15 times the number of Active Accounts existing at the close of business on the last day of such Monthly Period.

“ Account Schedule ” shall mean a computer file or microfiche list containing a true and complete list of the Accounts delivered to the Issuer by the Transferor pursuant to subsection 2.01(d).

“ Active Account ” shall mean an Account (i) with respect to which there is a balance due from the Obligor and (ii) that has not been charged off.

¹	VISA is a registered trademark of VISA U.S.A., Inc. in the United States and VISA International Services Association in the United Kingdom.

“ Adverse Effect ” shall mean, with respect to any action, that such action will (a) result in the occurrence of an Early Redemption Event, a Default or an Event of Default or (b) materially and adversely affect the amount or timing of distributions to be made to the Noteholders or any Series Enhancer of any Series or Class pursuant to this Agreement, the Indenture or the related Indenture Supplement.

“ Affiliate ” shall mean, with respect to any specified Person, any other Person controlling or controlled by or under common control with such specified 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 “ controlling ” and “ controlled ” have meanings correlative to the foregoing.

“ Agreement ” shall mean this Transfer and Servicing Agreement, as the same may be amended, supplemented or otherwise modified from time to time.

“ Allocation Amount ” shall mean, with respect to any Series and for any date, an amount equal to the allocation amount or adjusted allocation amount, as applicable, specified in the related Indenture Supplement.

“ Assignment and Assumption Agreement ” shall mean the Assignment and Assumption Agreement substantially in the form of Exhibit D between CCIA and CCIS and acknowledged and agreed to by the Transferor, the Issuer and the Indenture Trustee.

“ Appointment Date ” shall have the meaning specified in Section 7.01 .

“ Backup Servicer ” shall mean a credit card servicer in the United Kingdom designated by the Servicer after the Closing Date and its successors and permitted assigns.

“ Barclays Bank ” shall mean Barclays Bank PLC, a company incorporated in England and Wales.

“ Business Day ” shall mean any day other than (a) a Saturday or Sunday or (b) any other day on which banking institutions in London, England, New York, New York, Atlanta, Georgia, Las Vegas, Nevada, Wilmington, Delaware, or any other city in which the principal executive offices of the Servicer, the Transferor, the Owner Trustee, the Indenture Trustee, Raphaels Bank or other Account Owner, as the case may be, are located, are authorized or obligated by law, executive order or governmental decree to be closed or (c) for purposes of any particular Series, any other day specified in the applicable Indenture Supplement.

“ Cash Advance Fees ” shall mean cash advance transaction fees, if any, as specified in the Credit Card Agreement applicable to each Account.

“ CCIA ” shall mean CompuCredit International Acquisition Corporation, a Nevada corporation, and its successors and permitted assigns.

“ CCIA Receivables Purchase Agreement ” shall mean the Receivables Purchase Agreement between CCIA and Partridge Funding, dated as of April 4, 2007, as it may be further amended, amended and restated, supplemented, or otherwise modified from time to time.

“ CCIS ” shall mean CompuCredit International Servicing LLC, a Georgia limited liability company and its successors and permitted assigns.

“ Class A Noteholder ” has the meaning specified in the Series 2007-One Indenture Supplement.

“ Collections ” shall mean, to the extent transferred to the Transferor pursuant to a Receivables Purchase Agreement, all payments by or on behalf of Obligors received in respect of the Receivables, in the form of cash, checks, SWIFT payments, wire transfers, direct debits, bank giro credits, electronic transfers, ATM transfers or any other form of payment and all other amounts specified by this Agreement, the Indenture or any Indenture Supplement as constituting Collections including Interchange, Insurance Proceeds, and Recoveries with respect to the Receivables. All payments of the repurchase price with respect to Ineligible Receivables that are repurchased from the Issuer by the Transferor and all Recoveries will be treated as Collections of Finance Charge Receivables. Collections of Interchange paid to the Issuer with respect to any Monthly Period shall be applied as Collections of Finance Charge Receivables for all purposes. All adjustments to the Closing Purchase Price (as defined in the CCIA Receivables Purchase Agreement) that are received by the Transferor or the Issuer will be treated as Collections.

“ Commission ” shall mean the Securities and Exchange Commission and any successor Governmental Authority.

“ CompuCredit UK ” shall mean CompuCredit UK Limited, a company incorporated in England and Wales.

“ Consumer Credit Act ” shall mean the Consumer Credit Act of 1974 and all regulations in force thereunder from time to time.

“ Conversion Date ” shall mean the date on which the Transferor provides notice to the Issuer that Raphaels Bank has issued replacement credit cards to all Obligors bearing the name of Raphaels Bank in place of the existing credit cards bearing the name of Barclays Bank.

“ Corporate Trust Office ” shall have the meaning (a) when used in respect of the Owner Trustee, specified in the Trust Agreement and (b) when used in respect of the Indenture Trustee, specified in the Indenture.

“ Covered Account ” shall have the meaning specified in Section 2.05.

“ Credit Card Agreement ” shall mean, with respect to a revolving credit card account, the agreements between an Account Owner and the Obligor governing the terms and

conditions of such account, as such agreements or statements may be amended, modified or otherwise changed from time to time and as distributed (including any amendments and revisions thereto) to holders of such account.

“ Credit Card Guidelines ” shall mean the written policies and procedures of the Account Owner or the Servicer (and any Successor Servicer) for servicing credit card receivables comparable to the Receivables.

“ Cut-Off Time ” shall mean 11:59 p.m. London Time on April 3, 2007.

“ Date of Processing ” shall mean, with respect to any transaction or receipt of Collections, the date on which such transaction is first recorded on the Servicer’s computer file of revolving credit card accounts (without regard to the effective date of such recordation).

“ Defaulted Amount ” shall mean, with respect to any Monthly Period, an amount (which shall not be less than zero) equal to (a) the amount of Receivables which became Defaulted Receivables in such Monthly Period, plus (b) the amount of any Receivables which are identified as not being Eligible Receivables during such Monthly Period, plus (c) the amount of Receivables that have been adjusted downward pursuant to subsection 3.07(a) .

“ Defaulted Receivables ” shall mean, with respect to any Monthly Period, all Receivables (i) which are charged off as uncollectible in such Monthly Period in accordance with the Credit Card Guidelines or the Servicer’s customary and usual servicing procedures for servicing revolving credit card accounts; (ii) as to which any payment or part thereof remains unpaid for one hundred eighty (180) days or more from the original due date for such Receivables; (iii) as to which the Obligor thereof is currently the debtor in a case under the United Kingdom Insolvency Act 1986, as amended; (iv) as to which the Obligor has had an individual voluntary arrangement approved by the Servicer or the Account Owner; or (v) as to which the Obligor is deceased. A Receivable shall become a Defaulted Receivable no later than on the day on which such Receivable is recorded as charged-off on the Servicer’s computer file of revolving credit card accounts.

“ Determination Date ” shall mean, either (i) the third Business Day preceding each Distribution Date or (ii) such other date specified in the applicable Indenture Supplement.

“ Distribution Date ” shall mean, with respect to any Series, the date specified in the applicable Indenture Supplement.

“ Eligible Account ” shall mean a VISA consumer revolving credit card account which, as of the Cut-Off Time, has the following characteristics:

(a) is in existence, owned and maintained by the Account Owner;

(b) is not a Charged-Off Account; and

“ Eligible Receivable ” shall mean each Receivable:

(a) which has arisen in an Eligible Account;

(c) with respect to which all material consents, licenses, approvals or authorizations of, or registrations or declarations in respect of the Financial Services Markets Act 2000, the Consumer Credit Act and the Data Protection Act 1998 or with any Governmental Authority required to be obtained, effected or given in connection with the creation of such Receivable or the execution, delivery and performance by the Account Owner of its obligations, if any, under the related Credit Card Agreement pursuant to which such Receivable was created, have been duly obtained, effected or given and are in full force and effect;

(d) as to which at the time of the transfer of such Receivable to the Issuer, the Transferor has good and marketable title thereto free and clear of all Encumbrances;

(e) which, at the time of the transfer of such Receivables to the Issuer, is the legal, valid and binding payment obligation of the Obligor thereon enforceable against such Obligor in accordance with its terms, except as such enforceability may be limited by applicable Debtor Relief Laws and except as such enforceability may be limited by general principles of equity (whether considered in a proceeding at law or in equity);

(f) which, at the time of transfer to the Issuer, has not been waived or modified except as permitted in accordance with the Credit Card Guidelines and which waiver or modification is reflected in the Account Owner’s or the Servicer’s computer file of revolving credit card accounts or, with respect to terms other than pricing terms, otherwise on the Account Owner’s or the Servicer’s books and records;

(g) which, at the time of transfer to the Issuer, is not subject to any right of rescission, setoff, counterclaim or any other defense (including defenses arising out of violations of usury laws) of the Obligor, other than defenses arising out of applicable Debtor Relief Laws and except as such enforceability may be limited by general principles of equity (whether considered in a proceeding at law or in equity);

(h) as to which, at the time of transfer to the Issuer, the Account Owner has satisfied all of its obligations under the applicable Credit Card Agreement to the applicable Obligor required to be satisfied by such time; and

(i) as to which, at the time of transfer to the Issuer, none of the Account Owner, the Servicer or the Transferor has taken any action which would impair, or omitted to take any action the omission of which would impair, the rights of the Issuer in such Receivable.

“ Eligible Servicer ” shall mean CCIA, CCIS, the Backup Servicer, the Indenture Trustee or, if none of CCIA, CCIS, the Backup Servicer or the Indenture Trustee is acting as Servicer, an entity which, at the time of its appointment as Servicer, (a) is servicing a portfolio of revolving credit card accounts, (b) is legally qualified and has the capacity to service the Accounts, (c) has demonstrated the ability to service professionally and competently a portfolio of similar accounts in accordance with high standards of skill and care, (d) is qualified to use the software that is then being used to service the Accounts or obtains the right to use or has its own software which is adequate to perform its duties under this Agreement and (e) has a net worth of at least $50,000,000 as of the end of its most recent fiscal quarter.

“ Encumbrance ” shall mean any security interest, mortgage, claim, charge (fixed or floating), deed of trust, pledge, hypothecation, assignment, deposit arrangement, equity interest, encumbrance, lien (statutory or other), preference, participation interest, priority or other security agreement or preferential arrangement of any kind or nature whatsoever, including any conditional sale or other title retention agreement, or any financing lease having substantially the same economic effect as any of the foregoing, and the filing of any financing statement under the UCC or comparable law of any jurisdiction to evidence any of the foregoing; provided , however , that any assignment permitted by Section 2.04(b) of the Trust Agreement or Section 5.02 of, and the lien created by, this Agreement and any undivided interest in the Receivables retained by an Account Owner shall not be deemed to constitute an Encumbrance; provided further , however , that each of (1) the lien created in favor of CCIA under the RB Receivables Purchase Agreement, (2) the lien created in favor of Partridge Funding under the CCIA Receivables Purchase Agreement and (3) the lien created in favor of the Indenture Trustee under the Indenture shall not be deemed to constitute an Encumbrance.

“ Excess Finance Charge Collections ” shall have the meaning specified in Section 4.03 .

“ Excluded Account ” shall mean a credit card account which, as of the Cut-Off Time, has the following characteristics:

(b) is charged off or should have been charged off in accordance with the Policies and Procedures (as such term is defined in the Account Ownership Agreement);

(c) is subject to litigation, other than credit card accounts that are in litigation solely as a result of legal collection initiated by the Account Owner;

(d) does not have an address located in the United Kingdom;

(e) in respect of which the first payment has become due and payable and the Obligor has never made a payment;

(f) has been re-aged other than in accordance with the Policies and Procedures (but excluding any accounts which have been re-aged incorrectly as a result of a conversion as disclosed to CCIA by Barclays Bank) and the aggregate amount of outstanding Receivables related thereto as of the Cut-Off Time exceed £125,000;

(g) any test accounts opened or maintained by the Account Owner with respect to the VISA system for verification or other internal purposes;

(h) the Obligor in respect of which has pledged assets or made a cash collateral deposit as full or partial payment of Receivables outstanding as of the Cut-Off Time, which assets or deposits are held by the Account Owner as of the Closing Date;

(i) the Obligor in respect of which is dead or has had an individual voluntary arrangement approved by the Account Owner on or before the Cut-Off Time;

(j) has been originated by fraud or fraudulent action on or before the Cut-Off Time;

(k) is not identified on the Account Schedule as a “B” account or as a “C” account; or

(l) the Obligor in respect of which has been declared bankrupt.

“ Finance Charge Receivables ” shall mean, to the extent transferred to the Transferor pursuant to a Receivables Purchase Agreement, all Receivables that constitute (i) Periodic Rate Finance Charges, (ii) Cash Advance Fees, (iii) annual membership fees and annual service charges, (iv) Late Fees, (v) Overlimit Fees, and (vi) any other fees with respect to the Accounts designated by the Transferor at any time and from time to time to be included as Finance Charge Receivables. Finance Charge Receivables shall also include (a) Interchange as calculated pursuant to the Indenture Supplement for any Series, (b) all Recoveries with respect to Receivables previously charged off as uncollectible, and (c) all Collections in respect of Ineligible Receivables (to the extent such Ineligible Receivable has not been repurchased pursuant to a Receivables Purchase Agreement).

“ Finance Charge Shortfalls ” shall have the meaning specified in Section 4.03 .

“ Governmental Authority ” shall mean any governmental, regulatory or self-regulatory entity, in the United Kingdom or in the United States of America or any state thereof or any other foreign governmental state or other political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government.

“ Indenture ” shall mean the Master Indenture, dated as of April 4, 2007, among the Issuer, the Indenture Trustee and the Servicer, as the same may be amended, supplemented or otherwise modified from time to time.

“ Indenture Supplement ” shall mean, with respect to any Series, the related Indenture Supplement.

“ Independent Director ” shall have the meaning specified in Section 2.07(g)(vii) .

“ Ineligible Receivable ” shall mean any Receivable that has been determined to be a Receivable arising in a Covered Account.

“ Initial Issuance Date ” shall mean the Closing Date of the first Series of Notes issued to the Holders.

“ Insolvency Event ” shall have the meaning specified in Section 7.01 .

“ Insurance Proceeds ” shall mean, to the extent transferred to the Transferor pursuant to a Receivables Purchase Agreement, any amounts received by the Servicer pursuant to any credit insurance policies covering any Obligor with respect to Receivables under such Obligor’s Account.

“ Interchange ” shall mean, to the extent transferred to the Transferor pursuant to a Receivables Purchase Agreement, interchange fees payable to an Account Owner (net of any interchange fees paid by such Account Owner), in its capacity as credit card issuer, through VISA, in connection with cardholder charges for goods or services with respect to the Accounts, as calculated pursuant to Section 3.03(m) . Any reference in this Agreement, the Indenture or any Indenture Supplement to Interchange shall refer to only the interchange fees that are transferred by CCIA or an Account Owner to the Transferor pursuant to a Receivables Purchase Agreement.

“ Issuer ” shall mean Partridge Acquired Portfolio Business Trust, a Nevada business trust, and its successors and permitted assigns.

“ Late Fees ” shall have the meaning specified in the Credit Card Agreement applicable to each Account for late fees or similar terms if such fees are provided for with respect to such Account.

“ Minimum Monthly Fee ” shall mean, with respect to any Monthly Period, an amount equal to £15,000.

“ Monthly Period ” shall mean, with respect to each Distribution Date, unless otherwise provided in an Indenture Supplement, the preceding calendar month; provided , however , that the initial Monthly Period with respect to any Series will commence on the Closing Date with respect to such Series.

“ Monthly Servicing Fee ” shall have the meaning specified in Section 3.02 .

“ Moody’s ” shall mean Moody’s Investors Service, Inc., or its successor.

“ Notices ” shall have the meaning specified in Section 10.04 .

“ Obligor ” shall mean, with respect to any Account, the Person or Persons obligated to make payments with respect to such Account, including any guarantor thereof, but excluding any merchant.

