10-K

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

Annual Report for the year ended December 31, 2019

of

ATLANTICUS HOLDINGS CORPORATION

a Georgia Corporation

IRS Employer Identification No. 58-2336689

SEC File Number 0-53717

Five Concourse Parkway, Suite 300

Atlanta, Georgia 30328

(770) 828-2000

Atlanticus’ common stock, no par value per share, is registered pursuant to Section 12(b) of the Securities Exchange Act of 1934 (the “Act”) and trades on the NASDAQ Global Select Market under the ticker symbol "ATLC".

Atlanticus is not a well-known seasoned issuer, as defined in Rule 405 of the Securities Act of 1933.

Atlanticus (1) is required to file reports pursuant to Section 13 of the Act, (2) has filed all reports required to be filed by Section 13 of the Act during the preceding 12 months and (3) has been subject to such filing requirements for the past 90 days.

Atlanticus has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months.

Atlanticus is a smaller reporting company and is not a shell company or an emerging growth company.

The aggregate market value of Atlanticus’ common stock (based upon the closing sales price quoted on the NASDAQ Global Select Market) held by non-affiliates as of June 30, 2019 was $21.7 million. (For this purpose, directors, officers and 10% shareholders have been assumed to be affiliates, and we also have included 1,459,233 loaned shares at June 30, 2019.)

As of March 20, 2020, 15,919,360 shares of common stock, no par value, of Atlanticus were outstanding, including 1,459,233 loaned shares to be returned.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of Atlanticus' Proxy Statement for its 2020 Annual Meeting of Shareholders are incorporated by reference into Part III.

Table of Contents

Page

PART I

	Item 1.	Business	1
	Item 1A.	Risk Factors	7
	Item 1B.	Unresolved Staff Comments	16
	Item 2.	Properties	16
	Item 3.	Legal Proceedings	16
	Item 4.	Mine Safety Disclosure	16
PART II
	Item 5.	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	17
	Item 6.	Selected Financial Data	17
	Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	18
	Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	33
	Item 8.	Financial Statements and Supplementary Data	33
	Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	33
	Item 9A.	Controls and Procedures	33
	Item 9B.	Other Information	33
PART III

Item 10	Directors, Executive Officers and Corporate Governance	34
Item 11.	Executive Compensation	34
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	34
Item 13.	Certain Relationships and Related Transactions, and Director Independence	34
Item 14.	Principal Accountant Fees and Services	34

PART IV
	Item 15.	Exhibits and Financial Statement Schedules	35
	Item 16.	Form 10-K Summary	38

i

In this Report, except as the context suggests otherwise, the words “Company,” “Atlanticus Holdings Corporation,” “Atlanticus,” “we,” “our,” “ours” and “us” refer to Atlanticus Holdings Corporation and its subsidiaries and predecessors. Atlanticus owns Aspire^®, Emerge^®, Fortiva^®, Imagine^®, Salute^®, Tribute^® and other trademarks and service marks in the United States (“U.S.”) and the United Kingdom (“U.K.”).

Cautionary Notice Regarding Forward-Looking Statements

We make forward-looking statements in this Report and in other materials we file with the Securities and Exchange Commission (“SEC”) or otherwise make public. In this Report, both Item 1, “Business,” and Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contain forward-looking statements. In addition, our senior management might make forward-looking statements to analysts, investors, the media and others. Statements with respect to expected revenue; income; receivables; income ratios; net interest margins; long-term shareholder returns; acquisitions of financial assets and other growth opportunities; divestitures and discontinuations of businesses; loss exposure and loss provisions; delinquency and charge-off rates; changes in collection programs and practices; changes in the credit quality and fair value of our credit card loans, interest and fees receivable and the fair value of their underlying structured financing facilities; the impact of actions by the Federal Deposit Insurance Corporation (“FDIC”), Federal Reserve Board, Federal Trade Commission (“FTC”), Consumer Financial Protection Bureau (“CFPB”) and other regulators on both us, banks that issue credit cards and other credit products on our behalf, and merchants that participate in our point-of-sale finance operations; account growth; the performance of investments that we have made; operating expenses; the impact of bankruptcy law changes; marketing plans and expenses; the performance of our Auto Finance segment; the impact of our credit card receivables on our financial performance; the sufficiency of available capital; future interest costs; sources of funding operations and acquisitions; growth and profitability of our point-of-sale finance operations; our ability to raise funds or renew financing facilities; share repurchases or issuances; debt retirement; the results associated with our equity-method investee; our servicing income levels; gains and losses from investments in securities; experimentation with new products and other statements of our plans, beliefs or expectations are forward-looking statements. These and other statements using words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” “project,” “target,” “can,” “could,” “may,” “should,” “will,” “would” and similar expressions also are forward-looking statements. Each forward-looking statement speaks only as of the date of the particular statement. The forward-looking statements we make are not guarantees of future performance, and we have based these statements on our assumptions and analyses in light of our experience and perception of historical trends, current conditions, expected future developments and other factors we believe are appropriate in the circumstances. Forward-looking statements by their nature involve substantial risks and uncertainties that could significantly affect expected results, and actual future results could differ materially from those described in such statements. Management cautions against putting undue reliance on forward-looking statements or projecting any future results based on such statements or present or historical earnings levels.

Although it is not possible to identify all factors, we continue to face many risks and uncertainties. Among the factors that could cause actual future results to differ materially from our expectations are the risks and uncertainties described under “Risk Factors” set forth in Part I, Item 1A, and the risk factors and other cautionary statements in other documents we file with the SEC, including the following:

• the availability of adequate financing to support growth;

• the extent to which federal, state, local and foreign governmental regulation of our various business lines and the products we service for others limits or prohibits the operation of our businesses;

• current and future litigation and regulatory proceedings against us;

• the effect of adverse economic conditions on our revenues, loss rates and cash flows;

• competition from various sources providing similar financial products, or other alternative sources of credit, to consumers;

• the adequacy of our allowances for uncollectible loans, interest and fees receivable and estimates of loan losses used within our risk management and analyses;

• the possible impairment of assets;

• the duration and magnitude of the impact the novel coronavirus, or COVID-19 ("COVID-19"), could have on credit usage and payments;

• our ability to manage costs in line with the expansion or contraction of our various business lines;

• our relationship with (i) the merchants that participate in point-of-sale finance operations and (ii) the banks that issue credit cards and provide certain other credit products utilizing our technology platform and related services; and

• theft and employee errors.

Most of these factors are beyond our ability to predict or control. Any of these factors, or a combination of these factors, could materially affect our future financial condition or results of operations and the ultimate accuracy of our forward-looking statements. There also are other factors that we may not describe (because we currently do not perceive them to be material) that could cause actual results to differ materially from our expectations.

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.

ii

PART I

ITEM 1. BUSINESS

This Report contains information that we obtained from industry and general publications and research, surveys and studies conducted by third parties.  This information involves many assumptions and limitations, and you are cautioned not to give undue weight to any of this data.  We have obtained this information from sources that we believe are reliable.  However, we have not independently verified market or industry data from third party sources.

General

A general discussion of our business follows. For additional information about our business, please visit our website at www.Atlanticus.com. Information contained on or available through our website is not incorporated by reference in this Report.

We are a Georgia corporation formed in 2009, as successor to an entity that commenced operations in 1996. We utilize proprietary analytics and a flexible technology platform to enable financial institutions to provide various credit and related financial services and products to or associated with the financially underserved consumer credit market. According to data published by Experian, 41% of Americans had FICO® scores of less than 700 as of the second quarter of 2019, which represents a population in excess of 90 million consumers. A recent survey conducted by Charles Schwab further found that 59% of Americans lived "paycheck to paycheck" and only 38% of people have an emergency fund.These consumers often have short-term, immediate credit needs that are often not effectively met by traditional financial institutions.  By facilitating fairly priced consumer credit alternatives with value added features and benefits specifically curated for the unique needs of this financially underserved consumer, we endeavor to empower consumers on a path to improved financial well-being.

Currently, within our Credit and Other Investments segment, we are applying the experiences gained and infrastructure built from servicing over $26 billion in consumer loans over our 23-year operating history to support lenders who originate a range of consumer loan products. These products include retail credit and credit cards originated by lenders through multiple channels, including retail point-of-sale, direct mail solicitation, and partnerships with third parties. In the point-of-sale channel, we partner with retailers and service providers in various industries across the U.S. to allow them to provide credit to their customers for the purchase of a variety of goods and services including consumer electronics, furniture, elective medical procedures, healthcare, educational services and home-improvements. The services of our lending partners are often extended to consumers who may not have access to traditional financing options. We specialize in supporting this “second-look” credit service. Our flexible technology platform allows our lending partners to integrate our paperless process and instant decision-making platform with the technology infrastructure of participating retailers and service providers. Additionally, we support lenders who market general purpose credit cards directly to consumers through additional channels, which enables them to reach consumers through a diverse origination platform that includes retail point-of-sale, direct mail and digital marketing solicitation and partnerships with third parties. Our technology platform and proprietary analytics enable lenders to make instant credit decisions utilizing hundreds of inputs from multiple sources and thereby offer credit to consumers overlooked by traditional providers of financing. By supporting a range of products through a multitude of channels, we enable lenders to provide the right type of credit, whenever and wherever the consumer has a need.

In most cases, we invest in the receivables originated by lenders who utilize our technology platform and other related services. From time to time, we also purchase receivables portfolios from third parties.  In this report, "receivables" or "loans" typically refer to receivables we have purchased from our lending partners or from third parties.

Using our infrastructure and technology platform, we also provide loan servicing, including risk management and customer service outsourcing, for third parties. Also through our Credit and Other Investments segment, we engage in testing and limited investment in consumer finance technology platforms as we seek to capitalize on our expertise and infrastructure.

Additionally, we report within our Credit and Other Investments segment: (1) the income earned from an investment in an equity-method investee that holds credit card receivables for which we are the servicer; and (2) gains or losses associated with investments previously made in consumer finance technology platforms. These include investments in companies engaged in mobile technologies, marketplace lending and other financial technologies. These investments are carried at the lower of cost or market valuation. None of these companies are publicly-traded and there are no material pending liquidity events.

The recurring cash flows we receive within our Credit and Other Investments segment principally include those associated with (1) point-of-sale and direct-to-consumer receivables, (2) servicing compensation and (3) credit card receivables portfolios that are unencumbered or where we own a portion of the underlying structured financing facility.

We believe that our point-of-sale and direct-to-consumer receivables are generating, and will continue to generate, attractive returns on assets, thereby facilitating debt financing under terms and conditions (including advance rates and pricing) that will support attractive returns on equity, and we continue to pursue growth in this area.

Within our Auto Finance segment, our CAR subsidiary operations principally purchase and/or service loans secured by automobiles from or for, and also provide floor plan financing for, a pre-qualified network of independent automotive dealers and automotive finance companies in the buy-here, pay-here, used car business. We purchase auto loans at a discount and with dealer retentions or holdbacks that provide risk protection. Also within our Auto Finance segment, we are providing certain installment lending products in addition to our traditional loans secured by automobiles.

1

We are investing in our infrastructure in order to expand point-of-sale and direct-to-consumer finance and credit solutions and new product offerings, which we believe will allow for long-term shareholder returns. Subject to the availability of capital at attractive terms and pricing, we plan to continue to evaluate and pursue a variety of activities, including:  (1) investments in additional financial assets associated with point-of-sale and direct-to-consumer finance and credit activities as well as the acquisition of interests in receivables portfolios; (2) investments in other assets or businesses that are not necessarily financial services assets or businesses and (3) the repurchase of our convertible senior notes and other debt and our outstanding common stock.

Credit and Other Investments Segment.

Our Credit and Other Investments segment includes our activities relating to our servicing of and our investments in receivables from point-of-sale, direct-to-consumer personal finance and credit card operations, our various credit card receivables portfolios, as well as other product testing and investments that generally utilize much of the same infrastructure. The types of revenues we earn from our investments in receivables portfolios and services primarily include finance charges, fees and the accretion of merchant fees associated with the point-of-sale receivables or annual fees on our direct-to-consumer receivables.

As previously discussed, we support lenders who originate a range of consumer loan products over multiple channels. Through our point-of-sale operations, we leverage our flexible technology platform that allows retail partners and service providers to offer loan options to their customers who may have been declined by a primary lender. The same proprietary analytics and infrastructure also allows lenders to offer general purpose loan products directly to consumers with our direct-to-consumer products. We help lenders reach these consumers through a diverse origination platform that includes direct mail, digital marketing and partnerships, and we are currently expanding our acquisitions of new receivables associated with both our point-of-sale and direct-to-consumer credit card accounts.

Our credit and other operations are heavily regulated, which may cause us to change how we conduct our operations either in response to regulation or in keeping with our goal of leading the industry in adherence to consumer-friendly practices. We have made meaningful changes to our practices over the past several years, and because our account management practices are evolutionary and dynamic, it is possible that we may make further changes to these practices, some of which may produce positive, and others of which may produce adverse, effects on our operating results and financial position. Customers at the lower end of the credit score range intrinsically have higher loss rates than do customers at the higher end of the credit score range. As a result, we price our products to reflect this higher loss rate. As such, our products are subject to greater regulatory scrutiny than the products of prime only lenders who are able to price their credit products at much lower levels than we can. See “Consumer and Debtor Protection Laws and Regulations—Credit and Other Investments Segment” and Item 1A, “Risk Factors.”

Auto Finance Segment. The operations of our Auto Finance segment are conducted through our CAR platform, which we acquired in April 2005. CAR primarily purchases and/or services loans secured by automobiles from or for, and also provides floor-plan financing for, a pre-qualified network of independent automotive dealers and automotive finance companies in the buy-here, pay-here used car business.  We have expanded these operations to also include certain installment lending products in addition to our traditional loans secured by automobiles both in the U.S. and U.S. territories. 

Through our CAR operations, we generate revenues on purchased loans through interest earned on the face value of the installment agreements combined with the accretion of 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 assets owned by unrelated third parties. We offer a number of other products to our network of buy-here, pay-here dealers (including our floor-plan financing offering), but the majority of our activities are represented by our purchases of auto loans at discounts and our servicing of auto loans for a fee. As of December 31, 2019, our CAR operations served more than 600 dealers in 35 states, the District of Columbia and two U.S. territories. These operations continue to perform well (achieving consistent profitability and generating positive cash flows and growth).

2

How Do We Manage the Receivables and Mitigate Our Risks?

Credit and Other Investments Segment. We manage our investments in receivables using credit scoring, credit file data and our proprietary risk evaluation systems developed and refined over our 23-year operating history. These strategies include the management of transaction authorizations, account renewals, credit line modifications and collection programs. We use an adaptive control system to translate our strategies into account management processes. The system enables us to develop and test multiple strategies simultaneously, which allows us to continually refine our account management activities. We have incorporated our proprietary risk scores into the control system, in addition to standard credit behavior scores used widely in the industry, in order to segment, evaluate and manage the receivables. We believe that by combining external credit file data along with historical and current customer activity, we are able to better predict the true risk associated with current and delinquent receivables.

For our point-of-sale and direct-to-consumer finance activities as well as the accounts that are open to purchases, we generally assist our lending partners with managing credit lines to reward financially underserved customers who are performing well and to mitigate losses from delinquent customer segments. We also assist our lending partners with employing strategies to reduce otherwise open credit lines for customers demonstrating indicators of increased credit or bankruptcy risk. Data relating to account performance are captured and loaded into our proprietary database for ongoing analysis. We adjust account management strategies as necessary, based on the results of such analyses. Additionally, we use industry-standard fraud detection software to manage the portfolio. We route accounts to manual work queues and suspend charging privileges if the transaction-based fraud models indicate a probability of fraudulent use.

Auto Finance Segment. Our CAR operations manage credit quality and loss mitigation at the dealer portfolio level through the implementation of dealer-specific loss reserve accounts. In most instances, the reserve accounts are cross-collateralized across all accounts presented by any single dealer. CAR monitors performance at the dealer portfolio level (by product type) to adjust pricing or the reserve account or to determine whether to terminate future account purchases from such dealer.

CAR provides dealers with specific purchase guidelines based upon each product offering and delegates approval authority to assist in the monitoring of transactions during the loan acquisition process. Dealers are subject to specific approval criteria, and individual accounts typically are verified for accuracy before, during and after the acquisition process. Dealer portfolios across the business segment are monitored and compared against expected collections and peer dealer performance. Monitoring of dealer pool vintages, delinquencies and loss ratios helps determine past performance and expected future results, which are used to adjust pricing and reserve requirements. Our CAR operations also manage risk through diversifying their receivables among multiple dealers.

How Do We Collect?

Credit and Other Investments Segment. The goal of the collections process is to collect as much of the account balance that is owed in the most cost-effective and customer-friendly manner possible. To this end, we employ the traditional cross-section of letters and telephone calls to encourage payment. We also sometimes offer flexibility with respect to the application of payments in order to encourage larger or prompter payments. For instance, in certain cases collectors may vary the general payment application priority (i.e., of applying payments first to finance charges, then to fees, and then to principal) by agreeing to apply payments first to principal and then to finance charges and fees or by agreeing to provide payments or credits of finance charges and principal to induce or in exchange for an appropriate payment. Application of payments in this manner also permits collectors to assess real time the degree to which payments over the life of an account have covered the principal credit extensions on that account. This allows collectors to readily identify the potential economic loss associated with the charge off of a particular receivable (i.e., the excess of principal purchases and cash advances funded over payments received throughout the life of the account). The selection of collection techniques, including, for example, the order in which payments are applied or the provision of payments or credits to induce or in exchange for a payment, impacts the statistical performance of the portfolios that we present under “Credit and Other Investments Segment” within Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

3

Collectors employ various and evolving tools when collecting on our receivables, and they routinely test and evaluate new tools in their effort toward improving our collections with a greater degree of efficiency and service. These tools include programs under which the contractual interest associated with a receivable may be reduced or eliminated, or a certain amount of accrued fees is waived, provided a minimum number or amount of payments have been made. In some instances, collectors may agree to match the payment on a receivable, for example, with commensurate payments or reductions of finance charges or waivers of fees. In other situations, collectors may actually settle and adjust finance charges and fees on a receivable, for example, based on a commitment and follow through on a commitment to pay certain portions of the balances owed. Collectors may also decrease minimum payments owed under certain collection programs. Additionally, we employ re-aging techniques as discussed below. Moreover, we voluntarily participate in the Consumer Credit Counseling Service (“CCCS”) program by waiving a certain percentage of a receivable that is considered our “fair share” under the CCCS program. All of our programs are utilized based on the degree of economic success and customer service they achieve.

We regularly monitor and adapt collection strategies, techniques, technology and training to optimize our efforts to reduce delinquencies and charge offs. We use our operations systems to develop these proprietary collection strategies and techniques, and we analyze the output from these systems to identify the strategies and techniques that we believe are most likely to result in curing a delinquent receivable in the most cost-effective manner, rather than treating all delinquent receivables the same based on the mere passage of time.

As in all aspects of our risk management strategies, we compare the results of each of the above strategies with other collection strategies and devote resources to those strategies that yield the best results. Results are measured based on, among other things, delinquency rates, expected losses and costs to collect. Existing strategies are then adjusted based on these results. We believe that routinely testing, measuring and adjusting collection strategies results in lower bad debt losses and operating expenses.

Interest and fees for most credit products we service are discontinued when loans, interest and fees receivable become contractually 90 or more days past due and we charge off loans, interest and fees receivable when they become contractually more than 180 days past due. For all of our products, we charge off receivables within 30 days of notification and confirmation of bankruptcy or death of the obligor. However, in some cases of death, we do not charge off receivables if there is a surviving, contractually liable individual or an estate large enough to pay the debt in full.

Our determination of whether an account is contractually past due is relevant to our delinquency and charge-off data provided under the “Credit and Other Investments Segment” caption within Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Various factors are relevant in analyzing whether an account is contractually past due (e.g., whether an account has not satisfied its minimum payment due requirement), which for us is the trigger for moving receivables through our various delinquency stages and ultimately to charge-off status. For our point-of-sale and direct-to-consumer finance accounts, we consider an account to be delinquent if the customer has not made any required payment as of the payment due date. For credit card accounts, we consider a cardholder’s receivable to be delinquent if the cardholder has failed to pay a minimum amount, computed as the greater of a stated minimum payment or a fixed percentage of the statement balance (for example 3% to 10% of the outstanding balance in some cases or in other cases 1% of the outstanding balance plus any finance charges and late fees billed in the current cycle).

Additionally, we may re-age accounts that meet our qualifications for re-aging. Re-aging involves changing the delinquency status of an account. It is our policy to work cooperatively with customers demonstrating a willingness and ability to repay their indebtedness and who satisfy other criteria, but are unable to pay the entire past due amount. Generally, to qualify for re-aging, an account must have been opened for at least nine months and may not be re-aged more than once in a twelve-month period or twice in a five-year period. In addition, an account on a workout program may qualify for one additional re-age in a five-year period. The customer also must have made three consecutive minimum monthly payments or the equivalent cumulative amount in the last three billing cycles. If a re-aged account subsequently experiences payment defaults, it will again become contractually delinquent and will be charged off according to our regular charge-off policy. The practice of re-aging an account may affect delinquencies and charge offs, potentially delaying or reducing such delinquencies and charge offs; however, this impact generally changes such delinquencies and charge offs by less than 10% and 5%, respectively.

4

As discussed above, typically, once an account is 90 days or more past due, the account is placed on a non-accrual status. Placement on a non-accrual status results in the use of programs under which the contractual interest associated with a receivable may be reduced or eliminated, or a certain amount of accrued fees is waived, provided a minimum number or amount of payments have been made. Following this adjustment, if a customer demonstrates a willingness and ability to resume making monthly payments and meets the additional criteria discussed above, we will re-age the customer’s account. When we re-age an account, we adjust the status of the account to bring a delinquent account current, but generally do not make any further modifications to the payment terms or amount owed. Thus we do not recognize an impairment or write-down solely due to the re-aging process. Once an account is placed on a non-accrual status, it is closed for further purchases. We believe that re-ages help customers to manage difficult repayment periods, return to good standing and avoid further deterioration to their credit scores. Accounts that are placed on a non-accrual status and thereafter make at least one payment qualify as troubled debt restructurings (“TDRs”). See Note 2, “Significant Accounting Policies and Consolidated Financial Statement Components-Loans, Interest and Fees Receivable-Troubled Debt Restructurings” to our consolidated financial statements included herein for further discussion of TDRs.

Auto Finance Segment. Accounts that CAR purchases from approved dealers initially are collected by the originating branch or service center location using a combination of traditional collection practices. The collection process includes contacting the customer by phone or mail, skip tracing and using starter interrupt devices to minimize delinquencies. Uncollectible accounts in our CAR operation generally are returned to the dealer under an agreement with the dealer to charge the balance on the account against the dealer’s reserve account. We generally do not repossess autos in our CAR operation as a result of the agreements that we have with the dealers unless there are insufficient dealer reserves to offset the loss or if a dealer instructs us to do so.

Consumer and Debtor Protection Laws and Regulations

Credit and Other Investments Segment. Our U.S. business is regulated directly and indirectly under various federal and state consumer protection, collection and other laws, rules and regulations, including the federal Credit Card Accountability Responsibility and Disclosure Act of 2009 (the “CARD Act”), the federal Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”), the federal Truth In Lending Act (“TILA”), the federal Equal Credit Opportunity Act, the federal Fair Credit Reporting Act, the federal Fair Debt Collection Practices Act, the Federal Trade Commission (“FTC”) Act, the federal Gramm-Leach-Bliley Act and the federal Telemarketing and Consumer Fraud and Abuse Prevention Act. These laws, rules and regulations, among other things, impose disclosure requirements when consumer products are advertised, when an account is opened, when monthly billing statements are sent and when consumer obligations are collected. In addition, various statutes limit the liability of consumers for unauthorized use, prohibit discriminatory practices in consumer transactions, impose limitations on the types of charges that may be assessed and restrict the use of consumer credit reports and other account-related information. Many of our lending partners' products are designed for customers at the lower end of the credit score range. These products are priced to reflect the higher credit risk of these customers. Because of the inherently greater credit risks of these customers and the resulting higher interest and fees, we and our lending partners are subject to significant regulatory scrutiny. If regulators, including the FDIC (which regulates bank lenders), the CFPB and the FTC, object to the terms of these products, or to the marketing or collection practices used, we and our lending partners could be required to modify or discontinue certain products or practices.

Auto Finance Segment. This segment is regulated directly and indirectly under various federal and state consumer protection and other laws, rules and regulations, including the federal TILA, the federal Equal Credit Opportunity Act, the federal Fair Credit Reporting Act, the federal Fair Debt Collection Practices Act, Dodd-Frank, the federal Gramm-Leach-Bliley Act and the federal Telemarketing and Consumer Fraud and Abuse Prevention Act. In addition, various state statutes limit the interest rates and fees that may be charged, limit the types of interest computations (e.g., interest bearing or pre-computed) and refunding processes, prohibit discriminatory practices in extending credit, impose limitations on fees and other ancillary products and restrict the use of consumer credit reports and other account-related information. Many of the states in which this segment operates have various licensing requirements and impose certain financial or other conditions in connection with these licensing requirements.

5

Privacy and Data Security Laws and Regulations. We are required to manage, use, and store large amounts of personally identifiable information, principally the confidential personal and financial data of our lending partners’ customers, in the course of our business. We depend on our IT networks and systems, and those of third parties, to process, store, and transmit that information. In the past, financial service companies have been targeted for sophisticated cyber attacks. A security breach involving our files and infrastructure could lead to unauthorized disclosure of confidential information. We take numerous measures to ensure the security of our hardware and software systems as well as customer information.

We are subject to various U.S. federal and state laws and regulations designed to protect confidential personal and financial data. For example, we must comply with guidelines under the Gramm-Leach-Bliley Act that require each financial institution to develop, implement and maintain a written, comprehensive information security program containing safeguards that are appropriate to the financial institution’s size and complexity, the nature and scope of the financial institution’s activities and the sensitivity of any customer information at issue. Additionally, various federal banking regulatory agencies, and all 50 states, the District of Columbia, Puerto Rico and the Virgin Islands, have enacted data security regulations and laws requiring customer notification in the event of a security breach.

Competition

Credit and Other Investments Segment. We face substantial competition from financial service companies, the intensity of which varies depending upon economic and liquidity cycles. Our financial performance is, in part, a function of the performance of our investments in receivables and the aggregate outstanding amount of such receivables.  The point-of-sale and direct-to-consumer finance activities of our lending partners compete with national, regional and local bankcard and consumer credit issuers, other general-purpose credit card issuers and retail credit card and merchant credit issuers. Many of these competitors are substantially larger than we are, have significantly greater financial resources than we do and have significantly lower costs of funds than we have.

Auto Finance Segment. Competition within the auto finance sector is widespread and fragmented. Our auto finance operations target automobile dealers that oftentimes are not able to access indirect lending from major financial institutions or captive finance companies. We compete mainly with a handful of national and regional companies focused on this credit segment (e.g., Credit Acceptance Corporation, Westlake Financial, Mid-Atlantic Finance, Santander Consumer USA, Western Funding Inc., U.S. Auto Credit, and United Acceptance) and a large number of smaller, regional private companies with a narrow geographic focus. Individual dealers with access to capital may also compete in this segment through the purchase of receivables from peer dealers in their markets.

Employees

As of December 31, 2019, we had 319 employees, including 5 part-time employees, all of whom are principally employed within the U.S. We consider our relations with our employees to be good. None of our employees are covered by a collective-bargaining agreement, and we have never experienced any organized work stoppage, strike or labor dispute.

Trademarks, Trade Names and Service Marks

We have registered and continue to register, when appropriate, various trademarks, trade names and service marks used in connection with our businesses and for private-label marketing of certain of our products. We consider these trademarks, trade names and service marks to be readily identifiable with, and valuable to, our business. This Annual Report on Form 10-K also contains trade names and trademarks of other companies that are the property of their respective owners.

Additional Information

We are headquartered in Atlanta, Georgia, and our principal executive offices are located at Five Concourse Parkway, Suite 300, Atlanta, Georgia 30328. Our headquarters telephone number is (770) 828-2000, and our website is www.Atlanticus.com. We make available free of charge on our website certain of our recent SEC filings, including our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements and amendments to those filings as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.  These reports are also available on the SEC's website at http://www.sec.gov.

Certain corporate governance materials, including our Board of Directors committee charters and our Code of Business Conduct and Ethics, are posted on our website under the heading “For Investors.” From time to time, the corporate governance materials on our website may be updated as necessary to comply with rules issued by the SEC or NASDAQ, or as desirable to further the continued effective and efficient governance of our company.

6

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 or other securities. 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.

Investors should be particularly cautious regarding investments in our common stock or other securities at the present time in light of uncertainties as to the profitability of our business model going forward and our inability to achieve consistent earnings from our operations in recent years.

Our Cash Flows and Net Income Are Dependent Upon Payments from Our Investments in Receivables

The collectibility of our investments in receivables 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 consumers repay their accounts or become delinquent, and the rate at which consumers borrow funds.  Deterioration in these factors would adversely impact our business.  In addition, 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.

Our portfolio of receivables is not diversified and primarily originates from consumers whose creditworthiness is considered sub-prime. Historically, we have invested in receivables in one of two ways—we have either (i) invested in receivables originated by lenders who utilize our services or (ii) invested in or purchased pools of receivables from other issuers. In either case, substantially all of our receivables are from financially underserved borrowers—borrowers represented by credit risks that regulators classify as “sub-prime.” Our reliance on sub-prime receivables has negatively impacted and may in the future negatively impact, our performance. Our past losses may have been mitigated had our portfolios consisted of higher-grade receivables in addition to our sub-prime receivables.

Economic slowdowns increase our credit losses. During periods of economic slowdown or recession, we 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 comparatively higher during periods of economic slowdown or recession than those experienced by more traditional providers of consumer credit because of our focus on the financially underserved consumer market, which may be disproportionately impacted.

Because a significant portion of our reported income is based on management’s estimates of the future performance of receivables, differences between actual and expected performance of the receivables may cause fluctuations in net income. Significant portions of our reported income (or losses) are based on management’s estimates of cash flows we expect to receive on receivables, particularly for such assets that we report based on fair value. The expected cash flows are based on management’s estimates of interest rates, default rates, payment rates, cardholder purchases, servicing costs, and discount rates. 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 cause fluctuations in our net income. For instance, higher than expected rates of delinquencies and losses could cause our net income to be lower than expected. Similarly, levels of loss and delinquency can result in our being required to repay lenders earlier than expected, thereby reducing funds available to us for future growth. 

Due to our relative lack of historical experience with Internet consumers, we may not be able to evaluate their creditworthiness. We have less historical experience with respect to the credit risk and performance of receivables owed by consumers acquired over the Internet and other digital channels. As a result, we may not be able to evaluate successfully the creditworthiness of these potential consumers. Therefore, we may encounter difficulties managing the expected delinquencies and losses.

We Are Substantially Dependent Upon Borrowed Funds to Fund Receivables We Purchase

We finance receivables that we acquire in large part through financing facilities. All of our financing facilities are of finite duration (and ultimately will need to be extended or replaced) and contain financial covenants and other conditions that must be fulfilled in order for funding to be available. Moreover, some of our facilities currently are in amortization stages (and are not allowing for the funding of any new loans) based on their original terms. The cost and availability of equity and borrowed funds is dependent upon our financial performance, the performance of our industry overall and general economic and market conditions, and at times equity and borrowed funds have been both expensive and difficult to obtain.

If additional financing facilities are not available in the future on terms we consider acceptable—an issue that was made even more acute in the U.S. given regulatory changes that reduced asset-level returns on credit card lending—we will not be able to purchase additional receivables and those receivables may contract in size.

Capital markets may experience periods of disruption and instability, which could limit our ability to grow our receivables.  From time-to-time, capital markets may experience periods of disruption and instability. For example, from 2008 to 2009, the global capital markets were unstable as evidenced by the lack of liquidity in the debt capital markets, significant write-offs in the financial services sector, the re-pricing of credit risk in the broadly syndicated credit market and the failure of major financial institutions. Despite actions of the U.S. federal government and various foreign governments, these events contributed to worsening general economic conditions that materially and adversely impacted the broader financial and credit markets and reduced the availability of debt and equity capital for the market as a whole and financial services firms in particular. If similar adverse and volatile market conditions repeat in the future, we and other companies in the financial services sector may have to access, if available, alternative markets for debt and equity capital in order to grow our receivables.

7

Moreover, the re-appearance of market conditions similar to those experienced from 2008 through 2009 for any substantial length of time or worsened market conditions could make it difficult for us to borrow money or to extend the maturity of or refinance any indebtedness we may have under similar terms and any failure to do so could have a material adverse effect on our business. Unfavorable economic and political conditions, including future recessions, political instability, geopolitical turmoil and foreign hostilities, and disease, pandemics and other serious health events, also could increase our funding costs, limit our access to the capital markets or result in a decision by lenders not to extend credit to us.

Recently, the outbreak of the novel coronavirus, or COVID-19, in many countries continues to adversely impact global commercial activity and has contributed to significant volatility in financial markets. The global impact of the outbreak has been rapidly evolving, and as cases of the virus have continued to be identified in additional countries, many countries have reacted by instituting quarantines and restrictions on travel. Such actions are creating disruption in global supply chains, and adversely impacting a number of industries, such as transportation, hospitality and entertainment. The outbreak could have a continued adverse impact on economic and market conditions and trigger a period of global economic slowdown. The rapid development and fluidity of this situation precludes any prediction as to the ultimate adverse impact of the coronavirus. Nevertheless, the coronavirus presents material uncertainty and risk with respect to our performance and financial results.

We may in the future have difficulty accessing debt and equity capital on attractive terms, or at all, and a severe disruption and instability in the global financial markets or deteriorations in credit and financing conditions may cause us to reduce the volume of receivables we purchase or otherwise have a material adverse effect on our business, financial condition, results of operations and cash flows.

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 credit card issuers and other sources of consumer financing, access to funding, and the timing and extent of our receivable purchases.

The recent growth of our investments in point-of-sale finance and direct-to-consumer receivables may not be indicative of our ability to grow such receivables in the future.  Our investments in point-of-sale finance and direct-to-consumer receivables grew to $908.4 million for the year ended December 31, 2019 from $453.3 million for the year ended December 31, 2018. The amount of such receivables has fluctuated significantly over the course of our operating history.  Furthermore, even if such receivables continue to increase, the rate of such growth could decline. If we cannot manage the growth in receivables effectively, it could have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows.

Reliance upon relationships with a few large retailers in the point-of-sale finance operations may adversely affect our revenues and operating results from these operations. Our five largest retail partners accounted for over 50% of our outstanding point-of-sale receivables as of December 31, 2019. Although we are adding new retail partners on a regular basis, it is likely that we will continue to derive a significant portion of this operations’ receivables base and corresponding revenue from a relatively small number of partners in the future. If a significant partner reduces or terminates its relationship with us, these operations’ revenue could decline significantly and our operating results and financial condition could be harmed.

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 receivables, or otherwise adversely affect our operations. Similarly, regulatory changes could adversely affect the ability or willingness of lenders who utilize our technology platform and related services to market credit products and services to consumers. While the Presidential Administration supports reducing regulatory burdens, the prospects for significant modifications are uncertain. Also, the accounting rules that apply to 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 is subject to change depending upon the changes in, and, interpretation of, 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 receivables 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 the credit products we service are originated are subject to the jurisdiction of federal, state and local government authorities, including the CFPB, the SEC, the FDIC, the Office of the Comptroller of the Currency, the FTC, U.K. banking and licensing authorities, state regulators having jurisdiction over financial institutions and debt origination and collection and state attorneys general. Our business practices and the practices of issuing banks, including the terms of products, servicing and collection practices, are subject to both periodic and special reviews by these regulatory and enforcement authorities. These reviews can range from investigations of specific consumer complaints or concerns to broader inquiries. If as part of these reviews the regulatory authorities conclude that we or issuing banks 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 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 consumers. They also could require us or issuing banks to stop offering some credit products or obtain licenses to do so, either nationally or in selected states. To the extent that these remedies are imposed on the issuing banks that originate credit products using our platform, under certain circumstances we are responsible for the remedies as a result of our indemnification obligations with those banks. We or our issuing banks also may elect to change practices that we believe are compliant with law in order to respond to regulatory concerns. Furthermore, negative publicity relating to any specific inquiry or investigation could hurt our ability to conduct business with various industry participants or to generate new receivables 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.

8

If any deficiencies or violations of law or regulations are identified by us or asserted by any regulator, or if the CFPB, the FDIC, the FTC or any other regulator requires us or issuing banks to change any practices, the correction of such deficiencies or violations, or the making of such changes, could have a material adverse effect on our financial condition, results of operations or business. In addition, whether or not these practices are modified when a regulatory or enforcement authority requests or requires, 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 banks that originate credit products utilizing our platform 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.

The regulatory landscape in which we operate is continually changing due to new rules, regulations and interpretations, as well as various legal actions that have been brought against others that have sought to re-characterize certain loans made by federally insured banks as loans made by third parties. If litigation on similar theories were brought against us when we work with a federally insured bank that makes loans and were such an action successful, we could be subject to state usury limits and/or state licensing requirements, loans in such states could be deemed void and unenforceable, and we could be subject to substantial penalties in connection with such loans.

The case law involving whether an originating lender, on the one hand, or third-parties, on the other hand, are the “true lenders” of a loan is still developing and courts have come to different conclusions and applied different analyses. The determination of whether a third-party service provider is the “true lender” is significant because third-parties risk having the loans they service becoming subject to a consumer’s state usury limits. A number of federal courts that have opined on the “true lender” issue have looked to who is the lender identified on the borrower’s loan documents. A number of state courts and at least one federal district court have considered a number of other factors when analyzing whether the originating lender or a third party is the “true lender,” including looking at the economics of the transaction to determine, among other things, who has the predominant economic interest in the loan being made. If we were re-characterized as a “true lender” with respect to the receivables originated by the bank that utilizes our technology platform and other services, such receivables could be deemed to be void and unenforceable in some states, the right to collect finance charges could be affected, and we could be subject to fines and penalties from state and federal regulatory agencies as well as claims by borrowers, including class actions by private plaintiffs. Even if we were not required to change our business practices to comply with applicable state laws and regulations or cease doing business in some states, we could be required to register or obtain lending licenses or other regulatory approvals that could impose a substantial cost on us. If the bank that originates loans utilizing our technology platform were subject to such a lawsuit, it may elect to terminate its relationship with us voluntarily or at the direction of its regulators, and if it lost the lawsuit, it could be forced to modify or terminate such relationship.

In addition to true lender challenges, a question regarding the applicability of state usury rates may arise when a loan is sold from a bank to a non-bank entity. In Madden v. Midland Funding, LLC, the U.S. Court of Appeals for the Second Circuit held that the federal preemption of state usury laws did not extend to the purchaser of a loan issued by a national bank. In its brief urging the U.S. Supreme Court to deny certiorari, the U.S. Solicitor General, joined by the Office of the Comptroller of the Currency (“OCC”), noted that the Second Circuit (Connecticut, New York and Vermont) analysis was incorrect. On remand, the U.S. District Court for the Southern District of New York concluded on February 27, 2017 that New York’s state usury law, not Delaware’s state usury law, was applicable and that the plaintiff’s claims under the FDCPA and state unfair and deceptive acts and practices could proceed. To that end, the court granted Madden’s motion for class certification. At this time, it is unknown whether Madden will be applied outside of the defaulted debt context in which it arose; however, recently two class actions, Cohen v. Capital One Funding, LLC, et al. and Petersen v. Chase Card Funding, LLC, et al., have relied on Madden to challenge the interest rate charged once debt was sold to securitization trusts. The facts in Madden are not directly applicable to our business, as we do not engage in practices similar to those at issue in Madden. However, to the extent that the holding in Madden was broadened to cover circumstances applicable to our business, or if other litigation on related theories were brought against us and were successful, or we were otherwise found to be the “true lender,” we could become subject to state usury limits and state licensing laws, in addition to the state consumer protection laws to which we are already subject, in a greater number of states, loans in such states could be deemed void and unenforceable, and we could be subject to substantial penalties in connection with such loans.