“ Officer’s Certificate ” shall mean, unless otherwise specified in this Agreement, a certificate signed by the President, any Vice President, the Treasurer, Chief Financial Officer, or Controller of the Transferor or the Servicer, as the case may be (or an officer holding an office with equivalent or more senior responsibilities or, in the case of the Servicer, a Servicing Officer, and, in the case of the Transferor, any executive of the Transferor designated in writing by a Vice President or more senior officer of the Transferor for this purpose).

“ Operating Regulations ” shall mean the by-laws, rules and regulations of VISA.

“ Opinion of Counsel ” shall mean a written opinion of counsel, who may be counsel for, or an employee of, the Person providing the opinion and who shall be reasonably acceptable to the Person to whom the opinion is to be provided; provided , however , that any Tax Opinion or other opinion relating to federal income tax matters shall be an opinion of nationally recognized tax counsel.

“ Overlimit Fees ” shall have the meaning specified in the Credit Card Agreement applicable to each Account for overlimit fees or similar terms if such fees are provided for with respect to such Account.

“ Owner Trustee ” shall mean Wilmington Trust FSB, a federal savings bank, not in its individual capacity but solely as owner trustee under the Trust Agreement, and any successor Owner Trustee thereunder.

“ Partridge Funding ” shall mean Partridge Funding Corporation, a Nevada corporation, and its successors and permitted assigns.

“ Periodic Rate Finance Charges ” shall have the meaning specified in the Credit Card Agreement applicable to each Account for finance charges (due to periodic rate) or any similar term.

“ Personal Data ” shall have the meaning given to that term in the United Kingdom Data Protection Act 1998, as amended. Personal Data shall not include the Account numbers of the Obligors.

“ Pounds, ” “ £ ” or “ pounds sterling ” shall mean the lawful currency of the United Kingdom.

“ Principal Sharing Series ” shall mean a Series that, pursuant to the Indenture Supplement therefor, is entitled to receive Shared Principal Collections.

“ Principal Receivables ” shall mean, to the extent transferred to the Transferor pursuant to a Receivables Purchase Agreement, all Receivables other than Finance Charge Receivables or Defaulted Receivables. In calculating the aggregate amount of Principal Receivables on any day, the amount of Principal Receivables shall be reduced by the aggregate amount of credit balances in the Accounts on such day. Any Principal Receivables which the Transferor is unable to transfer as provided in Section 2.09 shall not be included in calculating the amount of Principal Receivables.

“ Principal Shortfalls ” shall have the meaning specified in Section 4.02 .

“ Raphaels Bank ” shall mean R. Raphael & Sons PLC, a public limited liability company incorporated in England and Wales.

“ RB Receivables Purchase Agreement ” shall mean the Receivables Purchase Agreement between Raphaels Bank and CCIA, dated as of April 4, 2007, as it may be further amended, amended and restated, supplemented, or otherwise modified from time to time.

“ Receivables ” shall mean, to the extent transferred to the Transferor pursuant to a Receivables Purchase Agreement, all amounts payable by Obligors on any Account from time to time, including amounts payable for Principal Receivables and Finance Charge Receivables. Receivables which become Defaulted Receivables will cease to be included as Receivables as of the day on which they become Defaulted Receivables.

“ Receivables Purchase Agreement ” shall mean, as applicable, (i) the RB Receivables Purchase Agreement, (ii) any future receivables purchase agreement substantially in the form of the agreement specified in (i) above, entered into between CCIA or Partridge Funding and an Account Owner; provided , that (A) the Rating Agency Condition is satisfied with respect to such future receivables purchase agreement and (B) the Transferor shall have delivered to the Indenture Trustee an Officer’s Certificate to the effect that such officer reasonably believes that the execution and delivery of such future receivables purchase agreement will not have an Adverse Effect, (iii) the CCIA Receivables Purchase Agreement and (iv) any future receivables purchase agreement substantially in the form of the agreement specified in (iii) above, entered into between a seller and the Transferor; provided , that (A) the Rating Agency Condition is satisfied with respect to such future receivables purchase agreement and (B) the Transferor shall have delivered to the Indenture Trustee an Officer’s Certificate to the effect that such officer reasonably believes that the execution and delivery of such future receivables purchase agreement will not have an Adverse Effect.

“ Recoveries ” shall mean, to the extent transferred to the Transferor pursuant to a Receivables Purchase Agreement, (i) all amounts received by the Servicer (net of out of pocket costs of collection incurred by Servicer) including Insurance Proceeds, with respect to Defaulted Receivables (including any related Finance Charge Receivables), including the net proceeds of any sale of such Defaulted Receivables and (ii) all amounts received from the Transferor in respect of such party’s repurchase of Ineligible Receivables from the Issuer.

“ Related Account ” shall mean an Account with respect to which a new credit account number has been issued by the applicable Account Owner or the Servicer under circumstances resulting from an error or a lost or stolen credit card and not requiring standard application and credit evaluation procedures under the Credit Card Guidelines; provided that such Related Account can be traced or identified, by reference to or by way of an Account Schedule, as an Account into which an Account has been transferred.

“ Requirements of Law ” shall mean, with respect to any Person, the Operating Regulations and the requirements of any national, supra-national or local law, statute, rule or regulation or judicial, governmental, or administrative order, decree or ruling or determination of (or agreement with) an arbitrator or Governmental Authority or any provision of any organizational, corporate, constitutional or governing documents, applicable to the Transferor, or the Servicer or the Accounts or the Account Owner or the actions of any party to this Agreement in the performance of its respective obligations hereunder or under any Transaction Document and shall include the certificate of incorporation and bylaws or other organizational documents of such Person.

“ Series Allocation Percentage ” shall have, for any Series, the meaning specified in the related Indenture Supplement.

“ Service Transfer ” shall have the meaning specified in Section 8.01 .

“ Servicer ” shall mean (i) initially CCIA, in its capacity as Servicer pursuant to this Agreement, (ii) upon its execution of an Assignment and Assumption Agreement pursuant to Section 3.01 , CCIS, and, (iii) after any Service Transfer or resignation of the Servicer pursuant to Section 6.05 , the Successor Servicer.

“ Servicer Default ” shall have the meaning specified in Section 8.01 .

“ Servicing Fee ” shall have the meaning specified in Section 3.02 .

“ Servicing Fee Rate ” shall mean, with respect to any Series, the servicing fee rate specified in the related Indenture Supplement.

“ Servicing Officer ” shall mean any officer of the Servicer or an attorney in fact of the Servicer who in either case is involved in, or responsible for, the administration and servicing of the Receivables and whose name appears on a list of servicing officers furnished to the Owner Trustee and the Indenture Trustee by the Servicer, as such list may from time to time be amended.

“ Shared Principal Collections ” shall have the meaning specified in Section 4.02 .

“ Standard & Poor’s ” shall mean Standard & Poor’s Ratings Services, or its successor.

“ Successor Servicer ” shall have the meaning specified in Section 8.02(a) .

“ Termination Notice ” shall have the meaning specified in Section 8.01 .

“ Transaction Documents ” shall mean this Agreement, the Account Ownership Agreement, the Indenture, the Indenture Supplement, any Receivables Purchase Agreement, the Trust Agreement, and the English Law Debenture (as defined in the Indenture).

“ Transfer Date ” shall mean the Business Day immediately preceding each Distribution Date.

“ Transfer Restriction Event ” shall have the meaning specified in Section 2.09 .

“ Transferor ” shall mean Partridge Funding or its successors or permitted assigns under this Agreement.

“ Transferred Account ” shall mean each Account (other than a Related Account) into which an Account shall be transferred, provided that such transfer was made in accordance with the Credit Card Guidelines, and further provided that such Transferred Account can be traced or identified, by reference to or by way of an Account Schedule, as an Account into which an Account has been transferred.

“ Transferred Assets ” shall have the meaning specified in Section 2.01(a) .

“ Transitional Servicer ” shall mean Barclays Bank.

“ Transitional Services Agreement ” shall mean the Agreement for Transitional Services, dated as of April 4, 2007, among Barclays Bank, CompuCredit UK and CCIA, as amended, amended and restated, supplemented or otherwise modified from time to time in accordance with the terms thereof.

“ Trust Agreement ” shall mean the Amended and Restated Trust Agreement relating to the Issuer, dated as of April 4, 2007, between Partridge Funding and the Owner Trustee, as the same may be amended, supplemented or otherwise modified from time to time.

“ UCC ” shall mean the Uniform Commercial Code, as amended from time to time, as in effect in any applicable jurisdiction.

“ VISA ” shall mean VISA International Services Association, VISA Europe Limited and any other VISA entity, as appropriate, and their successors in interest.

Section 1.02. Other Definitional Provisions .

(a) All terms used herein and not otherwise defined herein shall have meanings ascribed to them in the Trust Agreement, the Indenture and, for any Series, the related Indenture Supplement, as applicable.

(b) All terms defined in this Agreement shall have the defined meanings when used in any certificate or other document made or delivered pursuant hereto unless otherwise defined therein.

(c) As used in this Agreement and in any certificate or other document made or delivered pursuant hereto, accounting terms not defined in this Agreement or in any such certificate or other document, and accounting terms partly defined in this Agreement or in any such certificate or other document to the extent not defined, shall have the respective meanings given to them under generally accepted accounting principles or regulatory accounting principles, as applicable and as in effect on the date of this Agreement. To the extent that the definitions of accounting terms in this Agreement or in any such certificate or other document are inconsistent with the meanings of such terms under generally accepted accounting principles or regulatory accounting principles in the United States, the definitions contained in this Agreement or in any such certificate or other document shall control.

(d) Except as otherwise expressly provided herein, the agreements, representations and warranties of Partridge Funding in this Agreement in its capacity as Transferor shall be deemed to be the agreements, representations and warranties of Partridge Funding solely in such capacity for so long as Partridge Funding acts in such capacity under this Agreement.

(e) Any reference to each Rating Agency shall only apply to any specific rating agency if such rating agency is then rating any outstanding Series.

(f) Unless otherwise specified, references to any amount as on deposit or outstanding on any particular date shall mean such amount at the close of business on such day.

(g) The words “ hereof ,” “ herein ” and “ hereunder ” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision or subdivision of this Agreement; references to any subsection, Section, Schedule or Exhibit are references to subsections, Sections, Schedules and Exhibits in or to this Agreement unless otherwise specified; and the term “ including ” means “ including without limitation .”

(h) Terms used herein that are defined in the New York UCC and not otherwise defined shall have the meanings set forth in the New York UCC unless the context requires otherwise.

[END OF ARTICLE I]

ARTICLE II

CONVEYANCE OF RECEIVABLES

Section 2.01. Conveyance of Receivables . (a) For good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, the Transferor does hereby transfer, assign, set-over and otherwise convey to the Issuer, without recourse except as provided herein, all its right, title and interest in, to and under, whether now owned or hereafter acquired, (i) the Receivables existing as of the Cut-Off Time, and thereafter created from time to time in the Accounts (including Transferred Accounts and Related Accounts related to such Accounts) until the termination of the Issuer, (ii) all Interchange, (iii) all Insurance Proceeds and Recoveries, (iv) all rights to payment and amounts due or to become due with respect to all of the foregoing, (v) all amounts received or receivable with respect to any of the foregoing and (vi) all proceeds thereof (such property, collectively, the “ Transferred Assets ”). The foregoing does not constitute and is not intended to result in the creation or assumption by the Issuer, the Owner Trustee (as such or in its individual capacity), the Indenture Trustee, any Noteholder, any O/C Holder or any Series Enhancer of any obligation of Raphaels Bank or any other Account Owner or the Transferor, the Servicer or any other Person in connection with the Accounts, the Receivables or under any agreement or instrument relating thereto, including any obligations to Obligors, merchant banks, merchants’ clearance systems, VISA or insurers. The Obligors shall not be notified of the transfer, assignment, set-over and conveyance of the Receivables to the Issuer.

(b) In consideration for the conveyance and transfer of the Transferred Assets hereunder, the Issuer hereby agrees to pay to the Transferor the net proceeds received from the issuance of each Series, if any; provided , however , to the extent that CCIA has not been paid any amounts owed to it pursuant to Article III of the CCIA Receivables Purchase Agreement, the Transferor hereby directs the Issuer to pay such proceeds directly to CCIA in an amount equal to such unpaid amounts.

(c) The Transferor agrees to authorize, record, and file, at its own expense, financing statements (and amendments to financing statements when applicable) with respect to the Receivables and the other Transferred Assets meeting the requirements of applicable law in such manner and in such jurisdictions as are necessary to perfect, and maintain the perfection of, the transfer and assignment of the Receivables and the other Transferred Assets to the Issuer, and to deliver a file stamped copy of each such financing statement or other evidence of such filing (which can include telephonic confirmation) to the Issuer on or prior to the Initial Issuance Date, and, in the case of amendments to financing statements, as soon as practicable after receipt thereof by the Transferor. The Owner Trustee shall be under no obligation whatsoever to file such financing statements or amendments to financing statements or to make any other filing under the UCC in connection with such transfer and assignment.

(d) The Transferor further agrees, at its own expense, on or prior to the Initial Issuance Date to indicate in its books and records (including the appropriate computer files) that the Receivables and the other Transferred Assets have been conveyed to the Issuer pursuant to this Agreement and to deliver to the Issuer an Account Schedule specifying for each such

Account as of the Cut-Off Time its account number, the aggregate amount outstanding in such Account and the aggregate amount of Principal Receivables outstanding in such Account. Once the books and records (including the appropriate computer files) referenced in this paragraph have been indicated with respect to any Account, the Transferor further agrees not to alter such indication during the remaining term of this Agreement, other than pursuant to Section 2.10 with respect to Defaulted Receivables, unless and until the Transferor shall have delivered to the Issuer and the Indenture Trustee at least thirty (30) days’ prior written notice of its intention to do so and has taken such action as is necessary or advisable to cause the interest of the Issuer in the Receivables and the other Transferred Assets to continue to be perfected and of first priority, and has delivered to the Owner Trustee and the Indenture Trustee an Opinion of Counsel to such effect.

(e) In the event that it is determined that the transactions evidenced hereby constitute a loan and not a purchase and sale, this Agreement shall constitute a security agreement under applicable law. The Transferor hereby grants to the Issuer a first priority perfected security interest in all of the Transferor’s right, title and interest, whether now owned or hereafter acquired, in, to and under the Receivables and the other Transferred Assets, and all proceeds thereof, to secure its obligations hereunder.

Section 2.02. Acceptance by Issuer .

(a) The Issuer hereby acknowledges its acceptance of all right, title and interest to the Transferred Assets conveyed to the Issuer pursuant to Section 2.01 . The Issuer further acknowledges that, prior to or simultaneously with the execution and delivery of this Agreement, the Transferor delivered to it an Account Schedule relating to the Accounts described in paragraph (d) of Section 2.01.

(b) The Issuer hereby agrees not to disclose to any Person any of the account numbers or other information contained in any Account Schedule delivered to the Issuer, from time to time, except (i) to a Servicer or as required by a Requirement of Law applicable to the Owner Trustee or the Issuer, (ii) in connection with the performance of the Owner Trustee’s or the Issuer’s duties hereunder, (iii) to the Indenture Trustee in connection with its duties in enforcing the rights of Noteholders, any O/C Holder and Series Enhancers or (iv) to bona fide creditors or potential creditors of any Account Owner, CCIA, any seller, the Transferor or the Issuer for the limited purpose of enabling any such creditor to identify applicable Receivables or Accounts subject to this Agreement, the Receivables Purchase Agreements or the Indenture. The Issuer agrees to take such measures as shall be reasonably requested by the Transferor to protect and maintain the security and confidentiality of such information and, in connection therewith, shall allow the Transferor or its duly authorized representatives to inspect the Owner Trustee’s security and confidentiality arrangements as they specifically relate to the administration of the Issuer from time to time during normal business hours upon prior written notice.

(c) The Owner Trustee shall have no power to create, assume or incur indebtedness or other liabilities in the name of the Issuer other than as contemplated in the Trust Agreement, the Administration Agreement, this Agreement and the Indenture and the Indenture Supplements.

Section 2.03. Representations and Warranties of the Transferor Relating to the Transferor . The Transferor hereby represents and warrants to the Servicer and the Issuer (and agrees that the Owner Trustee and the Indenture Trustee may conclusively rely on each such representation and warranty in accepting the Receivables and the other Transferred Assets and in accepting the Trust Estate and authenticating the Notes, as the case may be), as of the Initial Issuance Date and each subsequent Closing Date that:

(a) Organization and Good Standing . The Transferor is a corporation validly existing under the laws of the jurisdiction of its organization and has, in all material respects, full power and authority to own its properties and conduct its business as presently owned or conducted, and to execute, deliver and perform its obligations under this Agreement, the Trust Agreement and any Receivables Purchase Agreement to which it is a party.

(b) Due Qualification . The Transferor is duly qualified to do business and is in good standing as a foreign corporation and has obtained all necessary licenses and approvals in each jurisdiction in which failure to so qualify or to obtain such licenses and approvals would have an Adverse Effect.

(c) Due Authorization . The execution and delivery of this Agreement and any Transaction Document to which it is a party by the Transferor and the consummation by the Transferor of the transactions provided for in this Agreement, the Trust Agreement and each Receivables Purchase Agreement to which it is a party have been duly authorized by the Transferor by all necessary action on the part of the Transferor.

(d) No Conflict . The execution and delivery by the Transferor of this Agreement, the Trust Agreement and each Receivables Purchase Agreement to which it is a party, and the performance by the Transferor of the transactions contemplated by this Agreement, the Trust Agreement and any Receivables Purchase Agreement to which it is a party and the fulfillment by the Transferor of the terms hereof and thereof applicable to the Transferor, will not conflict with or violate the organizational documents of the Transferor or any Requirements of Law applicable to the Transferor or conflict with, result in any breach of any of the terms and provisions of, or constitute (with or without notice or lapse of time or both) a default under, any indenture, contract, agreement, mortgage, deed of trust or other instrument to which the Transferor is a party or by which it or its properties are bound.

(e) No Proceedings . There are no Proceedings or investigations pending or, to the best knowledge of the Transferor, threatened, against the Transferor before any Governmental Authority (i) asserting the invalidity of this Agreement, the Trust Agreement or any Receivables Purchase Agreement to which it is a party, (ii) seeking to prevent the consummation of any of the transactions contemplated by this Agreement, the Trust Agreement or any Receivables Purchase Agreement to which it is a party, (iii) seeking any determination or ruling that, in the reasonable judgment of the Transferor, would materially and adversely affect the performance by the Transferor of its obligations under this Agreement, the Trust Agreement or any Receivables Purchase Agreement to which it is a party, (iv) seeking any determination or ruling that would materially and adversely affect the validity or enforceability of this Agreement, the Trust Agreement or any Receivables Purchase Agreement to which it is a party, or (v) seeking to affect adversely the income or franchise tax attributes of the Issuer under the United States Federal or any state income or franchise tax systems.

(f) All Consents . All authorizations, consents, orders or approvals of or registrations or declarations with any Governmental Authority required to be obtained, effected or given by the Transferor in connection with the execution and delivery by the Transferor of this Agreement, the Trust Agreement and any Receivables Purchase Agreement to which it is a party and the performance of the transactions contemplated by this Agreement, the Trust Agreement and any Receivables Purchase Agreement to which it is a party by the Transferor have been duly obtained, effected or given and are in full force and effect.

Section 2.04. Representations and Warranties of the Transferor Relating to this Agreement and the Receivables .

(a) Representations and Warranties . The Transferor hereby represents and warrants to the Issuer and the Servicer as of the Initial Issuance Date and each subsequent Closing Date that:

(i) this Agreement, the Trust Agreement and any Receivables Purchase Agreement to which it is a party, each constitutes a legal, valid and binding obligation of the Transferor enforceable against the Transferor in accordance with its terms, except as such enforceability may be limited by applicable Debtor Relief Laws or general principles of equity;

(ii) the Account Schedule provided to the Issuer by the Transferor, as supplemented to such date, is an accurate and complete listing in all material respects of all the Accounts the Receivables in which were transferred by the Transferor as of the Initial Issuance Date, and the information contained therein with respect to the identity of such Accounts and the Receivables existing thereunder is true and correct in all material respects as of the Cut-Off Time;

(iii) this Agreement constitutes a valid sale, transfer, assignment and conveyance to the Issuer of all right, title and interest of the Transferor in the Receivables conveyed to the Issuer by the Transferor and the proceeds thereof and Recoveries and Interchange identified as relating to the Receivables conveyed to the Issuer by the Transferor or, if this Agreement does not constitute a sale of such property, it constitutes a grant of a first priority perfected security interest in such property to the Issuer, which, in the case of existing Receivables and the proceeds thereof and Recoveries and Interchange, is enforceable upon execution and delivery of this Agreement, and which will be enforceable with respect to such Receivables hereafter created and the proceeds thereof upon such creation. Upon the filing of the financing statements and, in the case of Receivables hereafter created and the proceeds thereof, upon the creation thereof, the Issuer shall have a first priority perfected security or ownership interest in such property and proceeds;

(iv) as of the Cut-Off Time, each Account was an Eligible Account;

(v) as of the Cut-Off Time, each Receivable conveyed to the Issuer by the Transferor is an Eligible Receivable;

(vi) as of the date of the creation (after the Cut-Off Time) of any new Receivable transferred to the Issuer by the Transferor, such Receivable is an Eligible Receivable;

(vii) the Receivables constitute “accounts” or “payment intangibles” within the meaning of the applicable UCC;

(viii) the Transferor has caused or will have caused, within ten days of this Agreement, the filing of all appropriate financing statements in the proper filing office in the appropriate jurisdictions under applicable law in order to perfect the security interest in the Receivables granted to the Issuer hereunder; and

(ix) other than the security interest granted to the Issuer pursuant to this Agreement, the Transferor has not pledged, assigned, sold, granted a security interest in, or otherwise conveyed any of the Receivables described in Section 2.01. The Transferor has not authorized the filing of and is not aware of any financing statements against the Transferor that include a description of collateral covering such Receivables other than any financing statement (i) relating to the security interest granted to the Issuer hereunder, or (ii) that has been terminated.

(b) Notice of Breach . The representations and warranties set forth in Section 2.03 and this Section 2.04 , shall survive the transfers and assignments of the Receivables to the Issuer, the grant of a security interest in the Receivables to the Indenture Trustee pursuant to the Indenture, and the issuance of the Notes. Upon discovery by the Transferor, the Servicer or the Owner Trustee of a breach of any of the representations and warranties set forth in Section 2.03 or this Section 2.04 , the party discovering such breach shall give notice to the other parties and to the Indenture Trustee within three (3) Business Days following such discovery; provided that the failure to give notice within three (3) Business Days does not preclude subsequent notice.

Section 2.05. Reassignment of Ineligible Receivables . In the event any Account is (a) (i) within six (6) months of the Closing Date, determined to be an Account that was an Excluded Account as of the Cut-Off Time, or (ii) within eight (8) months of the Closing Date, determined to be an Account that was an Excluded Account as of the Cut-Off Time pursuant to clause (l) of the definition of Excluded Account or (b) within 90 days of transfer to the Issuer, determined to be an Account for which any representation or warranty under subsection 2.04(a)(iv)–(vi) is not true and correct on the date of transfer of the related Receivable arising therein in any material respect for any related Receivable as a result of any action or failure to act by the Transferor to the extent such failure to be so true and correct results in such Receivable not being an Eligible Receivable (in each case, a “ Covered Account ”), then after a Responsible Officer of the Indenture Trustee receives written notice that a Receivable has been deemed to be an Ineligible Receivable, the Indenture Trustee by notice then given to the Transferor and the Servicer, shall direct the Transferor to accept a reassignment of such Ineligible Receivable and the Transferor shall be obligated to accept such reassignment. Upon

reassignment of any Ineligible Receivable pursuant to a Receivables Purchase Agreement, if applicable, and payment to the Issuer of the amount required to be paid to it, the Issuer shall automatically and without further action transfer, assign, set over and otherwise convey to the party repurchasing such Ineligible Receivable, without recourse, representation or warranty, all the right, title and interest of the Issuer in and to such Ineligible Receivable, all Interchange, Insurance Proceeds, and Recoveries related thereto, all monies and amounts due or to become due, all related Transferred Assets, and all proceeds thereof and such reassigned Ineligible Receivable shall be treated by the Issuer as collected in full as of the date on which it was transferred. The Issuer shall execute such documents and instruments of transfer or assignment and take such other actions as shall reasonably be requested and provided by the party repurchasing such Ineligible Receivable to effect the conveyance of such Ineligible Receivable. Notwithstanding anything herein contained to the contrary, with respect to any Ineligible Receivable, the Issuer shall only be entitled to the amount, if any, payable under the applicable Receivables Purchase Agreement with respect to any breach of a representation, warranty, covenant or agreement thereunder.

Section 2.06. Reassignment of Trust Portfolio . In the event any representation or warranty of the Transferor set forth in Section 2.03 or Section 2.04(a)(i) or (iii) is not true and correct in any material respect and such breach has an Adverse Effect, of which written notice has been given to the Indenture Trustee by the Servicer, on the Receivables conveyed to the Issuer by the Transferor or the availability of the proceeds thereof to the Issuer, then the Indenture Trustee, by notice then given to the Transferor and the Servicer, shall direct the Transferor to accept a reassignment of the Receivables conveyed to the Issuer by the Transferor if such breach and any Adverse Effect caused by such breach are not cured within sixty (60) days of such notice (or within such longer period, as specified by the Transferor, not in excess of one hundred twenty (120) days), and upon those conditions the Transferor shall be obligated to accept such reassignment on the terms set forth below; provided , however , that such Receivables will not be reassigned to the Transferor if, on any day prior to the end of such sixty-day or longer period (i) the relevant representation and warranty shall be true and correct in all material respects as if made on such day and (ii) the Transferor shall have delivered to the Owner Trustee and the Indenture Trustee an Officer’s Certificate describing the nature of such breach and the manner in which the relevant representation and warranty has become true and correct.

The Transferor shall pay to the Issuer for deposit in the Collection Account in immediately available funds not later than 11:00 a.m., London time, on the fifth (5 ^th ) Business Day after the day on which such reassignment obligation arises, in payment for such reassignment, an amount equal to the sum of the amounts specified therefor with respect to each outstanding Series in the related Indenture Supplement. If the Indenture Trustee gives notice directing the Transferor to accept a reassignment of the Receivables as provided above, the obligation of the Transferor to accept such reassignment pursuant to this Section 2.06 and to make the payment required to be made to the Issuer for deposit in the Collection Account as provided in this paragraph shall constitute the sole remedy respecting an event of the type specified in the first sentence of this Section 2.06 available to the Issuer, the Noteholders, any O/C Holder (or the Indenture Trustee on behalf of the Noteholders and any O/C Holder) or any Series Enhancer. Upon reassignment of the Receivables on such date, the Issuer shall automatically and without further action transfer, assign, set-over and otherwise convey to the Transferor, without recourse, representation or warranty, all the right, title and interest of the

Issuer in and to the applicable Receivables, all related Interchange, Insurance Proceeds, and Recoveries allocable to the Issuer, all monies and amounts due or to become due with respect thereto, all related Transferred Assets and all proceeds thereof. The Issuer shall execute such documents and instruments of transfer or assignment and take such other actions as shall reasonably be requested by the Transferor to effect the conveyance of such property pursuant to this Section, but only upon receipt of an Officer’s Certificate from the Transferor that states that all conditions set forth in this Section have been satisfied.

Section 2.07. Covenants of the Transferor . The Transferor hereby covenants to the Issuer and the Servicer, that:

(a) Receivables Not To Be Evidenced by Instruments or Chattel Paper . Except in connection with its enforcement or collection of a Receivable, the Transferor will take no action to cause any Receivable conveyed by it to the Issuer to be evidenced by any instrument or chattel paper (each as defined in the UCC), and if any such Receivable is so evidenced as a result of any action of the Transferor, it shall be deemed to be an Ineligible Receivable and shall be treated as such in accordance with Section 2.05 .

(b) Security Interests . Except for the conveyances hereunder, the Transferor will not sell, pledge, assign or transfer to any other Person, or grant, create, incur, assume or suffer to exist any Encumbrance arising through or under the Transferor on, any Receivable conveyed by it to the Issuer, whether now existing or hereafter created, or any interest therein, and the Transferor shall defend the right, title and interest of the Issuer and the Indenture Trustee in, to and under the Receivables, whether now existing or hereafter created, against all claims of third parties claiming through or under the Transferor.

(c) Transferor Certificates . Except for the conveyances hereunder, and except in connection with any transaction permitted by Section 2.10 of the Indenture or conveyances with respect to which the Rating Agency Condition shall have been satisfied and a Tax Opinion shall have been delivered, the Transferor agrees not to transfer, sell, assign, exchange, participate or otherwise convey or pledge, hypothecate or otherwise grant a security interest in the Transferor’s interest represented by the Transferor Certificates and any such attempted transfer, assignment, exchange, conveyance, pledge, hypothecation, grant or sale shall be void.

(d) Delivery of Collections . In the event that the Transferor receives Collections, the Transferor agrees to pay to the Servicer all such Collections as soon as practicable after receipt thereof, but in no event later than two (2) Business Days after receipt.

(e) Notice of Encumbrances . The Transferor shall notify the Owner Trustee, the Indenture Trustee and each Series Enhancer promptly after becoming aware of any Encumbrance on any Receivable conveyed by it to the Issuer other than the conveyances hereunder and under the applicable Receivables Purchase Agreements and the Indenture.

(f) Amendment of the Certificate of Incorporation . The Transferor will not amend in any material respect its certificate of incorporation or other organizational documents without providing each Rating Agency, to the extent applicable, with notice no later than the fifth (5 ^th ) Business Day prior to such amendment (unless the right to such notice is waived by

each applicable Rating Agency) and satisfying the Rating Agency Condition; provided , however , that the Rating Agency Condition need not be satisfied if the Transferor ceases to be the Transferor on or before the date that such amendment becomes effective.

(g) Separate Existence . The Transferor shall, except as otherwise provided herein or in a Transaction Document:

(i) Maintain in full effect its existence, rights and franchises as a corporation under the laws of the state of its organization and will obtain and preserve its qualification to do business in each jurisdiction in which such qualification is or shall be necessary to protect the validity and enforceability of this Agreement, the Trust Agreement and any Receivables Purchase Agreement to which it is a party and each other instrument or agreement necessary or appropriate to proper administration hereof and to permit and effectuate the transactions contemplated hereby.

(ii) Maintain its own bank account or accounts, separate from those of any Affiliate of the Transferor, with commercial banking institutions. The funds of the Transferor will not be diverted to any other Person or for any other use other than the corporate use of the Transferor, and, except as may be expressly permitted by this Agreement or any Receivables Purchase Agreement to which it is a party, the funds of the Transferor shall not be commingled with those of any Affiliate of the Transferor or any other Person.

(iii) Ensure that, to the extent that it shares the same officers or other employees as any of its members, managers, or Affiliates, the salaries of and the expenses related to providing benefits to such officers and other employees shall be fairly allocated among such entities, and each such entity shall bear its fair share of the salary and benefit costs associated with all such common officers and employees.

(iv) Ensure that, to the extent that it jointly contracts with any of its members, managers, or Affiliates to do business with vendors or service providers or to share overhead expenses, the costs incurred in so doing shall be allocated fairly among the entities, and each such entity shall bear its fair share of such costs. To the extent that the Transferor contracts or does business with vendors or service providers where the goods and services provided are partially for the benefit of any other Person, the costs incurred in so doing shall be fairly allocated to or among such entities for whose benefit the goods and services are provided, and each such entity shall bear its fair share of such costs. All material transactions between the Transferor and any of its members, managers, or Affiliates shall be only on an arm’s-length basis and shall receive the approval of the Transferor’s Board of Directors including at least one Independent Director (defined below).

(v) Maintain a principal executive and administrative office through which its business is conducted and a telephone number separate from those of its members, and Affiliates (other than Affiliates that are special purpose bankruptcy remote entities). To the extent that the Transferor and any of its members, or Affiliates (other than Affiliates that are special purpose bankruptcy remote entities) have offices in

contiguous space, there shall be fair and appropriate allocation of overhead costs (including rent) among them, and each such entity shall bear its fair share of such expenses.