In response to the uncertainty Madden created as to the validity of interest rates of bank-originated loans sold in the secondary market, in November 2019, the OCC and the FDIC took action to reaffirm the “valid when made” doctrine by issuing a notice of proposed rulemaking to clarify that when a bank sells, assigns, or otherwise transfers a loan, the interest permissible prior to the transfer would continue to be permissible following the transfer. The 60-day comment periods ended January 21, 2020 and February 4, 2020, respectively, and it is anticipated that the agencies will issue final rules soon.

In September 2019, the FDIC and the OCC jointly submitted an amicus brief to the U.S. District Court for the District of Colorado in support of a debt buyer, urging the District Court to uphold the bank’s rights to enforce that debt to the debt buyer, including the bank’s right to charge interest as authorized under the laws of its home state. The brief includes related discussions of (i) the rights of federally regulated banks to “export” their home states’ interest rates by charging those rates to borrowers nationwide, first with respect to national banks under section 85 of the National Bank Act and then with respect to state banks under section 27 of the Federal Deposit Insurance Act and (ii) federal preemption of state usury laws. The portion of the brief that discusses rate exportation strongly reaffirms the OCC and the FDIC’s complete accord that section 27 and section 85 should be mirror images of each other. At the conclusion of their brief, the agencies ask the District Court to affirm the bankruptcy court’s decision in the case on the basis that affirmation would “preserve the banks’ longstanding ability to engage in loan sales, would reaffirm the traditional protections that such loan sales have received under the law, would ensure the proper functioning of the credit markets, and would promote safety and soundness in the banking sector by supporting loan sales and securitizations, which are used to manage capital and liquidity positions.”

We support a single bank that markets general purpose credit cards and certain other credit products directly to consumers. We acquire interests in and service the receivables originated by that bank.  The bank could determine not to continue the relationship for various business reasons, or its regulators could limit its ability to issue credit cards utilizing our technology platform or to originate some or all of the other products that we service or require the bank to modify those products significantly and could do either with little or no notice. Any significant interruption or change of our bank relationship would result in our being unable to acquire new receivables or develop certain other credit products.  Unless we were able to timely replace our bank relationship, such an interruption would prevent us from acquiring newly originated credit card receivables and growing our investments in point-of-sale and direct-to-consumer receivables.  In turn, it would materially adversely impact our business.

9

The FDIC has issued examination guidance affecting the bank that utilizes our technology platform to market general purpose credit cards and certain other credit products and these or subsequent new rules and regulations could have a significant impact on such credit products.  The bank that utilizes our technology platform and other services to market general purpose credit cards and certain other credit products is supervised and examined by both the state that charters it and the FDIC. If the FDIC or a state supervisory body considers any aspect of the products originated utilizing our technology platform to be inconsistent with its guidance, the bank may be required to alter or terminate some or all of these products.

On July 29, 2016, the board of directors of the FDIC released examination guidance relating to third-party lending as part of a package of materials designed to “improve the transparency and clarity of the FDIC’s supervisory policies and practices” and consumer compliance measures that FDIC-supervised institutions should follow when lending through a business relationship with a third party. The proposed guidance, if finalized, would apply to all FDIC-supervised institutions that engage in third-party lending programs, including the bank that utilizes our technology platform and other services to market general purpose credit cards and certain other credit products.

The proposed guidance elaborates on previously issued agency guidance on managing third-party risks and specifically addresses third-party lending arrangements where an FDIC-supervised institution relies on a third party to perform a significant aspect of the lending process. The types of relationships that would be covered by the guidance include (but are not limited to) relationships for originating loans on behalf of, through or jointly with third parties, or using platforms developed by third parties. If adopted as proposed, the guidance would result in increased supervisory attention of institutions that engage in significant lending activities through third parties, including at least one examination every 12 months, as well as supervisory expectations for a third-party lending risk management program and third-party lending policies that contain certain minimum requirements, such as self-imposed limits as a percentage of total capital for each third-party lending relationship and for the overall loan program, relative to origination volumes, credit exposures (including pipeline risk), growth, loan types, and acceptable credit quality. Comments on the guidance were due October 27, 2016. While the guidance has never formally been adopted, it is our understanding that the FDIC has relied upon it in its examination of third-party lending arrangements.

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. Many of these laws (and the related regulations) are focused on sub-prime lenders and are intended to prohibit or curtail industry-standard practices as well as non-standard practices. For instance, Congress 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. Similarly, in 2009 Congress enacted legislation that required changes to a variety of marketing, billing and collection practices, and the Federal Reserve adopted significant changes to a number of practices through its issuance of regulations. While our practices are in compliance with these changes, some of the changes (e.g., limitations on the ability to assess up-front fees) have significantly affected the viability of certain credit products within the U.S. Changes in the consumer protection laws could result in the following:

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

• we may be required to credit or refund previously collected amounts;

• certain fees and finance charges could be limited, prohibited or restricted, which would reduce the profitability of certain investments in receivables;

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

• limitations on our ability to recover on charged-off receivables regardless of any act or omission on our part;

• some credit products and services could be banned in certain states or at the federal level;

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

• a reduction in our ability or willingness to invest in receivables arising under loans to certain consumers, such as military personnel.

Material regulatory developments may adversely impact our business and results from operations.

10

Our Automobile Lending Activities Involve Risks in Addition to Others Described Herein

Automobile lending exposes us not only to most of the risks described above but also to additional risks, including the regulatory scheme that governs installment loans and those attendant to relying upon automobiles and their repossession and liquidation value as collateral. In addition, our Auto Finance segment operation acquires loans on a wholesale basis from used car dealers, for which we rely upon the legal compliance and credit determinations by those dealers.

Funding for automobile lending may become difficult to obtain and expensive. In the event we are unable to renew or replace any Auto Finance segment facilities that bear refunding or refinancing risks when they become due, our Auto Finance segment could experience significant constraints and diminution in reported asset values as lenders retain significant cash flows within underlying structured financings or otherwise under security arrangements for repayment of their loans. If we cannot renew or replace future facilities or otherwise are unduly constrained from a liquidity perspective, we may choose to sell part or all of our auto loan portfolios, possibly at less than favorable prices.

Our automobile lending business is dependent upon referrals from dealers. Currently we provide substantially all of our automobile loans only to or through 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 need to be competitive in these areas, but also 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.

The financial performance of our automobile loan portfolio is in part dependent upon the liquidation of repossessed automobiles. In the event of certain defaults, we may repossess automobiles and sell repossessed automobiles at wholesale auction markets located throughout the U.S. Auction proceeds from these types of 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 would result in higher credit losses for us.

Repossession of automobiles entails the risk of litigation and other claims. Although we have contracted 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 assets 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 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 our reported Credit and Other Investments segment’s managed receivables data, which may reduce the usefulness of this data in evaluating our business. Our reported Credit and Other Investments segment managed receivables data may fluctuate substantially from quarter to quarter as a result of recent and future credit card portfolio acquisitions.

Receivables included in purchased portfolios are likely to have been originated using credit criteria different from the criteria of issuing bank partners that have originated accounts utilizing our technology platform. 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 integrate and operate successfully 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.

11

Other Risks of Our Business    

We are a holding company with no operations of our own. As a result, our cash flow and ability to service our debt is dependent upon distributions from our subsidiaries. The distribution of subsidiary earnings, or advances or other distributions of funds by subsidiaries to us, all of which are subject to statutory and could be subject to contractual restrictions, are contingent upon the subsidiaries’ cash flows and earnings and are subject to various business and debt covenant considerations.

We are party to litigation. We are party to certain legal proceedings which include litigation customary for a business of our nature. In each case we believe that we have meritorious defenses or that the positions we are asserting otherwise are correct. However, adverse outcomes are possible in these matters, and we could decide to settle one or more of our litigation matters in order to avoid the ongoing cost of litigation or to obtain certainty of outcome. Adverse outcomes or settlements of these matters could require us to pay damages, make restitution, change our business practices or take other actions at a level, or in a manner, that would adversely impact our business.

We may be unable to use some or all of our net operating loss (“NOL”) carryforwards. At December 31, 2019, we had U.S. federal NOL carryforwards of $85.6 million the deferred tax assets on which were not offset by valuation allowances, and we had no material U.S. state and local or foreign NOLs the deferred tax assets on which were not offset by valuation allowances. Our NOLs have resulted from prior period losses and are available to offset future taxable income. If not used, $18.1 million of the NOLs will expire in 2029, and $17.8 million of the NOLs will expire in 2030. Under Section 382 of the Internal Revenue Code, our ability to use NOLs in any taxable year may be limited if we experience an “ownership change.” A Section 382 “ownership change” generally occurs if one or more shareholders or groups of shareholders, who own at least 5% of our stock, increase their ownership by more than 50 percentage points over their lowest ownership percentage within a rolling three-year period. We have not completed a Section 382 analysis through December 31, 2019. If we have previously had, or have in the future, one or more Section 382 “ownership changes,” or if we do not generate sufficient taxable income, we may not be able to use a material portion of the NOLs. If we are limited in our ability to use the NOLs in future years in which we have taxable income, we will pay more taxes than if we were able to fully use our NOLs. This could materially and adversely affect our results of operations.

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 generally outsource account and payment processing. If these outsourcing relationships were not renewed or were terminated or the services provided to us were otherwise disrupted, we would have to obtain these services from an alternative provider. There is a risk that we would not be able to enter into a similar outsourcing arrangement with an alternate provider on terms that we consider favorable or in a timely manner without disruption of our business.

Failure to keep up with the rapid technological changes in financial services and e-commerce could harm our business.  The financial services industry is undergoing rapid technological changes, with frequent introductions of new technology-driven products and services. The effective use of technology increases efficiency and enables financial and lending institutions to better serve customers and reduce costs. Our future success will depend, in part, upon our ability to address the needs of consumers by using technology to support products and services that will satisfy consumer demands for convenience, as well as to create additional efficiencies in our operations. We may not be able to effectively implement new technology-driven products and services as quickly as some of our competitors. Failure to successfully keep pace with technological change affecting the financial services industry could harm our ability to compete with our competitors.  Any such failure to adapt to changes could have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows.

If we are unable to protect our information systems against service interruption, our operations could be disrupted and our reputation may be damaged. We rely heavily on networks and information systems and other technology, that are largely hosted by third-parties to support our business processes and activities, including processes integral to the origination and collection of loans and other financial products, and information systems to process financial information and results of operations for internal reporting purposes and to comply with regulatory financial reporting and legal and tax requirements. Because information systems are critical to many of our operating activities, our business may be impacted by hosted system shutdowns, service disruptions or security breaches. These incidents may be caused by failures during routine operations such as system upgrades or user errors, as well as network or hardware failures, malicious or disruptive software, computer hackers, rogue employees or contractors, cyber-attacks by criminal groups, geopolitical events, natural disasters, failures or impairments of telecommunications networks, or other catastrophic events. If our information systems suffer severe damage, disruption or shutdown and our business continuity plans do not effectively resolve the issues in a timely manner, we could experience delays in reporting our financial results, and we may lose revenue and profits as a result of our inability to collect payments in a timely manner. We also could be required to spend significant financial and other resources to repair or replace networks and information systems. 

Unauthorized or unintentional disclosure of sensitive or confidential customer data could expose us to protracted and costly litigation, and civil and criminal penalties. To conduct our business, we are required to manage, use, and store large amounts of personally identifiable information, consisting primarily of confidential personal and financial data regarding consumers across all operations areas. We also depend on our IT networks and systems, and those of third parties, to process, store, and transmit this information. As a result, we are subject to numerous U.S. federal and state laws designed to protect this information. Security breaches involving our files and infrastructure could lead to unauthorized disclosure of confidential information.

We take a number of measures to ensure the security of our hardware and software systems and customer information. Advances in computer capabilities, new discoveries in the field of cryptography or other developments may result in the technology used by us to protect data being breached or compromised. In the past, banks and other financial service providers have been the subject of sophisticated and highly targeted attacks on their information technology. An increasing number of websites have reported breaches of their security.

If any person, including our employees or those of third-party vendors, negligently disregards or intentionally breaches our established controls with respect to such data or otherwise mismanages or misappropriates that data, we could be subject to costly litigation, monetary damages, fines, and/or criminal prosecution. Any unauthorized disclosure of personally identifiable information could subject us to liability under data privacy laws. Further, under credit card rules and our contracts with our card processors, if there is a breach of credit card information that we store, we could be liable to the credit card issuing banks for their cost of issuing new cards and related expenses. In addition, if we fail to follow credit card industry security standards, even if there is no compromise of customer information, we could incur significant fines. Security breaches also could harm our reputation, which could potentially cause decreased revenues, the loss of existing merchant credit partners, or difficulty in adding new merchant credit partners.

12

Internet and data security breaches also could impede our bank partners from originating loans over the Internet, cause us to lose consumers or otherwise damage our reputation or business. Consumers generally are concerned with security and privacy, particularly on the Internet. As part of our growth strategy, we have enabled lenders to originate loans over the Internet. The secure transmission of confidential information over the Internet is essential to maintaining customer confidence in such 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 our client or consumer application and transaction data transmitted over the Internet. In addition to the potential for litigation and civil penalties described above, security breaches could damage our reputation and cause consumers to become unwilling to do business with our clients or us, particularly over the Internet. Any publicized security problems could inhibit the growth of the Internet as a means of conducting commercial transactions. Our ability to service our clients’ needs over the Internet would be severely impeded if consumers become unwilling to transmit confidential information online.

Also, a party that is able to circumvent our security measures could misappropriate proprietary information, cause interruption in our operations, damage our computers or those of our users, or otherwise damage our reputation and business.

Regulation in the areas of privacy and data security could increase our costs. We are subject to various regulations related to privacy and data security/breach, and we could be negatively impacted by these regulations. For example, we are subject to the Safeguards guidelines under the Gramm-Leach-Bliley Act. The Safeguards guidelines require that each financial institution develop, implement and maintain a written, comprehensive information security program containing safeguards that are appropriate to the financial institution’s size and complexity, the nature and scope of the financial institution’s activities and the sensitivity of any customer information at issue. Broad-ranging data security laws that affect our business also have been adopted by various states. Compliance with these laws regarding the protection of consumer and employee data could result in higher compliance and technology costs for us, as well as potentially significant fines and penalties for non-compliance. Further, there are various other statutes and regulations relevant to the direct email marketing, debt collection and text-messaging industries including the Telephone Consumer Protection Act. The interpretation of many of these statutes and regulations is evolving in the courts and administrative agencies and an inability to comply with them may have an adverse impact on our business.

In addition to the foregoing enhanced data security requirements, various federal banking regulatory agencies, and all 50 states, the District of Columbia, Puerto Rico and the Virgin Islands, have enacted data security regulations and laws requiring varying levels of consumer notification in the event of a security breach.

Also, federal legislators and regulators are increasingly pursuing new guidelines, laws and regulations that, if adopted, could further restrict how we collect, use, share and secure consumer information, which could impact some of our current or planned business initiatives.

Unplanned system interruptions or system failures could harm our business and reputation. Any interruption in the availability of our transactional processing services due to hardware and operating system failures will reduce our revenues and profits. Any unscheduled interruption in our services results in an immediate, and possibly substantial, loss of revenues. Frequent or persistent interruptions in our services could cause current or potential consumers to believe that our systems are unreliable, leading them to switch to our competitors or to avoid our websites or services, and could permanently harm our reputation.

Although our systems have been designed around industry-standard architectures to reduce downtime in the event of outages or catastrophic occurrences, they remain vulnerable to damage or interruption from earthquakes, floods, fires, power loss, telecommunication failures, computer viruses, computer denial-of-service attacks, and similar events or disruptions. Some of our systems are not fully redundant, and our disaster recovery planning may not be sufficient for all eventualities. Our systems also are subject to break-ins, sabotage, and intentional acts of vandalism. Despite any precautions we may take, the occurrence of a natural disaster, a decision by any of our third-party hosting providers to close a facility we use without adequate notice for financial or other reasons, or other unanticipated problems at our hosting facilities could cause system interruptions, delays, and loss of critical data, and result in lengthy interruptions in our services. Our business interruption insurance may not be sufficient to compensate us for losses that may result from interruptions in our service as a result of system failures.

Climate change and related regulatory responses may impact our business. Climate change as a result of emissions of greenhouse gases is a significant topic of discussion and may generate federal and other regulatory responses. It is impracticable to predict with any certainty the impact on our business of climate change or the regulatory responses to it, although we recognize that they could be significant. The most direct impact is likely to be an increase in energy costs, which would adversely impact consumers and their ability to incur and repay indebtedness. However, we are uncertain of the ultimate impact, either directionally or quantitatively, of climate change and related regulatory responses on our business.

We have elected the fair value option effective as of January 1, 2020, and we use estimates in determining the fair value of our loans. If our estimates prove incorrect, we may be required to write down the value of these assets, which could adversely affect our results of operations. Our ability to measure and report our financial position and results of operations is influenced by the need to estimate the impact or outcome of future events on the basis of information available at the time of the issuance of the financial statements. Further, most of these estimates are determined using Level 3 inputs for which changes could significantly impact our fair value measurements. A variety of factors including, but not limited to, estimated yields on consumer receivables, customer default rates, the timing of expected payments, estimated costs to service the portfolio, interest rates, and valuations of comparable portfolios may ultimately affect the fair values of our loans and finance receivables. If actual results differ from our judgments and assumptions, then it may have an adverse impact on the results of operations and cash flows. Management has processes in place to monitor these judgments and assumptions, but these processes may not ensure that our judgments and assumptions are correct.

Our allowance for uncollectible loans is determined based upon both objective and subjective factors and may not be adequate to absorb loan losses. We face the risk that customers will fail to repay their loans in full. Through our analysis of loan performance, delinquency data, charge-off data, economic trends and the potential effects of those economic trends on consumers, we establish an allowance for uncollectible loans, interest and fees receivable as an estimate of the probable losses inherent within those loans, interest and fees receivable that we do not report at fair value.  We determine the necessary allowance for uncollectible loans, interest and fees receivable by analyzing some or all of the following unique to each type of receivable pool:  historical loss rates; current delinquency and roll-rate trends; vintage analyses based on the number of months an account has been in existence; the effects of changes in the economy on our customers; changes in underwriting criteria; and estimated recoveries. These inputs are considered in conjunction with (and potentially reduced by) any unearned fees and discounts that may be applicable for an outstanding loan receivable. Actual losses are difficult to forecast, especially if such losses are due to factors beyond our historical experience or control. As a result, our allowance for uncollectible loans may not be adequate to absorb incurred losses or prevent a material adverse effect on our business, financial condition and results of operations. Losses are the largest cost as a percentage of revenues across all of our products. Fraud and customers not being able to repay their loans are both significant drivers of loss rates. If we experienced rising credit or fraud losses this would significantly reduce our earnings and profit margins and could have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows.

13

Risks Relating to an Investment in Our Securities

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 Select 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:

• actual or anticipated fluctuations in our operating results;

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

• the overall financing environment, which is critical to our value;

• the operating and stock performance of our competitors;

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

• changes in interest rates;

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

• changes in generally accepted accounting principles in the U.S. ("GAAP"), laws, regulations or the interpretations thereof that affect our various business activities and segments;

• general domestic or international economic, market and political conditions;

• changes in ownership by executive officers, directors and parties related to them who control a majority of our common stock;

• additions or departures of key personnel; and

• future sales of our common stock and the transfer or cancellation of shares of common stock pursuant to a 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 short sale transactions by holders of convertible senior notes, 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. 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 sale transactions by holders of our convertible senior notes, may have a material adverse effect on the trading price of our common stock.

The shares of Series A Convertible Preferred Stock are senior obligations, rank prior to our common stock with respect to dividends, distributions and payments upon liquidation and have other terms, such as a redemption right, that could negatively impact the value of shares of our common stock.  In December 2019, we issued 400,000 shares of Series A Convertible Preferred Stock. The rights of the holders of our Series A Convertible Preferred Stock with respect to dividends, distributions and payments upon liquidation rank senior to similar obligations to our holders of common stock.  Holders of the Series A Convertible Preferred Stock are entitled to receive dividends on each share of such stock equal to 6% per annum on the liquidation preference of $100.  The dividends on the Series A Convertible Preferred Stock are cumulative and non-compounding and must be paid before we pay any dividends on the common stock.

In the event of our liquidation, dissolution or the winding up of our affairs, the holders of our Series A Convertible Preferred Stock have the right to receive a liquidation preference entitling them to be paid out of our assets generally available for distribution to our equity holders and before any payment may be made to holders of our common stock in an amount equal to $100 per share of Series A Convertible Preferred Stock plus any accrued but unpaid dividends.