(vi) Conduct its affairs strictly in accordance with its articles of incorporation and observe all necessary, appropriate and customary corporate formalities, including, but not limited to, holding all regular and special directors’ meetings appropriate to authorize all action, keeping separate and accurate minutes of such meetings, passing all resolutions or consents necessary to authorize actions taken or to be taken, and maintaining accurate and separate books, records and accounts, including, but not limited to, payroll and intercompany transaction accounts. Regular directors’ meetings shall be held at least annually.

(vii) Ensure that its board of directors shall at all times include at least one Independent Director (for purposes hereof, “ Independent Director ” shall mean any member of the board of directors of the Transferor that is not and has not at any time been (x) an officer, agent, advisor, consultant, attorney, accountant, service provider, employee or shareholder of any Affiliate of the Transferor which Affiliate is not a special purpose entity, (y) a director of any Affiliate of the Transferor other than an independent director of any Affiliate which is a special purpose entity or (z) a member of the immediate family of any of the foregoing).

(viii) Ensure that decisions with respect to its business and daily operations shall be independently made by the Transferor (although the officer making any particular decision may also be an officer, partner, member, manager or director of an Affiliate of the Transferor) and shall not be dictated by an Affiliate of the Transferor.

(ix) Act solely in its own name and through its own authorized officers and agents, and no Affiliate of the Transferor shall be appointed to act as agent of the Transferor. The Transferor shall at all times use its own stationery and business forms and describe itself as a separate legal entity.

(x) Ensure that no Affiliate of the Transferor will guaranty debts of the Transferor.

(xi) Other than organizational expenses, pay all expenses, indebtedness and other obligations incurred by it with its own funds.

(xii) Not enter into any guaranty, or otherwise become liable, with respect to or hold its assets or creditworthiness out as being available for the payment of any obligation of any Affiliate of the Transferor or of any other Person nor shall the Transferor make any loans to, or incur any indebtedness in respect of, any Person.

(xiii) Ensure that any financial reports required of the Transferor shall comply with generally accepted accounting principles and shall be issued separately from, but may be consolidated with, any reports prepared for any of its Affiliates.

(xiv) Ensure that at all times it is adequately capitalized to engage in the transactions contemplated in its organizational documents.

(h) Amendments to Receivables Purchase Agreements . The Transferor further covenants that it will not enter into any amendments to a Receivables Purchase Agreement or enter into a new Receivables Purchase Agreement, in each case, that would have an Adverse Effect unless the Rating Agency Condition has been satisfied.

(i) Taxes . The Transferor shall pay out of its own funds, without reimbursement, the costs and expenses relating to any stamp, documentary, excise, property (whether on real, personal or intangible property) or any similar tax levied on the Issuer or the Issuer’s assets that are not expressly stated in this Agreement to be payable by the Issuer (other than federal, state, local and foreign income and franchise taxes, if any, or any interest or penalties with respect thereto, assessed on the Issuer).

(j) Interchange . Not later than 11:00 a.m., London time, on each Transfer Date, the Transferor shall deposit, or cause to be deposited into the Collection Account, in immediately available funds, the amount of Interchange (as provided for in Section 3.03(m) ) to be included as Collections of Finance Charge Receivables with respect to such Monthly Period.

Section 2.08. Covenants of the Transferor with Respect to the Applicable Receivables Purchase Agreements . The Transferor, in its capacity as purchaser of Receivables pursuant to a Receivables Purchase Agreement, hereby covenants that it will at all times enforce the covenants and agreements of the seller in such Receivables Purchase Agreement, including any covenants to the effect that covenants will be enforced by the seller against an Account Owner under the Receivables Purchase Agreement that the seller has with such Account Owner, including any covenant that all aspects of such Account Owner’s credit card program, all terms of the relevant Accounts and the applicable Credit Card Agreements, and all solicitation materials and other related documents, materials and agreements supplied or communicated in any form to the cardholders, prospective cardholders or others in connection with such credit card program comply in all material respects with applicable law and regulations.

Section 2.09. Account Allocations . In the event that the Transferor is unable for any reason to transfer Receivables to the Issuer in accordance with the provisions of this Agreement, including by reason of the application of the provisions of Section 7.01 or any order of any Governmental Authority (a “ Transfer Restriction Event ”), then, in any such event, (a) the Transferor agrees (except as prohibited by any such order) to allocate and pay to the Issuer, after the date of such inability, all Collections, including Collections of Receivables transferred to the Issuer prior to the occurrence of such event, and all amounts which would have constituted Collections but for the Transferor’s inability to transfer Receivables (up to an aggregate amount equal to the amount of Receivables transferred to the Issuer by the Transferor on such date), (b) the Transferor agrees that such amounts will be applied as Collections in accordance with Article IV of this Agreement and the terms of each Indenture Supplement and (c) for so long as the allocation and application of all Collections and all amounts that would have constituted Collections are made in accordance with clauses (a) and (b) above, Principal Receivables and all amounts which would have constituted Principal Receivables but for the Transferor’s inability to transfer Receivables to the Issuer which are written off as uncollectible

in accordance with this Agreement shall continue to be allocated in accordance with Article IV of this Agreement and the terms of each Indenture Supplement. For the purpose of the immediately preceding sentence, the Transferor shall treat the first received Collections with respect to the Accounts as allocable to the Issuer until the Issuer shall have been allocated and paid Collections in an amount equal to the aggregate amount of Principal Receivables held by the Issuer as of the date of the occurrence of such event. If the Transferor is unable pursuant to any Requirements of Law to allocate Collections as described above, the Transferor agrees that, after the occurrence of such event, payments on each Account with respect to the principal balance of such Account shall be allocated first to the oldest principal balance of such Account and shall have such payments applied as Collections in accordance with Article IV of this Agreement and the terms of each Indenture Supplement. The parties hereto agree that Finance Charge Receivables, whenever created, accrued in respect of Principal Receivables which have been conveyed to the Issuer shall continue to belong to the Issuer notwithstanding any cessation of the transfer of additional Principal Receivables to the Issuer and Collections with respect thereto shall continue to be allocated and paid in accordance with Article IV of this Agreement and the terms of each Indenture Supplement.

Section 2.10. Defaulted Receivables . On the date when any Receivable becomes a Defaulted Receivable, the Issuer shall automatically and without further action sell, transfer, set over, and otherwise convey to the Transferor, without recourse, representation or warranty, free and clear of the lien of the Indenture, all right, title and interest of the Issuer in and to such Defaulted Receivable and any related Finance Charge Receivables, all Interchange allocable to such Defaulted Receivable, all Insurance Proceeds allocable to such Defaulted Receivable, all rights to payment and amounts due or to become due with respect to all of the foregoing, and all proceeds thereof. Notwithstanding any provision to the contrary in the Account Ownership Agreement, on the date any Receivable becomes a Defaulted Receivable, the Transferor shall automatically and without further action assign to the Servicer, solely for collection purposes, without recourse, representation or warranty, such Defaulted Receivable and any related Finance Charge Receivables. The Servicer shall take appropriate actions to collect all amounts due with respect to Defaulted Receivables assigned to it hereunder (including any related Finance Charge Receivables), in accordance with its customary and usual servicing procedures for servicing credit card receivables comparable to the Defaulted Receivables, the Credit Card Guidelines, and the terms of this Agreement. Upon collection of any amounts by the Servicer (net of all applicable fees and expenses incurred by the Servicer and any other amounts payable to the Servicer pursuant to the Account Ownership Agreement in connection with such collection efforts), with respect to any Defaulted Receivable assigned to it hereunder (including any related Finance Charge Receivables), including Insurance Proceeds and the net proceeds of any sale of any such Defaulted Receivable (including any related Finance Charge Receivables), the Servicer shall deposit such amounts in the Collection Account. Such amounts shall be treated as Recoveries.

Section 2.11. Account Owner Compensation . In consideration for discharging its obligations under the Account Ownership Agreement, prior to the termination of the Issuer pursuant to Section 8.01 of the Trust Agreement, the Account Owner shall be entitled to receive the Account Ownership Fee. The share of the Account Ownership Fee allocable to a particular Series with respect to any Monthly Period (the “ Monthly Account Ownership Fee ”) will be determined in accordance with the relevant Indenture Supplement. The portion of the Account

Ownership Fee with respect to any Monthly Period not paid pursuant to any particular Series shall be paid by the holders of the Transferor Certificates on the related Distribution Date. In no event shall the Issuer, the Servicer, the Owner Trustee (as such or in its individual capacity), the Indenture Trustee, the Noteholders of any Series or any Series Enhancer be liable for the share of the Account Ownership Fee that is not allocable to any particular Series.

[END OF ARTICLE II]

ARTICLE III

ADMINISTRATION AND SERVICING

OF RECEIVABLES

Section 3.01. Acceptance of Appointment and Other Matters Relating to the Servicer .

(a) CCIA agrees to act as the initial Servicer under this Agreement. The parties hereto agree and acknowledge that Barclays Bank will provide certain transitional services to CCIA during the term of the Transitional Services Agreement as provided in the Transitional Services Agreement. Upon its acquisition of a Consumer Credit Act license and its execution of an Assignment and Assumption Agreement, CCIS shall be the Servicer hereunder and CCIA shall as of such date resign from its obligations and duties as Servicer under this Agreement and the other Transaction Documents. The Noteholders, any O/C Holder, and any Series Enhancer by their acceptance of Notes, an O/C Certificate or by providing any Series Enhancement, as applicable, consent to CCIA and CCIS acting as Servicer and Barclays Bank performing the services referred to above pursuant to the Transitional Services Agreement.

(b) The Servicer shall service and administer the Receivables, shall collect and deposit into the Collection Account amounts received under the Receivables and shall charge-off as uncollectible Receivables, all in accordance with its customary and usual servicing procedures for servicing credit card receivables comparable to the Receivables and in accordance with the Credit Card Guidelines. The Servicer shall have full power and authority, acting alone or through any party properly designated by it hereunder, to do any and all things in connection with such servicing and administration which it may deem necessary or desirable; provided , however , that subject to the provisions of this Agreement and the other Transaction Documents and the rights of the Owner Trustee, the Issuer and the Indenture Trustee hereunder and under the other Transaction Documents, the Transferor shall have the right to direct the Servicer with respect to any power conferred on the Servicer hereunder. Without limiting the generality of the foregoing and subject to Section 8.01 , the Servicer or its designee is hereby authorized and empowered, unless such power is revoked by the Indenture Trustee on account of the occurrence of a Servicer Default pursuant to Section 8.01 , (i) to instruct the Owner Trustee or the Indenture Trustee to make withdrawals and payments from the Collection Account and any Series Account, as set forth in this Agreement, the Indenture or any Indenture Supplement, (ii) to take any action required or permitted under any Series Enhancement, as set forth in this Agreement, the Indenture or any Indenture Supplement, (iii) to execute and deliver, on behalf of the Issuer, any and all instruments of satisfaction or cancellation, or of partial or full release or discharge, and all other comparable instruments, with respect to the Receivables and, after the delinquency of any Receivable and to the extent permitted under and in compliance with applicable Requirements of Law, to commence collection proceedings with respect to such Receivable and (iv) to make any filings, reports, notices, applications and registrations with, and to seek any consents or authorizations from, the Commission and any state securities authority on behalf of the Issuer as may be necessary or advisable to comply with any federal or state securities or reporting requirements or other laws or regulations. The Issuer, the Owner Trustee and the Indenture Trustee upon reasonable written request therefor shall furnish the Servicer with any documents in their possession necessary or appropriate to enable the Servicer to carry out its servicing and administrative duties hereunder.

(c) The Servicer shall not be obligated to use separate servicing procedures, offices, employees or accounts for servicing the Receivables from the servicing procedures, offices, employees and accounts used by the Servicer in connection with servicing other credit card receivables.

(d) The Servicer shall comply with and perform its servicing obligations with respect to the Accounts and Receivables in accordance with the Credit Card Agreements relating to the Accounts and the Credit Card Guidelines and the Operating Regulations, except insofar as any failure to comply or perform would not have an Adverse Effect.

(e) The Servicer shall pay out of its own funds, without reimbursement (except as provided in Section 2.10 and Section 3.02 ), all expenses incurred in connection with the servicing activities hereunder including expenses related to enforcement of the Receivables.

Section 3.02. Servicing Compensation . As full compensation for its servicing activities hereunder and as reimbursement for any expense incurred by it in connection therewith, prior to the termination of the Issuer pursuant to Section 8.01 of the Trust Agreement, the Servicer shall be entitled to receive a servicing fee (the “ Servicing Fee ”) with respect to each Monthly Period, payable monthly on the related Distribution Date, in an amount equal to one-twelfth of the product of (a) the weighted average of the Servicing Fee Rates with respect to each outstanding Series (based upon the Servicing Fee Rate for each Series and the Allocation Amount (or such other amount as specified in the related Indenture Supplement) of such Series, in each case as of the last day of the prior Monthly Period) and (b) the amount of the sum of Principal Receivables and Finance Charge Receivables on each day of the related Monthly Period divided by the number of days in such Monthly Period. The share of the Servicing Fee allocable to a particular Series with respect to any Monthly Period (the “ Monthly Servicing Fee ”) will be determined in accordance with the relevant Indenture Supplement. The portion of the Servicing Fee with respect to any Monthly Period not paid pursuant to any particular Series shall be paid by the holders of the Transferor Certificates on the related Distribution Date. In no event shall the Issuer, the Owner Trustee (as such or in its individual capacity), the Indenture Trustee, the Noteholders of any Series or any Series Enhancer be liable for the share of the Servicing Fee that is not allocable to any particular Series.

Section 3.03. Representations, Warranties and Covenants of the Servicer . CCIA, as Servicer, hereby makes, and after its assumptions of the obligations and duties of Servicer hereunder, CCIS, as Servicer, shall make and any Successor Servicer by its appointment hereunder shall make, with respect to itself, on each Closing Date (and on the date of any such appointment), the following representations, warranties and covenants on which the Issuer shall be deemed to rely in accepting its interest in the Receivables and the Indenture Trustee shall be deemed to have relied in accepting the grant of a security interest in the Receivables and in entering into the Indenture:

(a) Organization and Good Standing . The Servicer is a corporation or limited liability company, as applicable, validly existing and in good standing under the applicable law

of the jurisdiction of its incorporation or organization and has, in all material respects, full power and authority to own its properties and conduct its credit card servicing business as presently owned or conducted, and to execute, deliver and perform its obligations under this Agreement, the Indenture and each Indenture Supplement.

(b) Due Qualification . The Servicer is duly qualified to do business and is in good standing as a foreign corporation or limited liability company, as applicable, (or is exempt from such requirements) and has obtained all necessary licenses and approvals in each jurisdiction in which the servicing of the Receivables as required by this Agreement requires such qualification except where the failure to so qualify or obtain licenses or approvals would not have a material adverse effect on its ability to perform its obligations as Servicer under this Agreement.

(c) Due Authorization . The execution, delivery, and performance by the Servicer of this Agreement and the other agreements and instruments executed and delivered by the Servicer as contemplated hereby, have been duly authorized by the Servicer by all necessary action on the part of the Servicer.

(d) Binding Obligation . This Agreement, the Indenture and each Indenture Supplement each constitutes a legal, valid and binding obligation of the Servicer, enforceable in accordance with its terms, except as such enforceability may be limited by applicable Debtor Relief Laws or by general principles of equity (whether considered in a proceeding at law or in equity).

(e) No Conflict . The execution and delivery of this Agreement, the Indenture and each Indenture Supplement by the Servicer, and the performance by the Servicer of the transactions contemplated by this Agreement and the fulfillment by the Servicer of the terms hereof and thereof applicable to the Servicer, will not conflict with, violate or result in any breach of any of the terms and provisions of, or constitute (with or without notice or lapse of time or both) a default under, any material indenture, contract, agreement, mortgage, deed of trust or other instrument to which the Servicer is a party or by which it or its properties are bound.

(f) No Violation . The execution and delivery of this Agreement, the Indenture and each Indenture Supplement by the Servicer, the performance by the Servicer of the transactions contemplated by this Agreement and the fulfillment by the Servicer of the terms hereof and thereof applicable to the Servicer will not conflict with or violate any Requirements of Law applicable to the Servicer.

(g) No Proceedings . There are no Proceedings or investigations pending or, to the best knowledge of the Servicer, threatened, against the Servicer before any Governmental Authority seeking to prevent the consummation of any of the transactions contemplated by this Agreement or seeking any determination or ruling that, in the reasonable judgment of the Servicer, would materially and adversely affect the performance by the Servicer of its obligations under this Agreement, the Indenture and each Indenture Supplement.

(h) Compliance with Requirements of Law . The Servicer shall duly satisfy all obligations on its part to be fulfilled hereunder or in connection with each Receivable and the related Account, if any, will maintain in effect all qualifications required under Requirements of Law in order to service properly each Receivable and the related Account, if any, and will comply in all material respects with all other Requirements of Law in connection with servicing each Receivable and the related Account the failure to comply with which would have an Adverse Effect.

(i) No Rescission or Cancellation . The Servicer shall not permit any rescission or cancellation of any Receivable except in accordance with the Credit Card Guidelines or as ordered by a court of competent jurisdiction or other Governmental Authority.

(j) Protection of Rights . The Servicer shall take no action in breach of this Agreement which, nor omit to take in breach of this Agreement any action the omission of which, would impair the rights of the Issuer or the Indenture Trustee in any Receivable or the related Account, if any, nor shall it reschedule, revise or defer payments due on any Receivable except in accordance with the Credit Card Guidelines.

(k) Receivables Not To Be Evidenced by Instruments or Chattel Paper . Except in connection with its enforcement or collection of a Receivable, the Servicer will take no action to cause any Receivable to be evidenced by any instrument or chattel paper (each as defined in the UCC), and, if any Receivable is so evidenced as a result of the Servicer’s action, it shall be reassigned or assigned to the Servicer as provided in this Section.

(l) All Consents . All authorizations, consents, orders or approvals of or registrations or declarations with any Governmental Authority required to be obtained, effected or given by the Servicer in connection with the execution and delivery of this Agreement by the Servicer and the performance of the transactions contemplated by this Agreement by the Servicer, have been duly obtained, effected or given and are in full force and effect.

(m) Interchange . With respect to any Distribution Date, on or prior to the immediately preceding Determination Date, the Servicer shall notify the Transferor of the amount of Interchange (if any) required to be included as Collections of Finance Charge Receivables with respect to such Monthly Period, which amount shall be equal to the amount of Interchange transferred to the Transferor with respect to such Monthly Period.

In the event (x) any of the representations, warranties or covenants of the Servicer contained in paragraphs (h), (i) or (j) of this Section 3.03 with respect to any Receivable or the related Account is breached, and such breach has a material adverse effect on the Issuer’s interest in or the collectibility of such Receivable and is not cured within sixty (60) days (or within such longer period, as specified by the Transferor, not in excess of one hundred twenty (120) days) of the earlier to occur of the discovery of such event by the Servicer, or receipt by the Servicer of notice of such event given by the Owner Trustee, the Indenture Trustee or the Transferor, or (y) as provided in Section 3.03(k) with respect to any Receivable, all Receivables in the Account or Accounts to which such event relates shall be assigned and transferred to the Servicer on the terms and conditions set forth below.

The Servicer shall effect such assignment by making a deposit into the Collection Account in immediately available funds not later than seven (7) days after such assignment obligation arises in an amount equal to the amount of such Receivables.

Upon each such reassignment or assignment to the Servicer, the Issuer shall automatically and without further action sell, transfer, assign, set over and otherwise convey to the Servicer, without recourse, representation or warranty, all right, title and interest of the Issuer in and to such Receivables, all Interchange, Insurance Proceeds, and Recoveries related thereto, all monies due or to become due and all amounts received or receivable with respect thereto and all proceeds thereof. The Issuer shall execute such documents and instruments of transfer or assignment and take such other actions as shall be reasonably requested by the Servicer to effect the conveyance of any such Receivables pursuant to this Section 3.03 but only upon receipt of an Officer’s Certificate of the Servicer that states that all conditions set forth in this Section have been satisfied. The obligation of the Servicer to accept reassignment or assignment of such Receivables, and to make the deposits, if any, required to be made to the Collection Account as provided in the preceding paragraph, shall constitute the sole remedy respecting the event giving rise to such obligation available to the Issuer, the Transferor, the Indenture Trustee or any Series Enhancer, except as provided in Section 6.04 .

Section 3.04. Reports and Records for the Owner Trustee and the Indenture Trustee .

(a) Daily Records . On each Business Day, the Servicer shall make or cause to be made available at the office of the Servicer for inspection by the Transferor, the Issuer, the Owner Trustee and the Indenture Trustee upon request a record setting forth (i) the Collections in respect of Principal Receivables and in respect of Finance Charge Receivables processed by the Servicer on the second (2 ^nd ) preceding Business Day in respect of each Account and (ii) the amount of Receivables as of the close of business on the second (2 ^nd ) preceding Business Day in each Account. The Servicer shall, at all times, maintain its computer files with respect to the Accounts in such a manner so that the Accounts may be specifically identified and shall make available to the Transferor, the Issuer, the Owner Trustee and the Indenture Trustee at the office of the Servicer on any Business Day any computer programs necessary to make such identification. The Owner Trustee and the Indenture Trustee shall enter into such reasonable confidentiality agreements as the Servicer shall deem necessary to protect its interests or as may be required under applicable Requirements of Law and as are reasonably acceptable in form and substance to the Owner Trustee and the Indenture Trustee.

(b) Monthly Servicer’s Certificate . Not later than each Determination Date, the Servicer shall, with respect to each outstanding Series, deliver to the Transferor, the Issuer, the Owner Trustee, the Indenture Trustee and each Rating Agency, if applicable, a certificate of a Servicing Officer in substantially the form set forth in the related Indenture Supplement.

Section 3.05. Annual Certificate of Servicer . The Servicer shall deliver to the Transferor, the Issuer, the Owner Trustee, the Indenture Trustee and each Rating Agency on or before June 30th of each calendar year, beginning with June 30, 2008, an Officer’s Certificate substantially in the form of Exhibit A .

Section 3.06. Annual Servicing Report of Independent Public Accountants; Copies of Reports Available .

(a) On or before June 30th each calendar year, beginning with June 30, 2008, the Servicer shall cause a firm of nationally recognized independent public accountants (who may also render other services to the Servicer or Transferor) to deliver a report (addressed to the Servicer) to the effect that the accountants have applied certain procedures that the accountants are reasonably able to review and perform under such accounting firm’s policies and are agreed upon with the Servicer to compare the mathematical calculations of certain amounts set forth in the Servicer’s certificates delivered pursuant to subsection 3.04(b) during the period covered by such report with the Servicer’s and the Account Owner’s computer reports that were the source of such amounts and that on the basis of such agreed-upon procedures and comparison, such accountants are of the opinion that such amounts are in agreement, except for such exceptions as they believe to be immaterial and such other exceptions as shall be set forth in such statement. Such report shall set forth the agreed-upon procedures performed in accordance with Exhibit C . Simultaneously with release of each of the reports described in Section 3.06(a) , the Servicer shall deliver copies thereof to each of the Issuer, the Transferor, the Indenture Trustee, the Owner Trustee and each Rating Agency; provided , that, if required by the accounting firm preparing such report, delivery of such copy shall be contingent upon such recipient reaching an agreement with such accounting firm concerning any potential terms or conditions associated with the release of such report to such recipient. In the event such firm requires the Indenture Trustee to agree to the procedures performed by such firm, the Servicer shall direct the Indenture Trustee in writing to so agree; it being understood and agreed that the Indenture Trustee will deliver such letter of agreement in conclusive reliance upon the direction of the Servicer, and the Indenture Trustee makes no independent inquiry or investigation as to, and shall have no obligation or liability in respect of, the sufficiency, validity or correctness of such procedures.

(b) By a request in writing to the Indenture Trustee addressed to the Corporate Trust Office, a copy of each certificate and report provided to the Indenture Trustee pursuant to Section 3.04(b) , 3.05 or 3.06 may be obtained by any Noteholder or O/C Holder.

Section 3.07. Adjustments .

(a) If the Servicer adjusts downward the amount of any Receivable because of a rebate, refund, unauthorized charge or billing error to a cardholder, or because such Receivable was created in respect of merchandise which was refused or returned by a cardholder, or if the Servicer otherwise adjusts downward the amount of any Receivable without receiving Collections therefor or charging off such amount as uncollectible, then, in any such case, the amount of Principal Receivables used to calculate any amount required herein or in the Indenture or any Indenture Supplement to be calculated by reference to the amount of Principal Receivables, will be reduced by the principal amount of the adjustment. Similarly, the amount of Principal Receivables used to calculate any amount required herein or in the Indenture or any Indenture Supplement to be calculated by reference to the amount of Principal Receivables will be reduced by the principal amount of any Receivable which was discovered as having been created through a fraudulent or counterfeit charge or with respect to which the covenant contained in Section 2.07(b) was breached. Any adjustment required pursuant to either of the two preceding sentences shall be made on or prior to the end of the Monthly Period in which such adjustment obligation arises.

(b) If (i) the Servicer makes a deposit into the Collection Account in respect of a Collection of a Receivable and such Collection was received by the Servicer in the form of a check or other payment which is not honored or is reversed for any reason or (ii) the Servicer makes a mistake with respect to the amount of any Collection and deposits an amount that is less than or more than the actual amount of such Collection, the Servicer shall appropriately adjust the amount subsequently deposited into the Collection Account to reflect such dishonored or reversed payment or mistake. Any Receivable in respect of which a dishonored or reversed payment is received shall be deemed not to have been paid. Notwithstanding the first two sentences of this paragraph, adjustments made pursuant to this Section 3.07 shall not require any change in any report previously delivered pursuant to Section 3.04(a) .

[END OF ARTICLE III]

ARTICLE IV

COLLECTIONS AND ALLOCATIONS

Section 4.01. Collections and Allocations .

(a) The Servicer will apply or will instruct the Indenture Trustee in writing to apply all funds on deposit in the Collection Account as described in this Article IV and in each Indenture Supplement. Except as otherwise provided below, the Servicer shall deposit Collections into the Collection Account as promptly as possible after the Date of Processing of such Collections, but in no event later than the second (2 ^nd ) Business Day following the Date of Processing. Subject to the express terms of any Indenture Supplement, but notwithstanding anything else in this Agreement to the contrary, for so long as the following conditions are satisfied: (A) (i) CCIA or CCIS remains the Servicer or the Servicer has a short-term debt rating of not less than A-1 by Standard & Poor’s and P-1 by Moody’s, and (ii) no Early Redemption Event or Event of Default shall have occurred or (B) other arrangements are made such that the Rating Agency Condition is satisfied with respect thereto, the Servicer need not make the daily deposits of Collections into the Collection Account as provided in the preceding sentence, but may make a single deposit in the Collection Account in immediately available funds not later than 4:00 p.m., London time, on the Transfer Date following the Monthly Period for which such Collections were processed. Subject to the proviso in Section 4.02 and the express terms of any Indenture Supplement, but notwithstanding anything else in this Agreement to the contrary, with respect to any Monthly Period, whether the Servicer is required to make deposits of Collections pursuant to the first or the second preceding sentence, (i) the Servicer will only be required to deposit Collections into the Collection Account up to the aggregate amount of Collections required to be deposited into any Series Account or, without duplication, distributed on or prior to the related Distribution Date to or for the benefit of Noteholders or any O/C Holder or to any Series Enhancer pursuant to the terms of any Indenture Supplement or Series Enhancement and any excess shall be paid to the Issuer for application in accordance with the Trust Agreement, and (ii) if at any time prior to such Distribution Date the amount of Collections deposited in the Collection Account exceeds the amount required to be deposited pursuant to clause (i) above, the Servicer will be permitted to withdraw the excess from the Collection Account and pay it to the Issuer for application in accordance with the Trust Agreement. The Servicer hereby acknowledges that any payments referenced in the immediately preceding sentence shall be paid directly to the Transferor pursuant to subsection 3.04(a) of the Trust Agreement. Subject to the second preceding sentence, the Servicer may retain its Servicing Fee with respect to a Series and shall not be required to deposit it in the Collection Account.

(b) Collections of Finance Charge Receivables and Principal Receivables will be allocated to each Series on the basis of the applicable Series Allocation Percentage of such Series and amounts so allocated to any Series will not, except as specified in the related Indenture Supplement, be available to any other Series. Allocations of the foregoing amounts among the Noteholders or any O/C Holder and the Series Enhancers, among the Series and among the Classes in any Series, shall be set forth in the related Indenture Supplement or Indenture Supplements.

Section 4.02. Shared Principal Collections . On each Distribution Date, (a) the Servicer shall allocate Shared Principal Collections (as defined below) to each Principal Sharing Series, pro rata, in proportion to the Principal Shortfalls (as defined below), if any, with respect to each such Series and (b) the Servicer shall withdraw from the Collection Account and pay to the Issuer for application in accordance with the Trust Agreement an amount equal to the excess, if any, of (x) the aggregate amount for all outstanding Series of Collections of Principal Receivables which the related Indenture Supplements specify are to be treated as “ Shared Principal Collections ” for such Distribution Date over (y) the aggregate amount for all outstanding Series which the related Indenture Supplements specify are “ Principal Shortfalls ” for such Series for such Distribution Date. The Issuer may, at its option, instruct the Indenture Trustee in writing to deposit Shared Principal Collections which are otherwise payable to the Issuer pursuant to the provisions set forth above into the Collection Account.

Section 4.03. Excess Finance Charge Collections . On each Distribution Date, (a) the Servicer shall allocate Excess Finance Charge Collections (as defined below) to each Excess Allocation Series pro rata , in proportion to the Finance Charge Shortfalls (as defined below), if any, with respect to each such Series, and (b) the Servicer shall withdraw from the Collection Account and pay to the Issuer for application in accordance with the Trust Agreement an amount equal to the excess, if any, of (x) the aggregate amount for all outstanding Series of Collections of Finance Charge Receivables which the related Indenture Supplements specify are to be treated as “ Excess Finance Charge Collections ” for such Distribution Date over (y) the aggregate amount for all outstanding Series which the related Indenture Supplements specify are “ Finance Charge Shortfalls ” for such Series and such Distribution Date.

[END OF ARTICLE IV]

ARTICLE V

OTHER MATTERS RELATING TO THE TRANSFEROR

Section 5.01. Liability of the Transferor . The Transferor shall be liable for all obligations, covenants, representations and warranties of the Transferor arising under or related to this Agreement. The Transferor shall be liable only to the extent of the obligations specifically undertaken by it in its capacity as a Transferor.

Section 5.02. Merger or Consolidation of, or Assumption of the Obligations of, the Transferor .

(a) The Transferor shall not dissolve, liquidate, consolidate with or merge into any other corporation, limited liability company or other entity or convey, transfer or sell (other than as provided in Article II ) its properties and assets substantially as an entirety to any Person unless:

(i) the entity formed by such consolidation or into which the Transferor is merged or the Person which acquires by conveyance, transfer or sale the properties and assets of the Transferor substantially as an entirety shall be, if the Transferor is not the surviving entity, organized and existing under the laws of the United States of America or any state or the District of Columbia, and shall be a savings association, a bank, or other entity which is not eligible to be a debtor in a case under Title 11 of the United States Code or is a special purpose corporation or other special purpose entity whose powers and activities are limited to substantially the same degree as provided in the articles of incorporation of Partridge Funding and, if the Transferor is not the surviving entity, shall expressly assume, by an agreement supplemental hereto, executed and delivered to the Owner Trustee and the Indenture Trustee, in form reasonably satisfactory to the Owner Trustee and the Indenture Trustee, the performance of every covenant and obligation of the Transferor hereunder; and

(ii) the Transferor or the surviving entity, as the case may be, has delivered to the Owner Trustee and the Indenture Trustee (with a copy to each Rating Agency) an Officer’s Certificate and an Opinion of Counsel each stating that such consolidation, merger, conveyance, transfer or sale and such supplemental agreement comply with this Section, that such supplemental agreement is a valid and binding obligation of such surviving entity enforceable against such surviving entity in accordance with its terms, except as such enforceability may be limited by applicable Debtor Relief Laws or general principles of equity, and that all conditions precedent herein provided for relating to such transaction have been complied with;

(iii) the Rating Agency Condition shall have been satisfied with respect to such consolidation, merger, conveyance or transfer; and

(iv) a Tax Opinion shall have been delivered to the Indenture Trustee with respect to such consolidation, merger, conveyance or transfer.