Further, on and after January 1, 2024, the holders of the Series A Convertible Preferred Stock will have the right to require us to purchase outstanding shares of Series A Convertible Preferred Stock for an amount equal to $100 per share plus any accrued but unpaid dividends.  This redemption right could expose us to a liquidity risk if we do not have sufficient cash resources at hand or are not able to find financing on sufficiently attractive terms to comply with our obligations to repurchase the Series A Convertible Preferred Stock upon exercise of such redemption right.

Our obligations to the holders of Series A Convertible Preferred Stock also could limit our ability to obtain additional financing or increase our borrowing costs, which could have an adverse effect on our financial condition and the value of our common stock.

Our outstanding Series A Convertible Preferred Stock has anti-dilution protection that, if triggered, could cause substantial dilution to our then-existing holders of common stock, which could adversely affect our stock price.  The document governing the terms of our outstanding Series A Convertible Preferred Stock contains anti-dilution provisions to benefit the holders of such stock. As a result, if we, in the future, issue common stock or other derivative securities, subject to specified exceptions, for a per share price less than the then existing conversion price of the Series A Convertible Preferred Stock, an adjustment to the then current conversion price would occur. This reduction in the conversion price could result in substantial dilution to our then-existing holders of common stock, which could adversely affect the price of our common stock.

We have no current plans to pay cash dividends on our common stock for the foreseeable future, and an increase in the market price of our common stock, if any, may be the sole source of gain on your investment.  With the exception of dividends payable on our Series A Convertible Preferred Stock, we currently intend to retain any future earnings for use in the operation and expansion of our business and do not expect to pay any dividends on our common stock in the foreseeable future.  The declaration and payment of all future dividends on our common stock, if any, will be at the sole discretion of our board of directors, which retains the right to change our dividend policy at any time.  Any decision by our board of directors to declare and pay dividends in the future will depend on, among other things, our results of operations, financial condition, cash requirements, contractual restrictions, restrictions on dividends imposed by the document governing the terms of the Series A Convertible Preferred Stock and other factors that our board of directors may deem relevant.  Consequently, appreciation in the market price of our common stock, if any, may be the sole source of gain on your investment for the foreseeable future.

Holders of the Series A Convertible Preferred Stock are entitled to receive dividends on each share of such stock equal to 6% per annum on the liquidation preference of $100.  The dividends on the Series A Convertible Preferred Stock are cumulative and non-compounding and must be paid before we pay any dividends on the common stock.

14

We have the ability to issue additional preferred stock, warrants, convertible debt and other securities without shareholder approval. Our common stock may be subordinate to additional classes of preferred stock issued in the future in the payment of dividends and other distributions made with respect to common stock, including distributions upon liquidation or dissolution. Our articles of incorporation permit our Board of Directors to issue preferred stock without first obtaining shareholder approval, which we did in December 2019 when we issued the Series A Convertible Preferred Stock. If we issue additional classes of preferred stock, these additional securities may have dividend or liquidation preferences senior to the common stock. If we issue additional classes of convertible preferred stock, a subsequent conversion may dilute the current common shareholders’ interest. We have similar abilities to issue convertible debt, warrants and other equity securities.

Our executive officers, directors and parties related to them, in the aggregate, control a majority of our common 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 share of our common stock 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.

The right to receive payments on our convertible senior notes is subordinate to the rights of our existing and future secured creditors. Our convertible senior notes are unsecured and are subordinate to existing and future secured obligations to the extent of the value of the assets securing such obligations. As a result, in the event of a bankruptcy, liquidation, dissolution, reorganization or similar proceeding of our company, our assets generally would be available to satisfy obligations of our secured debt before any payment may be made on the convertible senior notes. To the extent that such assets cannot satisfy in full our secured debt, the holders of such debt would have a claim for any shortfall that would rank equally in right of payment (or effectively senior if the debt were issued by a subsidiary) with the convertible senior notes. In such an event, we may not have sufficient assets remaining to pay amounts on any or all of the convertible senior notes.

As of December 31, 2019, Atlanticus Holdings Corporation had outstanding: $745.3 million of secured indebtedness, which would rank senior in right of payment to the convertible senior notes; $45.2 million of senior unsecured indebtedness in addition to the convertible senior notes that would rank equal in right of payment to the convertible senior notes; and no subordinated indebtedness. Included in senior secured indebtedness are certain guarantees we have executed in favor of our subsidiaries. For more information on our outstanding indebtedness, See Note 9, “Notes Payable and Variable Interest Entities,” to our consolidated financial statements included herein.

Our convertible senior notes are junior to the indebtedness of our subsidiaries. Our convertible senior notes are structurally subordinated to the existing and future claims of our subsidiaries’ creditors. Holders of the convertible senior notes are not creditors of our subsidiaries. Any claims of holders of the convertible senior notes to the assets of our subsidiaries derive from our own equity interests in those subsidiaries. Claims of our subsidiaries’ creditors will generally have priority as to the assets of our subsidiaries over our own equity interest claims and will therefore have priority over the holders of the convertible senior notes. Consequently, the convertible senior notes are effectively subordinate to all liabilities, whether or not secured, of any of our subsidiaries and any subsidiaries that we may in the future acquire or establish. Our subsidiaries’ creditors also may include general creditors and taxing authorities. As of December 31, 2019, our subsidiaries had total liabilities of approximately $792.3 million (including the $745.3 million of senior secured indebtedness mentioned above), excluding intercompany indebtedness. In addition, in the future, we may decide to increase the portion of our activities that we conduct through subsidiaries.

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, also may 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 occurs, 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 or other securities 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.

15

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

We lease 335,372 square feet of office space in Atlanta, Georgia for our executive offices and the primary operations of our Credit and Other Investments segment. We have sub-leased 254,710 square feet of this office space. Our Auto Finance segment principally operates from 12,807 square feet of leased office space in Lake Mary, Florida, with additional offices and branch locations in various states and territories. We believe that our facilities are suitable to our business and that we will be able to lease or purchase additional facilities as our needs, if any, require.

ITEM 3. LEGAL PROCEEDINGS

We are involved in various legal proceedings that are incidental to the conduct of our business. There are currently no pending legal proceedings that are expected to be material to us.

ITEM 4. MINE SAFETY DISCLOSURES

None.

16

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Our common stock is traded on the NASDAQ Global Select Market under the symbol “ATLC.”  As of March 20, 2020, there were 46 record holders of our common stock, which does not include persons whose stock is held in nominee or “street name” accounts through brokers, banks and intermediaries.

ISSUER PURCHASES OF EQUITY SECURITIES

The following table sets forth information with respect to our repurchases of common stock during the three months ended December 31, 2019.

	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)		Maximum Number of Shares that May Yet Be Purchased under the Plans or Programs (2)
October 1 - October 31		85,515	$	7.77		84,533		4,391,318
November 1 - November 30		358	$	7.02		—		4,391,318
December 1 - December 31		—	$	—		—		4,391,318
Total		85,873	$	7.77		84,533		4,391,318

(1)	Because withholding tax-related stock repurchases are permitted outside the scope of our 5,000,000 share Board-authorized repurchase plan, these amounts exclude shares of stock returned to us by employees in satisfaction of withholding tax requirements on vested stock grants. There were 1,340 such shares returned to us during the three months ended December 31, 2019.
(2)	Pursuant to a share repurchase plan authorized by our Board of Directors on May 10, 2018, we are authorized to repurchase 5,000,000 shares of our common stock through June 30, 2020.

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 shares of our stock.

ITEM 6. SELECTED FINANCIAL DATA

As a “smaller reporting company,” as defined by Item 10 of Regulation S-K, we are not required to provide this information.

17

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with our consolidated financial statements and the related notes included therein, where certain terms have been defined.

This Management’s Discussion and Analysis of Financial Condition and Results of Operations includes forward-looking statements. We base these forward-looking statements on our current plans, expectations and beliefs about future events. There are risks, including the factors discussed in “Risk Factors” in Item 1A and elsewhere in this Report, that our actual experience will differ materially from these expectations. For more information, see “Cautionary Notice Regarding Forward-Looking Statements” at the beginning of this Report.

In this Report, except as the context suggests otherwise, the words “Company,” “Atlanticus Holdings Corporation,” “Atlanticus,” “we,” “our,” “ours,” and “us” refer to Atlanticus Holdings Corporation and its subsidiaries and predecessors.

OVERVIEW

We utilize proprietary analytics and a flexible technology platform to enable financial institutions to provide various credit and related financial services and products to or associated with the financially underserved consumer credit market. According to data published by Experian, 41% of Americans had FICO® scores of less than 700 as of the second quarter of 2019, which represents a population in excess of 90 million consumers. A recent survey conducted by Charles Schwab further found that 59% of Americans lived "paycheck to paycheck" and only 38% of people have an emergency fund.  These consumers often have short-term, immediate credit needs that are often not effectively met by traditional financial institutions.  By facilitating fairly priced consumer credit alternatives with value added features and benefits specifically curated for the unique needs of this financially underserved consumer, we endeavor to empower consumers on a path to improved financial well-being.

Currently, within our Credit and Other Investments segment, we are applying the experiences gained and infrastructure built from servicing over $26 billion in consumer loans over our 23-year operating history to support lenders who originate a range of consumer loan products. These products include retail credit and credit cards originated by lenders through multiple channels, including retail point-of-sale, direct mail solicitation, and partnerships with third parties. In the point-of-sale channel, we partner with retailers and service providers in various industries across the U.S. to allow them to provide credit to their customers for the purchase of a variety of goods and services including consumer electronics, furniture, elective medical procedures, healthcare, educational services and home-improvements. The services of our lending partners are often extended to consumers who may not have access to traditional financing options. We specialize in supporting this “second-look” credit service. Our flexible technology platform allows our lending partners to integrate our paperless process and instant decision-making platform with the technology infrastructure of participating retailers and service providers. Additionally, we support lenders who market general purpose credit cards directly to consumers through additional channels, which enables them to reach consumers through a diverse origination platform that includes retail point-of-sale, direct mail and digital marketing solicitation and partnerships with third parties. Our technology platform and proprietary analytics enable lenders to make instant credit decisions utilizing hundreds of inputs from multiple sources and thereby offer credit to consumers overlooked by traditional providers of financing. By supporting a range of products through a multitude of channels, we enable lenders to provide the right type of credit, whenever and wherever the consumer has a need.

In most cases, we invest in the receivables originated by lenders who utilize our technology platform and other related services. From time to time, we also purchase receivables portfolios from third parties.  In this report, "receivables" or "loans" typically refer to receivables we have purchased from our lending partners or from third parties.

Using our infrastructure and technology platform, we also provide loan servicing, including risk management and customer service outsourcing, for third parties. Also through our Credit and Other Investments segment, we engage in testing and limited investment in consumer finance technology platforms as we seek to capitalize on our expertise and infrastructure.

Additionally, we report within our Credit and Other Investments segment: (1) the income earned from an investment in an equity-method investee that holds credit card receivables for which we are the servicer; and (2) gains or losses associated with investments previously made in consumer finance technology platforms. These include investments in companies engaged in mobile technologies, marketplace lending and other financial technologies. These investments are carried at the lower of cost or market valuation. None of these companies are publicly-traded and there are no material pending liquidity events.

The recurring cash flows we receive within our Credit and Other Investments segment principally include those associated with (1) point-of-sale and direct-to-consumer receivables, (2) servicing compensation and (3) credit card receivables portfolios that are unencumbered or where we own a portion of the underlying structured financing facility.

18

We believe that our point-of-sale and direct-to-consumer receivables are generating, and will continue to generate, attractive returns on assets, thereby facilitating debt financing under terms and conditions (including advance rates and pricing) that will support attractive returns on equity, and we continue to pursue growth in this area.

Within our Auto Finance segment, our CAR subsidiary operations principally purchase and/or service loans secured by automobiles from or for, and also provide floor plan financing for, a pre-qualified network of independent automotive dealers and automotive finance companies in the buy-here, pay-here, used car business. We purchase auto loans at a discount and with dealer retentions or holdbacks that provide risk protection. Also within our Auto Finance segment, we are providing certain installment lending products in addition to our traditional loans secured by automobiles.

Beyond these activities within our Credit and Other Investments segment, we invest in and service portfolios of credit card receivables. One of our portfolios of credit card receivables is encumbered by non-recourse structured financing, and for this portfolio our principal remaining economic interest is the servicing compensation we receive as an offset against our servicing costs given that the likely future collections on the portfolio are insufficient to allow for full repayment of the financing.

Subject to the availability of capital at attractive terms and pricing, we plan to continue to evaluate and pursue a variety of activities, including:  (1) investments in additional financial assets associated with point-of-sale and direct-to-consumer finance and credit activities as well as the acquisition of interests in receivables portfolios; (2) investments in other assets or businesses that are not necessarily financial services assets or businesses and (3) the repurchase of our convertible senior notes and other debt and our outstanding common stock.

As of January 1, 2020, we have elected the fair value option to account for certain loans receivable associated with our point-of-sale and direct-to-consumer platform that were originated on or after January 1, 2020 (the "Fair Value Receivables"). We believe the use of fair value for these receivables more closely approximates the true economics of these receivables, better matching the yields and corresponding charge-offs. We believe the fair value option also enables us to report GAAP net income that provides increased transparency into our profitability and asset quality. Receivables acquired prior to January 1, 2020 will continue to be accounted for in our 2020 and subsequent financial statements at amortized cost, net. We will estimate the Fair Value Receivables using a discounted cash flow model, which considers various factors such as expected yields on consumer receivables, customer default rates, the timing of expected payments, estimated costs to service the portfolio, interest rates, and valuations of comparable portfolios. As a result of this fair value adoption, our loans, interest and fees receivable acquired subsequent to January 1, 2020 will be carried at fair value with changes in fair value recognized directly in earnings, and certain fee billings (such as annual membership fees and merchant fees) and origination costs associated with these receivables will no longer be deferred. We will reevaluate the fair value of our Fair Value Receivables at the end of each quarter.

On January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency because of a new strain of coronavirus originating in Wuhan, China (the “COVID-19 outbreak”) and the risks to the international community as the virus spreads globally beyond its point of origin. In March 2020, the WHO classified the COVID-19 outbreak as a pandemic, based on the rapid increase in exposure globally.

The full impact of the COVID-19 outbreak continues to evolve as of the date of this report. As such, it is uncertain as to the magnitude of the effect the pandemic will have on the Company’s financial condition, liquidity, and future results of operations. Management is actively monitoring the global situation on its financial condition, liquidity, operations, industry, and workforce. Given the daily evolution of the COVID-19 outbreak and the global responses to curb its spread, the Company is not able to estimate the effects of the COVID-19 outbreak on its results of operations, financial condition, or liquidity for fiscal year 2020. 

As a result of the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act) signed into law by the President on March 27, 2020, additional avenues of relief will be available to workers and families through enhanced unemployment insurance provisions and to small businesses through programs administered by the Small Business Administration (SBA).  Management is currently assessing the availability of assistance under this program.

19

CONSOLIDATED RESULTS OF OPERATIONS

							Income
	For the Year Ended December 31,						Increases (Decreases)
(In Thousands)	2019			2018			from 2018 to 2019
Total interest income	$	261,218		$	161,168		$	100,050
Interest expense		(50,730	)		(36,896	)		(13,834	)
Fees and related income on earning assets:
Fees on credit products		68,639			25,694			42,945
Changes in fair value of loans, interest and fees receivable recorded at fair value		1,251			606			645
Changes in fair value of notes payable associated with structured financings recorded at fair value		1,731			3,589			(1,858	)
Other		(474	)		103			(577	)
Other operating income:
Servicing income		1,786			1,969			(183	)
Other income		117,903			39,820			78,083
Gain on repurchase of convertible senior notes		5,127			—			5,127
Equity in income of equity-method investee		1,001			581			420
Total	$	407,452		$	196,634		$	210,818
Net losses upon impairment of loans, interest and fees receivable recorded at fair value		897			549			(348	)
Provision for losses on loans, interest and fees receivable recorded at net realizable value		248,383			100,338			(148,045	)
Other operating expenses:
Salaries and benefits		26,229			23,430			(2,799	)
Card and loan servicing		49,459			37,145			(12,314	)
Marketing and solicitation		36,388			12,124			(24,264	)
Depreciation		1,137			987			(150	)
Other		13,196			18,579			5,383
Net income		26,210			7,612			18,598
Net (income) loss attributable to noncontrolling interests		233			244			(11	)
Net income attributable to controlling interests		26,443			7,856			18,587
Net income attributable to controlling interests to common shareholders		25,290			7,856			17,434

Year Ended December 31, 2019, Compared to Year Ended December 31, 2018

Total interest income. Total interest income consists primarily of finance charges and late fees earned on point-of-sale and direct-to-consumer receivables, credit card and auto finance receivables. Period-over-period results primarily relate to growth in point-of-sale finance and direct-to-consumer products, the receivables of which increased from $453.3 million as of December 31, 2018 to $908.4 million as of December 31, 2019. We are currently experiencing continued period-over-period growth in point-of-sale and direct-to-consumer receivables and to a lesser extent in our CAR receivables—growth which we expect to result in net period-over-period growth in our total interest income for these operations throughout 2020. Future periods’ growth is also dependent on the addition of new retail partners to expand the reach of point-of-sale operations as well as growth within existing partnerships and continued growth and marketing within the direct-to-consumer receivables. As discussed elsewhere in this Report, we have elected the fair value option to account for certain loan receivables associated with our point-of-sale and direct-to-consumer platform that are originated on or after January 1, 2020.  As a result, merchant fees that are charged upon the acquisition of the receivable will no longer be deferred and will be recognized in the loan acquisition period.  Absent the unknown impacts COVID-19 may have on our ability to acquire new receivables or the impact it may have on our customers ability to make payments on outstanding loans and fees receivable, the earlier recognition of these merchant fees is expected to further increase our period-over-period results in the near term.

20

Interest expense. Variations in interest expense are due to new borrowings associated with growth in point-of-sale and direct-to-consumer receivables and CAR operations as evidenced within Note 9, “Notes Payable and Variable Interest Entities,” to our consolidated financial statements offset by our debt facilities being repaid commensurate with net liquidations of the underlying credit card, auto finance and installment loan receivables that serve as collateral for the facilities. Outstanding notes payable associated with our point-of-sale and direct-to-consumer platform increased from $366.7 million as of December 31, 2018 to $701.2 million as of December 31, 2019. We anticipate additional debt financing over the next few quarters as we continue to grow, and as such, we expect our quarterly interest expense to be above that experienced in the prior periods for these operations.

Fees and related income on earning assets. The significant factors affecting our differing levels of fees and related income on earning assets include:

• increases in fees on credit products, primarily associated with growth in direct-to-consumer products and to a lesser degree by growth in point-of-sale finance products; and

• the effects of changes in the fair values of credit card receivables recorded at fair value and notes payable associated with structured financings recorded at fair value as described below.

We expect increasing levels of direct-to-consumer fee income throughout 2020 as we continue to invest in new credit card receivables. For credit card receivables for which we use fair value accounting (including those that we elected the fair value option for on January 1, 2020), we expect our change in fair value of credit card receivables recorded at fair value to increase throughout the year.  Inversely, we expect our change in fair value of notes payable associated with structured financings for our legacy credit card receivables recorded at fair value amounts to gradually diminish (absent significant changes in the assumptions used to determine these fair values) in the future. These amounts, however, are subject to potentially high levels of volatility if we experience changes in the quality of our credit card receivables or if there are significant changes in market valuation factors (e.g., interest rates and spreads) in the future.  Additionally, we expect to recognize certain fee billings (such as annual membership fees) associated with receivables accounted for under fair value as they are billed to the consumer (as opposed to deferred fee recognition), which, absent the unknown impacts COVID-19 may have on our ability to acquire new receivables or the impact it may have on our customers ability to make payments on outstanding loans and fees receivable, will further increase the expected levels of fee income in the near term. 

Servicing income. We earn servicing income by servicing loan portfolios for third parties (including our equity-method investee). Unless and/or until we grow the number of contractual servicing relationships we have with third parties or our current relationships grow their loan portfolios, we will not experience significant growth and income within this category, and we currently expect to experience continued declines in this category of revenue relative to revenue earned in prior periods.