(b) Except as permitted by Section 2.07(c) , the obligations, rights or any part thereof of the Transferor hereunder shall not be assignable nor shall any Person succeed to such obligations or rights of the Transferor hereunder except (i) for conveyances, mergers, consolidations, assumptions, sales or transfers in accordance with the provisions of the foregoing paragraph and (ii) for conveyances, mergers, consolidations, assumptions, sales or transfers to other entities (1) which the Transferor and the Servicer each determines will not result in an Adverse Effect, (2) which meet the requirements of clause (iii) of the preceding paragraph and (3) for which such purchaser, transferee, pledgee or entity shall expressly assume, in an agreement supplemental hereto, executed and delivered to the Owner Trustee and the Indenture Trustee in writing in form satisfactory to the Owner Trustee and the Indenture Trustee, the performance of every covenant and obligation of the Transferor thereby conveyed.

Section 5.03. Limitations on Liability of the Transferor . Subject to Section 5.01 , none of the Transferor or any of the directors, officers, employees, incorporators, agents, members or managers of the Transferor acting in such capacities shall be under any liability to the Issuer, the Owner Trustee, the Indenture Trustee, the Noteholders, any O/C Holder, any Series Enhancer or any other Person for any action taken or for refraining from the taking of any action in good faith in such capacities pursuant to this Agreement, it being expressly understood that such liability is expressly waived and released as a condition of, and consideration for, the execution of this Agreement; provided , however , that this provision shall not protect the Transferor or any such person against any liability which would otherwise be imposed by reason of willful misfeasance, bad faith or gross negligence in the performance of its duties or by reason of reckless disregard of obligations and its duties hereunder. The Transferor and any director, officer, employee, member or manager or agent of the Transferor may rely in good faith on any document of any kind prima facie properly executed and submitted by any Person (other than the Transferor) respecting any matters arising hereunder.

[END OF ARTICLE V]

ARTICLE VI

OTHER MATTERS RELATING TO THE SERVICER

Section 6.01. Liability of the Servicer . The Servicer shall be liable under this Article VI only to the extent of the obligations specifically undertaken by the Servicer in its capacity as Servicer.

Section 6.02. Merger or Consolidation of, or Assumption of the Obligations of, the Servicer . The Servicer shall not consolidate with or merge into any other corporation, limited partnership, limited liability company or other entity or convey, transfer or sell its properties and assets substantially as an entirety to any Person, unless:

(a) (i) the entity formed by such consolidation or into which the Servicer is merged or the Person which acquires by conveyance, transfer or sale the properties and assets of the Servicer substantially as an entirety shall be, if the Servicer is not the surviving entity, a corporation or other entity licensed under the laws of England and Wales and having a net worth of at least $50,000,000 at the end of its most recent fiscal quarter, and, if the Servicer is not the surviving entity, such corporation or other entity shall expressly assume, by an agreement supplemental hereto, executed and delivered to the Owner Trustee, the Indenture Trustee and the Transferor, in form satisfactory to the Owner Trustee, the Indenture Trustee and the Transferor, the performance of every covenant and obligation of the Servicer hereunder;

(ii) the Servicer or the surviving entity, as the case may be, has delivered to the Owner Trustee, the Indenture Trustee and the Transferor an Officer’s Certificate and an Opinion of Counsel each stating that such consolidation, merger, conveyance, transfer or sale comply with this Section 6.02 , that such supplemental agreement is a valid and binding obligation of such surviving entity enforceable against such surviving entity in accordance with its terms, except as such enforceability may be limited by applicable Debtor Relief Laws or general principles of equity, and that all conditions precedent herein provided for relating to such transaction have been complied with; and

(iii) the Servicer shall have given the Rating Agencies notice of such consolidation, merger or transfer of assets; and

(b) the corporation or other entity formed by such consolidation or into which the Servicer is merged or the Person which acquires by conveyance or transfer the properties and assets of the Servicer substantially as an entirety shall be an Eligible Servicer.

Section 6.03. Limitation on Liability of the Servicer and Others . Except as provided in Section 6.04 , neither the Servicer nor any of the directors, officers, partners, shareholders, members, managers, employees or agents of the Servicer shall be under any liability to the Issuer, the Transferor, the Owner Trustee, the Indenture Trustee, the Noteholders, any O/C Holder, any Series Enhancer or any other Person for any action taken or for refraining

from the taking of any action in good faith in its capacity as Servicer pursuant to this Agreement; provided , however , that this provision shall not protect the Servicer or any such Person against any liability which would otherwise be imposed by reason of willful misfeasance, bad faith or negligence in the performance of its duties or by reason of reckless disregard of its obligations and its duties hereunder. The Servicer and any director, officer, employee, partner, shareholder, member or manager or agent of the Servicer may rely in good faith on any document of any kind prima facie properly executed and submitted by any Person (other than the Servicer) respecting any matters arising hereunder. The Servicer shall not be under any obligation to appear in, prosecute or defend any legal action which is not incidental to its duties as Servicer in accordance with this Agreement and which in its reasonable judgment may involve it in any expense or liability. The Servicer may, in its sole discretion, undertake any such legal action which it may deem necessary or desirable for the benefit of the Transferor, the Issuer, any O/C Holder or the Noteholders with respect to this Agreement and the rights and duties of the parties hereto and the interests of the Transferor, the Issuer, any O/C Holder and the Noteholders hereunder.

Section 6.04. Servicer Indemnification of the Issuer, the Owner Trustee and the Indenture Trustee . (a) To the fullest extent permitted by applicable law, subject to Section 6.03 , the Servicer shall indemnify and hold harmless each of the Owner Trustee (as such and in its individual capacity), the Indenture Trustee and any trustees predecessor thereto (including the Indenture Trustee in its capacity as Note Registrar or as Paying Agent) and their respective directors, officers, employees, partners, delegates, members or managers and agents from and against any and all loss, liability, claim, expense, damage or injury suffered or sustained by reason of or in connection with any acts or omissions of the Servicer with respect to the Issuer in breach of this Agreement (except that the Servicer shall not be liable for or required to indemnify the Owner Trustee for the Owner Trustee’s own willful misconduct, bad faith or negligence or the Indenture Trustee for the Indenture Trustee’s own willful misconduct, bad faith or negligence) including any judgment, award, settlement, reasonable attorneys’ fees and other costs or expenses incurred in connection with the defense of any action, Proceeding or claim. Indemnification pursuant to this subsection 6.04(a) shall not be payable from the Transferred Assets. The Servicer’s obligations under this subsection 6.04(a) shall survive the termination of this Agreement or the Issuer or the earlier removal or resignation of the Owner Trustee or the Indenture Trustee, as applicable.

(b) To the fullest extent permitted by applicable law, subject to Section 6.03 , the Servicer shall indemnify and hold harmless the Issuer from and against any and all loss, liability, claim, expense, damage or injury suffered or sustained by reason of or in connection with any acts or omissions of the Servicer with respect to the Issuer in breach of this Agreement including any judgment, award, settlement, reasonable attorneys’ fees and other costs or expenses incurred in connection with the defense of any action, Proceeding or claim. Indemnification pursuant to this subsection 6.04(b) shall not be payable from the Transferred Assets. The Servicer’s obligations under this subsection 6.04(b) shall survive the termination of this Agreement.

Section 6.05. Resignation of the Servicer . The Servicer shall not resign from the obligations and duties hereby imposed on it except (a) upon a determination that (i) the performance of its duties hereunder is no longer permissible under applicable Requirements of

Law and (ii) there is no reasonable action which the Servicer could take to make the performance of its duties hereunder permissible under applicable law, or (b) upon the assumption, by an agreement supplemental hereto, executed and delivered to the Transferor, the Issuer and the Indenture Trustee, in form reasonably satisfactory to the Transferor, the Issuer and the Indenture Trustee, of the obligations and duties of the Servicer hereunder by any of its Affiliates or by any other entity the appointment of which shall have satisfied the Rating Agency Condition and, in either case, qualifies as an Eligible Servicer. Any determination permitting the resignation of the Servicer shall be evidenced as to clause (a) above by an Opinion of Counsel substantially to such effect delivered to the Owner Trustee and the Indenture Trustee. No resignation shall become effective until the Indenture Trustee or a Successor Servicer shall have assumed the responsibilities and obligations of the Servicer in accordance with Section 8.02 hereof. If within one hundred twenty (120) days of the date of the determination that the Servicer may no longer act as Servicer under clause (a) above the Indenture Trustee is unable to appoint a Successor Servicer, the Indenture Trustee shall serve as Successor Servicer. Notwithstanding the foregoing, the Indenture Trustee shall, if it is legally unable so to act, petition a court of competent jurisdiction to appoint any established institution qualifying as an Eligible Servicer as the Successor Servicer hereunder. The Issuer shall give prompt notice to each Rating Agency and each Series Enhancer upon the appointment of a Successor Servicer.

Section 6.06. Access to Certain Documentation and Information Regarding the Receivables . The Servicer shall provide to the Owner Trustee or the Indenture Trustee, as applicable, access to the documentation regarding the Accounts and the Receivables in such cases where the Owner Trustee or the Indenture Trustee, as applicable, is required in connection with the enforcement of the rights of the Issuer, any O/C Holder or the Noteholders or by applicable statutes or regulations to review such documentation, such access being afforded without charge but only (a) upon reasonable request, (b) during normal business hours, (c) subject to the Servicer’s normal security and confidentiality procedures and (d) at reasonably accessible offices in the United Kingdom designated by the Servicer. Nothing in this Section shall derogate from the obligation of the Transferor, the Owner Trustee, the Issuer, the Indenture Trustee and the Servicer to observe any applicable Requirements of Law prohibiting disclosure of information regarding the Obligors, and the failure of the Servicer to provide access as provided in this Section as a result of such obligation shall not constitute a breach of this Agreement.

Section 6.07. Delegation of Duties . In the ordinary course of business, the Servicer may at any time delegate its duties hereunder with respect to the Accounts and the Receivables to any Person that agrees to conduct such duties in accordance with the Credit Card Guidelines and this Agreement. Such delegation shall not relieve the Servicer of its liability and responsibility with respect to such duties, and shall not constitute a resignation within the meaning of Section 6.05 . Notwithstanding anything contained herein to the contrary, the provision of services by Barclays Bank pursuant to the Transitional Services Agreement is not a delegation for purposes of this paragraph and shall not constitute a violation of this Agreement. To the extent that Transitional Servicer’s acts or omissions create liability for the Servicer hereunder and under the other Transaction Documents, the Servicer’s obligations with respect to such liability shall be limited to its recourse from the Transitional Servicer.

Section 6.08. Examination of Records . The Transferor and the Servicer shall indicate generally in their computer files or other records that the Receivables arising in the Accounts have been conveyed to the Issuer pursuant to this Agreement. The Transferor and the Servicer shall, prior to the sale or transfer to a third party of any receivable held in its custody, examine its computer records and other records to determine that such receivable is not, and does not include, a Receivable.

[ END OF ARTICLE VI ]

ARTICLE VII

INSOLVENCY EVENTS

Section 7.01. Rights upon the Occurrence of an Insolvency Event . If the Transferor shall fail generally to, or admit in writing its inability to, pay its debts as they become due; or if a proceeding shall have been instituted in a court having jurisdiction in the premises seeking a decree or order for relief in respect of the Transferor in an involuntary case under any Debtor Relief Law, or for the appointment of a receiver, liquidator, assignee, trustee, custodian, sequestrator, conservator or other similar official of the Transferor or for any substantial part of the Transferor’s property, or for the winding-up or liquidation of the Transferor’s affairs and, if instituted against the Transferor, any such proceeding shall continue undismissed or unstayed and in effect for a period of sixty (60) consecutive days or upon entry of any order or decree providing for such relief, or any of the actions sought in such proceeding shall occur; or if the Transferor shall commence a voluntary case under any Debtor Relief Law, or if the Transferor shall consent to the entry of an order for relief in an involuntary case under any Debtor Relief Law, or consent to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator, conservator or other similar official of, or for, any substantial part of its property, or the Transferor shall make any general assignment for the benefit of its creditors; or the Transferor shall have taken any corporate action in furtherance of any of the foregoing actions (each an “ Insolvency Event ”), the Transferor shall on the day any such Insolvency Event occurs (the “ Appointment Date ”), immediately cease to transfer Principal Receivables to the Issuer and shall promptly give notice to the Indenture Trustee and the Issuer thereof. Notwithstanding any cessation of the transfer to the Issuer of additional Principal Receivables, Principal Receivables transferred to the Issuer prior to the occurrence of such Insolvency Event, Collections in respect of such Principal Receivables, Finance Charge Receivables (whenever created) accrued in respect of such Principal Receivables, and Collections thereof shall continue to be a part of the Transferred Assets and shall be allocated and distributed to Noteholders and any O/C Holder in accordance with the terms of this Agreement, the Indenture and each Indenture Supplement.

[END OF ARTICLE VII ]

ARTICLE VIII

SERVICER DEFAULTS

Section 8.01. Servicer Defaults . If any one of the following events (a “ Servicer Default ”) shall occur and be continuing:

(a) any failure by the Servicer to make any payment, transfer or deposit or to give instructions or to give notice to the Indenture Trustee to make such payment, transfer or deposit on or before the date occurring five (5) Business Days after the date such payment, transfer or deposit or such instruction or notice is required to be made or given by the Servicer, as the case may be, under the terms of this Agreement, the Indenture or any Indenture Supplement;

(b) failure on the part of the Servicer duly to observe or perform in any material respect any other covenants or agreements of the Servicer set forth in this Agreement, the Indenture or any Indenture Supplement and which continues unremedied for a period of sixty (60) days after the date on which notice of such failure, requiring the same to be remedied, shall have been given to the Servicer by the Owner Trustee or the Indenture Trustee, or to the Servicer, the Owner Trustee and the Indenture Trustee by Holders of Notes evidencing not less than 10% of the aggregate unpaid principal amount of all Notes Outstanding (or, with respect to any such failure that does not relate to all Series, 10% of the aggregate unpaid principal amount of all Notes Outstanding of all Series to which such failure relates); or the Servicer shall assign or delegate its duties under this Agreement, except as permitted by Sections 6.02 , 6.05 and 6.07 ;

(c) any representation, warranty or certification made by the Servicer in this Agreement or in any certificate delivered pursuant to this Agreement shall prove to have been incorrect when made, which has an Adverse Effect and which Adverse Effect continues for a period of sixty (60) days after the date on which notice thereof, requiring the same to be remedied, shall have been given to the Servicer by the Owner Trustee or the Indenture Trustee, or to the Servicer, the Owner Trustee and the Indenture Trustee by the Holders of Notes evidencing not less than 10% of the aggregate unpaid principal amount of all Notes Outstanding (or, with respect to any such representation, warranty or certification that does not relate to all Series, 10% of the aggregate unpaid principal amount of all Notes Outstanding of all Series to which such representation, warranty or certification relates); or

(d) the Servicer shall consent to the appointment of a trustee or conservator or receiver or liquidator in any bankruptcy proceeding or other insolvency, readjustment of debt, marshalling of assets and liabilities or similar Proceedings of or relating to the Servicer or of or relating to all or substantially all its property, or an action seeking a decree or order of a court or agency or supervisory authority having jurisdiction in the premises for the appointment of a trustee or a conservator or receiver or liquidator in any bankruptcy, insolvency, readjustment of debt, marshalling of assets and liabilities or similar Proceedings, or the winding-up or liquidation of its affairs, shall have been commenced against the Servicer and such action shall have remained undischarged or unstayed for a period of sixty (60) days or an order or decree providing for such relief shall have been entered; or the Servicer shall admit in writing its

inability to pay its debts generally as they become due, file a petition to take advantage of any applicable Debtor Relief Law, make any assignment for the benefit of its creditors or voluntarily suspend payment of its obligations;

then, in the event of any Servicer Default, so long as the Servicer Default shall not have been remedied, either the Indenture Trustee or the Holders of Notes evidencing a majority of the aggregate unpaid principal amount of all Notes Outstanding, by notice then given to the Servicer, the Transferor, and the Owner Trustee (and to the Indenture Trustee if given by the Noteholders) (a “ Termination Notice ”), may terminate all but not less than all of the rights and obligations of the Servicer as Servicer under this Agreement, the Indenture and each Indenture Supplement. The Indenture Trustee shall notify each Rating Agency of any Servicer Default of which a Responsible Officer has actual knowledge and shall provide each Rating Agency with a copy of any Termination Notice given to the Servicer and the Owner Trustee by the Indenture Trustee or received by the Indenture Trustee pursuant to this Section 8.01 .

After receipt by the Servicer of a Termination Notice, and on the date that a Successor Servicer is appointed by the Indenture Trustee pursuant to Section 8.02 , all authority and power of the Servicer under this Agreement shall pass to and be vested in the Successor Servicer (a “ Service Transfer ”); and, without limitation, the Indenture Trustee is hereby authorized and empowered (upon the failure of the Servicer to cooperate) to execute and deliver, on behalf of the Servicer, as attorney-in-fact or otherwise, all documents and other instruments upon the failure of the Servicer to execute or deliver such documents or instruments, and to do and accomplish all other acts or things necessary or appropriate to effect the purposes of such Service Transfer. The Servicer agrees to cooperate with the Indenture Trustee and such Successor Servicer in effecting the termination of the responsibilities and rights of the Servicer to conduct servicing hereunder, including the transfer to such Successor Servicer of all authority of the Servicer to service the Receivables provided for under this Agreement, including all authority over all Collections which shall on the date of transfer be held by the Servicer for deposit, or which have been deposited by the Servicer, in the Collection Account, or which shall thereafter be received with respect to the Receivables, and in assisting the Successor Servicer. The Servicer shall within twenty (20) Business Days transfer its electronic records relating to the Receivables to the Successor Servicer in such electronic form as the Successor Servicer may reasonably request and shall promptly transfer to the Successor Servicer all other records, correspondence and documents necessary for the continued servicing of the Receivables in the manner and at such times as the Successor Servicer shall reasonably request. The predecessor Servicer shall be responsible for all expenses incurred in transferring the servicing duties to the Successor Servicer. To the extent that compliance with this Section shall require the Servicer to disclose to the Successor Servicer information of any kind which the Servicer deems to be confidential, the Successor Servicer shall be required to enter into such customary licensing and confidentiality agreements as the Servicer shall deem reasonably necessary to protect its interests.

Notwithstanding the foregoing, a delay in or failure of performance referred to in paragraph (a) above for a period of ten (10) Business Days after the applicable grace period or under paragraph (b) or (c) above for a period of sixty (60) Business Days after the applicable grace period, shall not constitute a Servicer Default if such delay or failure could not be prevented by the exercise of reasonable diligence by the Servicer and such delay or failure was caused by an act of God or the public enemy, acts of declared or undeclared war, terrorism,

public disorder, rebellion or sabotage, strikes, epidemics, landslides, lightning, fire, hurricanes, earthquakes, floods or similar causes. The preceding sentence shall not relieve the Servicer from using all commercially reasonable efforts to perform its obligations in a timely manner in accordance with the terms of this Agreement and the Servicer shall provide the Indenture Trustee, the Issuer, the Transferor and any Series Enhancer with an Officer’s Certificate giving prompt notice of such failure or delay by it, together with a description of its efforts so to perform its obligations.

Section 8.02. Indenture Trustee To Act; Appointment of Successor .

(a) On and after the receipt by the Servicer of a Termination Notice pursuant to Section 8.01 , the Servicer shall continue to perform all servicing functions under this Agreement until the date specified in the Termination Notice or otherwise specified by the Indenture Trustee or until a date mutually agreed upon by the Servicer and the Indenture Trustee. The Indenture Trustee shall as promptly as possible after it gives, or a Responsible Officer of the Indenture Trustee receives, a Termination Notice appoint an Eligible Servicer as a successor servicer (the “ Successor Servicer ”), and such Successor Servicer shall accept its appointment by a written assumption in a form acceptable to the Indenture Trustee; provided , however , for so long as a Back-Up Servicer is designated pursuant to an Indenture Supplement, then the Back-Up Servicer shall be the Successor Servicer. In the event that a Successor Servicer has not been appointed or has not accepted its appointment at the time when the Servicer ceases to act as Servicer, the Indenture Trustee without further action shall automatically be appointed the Successor Servicer. The Indenture Trustee may delegate any of its servicing obligations to an Affiliate or agent in accordance with Section 3.01(b) , Section 6.05 and Section 6.07 . Notwithstanding the foregoing, the Indenture Trustee shall, if it is legally unable or unwilling so to act, petition a court of competent jurisdiction to appoint any established institution qualifying as an Eligible Servicer as the Successor Servicer hereunder. The Indenture Trustee shall give prompt notice to each Rating Agency and each Series Enhancer upon the appointment of a Successor Servicer.

(b) Upon its appointment, the Successor Servicer shall be the successor in all respects to the Servicer with respect to servicing functions under this Agreement and shall be subject to all the responsibilities, duties and liabilities relating thereto placed on the Servicer by the terms and provisions hereof, and all references in this Agreement to the Servicer shall refer to the Successor Servicer.

(c) In connection with any Termination Notice, if a Back-Up Servicer is not designated pursuant to the applicable Indenture Supplement, the Indenture Trustee will review any bids which it obtains from Eligible Servicers and shall be permitted to appoint any Eligible Servicer submitting such a bid as a Successor Servicer for servicing compensation not in excess of the aggregate Servicing Fees for all Series plus the sum of the amounts with respect to each Series and with respect to each Distribution Date equal to any Collections of Finance Charge Receivables allocable to Noteholders and any O/C Holder of such Series which are payable to the Issuer for payment to the holders of the Transferor Certificates under the Trust Agreement after payment of all amounts owing to the Noteholders and any O/C Holder of such Series with respect to such Distribution Date or required to be deposited in the applicable Series Accounts with respect to such Distribution Date and any amounts required to be paid to any Series

Enhancer for such Series with respect to such Distribution Date pursuant to the terms of any Series Enhancement; provided , however , that the holders of the Transferor Certificates shall be responsible for payment of their portion of such aggregate Servicing Fees and the Indenture Trustee shall have no liability in the event the holders of the Transferor Certificates fail to pay their portion of such aggregate Servicing Fees. Each holder of any of the Transferor Certificates agrees that, if CCIA (or any Successor Servicer) is terminated as Servicer hereunder, the portion of the Collections in respect of Finance Charge Receivables that the Issuer is entitled to receive pursuant to this Agreement, the Indenture or any Indenture Supplement shall be reduced by an amount sufficient to pay such holders’ share of the compensation of the Successor Servicer.

(d) All authority and power granted to the Servicer under this Agreement shall automatically cease and terminate upon termination of the Issuer pursuant to Section 8.01 of the Trust Agreement, and shall pass to and be vested in the Transferor and, without limitation, the Transferor is hereby authorized and empowered to execute and deliver, on behalf of the Servicer, as attorney-in-fact or otherwise, all documents and other instruments, and to do and accomplish all other acts or things necessary or appropriate to effect the purposes of such transfer of servicing rights. The Servicer agrees to cooperate with the Transferor in effecting the termination of the responsibilities and rights of the Servicer to conduct servicing of the Receivables. The Servicer shall transfer its electronic records relating to the Receivables to the Transferor or its designee in such electronic form as it may reasonably request and shall transfer all other records, correspondence and documents to it in the manner and at such times as it shall reasonably request. To the extent that compliance with this Section 8.02 shall require the Servicer to disclose to the Transferor information of any kind which the Servicer deems to be confidential, the Transferor shall be required to enter into such customary licensing and confidentiality agreements as the Servicer shall deem reasonably necessary to protect its interests and to comply with applicable Requirements of Law.

(e) The Successor Servicer will not be responsible for delays attributable to the Servicer’s failure to deliver information, defects in the information supplied by the Servicer or other circumstances beyond the control of the Successor Servicer.

(f) The Successor Servicer will make arrangements with the Servicer for the prompt and safe transfer of, and the Servicer shall provide to the Successor Servicer, all necessary servicing files and records, including (as deemed necessary by the Successor Servicer at such time): (i) microfiche loan documentation, (ii) servicing system tapes, (iii) contract payment history, (iv) collections history and (v) the trial balances, as of the close of business on the day immediately preceding conversion to the Successor Servicer, reflecting all applicable contract information. The current Servicer shall be obligated to pay the costs associated with the transfer of the servicing files and records to the Successor Servicer, including costs of the Indenture Trustee related to the servicing transfer if the Indenture Trustee is the Successor Servicer.

(g) The Successor Servicer shall have no responsibility and shall not be in default hereunder nor incur any liability for any failure, error, malfunction or any delay in carrying out any of its duties under this Agreement if any such failure or delay results from the Successor Servicer acting in accordance with information prepared or supplied by a Person other than the Successor Servicer or the failure of any such Person to prepare or provide such

information. The Successor Servicer shall have no responsibility, shall not be in default and shall incur no liability (i) for any act or failure to act by any third party, including the Servicer, the Issuer or the Indenture Trustee or for any inaccuracy or omission in a notice or communication received by the Successor Servicer from any third party or (ii) which is due to or results from the invalidity, unenforceability of any contract with applicable law or the breach or the inaccuracy of any representation or warranty made with respect to any contract; provided that this sentence shall in no way limit or alter the liability of any Successor Servicer under Section 6.04 of this Agreement.

(h) If the Indenture Trustee or any other Successor Servicer assumes the role of Successor Servicer hereunder, such Successor Servicer shall be entitled to the benefits of (and subject to the provisions of) Section 6.07 concerning delegation of duties to subservicers.

Section 8.03. Notification to Noteholders . Within five (5) Business Days after the Servicer becomes aware of any Servicer Default, the Servicer shall give notice thereof to the Issuer, the Transferor, the Indenture Trustee, each Rating Agency and each Series Enhancer and upon receipt of such written notice by a Responsible Officer of the Indenture Trustee, the Indenture Trustee shall give notice to the Noteholders. Upon any termination of the Servicer or appointment of a Successor Servicer pursuant to this Article VIII , the Indenture Trustee shall give prompt notice thereof to the Transferor, the Issuer, the Noteholders and each Series Enhancer.

[END OF ARTICLE VIII ]

ARTICLE IX

TERMINATION

Section 9.01. Termination of Agreement . This Agreement and the respective obligations and responsibilities of the Issuer, the Transferor, the Indenture Trustee and the Servicer under this Agreement shall terminate, except with respect to the obligations described in Section 6.04 , Section 8.02(d) and Section 10.07 , on the date of the termination of the Issuer.

[END OF ARTICLE IX ]

ARTICLE X

MISCELLANEOUS PROVISIONS

Section 10.01. Amendment; Waiver of Past Defaults .

(a) This Agreement may be amended from time to time by the Servicer, the Transferor, the Issuer and the Indenture Trustee, by a written instrument signed by each of them, without consent of any of the Noteholders or the Series Enhancers, (i) to cure any ambiguity, (ii) to correct or supplement any provisions herein which may be inconsistent with any other provisions herein, or (iii) to add any other provisions with respect to matters or questions arising under this Agreement which shall not be inconsistent with the provisions of this Agreement; provided , however , that such action shall not adversely affect in any material respect the interest of any of the Noteholders or any Series Enhancer as evidenced by an Officer’s Certificate of Transferor to such effect. The Transferor shall provide notice of any such amendment to each Rating Agency. Additionally, this Agreement may be amended from time to time (including to change the definition of Monthly Period, Determination Date or Distribution Date) by the Servicer, the Transferor, the Issuer and the Indenture Trustee, by a written instrument signed by each of them, without the consent of any of the Series Enhancers or any of the Noteholders, provided that (i) the Transferor shall have delivered to the Indenture Trustee and the Owner Trustee an Officer’s Certificate, dated the date of any such amendment, stating that the Transferor reasonably believes that such amendment will not have an Adverse Effect and (ii) the Rating Agency Condition shall have been satisfied with respect to any such amendment. Notwithstanding anything else to the contrary herein, this agreement may be amended by the Servicer, the Transferor, the Issuer and the Indenture Trustee, by a written instrument signed by each of them without the consent of the Noteholders or the Series Enhancers, upon satisfaction of the Rating Agency Condition with respect to such amendment (without anything further) as may be necessary or advisable in order to avoid the imposition of any withholding taxes or state or local income or franchise taxes imposed on the Issuer’s property or its income; provided , however , the amendments which the Transferor, the Servicer, the Issuer and the Indenture Trustee may make without the consent of any of the Noteholders or Series Enhancers pursuant to this sentence may include, without limitation, the addition of provisions to permit a sale of Receivables.

(b) This Agreement may also be amended from time to time by the Servicer, the Transferor, the Issuer and the Indenture Trustee, with the consent of the Holders of Notes evidencing not less than 66 2/3% of the aggregate unpaid principal amount of the Notes Outstanding of all affected Series for which the Transferor has not delivered an Officer’s Certificate stating that there is no Adverse Effect, for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Agreement or of modifying in any manner the rights of the Noteholders; provided , however , that no such amendment shall (i) reduce in any manner the amount of or delay the timing of any distributions (changes in Early Redemption Events that decrease the likelihood of the occurrence thereof shall not be considered delays in the timing of distributions for purposes of this clause) to be made to Noteholders or deposits of amounts to be so distributed or the amount available under any Series Enhancement without the consent of each affected Noteholder, (ii) change the definition of or the manner of

calculating the interest of any Noteholder without the consent of each affected Noteholder, (iii) reduce the aforesaid percentage required to consent to any such amendment without the consent of each Noteholder or (iv) adversely affect the rating of any Series or Class by each Rating Agency without the consent of each Noteholder of such Series or Class.

(c) Promptly after the execution of any such amendment or consent (other than an amendment pursuant to paragraph (a)), the Issuer shall furnish notification of the substance of such amendment to the Indenture Trustee and each Noteholder, and the Servicer shall furnish notification of the substance of such amendment to each Rating Agency and each Series Enhancer.

(d) It shall not be necessary for the consent of Noteholders under this Section 10.01 to approve the particular form of any proposed amendment, but it shall be sufficient if such consent shall approve the substance thereof. The manner of obtaining such consents and of evidencing the authorization of the execution thereof by Noteholders shall be subject to such reasonable requirements as the Indenture Trustee may prescribe.

(e) Notwithstanding anything in this Section 10.01 to the contrary, no amendment may be made to this Agreement which would adversely affect in any material respect the interests of any Series Enhancer without the consent of such Series Enhancer.

(f) The Holders of Notes evidencing more than 66 2/3% of the aggregate unpaid principal amount of the Notes Outstanding of each Series or, with respect to any Series with two (2) or more Classes, of each Class (or, with respect to any default that does not relate to all Series, 66 2/3% of the aggregate unpaid principal amount of the Notes Outstanding of each Series to which such default relates or, with respect to any such Series with two or more Classes, of each Class) may, on behalf of all Noteholders, waive any default by the Transferor, the Issuer, or the Servicer in the performance of their obligations hereunder and its consequences, except the failure to make any distributions required to be made to Noteholders or any Series Enhancer or to make any required deposits of any amounts to be so distributed. Upon any such waiver of a past default, such default shall cease to exist, and any default arising therefrom shall be deemed to have been remedied for every purpose of this Agreement. No such waiver shall extend to any subsequent or other default or impair any right consequent thereon except to the extent expressly so waived.

(g) The Owner Trustee and the Indenture Trustee may, but shall not be obligated to, enter into any such amendment which affects the Owner Trustee’s or the Indenture Trustee’s rights, duties, benefits, protections, privileges or immunities under this Agreement or otherwise. In connection with the execution of any amendment hereunder, each of the Owner Trustee and the Indenture Trustee shall be entitled to receive the Opinion of Counsel described in Section 10.02(c)(i) .