Other income. Included within our other income category are ancillary and interchange revenues. Given recent growth associated with new credit card receivables, we expect ancillary and interchange revenues to grow throughout the year. Also included within our other income category for the year ended December 31, 2019 is $105.9 million associated with reductions in accruals related to one of our portfolios.  The original accrual was based upon our estimate of the amount that may be claimed by customers and was based upon several factors including customer claims volume, average claim amount and a determination of the amount, if any, which may be offered to resolve such claims.  The assumptions used in the accrual estimate were subjective, mainly due to uncertainty associated with future claims volumes and the resolution costs, if any, per claim. As of  December 31, 2019, we had no further reserves associated with this matter.   Included within our other income category for the year ended December 31, 2018, is the receipt of £34 million (approximately $42.9 million) in settlement of previously-disclosed litigation, resulting in income recognition of approximately $36.2 million after adjusting for amounts previously recorded.  

21

Equity in income of equity-method investee. Because our equity-method investee uses the fair value option to account for its financial assets and liabilities, changes in fair value estimates can cause some volatility in the earnings of this investee. Because of continued liquidations in the credit card receivables portfolio of our equity-method investee, absent additional investments in our existing or in new equity-method investees in the future, we expect gradually declining effects from our equity-method investment on our operating results.

Net losses upon impairment of loans, interest and fees receivable recorded at fair value. This account reflects charge offs (net of recoveries) of the face amount of credit card receivables we record at fair value on our consolidated balance sheet. We have experienced a general trending decline in this category as our legacy credit card portfolios diminished.  As discussed above, we expect future trending increases in the third and fourth quarter of 2020 due to our election of the fair value option to account for certain loans receivable that are acquired on or after January 1, 2020.  These increases will be abated somewhat as we continue to liquidate our historical credit card receivables.  Further. the unknown impacts of COVID-19 could lead to increased variability in our expected charge-offs

Provision for losses on loans, interest and fees receivable recorded at net realizable value. Our provision for losses on loans, interest and fees receivable recorded at net realizable value covers, with respect to such receivables, changes in estimates regarding our 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. We have experienced a period-over-period increase in this category between the years ended December 31, 2019 and 2018 primarily reflecting the effects of volume associated with point-of-sale and direct-to-consumer finance receivables (i.e., growth of new product receivables and their subsequent maturation), rather than specific credit quality changes or deterioration, which also impacted our provision for losses on loans, interest and fees receivable recorded at net realizable value to a lesser degree. Partially offsetting this increase was a reduction in our provision for loan losses for unearned fees and discounts that may be applicable for outstanding loan receivables and which would serve to reduce the financial impact of an eventual charge-off.  See Note 2, “Significant Accounting Policies and Consolidated Financial Statement Components,” to our consolidated financial statements and the discussions of our Credit and Other Investments and Auto Finance segments for further credit quality statistics and analysis.  Given the above referenced election of the fair value option to account for certain loans receivable that are acquired on or after January 1, 2020, and absent the unknown impacts COVID-19 may have on our ability to acquire new receivables or the impact it may have on our customers ability to make payments on outstanding loans and fees receivable, we expect that our provision for losses on loans will diminish as the underlying receivables that continue to be recorded at net realizable value liquidate.

Total other operating expense. Total other operating expense variances for the year ended December 31, 2019, relative to the year ended December 31, 2018, reflect the following:

• increases in salaries reflecting marginal growth in both the number of employees and increases in related benefit costs.  We expect some marginal increase in this cost for 2020 when compared to 2019 as we expect our receivables to continue to grow;

• increases in card and loan servicing expenses in the year ended December 31, 2019 when compared to the year ended December 31, 2018 due to growth in receivables associated with our investments in point-of-sale and direct-to-consumer receivables, which grew from $453.3 million outstanding to $908.4 million outstanding at December 31, 2018 and December 31, 2019, respectively, offset by the continued net liquidations in our legacy credit card portfolios, the receivables of which declined from $9.6 million outstanding to $6.4 million outstanding at December 31, 2018 and December 31, 2019, respectively;

• increases in marketing and solicitation costs for the year ended December 31, 2019 primarily due to volume-related increases in costs attributable to the growth in our direct-to-consumer and (to a lesser extent) retail point-of-sale portfolios. We expect that increased origination and brand marketing support will result in overall increases in year-over-year costs during 2020 although the frequency and timing of marketing efforts could result in reductions in quarter-over-quarter marketing costs; and

• slight decreases in other expenses primarily related to realized translation gains and losses recognized during both periods.

Certain operating costs are variable based on the levels of accounts and receivables we service (both for our own account and for others) and the pace and breadth of our growth in receivables. However, a number of our operating costs are fixed and until recently have comprised a larger percentage of our total costs based on the ongoing contraction of our legacy credit card receivables. This trend is reversing as we continue to grow our earning assets (including loans, interest and fees receivable) based principally on growth of point-of-sale and direct-to-consumer receivables and to a lesser extent, growth within our CAR operations. This is evidenced by the growth we experienced in our managed receivables levels with minimal growth in the fixed portion of our card and loan servicing expenses as well as our salaries and benefits costs as we were able to better utilize our fixed costs to grow our asset base. We continue to manage our costs effectively.

22

Notwithstanding our cost-control efforts and focus, we expect increased levels of expenditures associated with anticipated growth in point-of-sale and direct-to-consumer credit card-related operations. These expenses will primarily relate to the variable costs of marketing efforts and card and loan servicing expenses associated with new receivable acquisitions. While we have greater control over our variable expenses, it is difficult (as explained above) for us to appreciably reduce our fixed and other costs associated with an infrastructure (particularly within our Credit and Other Investments segment) that was built to support levels of managed receivables that are significantly higher than both our current levels and the levels that we expect to see in the near future. Additionally, the above referenced unknown potential impacts related to COVID-19 could result in more variability in these expenses. At this point, our Credit and Other Investments segment cash inflows are sufficient to cover its direct variable costs and a portion, but not all, of its share of overhead costs (including, for example, corporate-level executive and administrative costs and our convertible senior notes interest costs). As such, if we are unable to contain overhead costs or expand revenue-earning activities to levels commensurate with such costs, then we may experience continuing pressure on our ability to achieve consistent profitability.

Noncontrolling interests. We reflect the ownership interests of noncontrolling holders of equity in our majority-owned subsidiaries as noncontrolling interests in our consolidated statements of operations. Unless we enter into significant new majority-owned subsidiary ventures with noncontrolling interest holders in the future, we expect to have negligible noncontrolling interests in our majority-owned subsidiaries and negligible allocations of income or loss to noncontrolling interest holders in future quarters. 

On November 14, 2019, a wholly-owned subsidiary issued 50.5 million Class B preferred units at a purchase price of $1.00 per unit to an unrelated third party. The units carry a 16% preferred return to be paid quarterly, with up to 6 percentage points of the preferred return to be paid through the issuance of additional units or cash, at our election. The units have both call and put rights and are also subject to various covenants including a minimum book value, which if not satisfied, could allow for the securities to be put back to the subsidiary. Subject to satisfying certain closing conditions, the subsidiary has the right to issue up to 50.5 million additional units on the same terms. The proceeds from the transaction are being used for general corporate purposes.  We have included the issuance of these Class B preferred units as temporary noncontrolling interests on the consolidated balance sheets.

Income Taxes. We experienced an effective income tax expense rate of 17.5% for the year ended December 31, 2019, compared to a negative effective income tax expense rate of 118.6% for the year ended December 31, 2018. Our  effective income tax expense rate for the year ended December 31, 2019 was below the statutory rate principally as a result of the release of federal valuation allowances. Our negative effective income tax expense rate for the year ended December 31, 2018 was significantly below the statutory rate principally as a result of our settlement during 2018 of an IRS examination of our 2008 tax return and the carryback of its resulting net operating losses to pre-2008 tax years. The settlement resulted in a decrease in our federal tax valuation allowance and net reductions in our accruals of interest on liabilities for uncertain tax positions and unpaid taxes.

We report income tax-related interest and penalties (including those associated with both our accrued liabilities for uncertain tax positions and unpaid tax liabilities) within our income tax line item on our consolidated statements of operations.  We likewise report the reversal of income tax-related interest and penalties within such line item to the extent we resolve our liabilities for uncertain tax positions or unpaid tax liabilities in a manner favorable to our accruals therefor.  For 2019, we reported a net accrual of income tax-related interest and penalties of $0.1 million within our income tax line item, and, for 2018, we reported a net reversal of income tax-related interest and penalties of $1.2 million within our income tax line item.

In December 2014, we reached a settlement with the IRS concerning the tax treatment of net operating losses we incurred in 2007 and 2008 and carried back to obtain refunds of federal income taxes paid in earlier years dating back to 2003. In 2015, we filed an amended return claim that, if accepted, would have eliminated the $7.4 million assessment (and corresponding interest and penalties) under a negotiated provision of the December 2014 IRS settlement. The IRS filed a lien (as is customarily the case) associated with the assessment.  Subsequently, an IRS examination team denied our amended return claims, and we filed a protest with IRS Appeals. Following correspondence and conferences held with IRS Appeals, we received and accepted a settlement offer from IRS Appeals in June 2018 that reduced our $7.4 million net unpaid income tax assessment referenced above to $3.7 million (such $3.7 million remaining unpaid assessment relating to the 2006 year to which we had originally carried back the aforementioned net operating losses). In July 2018, we paid $5.4 million to the IRS to cover the $3.7 million unpaid income tax assessment and most of the interest that had accrued thereon. Subsequently, during the three months ended September 30, 2018, the IRS refunded $0.5 million of our $5.4 million payment, and in 2019, we paid $0.7 million to the IRS to cover the interest on the 2006 income tax liability.  Although we have paid all assessed income taxes related to this matter, we still have an outstanding accrued liability for failure-to-pay penalties (and accrued interest thereon) related to this matter. We are pursuing complete abatement of the failure-to-pay penalties of $0.9 million, and once this matter is resolved through either abatement or payment, we expect the IRS to remove the aforementioned lien in due course.

Credit and Other Investments Segment

Our Credit and Other Investments segment includes our activities relating to our servicing of and our investments in the point-of-sale, direct-to-consumer personal finance and credit card operations, our various credit card receivables portfolios, as well as other product testing and investments that generally utilize much of the same infrastructure. The types of revenues we earn from our investments in receivables portfolios and services primarily include finance charges, fees and the accretion of merchant fees associated with the point-of-sale receivables or annual fees on our direct-to-consumer receivables.

We record (i) the finance charges, merchant fee accretion and late fees assessed on our Credit and Other Investments segment receivables in the interest income - consumer loans, including past due fees category on our consolidated statements of operations, (ii) the annual, activation, monthly maintenance, returned-check, cash advance and other fees in the fees and related income on earning assets category on our consolidated statements of operations, and (iii) the charge offs (and recoveries thereof) within our provision for losses on loans, interest and fees receivable recorded at net realizable value on our consolidated statements of operations (for all credit product receivables other than those for which we have elected the fair value option) and within net losses upon impairment of loans, interest and fees receivable recorded at fair value on our consolidated statements of operations (for all of our other receivables for which we have elected the fair value option). Additionally, we show the effects of fair value changes for those credit card receivables for which we have elected the fair value option as a component of fees and related income on earning assets in our consolidated statements of operations.

We historically have invested in receivables portfolios through subsidiary entities. If we control through direct ownership or exert a controlling interest in the entity, we consolidate it and reflect its operations as noted above. If we exert significant influence but do not control the entity, we record our share of its net operating results in the equity in income of equity-method investee category on our consolidated statements of operations.

23

Managed Receivables

We make various references within our discussion of the Credit and Other Investments segment to our managed receivables. Our managed receivables data includes only the performance of those receivables underlying consolidated subsidiaries and excludes from managed receivables data the performance of receivables held by our equity method investee. As the receivables underlying our equity method investee reflect a small and diminishing portion of our overall receivables base, we do not believe their inclusion or exclusion in the overall results is material. Additionally, we calculate average managed receivables based on the quarter-end balances. 

Financial, operating and statistical data based on aggregate managed receivables are important to any evaluation of the performance of our credit portfolios, including our risk management, servicing and collection activities and our valuing of purchased receivables. In allocating our resources and managing our business, management relies heavily upon financial data and results prepared on this “managed basis.” Analysts, investors and others also consider it important 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 our managed receivables because it provides information concerning the quality of loan originations and the related credit risks inherent within the portfolios.

Reconciliation of the managed receivables data to our GAAP financial statements requires an understanding that: (1) our managed receivables data are based on billings and actual charge-offs as they occur, without regard to any changes in our allowance for uncollectible loans, interest and fees receivable; (2) our managed receivables data exclude non-consolidated receivables (3) the period-end and average managed receivables data include the face value of receivables which are accounted for under the fair value option; and (4) when applicable, we exclude from our managed receivables data certain reimbursements received in respect of one of our portfolios which resulted in pre-tax income benefits within our net recovery of impairment of loans, interest and fees receivable recorded at fair value line item on our consolidated statements of operations totaling approximately $0.4 million for the three months ended September 30, 2018 and $1.7 million for the three months ended June 30, 2018. This last category of reconciling items above is excluded because it does not bear on our performance in managing our credit card portfolios, including our risk management, servicing and collection activities and our valuing of purchased receivables; moreover, we do not expect to receive any further material reimbursements with respect to this portfolio.

A reconciliation of our Loans, interest and fees receivable, at fair value to the assets underlying those receivables which are included in our managed receivables are as follows (in thousands):

	At or for the Three Months Ended
	2019												2018
	Dec. 31			Sept. 30			Jun. 30			Mar. 31			Dec. 31			Sept. 30			Jun. 30			Mar. 31
Loans, interest and fees receivable, gross		6,404			7,070			7,803			8,664			9,575			10,504			13,790			15,557
Fair value adjustment		(2,018	)		(2,545	)		(2,899	)		(3,270	)		(3,269	)		(3,379	)		(5,504	)		(6,144	)
Loans, interest and fees receivable, at fair value		4,386			4,525			4,904			5,394			6,306			7,125			8,286			9,413

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 the accounts underlying our receivables, 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 the accounts underlying our receivables portfolio also affects the stability of our delinquency and loss rates. We consider this delinquency and charge-off data in our allowance for uncollectible loans, interest and fees receivable for our other credit product receivables that we report at net realizable value. Our strategy for managing delinquency and receivables losses consists of account management throughout the life of the receivable. This strategy includes credit line management and pricing based on the risks.  See also our discussion of collection strategies under the “How Do We Collect?” in Item 1, “Business”.

24

The following table presents the delinquency trends of the receivables we manage within our Credit and Other Investments segment, as well as charge-off data and other managed receivables statistics (in thousands; percentages of total):

	At or for the Three Months Ended
	2019												2018
	Dec. 31			Sept. 30			Jun. 30			Mar. 31			Dec. 31			Sept. 30			Jun. 30			Mar. 31
Period-end managed receivables	$	914,828		$	776,102		$	610,129		$	480,928		$	462,862		$	406,057		$	371,331		$	337,848
Percent 30 or more days past due		15.3	%		12.9	%		11.5	%		13.7	%		13.2	%		12.7	%		11.8	%		12.1	%
Percent 60 or more days past due		11.4	%		9.2	%		8.2	%		10.3	%		9.5	%		9.3	%		8.5	%		9.1	%
Percent 90 or more days past due		8.1	%		6.1	%		5.8	%		7.5	%		6.7	%		6.4	%		5.7	%		6.5	%
Averaged managed receivables	$	845,465		$	693,116		$	545,529		$	471,895		$	434,460		$	388,694		$	354,590		$	335,567
Total yield ratio		50.0	%		49.7	%		47.0	%		46.5	%		44.3	%		43.2	%		41.6	%		41.0	%
Combined gross charge-off ratio		22.4	%		17.6	%		23.8	%		23.6	%		21.6	%		19.7	%		22.4	%		24.2	%

The following table presents additional trends and data with respect to our current point-of-sale (“Retail”) and direct-to-consumer (“Direct”) receivables (dollars in thousands). Results of our legacy credit card receivables portfolios are excluded:

	Retail - At or for the Three Months Ended
	2019												2018
	Dec. 31			Sept. 30			Jun. 30			Mar. 31			Dec. 31			Sept. 30			Jun. 30			Mar. 31
Period-end managed receivables	$	397,690		$	365,652		$	308,382		$	255,922		$	257,772		$	238,851		$	223,873		$	207,231
Percent 30 or more days past due		13.2	%		11.6	%		10.4	%		12.7	%		13.6	%		13.4	%		12.4	%		12.6	%
Percent 60 or more days past due		9.7	%		8.2	%		7.3	%		9.8	%		9.9	%		9.8	%		8.8	%		9.4	%
Percent 90 or more days past due		6.8	%		5.6	%		5.0	%		7.2	%		7.1	%		6.9	%		5.8	%		6.8	%
Average APR		22.1	%		22.5	%		24.0	%		24.8	%		25.0	%		24.7	%		24.8	%		24.2	%
Receivables purchased during period	$	116,327		$	133,528		$	123,533		$	69,120		$	80,096		$	70,860		$	74,391		$	60,932

	Direct - At or for the Three Months Ended
	2019												2018
	Dec. 31			Sept. 30			Jun. 30			Mar. 31			Dec. 31			Sept. 30			Jun. 30			Mar. 31
Period-end managed receivables	$	510,734		$	403,380		$	293,944		$	216,342		$	195,515		$	156,702		$	133,668		$	115,060
Percent 30 or more days past due		17.0	%		14.2	%		12.8	%		15.1	%		13.0	%		12.1	%		11.5	%		12.2	%
Percent 60 or more days past due		12.8	%		10.3	%		9.3	%		11.2	%		9.3	%		8.9	%		8.5	%		9.2	%
Percent 90 or more days past due		9.1	%		6.7	%		6.7	%		8.0	%		6.4	%		6.0	%		5.9	%		6.4	%
Average APR		27.0	%		28.2	%		28.5	%		27.9	%		28.1	%		27.6	%		27.2	%		26.9	%
Receivables purchased during period	$	195,243		$	174,026		$	123,776		$	60,733		$	69,585		$	48,729		$	48,966		$	33,747

25

The following discussion relates to the tables above.

Managed receivables levels. We experienced overall quarterly receivables growth throughout 2019 and 2018 with over $455.1 million in net receivables growth associated with the point-of-sale and direct-to-consumer products offered by our lending partners during 2019. The addition of large point-of-sale retail partners and ongoing purchases of receivables arising in accounts issued by our lending partners to customers of our existing retail partners helped grow our point-of-sale receivables by $139.9 million and $50.9 million in the years ended December 31, 2019 and 2018, respectively. Our direct-to-consumer acquisitions grew by over $315.2 million and $85.7 million, net during the years ended December 31, 2019 and 2018, respectively. While we expect continued quarterly growth in our managed receivables balances for all of our products during 2020 (absent the unknown impacts COVID-19 may have on our ability to acquire new receivables or the impact it may have on our customers ability to make payments on outstanding loans and fees receivable), this growth in future periods largely is dependent on the addition of new retail partners to the point-of-sale origination platform as well as the timing of solicitations within the direct-to-consumer platform by our lending partner. Further, the loss of existing retail partner relationships could adversely affect new loan acquisition levels.  Our top five retail partnerships accounted for over 50% of the above referenced Retail period-end managed receivables outstanding as of December 31, 2019. 

Delinquencies. Delinquencies have the potential to impact net income in the form of net credit losses. Delinquencies also are costly in terms of the personnel and resources dedicated to resolving them. We intend for the receivables management strategies we use on our portfolios to manage and, to the extent possible, reduce the higher delinquency rates that can be expected with the younger average age of the newer receivables in our managed portfolio. These management strategies include conservative credit line management and collection strategies intended to optimize the effective account-to-collector ratio across delinquency categories. We measure the success of these efforts by reviewing delinquency rates. These rates exclude receivables that have been charged off.

As we continue to invest in newer point-of-sale and direct-to-consumer receivables, our delinquency rates have increased when compared to the same periods in prior years. This is largely a result of the risk profiles (and corresponding expected returns) for these receivables. Our delinquency rates have continued to be somewhat lower than what we ultimately expect for our new point-of-sale and direct-to-consumer receivables given the continued growth and age of the related accounts. This trend can be seen in periods of large growth in the charts above which result in lower delinquency rates. If and when growth for these product lines moderates, we expect increased overall delinquency rates as the existing receivables mature through their peak charge-off periods. Additionally, absent the unknown impacts COVID-19 may have on our ability to acquire new receivables or the impact it may have on our customers ability to make payments on outstanding loans and fees receivable and the corresponding impact on our delinquency rates, we expect to continue to see seasonal payment patterns on these receivables which impact our delinquencies. For example, delinquency rates historically are lower in the first quarter of each year due to the benefits of seasonally strong payment patterns associated with year-end tax refunds for most consumers.

Total yield ratio. Currently, we are experiencing growth in newer, higher yielding receivables, including point-of-sale receivables and direct-to-consumer receivables. While this growth has contributed to increases in our total yield ratio, we expect this growth also will continue to result in higher charge-off and delinquency rates than those experienced historically. Additionally, direct-to-consumer receivables tend to have higher total yields than point-of-sale receivables, so recent accelerated growth in direct-to-consumer receivables has also contributed to the trending higher total yield ratio. Our fourth, third, second and first quarter 2019 total yield ratios exclude the impacts of $37.8 million, $26.7 million, $26.0 million and $15.4 million, respectively, associated with our aforementioned reduction in reserves associated with one of our portfolios. Similarly, our fourth quarter 2018 total yield ratio excludes the impact of $36.2 million associated with a litigation settlement in such quarter.

26

Absent the unknown impacts COVID-19 may have on our ability to acquire new receivables or the impact it may have on our customers ability to make payments on outstanding loans and fees receivable, we expect total yield ratios to continue to fluctuate somewhat based on the relative mix of growth in point-of-sale receivables and higher yielding direct-to-consumer credit card receivables. 

Combined gross charge-off ratio. We charge off our Credit and Other Investments segment receivables when they become contractually more than 180 days past due. For all of our products, we charge off receivables within 30 days of notification and confirmation of a customer’s bankruptcy or death. However, in some cases of death, we do not charge off receivables if there is a surviving, contractually liable individual or an estate large enough to pay the debt in full.

Growth within point-of-sale finance and direct-to-consumer receivables has resulted in increases in our charge-off rates over time. Our first quarter 2018 combined gross charge-off ratios reflect further significant investments during late 2017 in direct-to-consumer receivables, which reached their peak charge off periods during the fourth quarter of 2017 and first quarter of 2018. Second and third quarter 2018 declines in the gross charge-off ratio are reflective of this as well and are also indicative of some of the seasonal delinquency benefits discussed above. Combined gross charge-off rates for the fourth quarter of 2018 and first quarter of 2019 reflect the expected higher charge-off rates associated with a mix shift to higher yielding products and ongoing testing of new products throughout 2018. The combined gross charge-off ratio in the third quarter of 2019 further reflects the positive impacts of a bulk sale of charged off receivables.  Absent this sale, the combined gross charge-off ratio would have been 18.6%.

The growth in the point-of-sale and direct-to-consumer receivables continues to result in higher charge-offs than those experienced historically. In the next few quarters, we expect continued elevated charge off rates when compared to historical results, given the following: (1) higher expected charge off rates on the point-of-sale and direct-to-consumer receivables corresponding with higher yields on these receivables, (2) continued testing of receivables with higher risk profiles, which could lead to periodic increases in combined gross charge-offs, and (3) recent vintages reaching peak charge-off periods. Offsetting these increases will be growth in the underlying receivables base which will serve to mute to a varying degree some of the aforementioned impacts as has been seen in recent quarters. Further impacting our charge-off rates are the timing of solicitations which serve to minimize charge off rates in periods of high receivable acquisitions but also exacerbate charge-off rates in periods of lower receivable acquisitions. The unknown impacts COVID-19 may have on our ability to acquire new receivables or the impact it may have on our customers ability to make payments on outstanding loans and fees receivable could lead to changes in these expectations.

Average APR. Our average annual percentage rate (“APR”) charged to customers varies by receivable type, credit history and other factors. The APR for receivables originated through our point-of-sale platform range from 0% to 36.0%. For direct-to-consumer receivables, APR ranges from 19.99% to 36.0%. We have experienced minor fluctuations in our average APR based on the relative product mix of receivables purchased during a period. We currently expect our average APRs in 2020 to remain consistent with the average APRs we have experienced over the past several quarters; however, the timing and relative mix of receivables acquired could cause some minor fluctuations.

Receivables purchased during period. Receivables purchased during the period reflect the gross amount of investments we have made in a given period, net of any credits issued to consumers during that same period. For most periods presented, our point-of-sale receivable purchases experienced overall growth throughout the periods presented largely based on the addition of new point-of-sale retail partners, as previously discussed. We may experience periodic declines in these acquisitions due to: the loss of one or more retail partners; seasonal purchase activity by consumers; or the timing of new customer originations by our lending partners. We currently expect to see increases in receivable acquisitions when compared to the same period in prior years. Our direct-to-consumer receivable acquisitions tend to have more volatility based on the issuance of new credit card accounts by our lending partner and the availability of capital to fund new purchases. Nonetheless, absent the unknown impacts COVID-19 may have on our ability to acquire new receivables or the impact it may have on our customers ability to make payments on outstanding loans and fees receivable we expect continued growth in the acquisition of these receivables throughout 2020.

Auto Finance Segment

CAR, our auto finance platform acquired in April 2005, principally purchases and/or services loans secured by automobiles from or for, and also provides floor-plan financing for, a pre-qualified network of independent automotive dealers and automotive finance companies in the buy-here, pay-here used car business.  We have expanded these operations to also include certain installment lending products in addition to our traditional loans secured by automobiles both in the U.S. and U.S. territories.

Collectively, as of December 31, 2019, we served more than 600 dealers through our Auto Finance segment in 35 states, the District of Columbia and two U.S. territories.

27

Managed Receivables Background

For reasons set forth above within our Credit and Other Investments segment discussion, we also provide managed receivables-based financial, operating and statistical data for our Auto Finance segment. Reconciliation of the auto finance managed receivables data to our GAAP financial statements requires an understanding that our managed receivables data are based on billings and actual charge offs as they occur, without regard to any changes in our allowance for uncollectible loans, interest and fees receivable. Similar to the managed calculation above, the average managed receivables used in the ratios below is calculated based on the quarter ending balances of consolidated receivables.

Analysis of Statistical Data

Financial, operating and statistical metrics for our Auto Finance segment are detailed (in thousands; percentages of total) in the following table:

	At or for the Three Months Ended
	2019												2018
	Dec. 31			Sept. 30			Jun. 30			Mar. 31			Dec. 31			Sept. 30			Jun. 30			Mar. 31
Period-end managed receivables	$	89,785		$	89,451		$	89,490		$	90,208		$	88,057		$	85,338		$	83,872		$	78,436
Percent 30 or more days past due		15.2	%		14.5	%		13.3	%		11.4	%		14.7	%		13.3	%		10.8	%		8.8	%
Percent 60 or more days past due		6.2	%		5.9	%		5.4	%		5.3	%		5.7	%		4.3	%		3.6	%		3.3	%
Percent 90 or more days past due		2.9	%		3.1	%		2.6	%		2.9	%		2.5	%		1.7	%		1.4	%		1.6	%
Average managed receivables	$	89,618		$	89,471		$	89,849		$	89,133		$	86,698		$	84,605		$	81,154		$	77,825
Total yield ratio		36.3	%		36.4	%		36.7	%		36.0	%		36.1	%		37.9	%		38.2	%		37.9	%
Combined gross charge-off ratio		4.0	%		2.7	%		4.9	%		2.7	%		2.8	%		0.9	%		0.5	%		2.1	%
Recovery ratio		1.3	%		1.8	%		1.8	%		1.3	%		0.9	%		0.9	%		1.0	%		1.5	%

Managed receivables.  We expect modest growth in the level of our managed receivables for 2020 when compared to the same periods in prior years in both the U.S. and U.S. territories as CAR expands within its current geographic footprint and continues plans for service area expansion. Although we are expanding our CAR operations, the Auto Finance segment faces strong competition from other specialty finance lenders, as well as the indirect effects on us of our buy-here, pay-here dealership partners’ competition with more traditional franchise dealerships for consumers interested in purchasing automobiles. Managed receivable levels have increased in each of the periods of 2019 when compared to the same period in 2018 primarily due to the acquisition of new dealer relationships which has resulted in the ability to purchase higher levels of auto receivables.  We expect this increase in receivables when compared to the same periods in the prior year will continue to result in period over period increases for the coming quarters absent the unknown impacts COVID-19 may have on our ability to acquire new receivables or the impact it may have on our customers ability to make payments on outstanding loans and fees receivable.

Delinquencies. Current delinquency levels are consistent with our expectations for levels in the near term with some improvement noted in the first quarter of 2019 due to seasonal performance improvements. Delinquency levels experienced for the first three quarters of 2018 generally were lower than historical rates largely due to the absence of any significant dealer-related losses (as opposed to individual consumer defaults) that are typical during any given year and which tend to produce larger portfolio level defaults on receivables.  These low delinquencies also contributed to lower combined gross charge-off rates during 2018. Delinquency rates also tend to fluctuate based on seasonal trends and historically are lower in the first quarter of each year as seen above due to the benefits of strong payment patterns associated with year-end tax refunds for most consumers. While we experienced some increase in our delinquency rates in 2019 when compared to the same periods in 2018, we are not concerned with modest fluctuations in delinquency rates and do not believe they will have a significantly positive or adverse impact on our results of operations; even at slightly elevated rates, we earn significant yields on CAR’s receivables and have significant dealer reserves (i.e., retainages or holdbacks on the amount of funding CAR provides to its dealer customers) to protect against meaningful credit losses.

Total yield ratio. We have experienced modest fluctuations in our total yield ratio largely impacted by the relative mix of receivables in various products offered by CAR as some shorter term product offerings tend to have higher yields. Yields on our CAR products over the last few quarters are consistent with our expectations.  Further, we expect our total yield ratio to remain in line with current experience, with moderate fluctuations based on relative growth or declines in average managed receivables for a given quarter.  These variations would be based on the relative mix of receivables in our various product offerings. Additionally, our product offerings in the U.S. territories tend to have slightly lower yields than those offered in the U.S. As such, continued growth in that region also will serve to slightly depress our overall total yield ratio, yet we expect growth in that region to continue to generate attractive returns on assets.

Combined gross charge-off ratio and recovery ratio. We charge off auto finance receivables when they are between 120 and 180 days past due, unless the collateral is repossessed and sold before that point, in which case we will record a charge off when the proceeds are received. Combined gross charge-off ratios in the above table reflect the lower delinquency rates we have recently experienced. While we anticipate our charge-offs to be incurred ratably across our portfolio of dealers, specific dealer-related losses are difficult to predict and can negatively influence our combined gross charge-off ratio. This is evidenced by the slightly elevated combined gross charge-off rate we experienced during 2019.  We continually re-assess our dealers and will take appropriate action if we believe a particular dealer’s risk characteristics adversely change. While we have appropriate dealer reserves to mitigate losses across the majority of our pool of receivables, the timing of recognition of these reserves as an offset to charge offs is largely dependent on various factors specific to each of our dealer partners including ongoing purchase volumes, outstanding balances of receivables and current performance of outstanding loans. As such, the timing of charge-off offsets is difficult to predict; however, we believe that these reserves are adequate to offset any loss exposure we may incur. Additionally, the products we issue in the U.S. territories do not have dealer reserves with which we can offset losses. Further, given our expectation of some gradual increase in our delinquency rates as discussed above, we expect gross charge-off rates will climb slightly over existing rates although as indicated above, the timing of individual dealer-related losses is difficult to predict. We also expect our recovery rate to fluctuate modestly from quarter to quarter due to the timing of the sale of repossessed autos. Given the unknown impacts COVID-19 may have on our ability to acquire new receivables or the impact it may have on our customers ability to make payments on outstanding loans and fees receivable we could experience variation in these expectations.

28

Definitions of Financial, Operating and Statistical Measures

Total yield ratio. Represents an annualized fraction, the numerator of which includes (as appropriate for each applicable disclosed segment) the: 1) finance charge and late fee income billed on all consolidated outstanding receivables and the amortization of the accretable yield component of our acquisition discounts for portfolio purchases, collectively included in the consumer loans, including past due fees category on our consolidated statements of income; plus 2) credit card fees (including over-limit fees, cash advance fees, returned check fees and interchange income), earned, amortized amounts of annual membership fees and activation fees with respect to certain credit card receivables, collectively included in our fees and related income on earning assets category on our consolidated statements of income; plus 3) servicing, other income and other activities collectively included in our other operating income category on our consolidated statements of income. The denominator used represents our average managed receivables.

Combined gross charge-off ratio. Represents an annualized fraction, the numerator of which is the aggregate consolidated amounts of finance charge, fee and principal losses from consumers unwilling or unable to pay their receivables balances, as well as from bankrupt and deceased consumers, less current-period recoveries (including recoveries from dealer reserve offsets for our CAR operations) and the related portion of unamortized fees and discounts, as reflected in Note 2 “Significant Accounting Policies and Consolidated Financial Statement Components—Loans, Interest and Fees Receivable”, and the denominator of which is average managed receivables. Recoveries on managed receivables represent all amounts received related to managed receivables that previously have been charged off, including payments received directly from consumers and proceeds received from the sale of those charged-off receivables. Recoveries typically have represented less than 2% of average managed receivables.

29

LIQUIDITY, FUNDING AND CAPITAL RESOURCES

As discussed elsewhere in this Report, we incur a significant level of costs associated with a fixed infrastructure that had been designed to support our significant legacy credit card operations. Our infrastructure costs are still somewhat elevated, and while we had in the past focused on cost reduction, our primary focus now is growing the point-of-sale and direct-to-consumer credit card receivables so that our revenues from these investments can cover our infrastructure costs and return us to consistent profitability. Increases in new and existing retail partnerships and the expansion of our investments in direct-to-consumer finance products have resulted in quarterly growth of total managed receivables levels, and we expect this growth to continue in the coming quarters.

Accordingly, we will continue to focus on (i) containing costs (as opposed to our previous focus on reducing expenses) (ii) adding new retail partners to our platform to continue growth of the point-of-sale receivables (iii) continuing growth in direct-to-consumer credit card receivables and (iv) obtaining the funding necessary to meet capital needs required by the growth of our receivables.

All of our Credit and Other Investments segment’s structured financing facilities are expected to amortize down with collections on the receivables within their underlying trusts and should not represent significant refunding or refinancing risks to our consolidated balance sheet.  Additionally, we do not expect any imminent refunding or financing needs associated with our convertible senior notes given their maturity in 2035. As such, facilities that could represent near-term significant refunding or refinancing needs as of December 31, 2019 are those associated with the following notes payable in the amounts indicated (in millions):   

Revolving credit facility (expiring November 1, 2021) that is secured by certain assets of our CAR subsidiary	$	39.1
Revolving credit facility (expiring March 31, 2020) that is secured by certain receivables and restricted cash		19.4
Revolving credit facility (expiring July 15, 2021) that is secured by certain receivables and restricted cash		14.6
Revolving credit facility (expiring December 21, 2020) that is secured by certain receivables and restricted cash		8.6
Revolving credit facility (expiring September 19, 2021) that is secured by certain receivables and restricted cash		15.0
Amortizing debt facility (expiring September 30, 2021) that is sescured by certain receivables and restricted cash		10.0
Total	$	106.7

Further details concerning the above debt facilities and our convertible senior notes are provided in Note 9, “Notes Payable and Variable Interest Entities,” and Note 10, “Convertible Senior Notes,” to our consolidated financial statements included herein. Based on the state of the debt capital markets, the performance of our assets that serve as security for the above facilities, and our relationships with lenders, we view imminent refunding or refinancing risks with respect to the above facilities as low in the current environment, and we believe that the quality of our new receivables should allow us to raise more capital through increasing the size of our facilities with our existing lenders and attracting new lending relationships.  

In February 2017, we (through a wholly owned subsidiary) established a program under which we sell certain receivables to a consolidated trust in exchange for notes issued by the trust. The notes are secured by the receivables and other assets of the trust. Simultaneously with the establishment of the program, the trust issued a series of variable funding notes and sold an aggregate amount of up to $90.0 million (subsequently reduced to $70.0 million) of such notes (of which $25.8 million was outstanding as of December 31, 2019) to an unaffiliated third party pursuant to a facility that can be drawn upon to the extent of outstanding eligible receivables. Interest rates on the notes are fixed at 14.0%. The facility matures on February 8, 2022 and is subject to certain affirmative covenants and collateral performance tests, the failure of which could result in required early repayment of all or a portion of the outstanding balance of notes. The facility also may be prepaid subject to payment of a prepayment or other fee.

In June 2018 and again in November 2018, we (through a wholly owned subsidiary) expanded the above mentioned program to sell up to an additional $100.0 million of notes ($200.0 million in total notes through the June and November 2018 expansions) which are secured by the receivables and other assets of the trust (of which $0.0 million was outstanding as of December 31, 2019) to separate unaffiliated third parties pursuant to facilities that can be drawn upon to the extent of outstanding eligible receivables. Interest rates on the notes are based on commercial paper rates plus 3.75% and LIBOR plus 4.875%, respectively. The above facilities mature on June 11, 2021 and November 16, 2020, respectively, and are subject to certain affirmative covenants and collateral performance tests, the failure of which could result in required early repayment of all or a portion of the outstanding balance of notes. The facilities also may be prepaid subject to payment of a prepayment or other fee.

In November 2018, we sold $167.3 million of asset backed securities (“ABS”) secured by certain retail point-of-sale receivables. A portion of the proceeds from the sale were used to pay-down our existing term and revolving facilities associated with our point-of-sale receivables. The weighted average interest rate on the securities is 5.76%.

In June 2019, we sold $200.0 million of ABS secured by certain credit card receivables. A portion of the proceeds from the sale was used to pay-down our existing facilities associated with our credit card receivables. The terms of the ABS allow for a two-year revolving structure with a subsequent 12-month to 18-month amortization period. The weighted average interest rate on the securities is fixed at 5.37%.

In September 2019, we extended the maturity date of the revolving credit facility secured by the financial and operating assets of CAR to November 1, 2021, and, in October 2019, we expanded the borrowing capacity to $55.0 million. All other material terms remain unchanged.

In November 2019, we sold $200.0 million of ABS secured by certain credit card receivables. A portion of the proceeds from the sale was used to pay-down our existing facilities associated with our credit card receivables and the remaining proceeds were available to fund the acquisition of future receivables. The terms of the ABS allow for a three-year revolving structure with a subsequent 12-month to 18-month amortization period. The weighted average interest rate on the securities is fixed at 4.91%.

30

On November 26, 2014, we and certain of our subsidiaries entered into a Loan and Security Agreement with Dove Ventures, LLC, a Nevada limited liability company (“Dove”). The agreement provided for a senior secured term loan facility in an amount of up to $40.0 million at any time outstanding. On December 27, 2019, the Company issued 400,000 shares of its Series A Preferred Stock (10,000,000 shares authorized, 400,000 shares outstanding) with an aggregate initial liquidation preference of $40.0 million, in exchange for full satisfaction of the $40.0 million that the Company owed Dove under the Loan and Security Agreement.  Dividends on the preferred stock are 6% per annum (cumulative, non-compounding) and are payable as declared, and in preference to any common stock dividends, in cash. The Series A Preferred Stock is perpetual and has no maturity date. The Company may, at its option, redeem the shares of Series A Preferred Stock on or after January 1, 2025 at a redemption price equal to $100 per share, plus any accumulated and unpaid dividends. At the request of a majority of the holders of the Series A Preferred Stock, the Company is required to offer to redeem all of the Series A Preferred Stock at a redemption price equal to $100 per share, plus any accumulated and unpaid dividends, at the option of the holders thereof, on or after January 1, 2024. Upon the election by the holders of a majority of the Series A Preferred Stock, each share of the Series A Preferred Stock is convertible into the number of shares of the Company’s common stock as is determined by dividing (i) the sum of (a) $100 and (b) any accumulated and unpaid dividends on such share by (ii) an initial conversion price equal to $10 per share, subject to adjustment in certain circumstances to prevent dilution. 