Section 10.02. Protection of Right, Title and Interest of Issuer .

(a) The Transferor shall cause this Agreement, all amendments and supplements hereto and all financing statements and amendments thereto and continuation statements and any other necessary documents covering the Issuer’s right, title and interest to the

Transferred Assets to be promptly recorded, registered and filed, and at all times to be kept recorded, registered and filed, all in such manner and in such places as may be required by law fully to preserve and protect the right, title and interest of the Issuer hereunder to the Transferred Assets. The Transferor shall deliver to the Issuer and Indenture Trustee file-stamped copies of, or filing receipts for, any document recorded, registered or filed as provided above, as soon as available following such recording, registration or filing. The Transferor shall cooperate fully with the Servicer in connection with the obligations set forth above and will execute any and all documents reasonably required to fulfill the intent of this paragraph.

(b) Within thirty (30) days after the Transferor makes any change in its name, type or jurisdiction of organization, or organizational identification number, the Transferor shall give the Issuer and the Indenture Trustee notice of any such change and shall file such financing statements or amendments as may be necessary to continue the perfection and priority of the Issuer’s security interest or ownership interest in the Receivables and the other Transferred Assets.

(c) The Transferor shall deliver to the Issuer and the Indenture Trustee (i) upon the execution and delivery of each amendment of this Agreement, an Opinion of Counsel to the effect specified in Exhibit B-1 , and (ii) on or before June 30th of each year, beginning with June 30, 2008 an Opinion of Counsel substantially in the form of Exhibit B-2 .

Section 10.03. GOVERNING LAW . THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO ITS CONFLICT OF LAWS PROVISIONS (OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW) AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

Section 10.04. Notices .

All demands, notices, instructions, directions and communications (collectively, “ Notices ”) under this Agreement shall be in writing and shall be deemed to have been duly given if personally delivered at, mailed by certified mail, return receipt requested, or sent by facsimile transmission.

(a)

in the case of the Transferor, to:

Partridge Funding Corporation

3993 Howard Hughes Parkway

Suite 250, Office 215

Las Vegas, Nevada 89169

(facsimile no. (702) 866-2244)

Attention: Rebecca Howell

with a copy to:

Colleen Dolan, Esq.

Lionel Sawyer & Collins

50 West Liberty Street

Suite 1100

Reno, NV 89501

(775) 788-8654 (business)

(775) 788-8682 (fax)

(b)

in the case of the Servicer, to:

CompuCredit International Acquisition Corporation

101 Convention Center Drive,

Suite 850-33A

Las Vegas, Nevada 89109

Attention: Joshua Miller

with a copy to:

Colleen Dolan, Esq.

Lionel Sawyer & Collins

50 West Liberty Street

Suite 1100

Reno, NV 89501

(775) 788-8654 (business)

(775) 788-8682 (fax)

(c)

in the case of the Issuer, to:

Partridge Acquired Portfolio Business Trust

c/o Wilmington Trust FSB

3993 Howard Hughes Parkway

Suite 250

Las Vegas, Nevada 89169

Attention: Corporate Trust Administration

(facsimile no. (702) 866-2244)

(d)

in the case of the Owner Trustee, to:

Wilmington Trust FSB

3993 Howard Hughes Parkway

Suite 250

Las Vegas, Nevada 89169

Attention: Corporate Trust Administration

(facsimile no. (702) 866-2244)

(e)

in the case of the Indenture Trustee, to:

Deutsche Bank Trust Company Americas

60 Wall Street, MSNYC 60-2602

New York, New York 10005

Attention: TSS – Structured Finance

with a copy to:

Deutsche Bank AG, London Branch

Winchester House

1 Great Winchester Street

London EC2N 2DB

Attn: TSS – SFS (ABS/MBS Group)

(facsimile no. 44 20 7547 5919)

(f)

in the case of the Rating Agency for a particular Series, to the address, if any, specified in the Indenture or any Indenture Supplement relating to such Series, and

(g)

to any other Person as specified in the Indenture or any Indenture Supplement; or, as to each party, at such other address or facsimile number as shall be designated by such party in a written notice to each other party.

Section 10.05. Severability of Provisions . If any one or more of the covenants, agreements, provisions or terms of this Agreement shall for any reason whatsoever be held invalid, then such provisions shall be deemed severable from the remaining provisions of this Agreement and shall in no way affect the validity or enforceability of the remaining provisions.

Section 10.06. Further Assurances . The Transferor, the Issuer and the Servicer agree to do and perform, from time to time, any and all acts and to authorize or execute any and all further instruments required or reasonably requested by the Owner Trustee and the Indenture Trustee more fully to effect the purposes of this Agreement, including the authorization of any financing statements or amendments to financing statements relating to the Transferred Assets for filing under the provisions of the UCC of any applicable jurisdiction.

Section 10.07. Nonpetition Covenant .

(a) Notwithstanding any prior termination of this Agreement, the Servicer, the Indenture Trustee, the Owner Trustee (as such and in its individual capacity) and the Transferor shall not, prior to the date which is one year and one day after the termination of this Agreement, acquiesce, petition or otherwise invoke or cause the Issuer to invoke the process of any Governmental Authority for the purpose of commencing or sustaining a case against the Issuer under any Debtor Relief Law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Issuer or any substantial part of its property or ordering the winding-up or liquidation of the affairs of the Issuer.

(b) Notwithstanding any prior termination of this Agreement, the Servicer, the Indenture Trustee, the Owner Trustee (as such and in its individual capacity) and the Issuer shall not, prior to the date which is one year and one day after the termination of this Agreement, acquiesce, petition or otherwise invoke or cause the Transferor to invoke the process of any Governmental Authority for the purpose of commencing or sustaining a case against the Transferor under any Debtor Relief Law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Transferor or any substantial part of its property or ordering the winding-up or liquidation of the affairs of the Transferor.

Section 10.08. No Waiver; Cumulative Remedies . No failure to exercise and no delay in exercising, on the part of the Issuer, the Transferor, the Servicer, the Owner Trustee, the Noteholders or the Indenture Trustee, any right, remedy, power or privilege under this Agreement shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege under this Agreement preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges provided under this Agreement are cumulative and not exhaustive of any rights, remedies, powers and privileges provided by law.

Section 10.09. Counterparts . This Agreement may be executed in two or more counterparts (and by different parties on separate counterparts), each of which shall be an original, but all of which together shall constitute one and the same instrument.

Section 10.10. Third-Party Beneficiaries . This Agreement will inure to the benefit of and be binding upon the parties hereto, the Noteholders, any holder of a Transferor Certificate, any Series Enhancer, and the Owner Trustee (with respect to Sections 3.01(e) , 6.04 , 10.07 and 10.13 only), and their respective successors and permitted assigns. Except as otherwise expressly provided in this Agreement, no other Person will have any right or obligation hereunder.

Section 10.11. Merger and Integration . Except as specifically stated otherwise herein, this Agreement sets forth the entire understanding of the parties relating to the subject matter hereof, and all prior understandings, written or oral, are superseded by this Agreement. This Agreement may not be modified, amended, waived or supplemented except as provided herein.

Section 10.12. Headings . The headings herein are for purposes of reference only and shall not otherwise affect the meaning or interpretation of any provision hereof.

Section 10.13. Limitation of Liability of Owner Trustee .

It is expressly understood and agreed by the parties hereto that (a) this Agreement is executed and delivered by Wilmington Trust FSB, not individually or personally but solely as owner trustee of the Issuer, in the exercise of the powers and authority conferred and vested in it under the Trust Agreement, (b) each of the representations, undertakings and agreements herein made on the part of the Issuer is made and intended not as personal representations, undertakings and agreements by Wilmington Trust FSB but is made and intended for the purpose of binding only the Issuer and (c) under no circumstances shall Wilmington Trust FSB be personally liable

for the payment of any indebtedness or expenses of the Issuer or be liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by the Issuer under this Agreement or the other Transaction Documents to which the Issuer is a party.

Section 10.14. Personal Data . The parties acknowledge and agree that no Personal Data shall be transferred between the parties pursuant to or in connection with this Agreement. Any data relating to the Accounts that is processed under this Agreement shall be delivered in an anonymous format, without the use of Personal Data.

[END OF ARTICLE X ]

IN WITNESS WHEREOF, the Transferor, the Servicer, the Issuer and the Indenture Trustee have caused this Transfer and Servicing Agreement to be duly executed by their respective officers as of the date first above written.


PARTRIDGE FUNDING CORPORATION,
as Transferor

By:		/s/ Rebecca Howell
Name:		Rebecca Howell
Title:		Assistant Secretary

COMPUCREDIT INTERNATIONAL ACQUISITION CORPORATION,
as Servicer

By:		/s/ Joshua C. Miller
Name:		Joshua C. Miller
Title:		Assistant Secretary

PARTRIDGE ACQUIRED PORTFOLIO BUSINESS TRUST, as Issuer

By:		WILMINGTON TRUST FSB, not in its individual capacity but solely as Owner Trustee of the Issuer

By:		/s/ Jim Lawler
Name:		Jim Lawler
Title:		Vice President

DEUTSCHE BANK TRUST COMPANY AMERICAS,
not in its individual capacity but solely as Indenture Trustee

By:		/s/ Michele HY Voon
Name:		Michele HY Voon
Title:		Attorney-in-fact

By:		/s/ Dorit Ritter-Haddad
Name:		Dorit Ritter-Haddad
Title:		Attorney-in-fact

[Signature Page to Transfer and Servicing Agreement]

Exhibit 10.8

SECOND AMENDMENT

TO THE

NOTE PURCHASE AGREEMENT

THIS SECOND AMENDMENT TO THE NOTE PURCHASE AGREEMENT, dated as of July 30, 2007 (this “ Amendment ”), is among COMPUCREDIT CREDIT CARD MASTER NOTE BUSINESS TRUST, a Nevada business trust (together with its successors and assigns, the “ Issuer ”), COMPUCREDIT FUNDING CORP., a Nevada corporation (“ CFC ”), individually and as Transferor, COMPUCREDIT CORPORATION, a Georgia corporation (“ CompuCredit ”), as Servicer, and MERRILL LYNCH MORTGAGE CAPITAL INC., a Delaware corporation (“MLMCI”), as an Investor.

RECITALS

WHEREAS, the Issuer, CFC, CompuCredit and MLMCI are parties to the Note Purchase Agreement, dated as of January 30, 2004, as amended pursuant to a certain First Amendment to the Note Purchase Agreement, dated as of September 30, 2005 (as amended, the “ Note Purchase Agreement ”), relating to CompuCredit Credit Card Master Note Business Trust Variable Funding Notes, Series 2004-One, and wish to amend certain provisions of the Note Purchase Agreement as provided herein.

NOW THEREFORE, in consideration of the premises and the agreements contained herein, the parties hereto agree as follows:

SECTION 1 . Definitions . Capitalized terms used herein and not otherwise defined herein shall have the meanings specified in the Note Purchase Agreement.

SECTION 2 . Amendment to Section 1.1 of the Note Purchase Agreement . Section 1.1 of the Note Purchase Agreement is hereby amended by deleting the definition of “Scheduled Expiration Date” in its entirety and substituting the following definition in lieu thereof:

“ Scheduled Expiration Date ” means the January 2010 Distribution Date, or such later date to which the Scheduled Expiration Date may be extended (if extended) in the sole discretion of the Investors in accordance with the terms of subsection 2.2(b) .

SECTION 3 . Amendment to Schedule 1 of the Note Purchase Agreement . Schedule 1 of the Note Purchase Agreement is hereby deleted in its entirety and Schedule 1 attached hereto as Exhibit A substituted in lieu thereof.

SECTION 4 . Miscellaneous .

4.1 Ratification . As amended hereby, the Note Purchase Agreement is in all respects ratified and confirmed and the Note Purchase Agreement as so supplemented by this Amendment shall be read, taken and construed as one and the same instrument.

4.2 Representation and Warranty . Each of the parties hereto represents and warrants that this Amendment has been duly authorized, executed and delivered by it and constitutes its legal, valid and binding obligations, enforceable in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium or other similar laws now or hereafter in effect affecting the enforcement of creditors’ rights in general and by general principles of equity (regardless of whether such enforceability is considered in a proceeding at law or in equity).

4.3 Governing Law; Parties; Severability . THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT REFERENCE TO THE CONFLICTS OF LAW PRINCIPLES THEREOF OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW). Whenever in this Amendment there is reference made to any of the parties hereto, such reference shall also be a reference to the successors and assigns of such party, including, without limitation, any debtor-in-possession or trustee. The provisions of this Amendment shall be binding upon and shall inure to the benefit of the successors and assigns of the parties hereto. If any one or more of the covenants, agreements, provisions or terms of this Amendment shall for any reason whatsoever be held invalid, then such provisions shall be deemed severable from the remaining provisions of this Amendment and shall in no way affect the validity or enforceability of the remaining provisions.

4.4 Effectiveness . This Amendment shall be effective as of the date first above written.

4.5 Counterparts . This Amendment may be executed in any number of counterparts (and by different parties on separate counterparts), each of which shall be an original, but all of which together shall constitute one and the same instrument.

4.6 Limitation of Liability . It is expressly understood and agreed by the parties hereto that (a) this Amendment is executed and delivered by Wilmington Trust FSB, not individually or personally but solely as trustee of the Issuer, in the exercise of the powers and authority conferred and vested in it under the Trust Agreement, (b) each of the representations, undertakings and agreements herein made on the part of the Issuer is made and intended not as personal representations, undertakings and agreements by Wilmington Trust FSB but is made and intended for the purpose of binding only the Issuer and (c) under no circumstances shall Wilmington Trust FSB be personally liable for the payment of any indebtedness or expenses of the Issuer or be liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by the Issuer under this Amendment or the other Transaction Documents to which the Issuer is a party.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to the Note Purchase Agreement to be duly executed by their respective authorized officers as of the day and year first above written.


COMPUCREDIT CREDIT CARD MASTER NOTE BUSINESS TRUST

By:		Wilmington Trust FSB, not in its individual capacity but solely as Owner Trustee under the Trust Agreement dated as of July 14, 2000

By:
		Name:
		Title:


COMPUCREDIT FUNDING CORP., as Transferor

By:
		Name:
		Title:


COMPUCREDIT CORPORATION, as Servicer

By:
		Name:
		Title:


MERRILL LYNCH MORTGAGE CAPITAL INC., as an Investor

By:
		Name:
		Title:

[Second Amendment to Series 2004-One NPA]

Exhibit 31.1

CERTIFICATIONS

I, David G. Hanna, certify that:

1. I have reviewed this report on Form 10-Q of CompuCredit Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; and

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) and 15d-14) for the registrant and have:

designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the fourth fiscal period in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

all significant deficiencies in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 1, 2007

/s/ DAVID G. HANNA

David G. Hanna

Chief Executive Officer and Chairman of the Board

Exhibit 31.2

CERTIFICATIONS

I, J.Paul Whitehead III, certify that:

1. I have reviewed this report on Form 10-Q of CompuCredit Corporation;

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 1, 2007

/s/ J. PAUL WHITEHEAD, III

J. Paul Whitehead, III

Chief Financial Officer

Exhibit 32.1

CERTIFICATION

The undersigned, as the Chief Executive Officer and Chairman of the Board, and as the Chief Financial Officer, respectively, of CompuCredit Corporation, certify that, to the best of their knowledge and belief, the Quarterly Report on Form 10-Q for the period ended June 30, 2007, which accompanies this certification fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 and the information contained in the periodic report fairly presents, in all material respects, the financial condition and results of operations of CompuCredit Corporation at the dates and for the periods indicated. The foregoing certifications are made pursuant to § 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. § 1350) and shall not be relied upon for any other purpose.

This 1 ^st day of August, 2007.

/s/ DAVID G. HANNA

David G. Hanna

Chief Executive Officer and

Chairman of the Board

/s/ J. PAUL WHITEHEAD, III

J. Paul Whitehead, III

Chief Financial Officer

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to CompuCredit Corporation and will be retained by CompuCredit Corporation and furnished to the Securities and Exchange Commission or its staff upon request.