The use of the London Interbank Offered Rate (“LIBOR”) is expected to be phased out by the end of 2021. Currently, LIBOR is used as a reference rate for certain of our financial instruments. In any event, the majority of our revolving credit facilities mature prior to the expected phase out of LIBOR. At this time, there is no definitive information regarding the future utilization of LIBOR or of any particular replacement rate. Going forward, we will work with our lenders to use suitable alternative reference rates for our financial instruments. We will continue to monitor, assess and plan for the phase out of LIBOR; however, we currently do not expect the impact to be material to the Company.

At December 31, 2019, we had $135.4 million in unrestricted cash held by our various business subsidiaries. Because the characteristics of our assets and liabilities change, liquidity management has been a dynamic process for us, driven by the pricing and maturity of our assets and liabilities. We historically have financed our business through cash flows from operations, asset-backed structured financings and the issuance of debt and equity. Details concerning our cash flows for the years ended December 31, 2019 and 2018 are as follows:

• During the year ended December 31, 2019, we generated $100.0 million of cash flows from operations compared to our generating $42.9 million of cash flows from operations during the year ended December 31, 2018. The increase in cash provided by operating activities was principally related to a deferred payment program started with an unrelated third-party for a significant portion of our marketing expenditures and increases in finance collections associated with growing point-of-sale and direct-to-consumer receivables.  Offsetting this increase was reimbursements received in the second and third quarters of 2018 in respect of one of our portfolios with no corresponding receipt during 2019 as well as the settlement of aforementioned litigation.

• During the year ended December 31, 2019, we used $433.7 million of cash from our investing activities, compared to use of $134.5 million of cash from investing activities during the year ended December 31, 2018. This increase in cash used is primarily due to significant increases in the level of investments for 2019 in the point-of-sale and direct-to-consumer receivables relative to the same period in 2018 and which we expect to continue to make throughout 2020. Slightly offsetting this increase in cash used by investing activities are returns on our aforementioned investments in point-of-sale and direct-to-consumer receivables which contributed positively to our cash generated from investing activities.

• During the year ended December 31, 2019, we generated $368.7 million of cash in financing activities, compared to our generating $161.7 million of cash in financing activities during the year ended December 31, 2018. In both periods, the data reflect borrowings associated with point-of-sale and direct-to-consumer receivables offset by net repayments of amortizing debt facilities as payments are made on the underlying receivables that serve as collateral. Further, on November 14, 2019, a wholly-owned subsidiary issued 50.5 million Class B preferred units at a purchase price of $1.00 per unit. 

Beyond our immediate financing efforts discussed throughout this report, we will continue to evaluate debt and equity issuances as a means to fund our investment opportunities. We expect to take advantage of any opportunities to raise additional capital if terms and pricing are attractive to us. Any proceeds raised under these efforts or additional liquidity available to us could be used to fund (1) additional investments in point-of-sale and direct-to-consumer finance receivables as well as the acquisition of credit card receivables portfolios and (2) further repurchases of our convertible senior notes and common stock. Pursuant to a share repurchase plan authorized by our Board of Directors on May 10, 2018, we are authorized to repurchase up to 5,000,000 shares of our common stock through June 30, 2020.  As of December 31, 2019 we were authorized to repurchase a remaining 4,391,318 shares under this share repurchase plan.

CONTRACTUAL OBLIGATIONS, COMMITMENTS AND OFF-BALANCE-SHEET ARRANGEMENTS

Commitments and Contingencies

We do not currently have any off-balance-sheet arrangements; however, we do have certain contractual arrangements that would require us to make payments or provide funding if certain circumstances occur, which we refer to as contingent commitments. We do not currently expect that these contingent commitments will result in any material amounts being paid by us. See Note 11, “Commitments and Contingencies,” to our consolidated financial statements included herein for further discussion of these matters.

RECENT ACCOUNTING PRONOUNCEMENTS

See Note 2, “Significant Accounting Policies and Consolidated Financial Statement Components,” to our consolidated financial statements included herein 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 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. Nevertheless, we describe below the areas for which we believe that the estimations, judgments or interpretations that we have made, if different, would have yielded the most significant differences in our consolidated financial statements.

On a quarterly basis, we review our significant accounting policies and the related assumptions, in particular, those mentioned below, with the audit committee of the Board of Directors.

31

Revenue Recognition

Consumer Loans, Including Past Due Fees

Consumer loans, including past due fees reflect interest income, including finance charges, and late fees on loans in accordance with the terms of the related customer agreements. Premiums, discounts and merchant fees paid or received associated with a loan are generally deferred and amortized over the average life of the related loans using the effective interest method. Finance charges and fees, net of amounts that we consider uncollectible, are included in loans, interest and fees receivable and revenue when the fees are earned.

Fees and Related Income on Earning Assets

Fees and related income on earning assets primarily include:  (1) fees associated with our credit products, including the receivables underlying our U.S. point-of-sale finance and direct-to-consumer platform, and our legacy credit card receivables; (2) changes in the fair value of loans, interest and fees receivable recorded at fair value; (3) changes in fair value of notes payable associated with structured financings recorded at fair value; (4) revenues associated with rent payments on rental merchandise; and (5) gains or losses associated with our investments in securities. 

We assess fees on credit card accounts underlying our credit card receivables according to the terms of the related cardholder agreements and, except for annual membership fees, we recognize these fees as income when they are charged to the customer's accounts. We accrete annual membership fees associated with our credit card receivables into income on a straight-line basis over the cardholder privilege period. Similarly, fees on our other credit products are recognized when earned, which coincides with the time they are charged to the customer’s account. Fees and related income on earning assets, net of amounts that we consider uncollectible, are included in loans, interest and fees receivable and revenue when the fees are earned.

Measurements for Loans, Interest and Fees Receivable at Fair Value and Notes Payable Associated with Structured Financings at Fair Value

Our valuation of loans, interest and fees receivable, at fair value is based on the present value of future cash flows using a valuation model of expected cash flows and the estimated cost to service and collect those cash flows. We estimate the present value of these future cash flows using a valuation model consisting of internally developed estimates of assumptions third-party market participants would use in determining fair value, including estimates of net collected yield, principal payment rates, expected principal credit loss rates, costs of funds, discount rates and servicing costs.  Similarly, our valuation of notes payable associated with structured financings, at fair value is based on the present value of future cash flows utilized in repayment of the outstanding principal and interest under the facilities using a valuation model of expected cash flows net of the contractual service expenses within the facilities. We estimate the present value of these future cash flows using a valuation model consisting of internally developed estimates of assumptions third-party market participants would use in determining fair value, including:  estimates of net collected yield, principal payment rates and expected principal credit loss rates on the credit card receivables that secure the non-recourse notes payable; costs of funds; discount rates; and contractual servicing fees.

The estimates for credit losses, payment rates, servicing costs, contractual servicing fees, costs of funds, discount rates and yields earned on credit card receivables significantly affect the reported amount of our loans, interest and fees receivable, at fair value and our notes payable associated with structured financings, at fair value on our consolidated balance sheet, and they likewise affect our changes in fair value of loans, interest and fees receivable recorded at fair value and changes in fair value of notes payable associated with structured financings recorded at fair value categories within our fees and related income on earning assets line item on our consolidated statements of operations.

Allowance for Uncollectible Loans, Interest and Fees

Through our analysis of loan performance, delinquency data, charge-off data, economic trends and the potential effects of those economic trends on consumers, we establish an allowance for uncollectible loans, interest and fees receivable as an estimate of the probable losses inherent within those loans, interest and fees receivable that we do not report at fair value. Our loans, interest and fees receivable consist of smaller-balance, homogeneous loans, divided into two portfolio segments:  Credit and Other Investments; and Auto Finance. Each of these portfolio segments is further divided into pools based on common characteristics such as contract or acquisition channel. For each pool, we determine the necessary allowance for uncollectible loans, interest and fees receivable by analyzing some or all of the following unique to each type of receivable pool:  historical loss rates; current delinquency and roll-rate trends; vintage analyses based on the number of months an account has been in existence; the effects of changes in the economy on our customers; changes in underwriting criteria; and estimated recoveries. These inputs are considered in conjunction with (and potentially reduced by) any unearned fees and discounts that may be applicable for an outstanding loan receivable. To the extent that actual results differ from our estimates of uncollectible loans, interest and fees receivable, our results of operations and liquidity could be materially affected.

32

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a “smaller reporting company,” as defined by Item 10 of Regulation S-K, we are not required to provide this information.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

See the Index to Financial Statements in Item 15, “Exhibits and Financial Statement Schedules.”

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures 

As of December 31, 2019, an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Act) was carried out on behalf of Atlanticus Holdings Corporation and our subsidiaries by our management and with the participation of our Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal financial officer). Based upon the evaluation, our principal executive officer and principal financial officer concluded that these disclosure controls and procedures were effective as of December 31, 2019.

Management’s Report on Internal Control over Financial Reporting

Management of Atlanticus Holdings Corporation is responsible for establishing and maintaining adequate internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Act) for Atlanticus Holdings Corporation and our subsidiaries. Our management conducted an evaluation of the effectiveness of internal control over financial reporting as of December 31, 2019, based on the framework in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) Internal Control-Integrated Framework (2013 framework).

Based on our evaluation under the COSO 2013 framework, management has concluded that internal control over financial reporting was effective as of December 31, 2019.

This Annual Report does not include an attestation report of our independent public accounting firm regarding internal control over financial reporting. Management’s report is not subject to attestation by our independent public accounting firm pursuant to SEC rules that permit us to provide only management’s report in this Annual Report.

Changes in Internal Control Over Financial Reporting

During the quarter ended December 31, 2019, no change in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Act) occurred that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Limitations on Controls

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

ITEM 9B. OTHER INFORMATION

None.

33

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information required by this Item will be set forth in our Proxy Statement for the 2020 Annual Meeting of Shareholders in the sections entitled “Proposal One: Election of Directors,” “Executive Officers of Atlanticus,” “Delinquent Section 16(a) Reports” and “Corporate Governance” and is incorporated by reference.

ITEM 11. EXECUTIVE COMPENSATION

The information required by this Item will be set forth in our Proxy Statement for the 2020 Annual Meeting of Shareholders in the section entitled “Executive and Director Compensation” and is incorporated by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information required by this Item will be set forth in our Proxy Statement for the 2020 Annual Meeting of Shareholders in the sections entitled “Security Ownership of Certain Beneficial Owners and Management” and “Equity Compensation Plan Information” and is incorporated by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information required by this Item will be set forth in our Proxy Statement for the 2020 Annual Meeting of Shareholders in the sections entitled “Related Party Transactions” and “Corporate Governance” and is incorporated by reference.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required by this Item will be set forth in our Proxy Statement for the 2020 Annual Meeting of Shareholders in the section entitled “Auditor Fees” and is incorporated by reference.

34

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

The following documents are filed as part of this Report:

1. Financial Statements

INDEX TO FINANCIAL STATEMENTS

	Page
Report of Independent Public Accounting Firm	F-1
Consolidated Balance Sheets as of December 31, 2019 and 2018	F-2
Consolidated Statements of Operations for the Years Ended December 31, 2019 and 2018	F-3
Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2019 and 2018	F-4
Consolidated Statements of Shareholders’ Equity (Deficit) for the Years Ended December 31, 2019 and 2018	F-5
Consolidated Statements of Cash Flows for the Years Ended December 31, 2019 and 2018	F-6
Notes to Consolidated Financial Statements as of December 31, 2019 and 2018	F-7

2. Financial Statement Schedules

None.

35

3. Exhibits

Exhibit Number	Description of Exhibit	Incorporated by Reference from Atlanticus’ SEC Filings Unless Otherwise Indicated(1)
3.1	Articles of Incorporation, as amended	May 16, 2017, Form 8-K, exhibit 3.1
3.1(a)	Articles of Amendment Establishing Cumulative Convertible Preferred Stock, Series A	December 30, 2019, Form 8-K, exhibit 3.1
3.2	Amended and Restated Bylaws (as amended through May 12, 2017)	May 16, 2017, Form 8-K, exhibit 3.2
4.1	Description of Common Stock of Atlanticus Holdings Corporation	Filed herewith
4.2	Form of common stock certificate	March 30, 2016, Form 10-K, exhibit 4.1
4.3	Indenture dated November 23, 2005 with U.S. Bank National Association, as successor to Wachovia Bank, National Association	November 28, 2005, Form 8-K, exhibit 4.1
4.4	Supplemental Indenture dated June 30, 2009 with U.S. Bank National Association, as successor to Wachovia Bank, National Association	July 7, 2009, Form 8-K, exhibit 4.2
10.1	Stockholders Agreement dated as of April 28, 1999	January 18, 2000, Form S-1, exhibit 10.1
10.2†	Fourth Amended and Restated 2014 Equity Incentive Plan	April 11, 2019, Definitive Proxy Statement on Schedule 14A, Appendix A
10.2(a)†	Form of Restricted Stock Agreement–Directors	August 14, 2019, Form 10-Q, exhibit 10.2
10.2(b)†	Form of Restricted Stock Agreement–Employees	August 14, 2019, Form 10-Q, exhibit 10.3
10.2(c)†	Form of Stock Option Agreement–Directors	August 14, 2019, Form 10-Q, exhibit 10.4
10.2(d)†	Form of Stock Option Agreement–Employees	August 14, 2019, Form 10-Q, exhibit 10.5
10.2(e)†	Form of Restricted Stock Unit Agreement–Directors	August 14, 2019, Form 10-Q, exhibit 10.6
10.2(f)†	Form of Restricted Stock Unit Agreement–Employees	August 14, 2019, Form 10-Q, exhibit 10.7
10.3†	Second Amended and Restated Employee Stock Purchase Plan	April 10, 2018, Definitive Proxy Statement on Schedule 14A, Appendix A
10.4†	Amended and Restated Employment Agreement for David G. Hanna	December 29, 2008, Form 8-K, exhibit 10.1
10.5†	Employment Agreement for Jeffrey A. Howard	March 28, 2014, Form 10-K, exhibit 10.7
10.6†	Employment Agreement for William R. McCamey	March 28, 2014, Form 10-K, exhibit 10.8
10.7†	Outside Director Compensation Package	November 14, 2019, Form 10-Q, exhibit 10.1
10.8	Amended and Restated Note Purchase Agreement, dated March 1, 2010, among Merrill Lynch Mortgage Capital Inc., CCFC Corp. (formerly CompuCredit Funding Corp.), Atlanticus Services Corporation (formerly CompuCredit Corporation), and CompuCredit Credit Card Master Note Business Trust	June 25, 2010, Form 8-K/A, exhibit 10.1
10.9	Share Lending Agreement	November 22, 2005, Form 8-K, exhibit 10.1
10.9(a)	Amendment to Share Lending Agreement	March 6, 2012, Form 10-K, exhibit 10.12(a)
10.10	Assumption Agreement dated June 30, 2009 between Atlanticus Holdings Corporation (formerly CompuCredit Holdings Corporation) and Atlanticus Services Corporation (formerly CompuCredit Corporation)	July 7, 2009, Form 8-K, exhibit 10.1
10.11	Master Indenture for Perimeter Master Note Business Trust, dated February 8, 2017, among Perimeter Master Note Business Trust, U.S. Bank National Association and Atlanticus Services Corporation	May 15, 2017, Form 10-Q, exhibit 10.1
10.11(a)*	Amended and Restated Series 2017-One Indenture Supplement for Perimeter Master Note Business Trust, dated June 11, 2018	Filed herewith
10.11(b)*	First Amendment to the Amended and Restated Series 2017-One Indenture Supplement for Perimeter Master Note Business Trust, dated November 16, 2018	Filed herewith
10.11(c)*	Second Amendment to the Amended and Restated Series 2017-One Indenture Supplement for Perimeter Master Note Business Trust, dated September 20, 2019	Filed herewith

36

Exhibit Number	Description of Exhibit	Incorporated by Reference from Atlanticus’ SEC Filings Unless Otherwise Indicated(1)
10.11(d)	Third Amendment to the Amended and Restated Series 2017-One Indenture Supplement for Perimeter Master Note Business Trust, dated November 13, 2019	Filed herewith
10.11(e)*	Fourth Amendment to the Amended and Restated Series 2017-One Indenture Supplement for Perimeter Master Note Business Trust, dated January 23, 2020	Filed herewith
10.11(f)*	Series 2018-Three Indenture Supplement for Perimeter Master Note Business Trust, dated November 16, 2018	Filed herewith
10.11(g)*	First Amendment to the Series 2018-Three Indenture Supplement for Perimeter Master Note Business Trust, dated October 9, 2019	Filed herewith
10.11(h)	Second Amendment to the Series 2018-Three Indenture Supplement for Perimeter Master Note Business Trust, dated November 13, 2019	Filed herewith
10.11(i)*	Third Amendment to Series 2018-Three Indenture Supplement for Perimeter Master Note Business Trust, dated January 23, 2020	Filed herewith
10.11(j)*	Purchase Agreement, dated February 8, 2017, among TSO-Fortiva Notes Holdco LP, TSO-Fortiva Certificate Holdco LP, Perimeter Funding Corporation, Atlanticus Services Corporation and Perimeter Master Note Business Trust	May 15, 2017, Form 10-Q, exhibit 10.1(b)
10.11(k)*	First Amendment to Purchase Agreement, dated June 11, 2018, among TSO-Fortiva Notes Holdco LP, TSO-Fortiva Certificate Holdco LP, Perimeter Funding Corporation, Access Financing, LLC and Perimeter Master Note Business Trust	Filed herewith
10.11(l)*	Second Amendment to Purchase Agreement, dated November 16, 2018, among TSO-Fortiva Notes Holdco LP, TSO-Fortiva Certificate Holdco LP, Perimeter Funding Corporation, Access Financing, LLC and Perimeter Master Note Business Trust	Filed herewith
10.11(m)	Third Amendment to Purchase Agreement, dated November 13, 2019, among TSO-Fortiva Notes Holdco LP, TSO-Fortiva Certificate Holdco LP, Perimeter Funding Corporation, Access Financing, LLC and Perimeter Master Note Business Trust	Filed herewith
10.11(n)*	Fourth Amendment to Purchase Agreement, dated January 23, 2020, among TSO-Fortiva Notes Holdco LP, TSO-Fortiva Certificate Holdco LP, Perimeter Funding Corporation, Access Financing, LLC and Perimeter Master Note Business Trust	Filed herewith
10.11(o)*	Purchase Agreement, dated November 16, 2018, among TSO-Fortiva Notes Holdco LP, Perimeter Funding Corporation, Access Financing, LLC and Perimeter Master Note Business Trust	Filed herewith
10.11(p)	First Amendment to Purchase Agreement, dated November 13, 2019, among TSO-Fortiva Notes Holdco LP, Perimeter Funding Corporation, Access Financing, LLC and Perimeter Master Note Business Trust	Filed herewith
10.11(q)*	Second Amendment to Purchase Agreement, dated January 23, 2020, among TSO-Fortiva Notes Holdco LP, Perimeter Funding Corporation, Access Financing, LLC and Perimeter Master Note Business Trust	Filed herewith
10.11(r)*	Series 2019-One Indenture Supplement for Perimeter Master Note Business Trust, dated June 12, 2019	Filed herewith
10.11(s)*	Series 2019-Two Indenture Supplement for Perimeter Master Note Business Trust, dated November 26, 2019	Filed herewith
10.11(t)	Trust Agreement, dated February 8, 2017, between Perimeter Funding Corporation and Wilmington Trust, National Association	May 15, 2017, Form 10-Q, exhibit 10.1(c)
10.11(u)	First Amendment to Trust Agreement, dated June 11, 2018, between Perimeter Funding Corporation and Wilmington Trust, National Association	Filed herewith
10.12	Master Indenture for Fortiva Retail Credit Master Note Business Trust, dated November 9, 2018, among Fortiva Retail Credit Master Note Business Trust, U.S. Bank National Association and Access Financing, LLC	March 27, 2019, Form 10-K, exhibit 10.12
10.12(a)*	Series 2018-One Indenture Supplement for Fortiva Retail Credit Master Note Business Trust, dated November 9, 2018	March 27, 2019, Form 10-K, exhibit 10.12(a)
10.12(b)	Amended and Restated Trust Agreement, dated November 9, 2018, between FRC Funding Corporation and Wilmington Trust, National Association	March 27, 2019, Form 10-K, exhibit 10.12(b)
10.13	Loan and Security Agreement, dated November 26, 2014, by and among Atlanticus Holdings Corporation, Certain Subsidiaries Named Therein, and Dove Ventures, LLC	March 6, 2015, Form 10-K, exhibit 10.15
10.13(a)	First Amendment to Loan and Security Agreement, dated November 23, 2015	March 30, 2016, Form 10-K, exhibit 10.14(a)
10.13(b)	Second Amendment to Loan and Security Agreement, dated November 22, 2016	March 31, 2017, Form 10-K, exhibit 10.14(b)
10.13(c)	Third Amendment to Loan and Security Agreement, dated November 22, 2017	April 2, 2018, Form 10-K, exhibit 10.14(c)
10.13(d)	Fourth Amendment to Loan and Security Agreement, dated June 5, 2018	August 14, 2018, Form 10-Q, exhibit 10.2
10.13(e)	Fifth Amendment to Loan and Security Agreement, dated October 22, 2018	March 27, 2019, Form 10-K, exhibit 10.13(e)
10.13(f)	Sixth Amendment to Loan and Security Agreement, dated November 21, 2018	March 27, 2019, Form 10-K, exhibit 10.13(f)
10.13(g)	Seventh Amendment to Loan and Security Agreement, dated November 5, 2019	Filed herewith
10.13(h)	Eighth Amendment to Loan and Security Agreement, dated November 19, 2019	Filed herewith
10.13(i)	Ninth Amendment to Loan and Security Agreement, dated December 20, 2019	Filed herewith
10.13(j)	Payoff Letter, dated December 27, 2019, between Dove Ventures, LLC and Atlanticus Holdings Corporation	Filed herewith

37

Exhibit Number	Description of Exhibit	Incorporated by Reference from Atlanticus’ SEC Filings Unless Otherwise Indicated(1)
10.14	Program Management Agreement, dated April 1, 2017, between Mid America Bank & Trust Company and Atlanticus Services Corporation	May 14, 2019, Form 10-Q, exhibit 10.2
10.14(a)*	Amended and Restated Receivable Sales Agreement, dated April 1, 2017, between Mid America Bank & Trust Company and Fortiva Funding, LLC	May 14, 2019, Form 10-Q, exhibit 10.2(a)
10.14(b)	Assignment and Assumption Agreement, dated March 24, 2018, among Mid America Bank & Trust Company, Atlanticus Services Corporation and The Bank of Missouri	May 14, 2019, Form 10-Q, exhibit 10.2(b)
10.14(c)	Assignment and Assumption Agreement, dated March 24, 2018, among Mid America Bank & Trust Company, Fortiva Funding, LLC and The Bank of Missouri	May 14, 2019, Form 10-Q, exhibit 10.2(c)
10.15*	Amended and Restated Operating Agreement of Access Financial Holdings, LLC, dated November 14, 2019	Filed herewith
21.1	Subsidiaries of the Registrant	Filed herewith
23.1	Consent of BDO USA, LLP	Filed herewith
31.1	Certification of Principal Executive Officer pursuant to Rule 13a-14(a)	Filed herewith
31.2	Certification of Principal Financial Officer pursuant to Rule 13a-14(a)	Filed herewith
32.1	Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350	Filed herewith
101.INS	XBRL Instance Document	Filed herewith
101.SCH	XBRL Taxonomy Extension Schema Document	Filed herewith
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document	Filed herewith
101.LAB	XBRL Taxonomy Extension Label Linkbase Document	Filed herewith
101.PRE	XBRL Taxonomy Presentation Linkbase Document	Filed herewith
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document	Filed herewith

† Management contract, compensatory plan or arrangement.

(1) Documents incorporated by reference from SEC filings made prior to June 2009 were filed under CompuCredit Corporation (now Atlanticus Services Corporation) (File No. 000-25751), our predecessor issuer.

* Certain portions of this document have been excluded because they are both not material and would likely cause competitive harm to the Company if publicly disclosed.

ITEM 16. FORM 10-K SUMMARY

None.

38

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Atlanta, State of Georgia, on March 30, 2020.

Atlanticus Holdings Corporation
By:	/s/ David G. Hanna
	David G. Hanna Chief Executive Officer and Chairman of the Board

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Report has been signed below by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/s/David G. Hanna David G. Hanna	Chief Executive Officer and Chairman of the Board (Principal Executive Officer)	March 30, 2020
/s/William R. McCamey William R. McCamey	Chief Financial Officer (Principal Financial Officer)	March 30, 2020
/s/Mitchell C. Saunders Mitchell C. Saunders	Chief Accounting Officer (Principal Accounting Officer)	March 30, 2020
/s/Jeffrey A. Howard Jeffrey A. Howard	Director	March 30, 2020
/s/Deal W. Hudson Deal W. Hudson	Director	March 30, 2020
/s/Mack F. Mattingly Mack F. Mattingly	Director	March 30, 2020
/s/Thomas G. Rosencrants Thomas G. Rosencrants	Director	March 30, 2020

39

Report of Independent Registered Public Accounting Firm

Shareholders and Board of Directors

Atlanticus Holdings Corporation

Atlanta, Georgia

Opinion on the consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Atlanticus Holdings Corporation (the “Company”) and subsidiaries as of December 31, 2019 and 2018, the related consolidated statements of operations, comprehensive income, shareholders’ equity (deficit), and cash flows for each of the two years in the period ended December 31, 2019, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company and subsidiaries at December 31, 2019 and 2018, and the results of their operations and their cash flows for each of the two years in the period ended December 31, 2019, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ BDO USA, LLP

We have served as the Company's auditor since 2002.

Atlanta, Georgia

March 30, 2020

F-1

Atlanticus Holdings Corporation and Subsidiaries

Consolidated Balance Sheets

(Dollars in thousands)

	December 31,			December 31,
	2019			2018
Assets
Unrestricted cash and cash equivalents (including $78.7 million and $16.8 million associated with variable interest entities at December 31, 2019 and December 31, 2018, respectively)	$	135,379		$	60,968
Restricted cash and cash equivalents (including $25.9 million and $61.0 million associated with variable interest entities at December 31, 2019 and December 31, 2018, respectively)		41,015			80,786
Loans, interest and fees receivable:
Loans, interest and fees receivable, at fair value (including $3.9 million and $5.7 million associated with variable interest entities at December 31, 2019 and December 31, 2018, respectively)		4,386			6,306
Loans, interest and fees receivable, gross (including $857.2 million and $403.4 million associated with variable interest entities at December 31, 2019 and December 31, 2018, respectively)		998,209			541,344
Allowances for uncollectible loans, interest and fees receivable (including $168.8 million and $57.4 million associated with variable interest entities at December 31, 2019 and December 31, 2018, respectively)		(186,329	)		(79,211	)
Deferred revenue (including $40.7 million and $13.2 million associated with variable interest entities at December 31, 2019 and December 31, 2018, respectively)		(90,307	)		(43,897	)
Net loans, interest and fees receivable		725,959			424,542
Property at cost, net of depreciation		2,738			3,625
Investments in equity-method investee		1,957			2,476
Deposits		104			124
Operating lease right-of-use assets		14,091			—
Prepaid expenses and other assets		15,023			10,087
Total assets	$	936,266		$	582,608
Liabilities
Accounts payable and accrued expenses	$	41,617		$	105,765
Operating lease liabilities		22,259			—
Notes payable, at face value (including $701.1 million and $366.7 million associated with variable interest entities at December 31, 2019 and December 31, 2018, respectively)		749,209			390,927
Notes payable to related parties		—			40,000
Notes payable associated with structured financings, at fair value (associated with variable interest entities)		3,920			5,651
Convertible senior notes		24,091			62,142
Income tax liability		5,785			252
Total liabilities		846,881			604,737
Commitments and contingencies (Note 11)
Preferred stock, no par value, 10,000,000 shares authorized:
Series A preferred stock, 400,000 shares issued and outstanding at December 31, 2019 (liquidation preference - $40.0 million); 0 shares issued and outstanding at December 31, 2018 (Note 4)		40,000			—
Class B preferred units issued to noncontrolling interests (Note 4)		49,050			—
Shareholders' Equity
Common stock, no par value, 150,000,000 shares authorized: 15,885,314 shares issued and outstanding (including 1,459,233 loaned shares to be returned) at December 31, 2019; and 15,563,574 shares issued and outstanding (including 1,459,233 loaned shares to be returned) at December 31, 2018		—			—
Paid-in capital		212,692			213,435
Accumulated other comprehensive income		—			3,558
Retained deficit		(211,786	)		(238,784	)
Total shareholders’ equity (deficit)		906			(21,791	)
Noncontrolling interests		(571	)		(338	)
Total equity (deficit)		335			(22,129	)
Total liabilities, preferred stock and shareholders' equity (deficit)	$	936,266		$	582,608

See accompanying notes.

F-2

Atlanticus Holdings Corporation and Subsidiaries

Consolidated Statements of Operations

(Dollars in thousands, except per share data)

	For the Year Ended December 31,
	2019			2018
Interest income:
Consumer loans, including past due fees	$	260,832		$	160,968
Other		386			200
Total interest income		261,218			161,168
Interest expense		(50,730	)		(36,896	)
Net interest income before fees and related income on earning assets and provision for losses on loans, interest and fees receivable		210,488			124,272
Fees and related income on earning assets		71,147			29,992
Net losses upon impairment of loans, interest and fees receivable recorded at fair value		(897	)		(549	)
Provision for losses on loans, interest and fees receivable recorded at net realizable value		(248,383	)		(100,338	)
Net interest income, fees and related income on earning assets		32,355			53,377
Other operating income:
Servicing income		1,786			1,969
Other income		117,903			39,820
Gain on repurchase of convertible senior notes		5,127			-
Equity in income of equity-method investee		1,001			581
Total other operating income		125,817			42,370
Other operating expense:
Salaries and benefits		26,229			23,430
Card and loan servicing		49,459			37,145
Marketing and solicitation		36,388			12,124
Depreciation		1,137			987
Other		13,196			18,579
Total other operating expense		126,409			92,265
Income before income taxes		31,763			3,482
Income tax (expense) benefit		(5,553	)		4,130
Net income		26,210			7,612
Net loss attributable to noncontrolling interests		233			244
Net income attributable to controlling interests	$	26,443		$	7,856
Preferred dividends	$	(1,153	)	$	-
Net income attributable to common shareholders	$	25,290		$	7,856
Net income attributable to common shareholders per common share—basic	$	1.74		$	0.56
Net income attributable to common shareholders per common share—diluted	$	1.66		$	0.56

See accompanying notes.

F-3

Atlanticus Holdings Corporation and Subsidiaries

Consolidated Statements of Comprehensive Income

(Dollars in thousands)

	For the Year Ended December 31,
	2019			2018
Net income	$	26,210		$	7,612
Other comprehensive income (loss):
Foreign currency translation adjustment		2,282			5,774
Reclassifications of foreign currency translation gains to Other operating expense on the consolidated statements of operations		(5,840	)		(38	)
Income tax expense related to other comprehensive income		—			—
Comprehensive income		22,652			13,348
Comprehensive loss attributable to noncontrolling interests		233			244
Comprehensive income attributable to controlling interests	$	22,885		$	13,592
Comprehensive income attributable to controlling interests to common shareholders	$	21,732		$	13,592

See accompanying notes.

F-4

Atlanticus Holdings Corporation and Subsidiaries

Consolidated Statements of Shareholders’ Equity (Deficit)

For the Years Ended December 31, 2019 and 2018

(Dollars in thousands)

	Common Stock
	Shares Issued			Amount		Paid-In Capital			Accumulated Other Comprehensive Income (Loss)			Retained Deficit			Noncontrolling Interests			Total Equity (Deficit)			Temporary Equity Associated with Noncontrolling Interests			Series A Preferred Stock
Balance at December 31, 2017		15,291,884		$	—	$	212,785		$	(2,178	)	$	(246,640	)	$	(94	)	$	(36,127	)	$	—		$	—
Stock options exercises and proceeds related thereto		20,300			—		50			—			—			—			50			—			—
Compensatory stock issuances, net of forfeitures		533,177			—		—			—			—			—			—			—			—
Deferred stock-based compensation costs		—			—		1,323			—			—			—			1,323			—			—
Redemption and retirement of shares		(281,787	)		—		(723	)		—			—			—			(723	)		—			—
Comprehensive income (loss)		—			—		—			5,736			7,856			(244	)		13,348						—
Balance at December 31, 2018		15,563,574		$	—	$	213,435		$	3,558		$	(238,784	)	$	(338	)	$	(22,129	)	$	—		$	—
Cumulative effects from adoption of new lease standard (Note 2)		—			—		—			—			555			—			555			—			—
Accretion of discount associated with issuance of subsidiary equity		—			—		(50	)		—			—			—			(50	)		50			—
Preferred dividends		—			—		(1,103	)		—			—			—			(1,103	)		—			—
Stock option exercises and proceeds related thereto		469,701			—		1,215			—			—			—			1,215			—			—
Compensatory stock issuances, net of forfeitures		209,500			—		—			—			—			—			—			—			—
Contributions by preferred shareholders		—			—		—			—			—			—			—			50,500			40,000
Costs associated with contributions by preferred shareholders		—			—		—			—			—			—			—			(1,500	)		—
Deferred stock-based compensation costs		—			—		1,712			—			—			—			1,712			—			—
Redemption and retirement of shares		(357,461	)		—		(2,517	)		—			—			—			(2,517	)		—			—
Comprehensive income (loss)		—			—		—			(3,558	)		26,443			(233	)		22,652			—			—
Balance at December 31, 2019		15,885,314		$	—	$	212,692		$	—		$	(211,786	)	$	(571	)	$	335		$	49,050		$	40,000

See accompanying notes.

F-5

Atlanticus Holdings Corporation and Subsidiaries

Consolidated Statements of Cash Flows

(Dollars in thousands)

	For the Year Ended December 31,
	2019			2018
Operating activities
Net income	$	26,210		$	7,612
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and accretion, net		7,693			987
Losses upon impairment of loans, interest and fees receivable recorded at fair value		897			549
Provision for losses on loans, interest and fees receivable		248,383			100,338
Interest expense from accretion of discount on notes		818			890
Income from accretion of merchant fees and discount associated with receivables purchases		(116,252	)		(75,517	)
Unrealized gain on loans, interest and fees receivable and underlying notes payable held at fair value		(2,982	)		(4,195	)
Amortization of deferred loan costs		3,518			2,128
Income from equity-method investments		(1,001	)		(581	)
Gain on repurchase of convertible senior notes		(5,127	)		—
Deferred stock-based compensation costs		1,712			1,323
Lease liability payments		(10,080	)		—
Changes in assets and liabilities:
Decrease (increase) in uncollected fees on earning assets		1,765			(8,754	)
Increase (decrease) in income tax liability		5,533			(8,880	)
Decrease in deposits		20			126
(Decrease) increase in accounts payable and accrued expenses		(52,720	)		(5,411	)
Other		(8,424	)		32,241
Net cash provided by operating activities		99,963			42,856
Investing activities
Proceeds from equity-method investee		1,520			2,349
Investments in earning assets		(1,098,764	)		(607,981	)
Proceeds from earning assets		663,805			472,497
Purchases and development of property, net of disposals		(250	)		(1,383	)
Net cash used in investing activities		(433,689	)		(134,518	)
Financing activities
Noncontrolling interests contributions		50,500			—
Issuance costs for nonontrolling interests		(1,500	)		—
Proceeds from issuance of preferred stock		40,000			—
Proceeds from exercise of stock options		1,215			50
Purchase and retirement of outstanding stock		(2,517	)		(723	)
Proceeds from borrowings		873,340			632,043
Repayment of borrowings		(592,318	)		(469,623	)
Net cash provided by financing activities		368,720			161,747
Effect of exchange rate changes on cash		(354	)		1,011
Net increase in cash and cash equivalents		34,640			71,096
Cash and cash equivalents and restricted cash at beginning of period		141,754			70,658
Cash and cash equivalents and restricted cash at end of period	$	176,394		$	141,754
Supplemental cash flow information
Cash paid for interest	$	46,302		$	33,467
Net cash income tax payments	$	20		$	4,750

See accompanying notes.

F-6

Atlanticus Holdings Corporation and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2019 and 2018

1. Description of Our Business

Our accompanying consolidated financial statements include the accounts of Atlanticus Holdings Corporation (the “Company”) and those entities we control. We are primarily focused on providing financial technology and related services. Through our subsidiaries, we provide technology and other support services to lenders who offer an array of financial products and services to consumers who may have been declined under traditional financing options.

In most cases, we invest in the receivables originated by lenders who utilize our technology platform and other related services. From time to time, we also purchase receivables portfolios from third parties.  References to "receivables" include receivables purchased from our lending partners and from third parties. As discussed further below, we reflect our business lines within two reportable segments: Credit and Other Investments; and Auto Finance. See also Note 3, “Segment Reporting,” for further details.

Within our Credit and Other Investments segment, we facilitate consumer finance programs offered by our bank partner to originate consumer loans through multiple channels, including retail point-of-sale, direct mail solicitation, digital marketing and through partner relationships. In the retail credit (the “point-of-sale” operations) channel, we partner with retailers and service providers in various industries across the United States (“U.S.”) to enable them to provide credit to their customers for the purchase of goods and services. These services of our lending partners are often extended to consumers who may have been declined under traditional financing options. We specialize in supporting this “second look” credit service in various market segments across the U.S. Additionally, we support lenders who market general purpose credit cards directly to consumers (collectively, the “direct-to-consumer” operations) through additional channels enabling them to reach consumers through a diverse origination platform that includes retail point-of-sale, direct mail solicitation, digital marketing and partnerships with third parties. Using our infrastructure and technology platform, we also provide loan servicing, including risk management and customer service outsourcing, for third parties.

Additionally, we report within our Credit and Other Investments segment: 1) the servicing income from our legacy credit card receivables, 2) the income earned from an investment in an equity-method investee that holds credit card receivables for which we are the servicer; and 3) gains or losses associated with investments previously made in consumer finance technology platforms. These include investments in companies engaged in mobile technologies, marketplace lending and other financial technologies. These investments are carried at the lower of cost or market valuation. None of these companies are publicly-traded and there are no material pending liquidity events.

Within our Auto Finance segment, our CAR subsidiary operations principally purchase and/or service loans secured by automobiles from or for, and also provide floor plan financing for, a pre-qualified network of independent automotive dealers and automotive finance companies in the buy-here, pay-here, used car business. We purchase auto loans at a discount and with dealer retentions or holdbacks that provide risk protection. Also within our Auto Finance segment, we are providing certain installment lending products in addition to our traditional loans secured by automobiles.

2. Significant Accounting Policies and Consolidated Financial Statement Components

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

Basis of Presentation and Use of Estimates

We prepare our consolidated financial statements in accordance with generally accepted accounting principles in the U.S. (“GAAP”). The preparation of financial statements in accordance with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of our consolidated financial statements, as well as the reported amounts of revenues and expenses during each reporting period. We base these estimates on information available to us as of the date of the financial statements. Actual results could differ materially from these estimates. Certain estimates, such as credit losses, payment rates, costs of funds, discount rates and the yields earned on credit card receivables, significantly affect the reported amount of credit card receivables that we report at fair value and our notes payable associated with structured financings, at fair value; these estimates likewise affect the changes in these amounts reflected within our fees and related income on earning assets line item on our consolidated statements of operations. Additionally, estimates of future credit losses have a significant effect on loans, interest and fees receivable, net, as shown on our consolidated balance sheets, as well as on the provision for losses on loans, interest and fees receivable within our consolidated statements of operations.

We have eliminated all significant intercompany balances and transactions for financial reporting purposes.

F-7

Unrestricted Cash and Cash Equivalents

Unrestricted cash and cash equivalents consist of cash, money market investments and overnight deposits. We consider all highly liquid cash investments with low interest rate risk and original maturities of three months or less to be cash equivalents. Cash equivalents are carried at cost, which approximates market. We maintain unrestricted cash and cash equivalents for general operating purposes and to meet our longer term debt obligations. The majority of these cash balances are not insured.

Restricted Cash

Restricted cash as of December 31, 2019 and 2018 includes certain collections on loans, interest and fees receivable, the cash balances of which are required to be distributed to noteholders under our debt facilities. Our restricted cash balances also include minimum cash balances held in accounts at the request of certain of our business partners.

Loans, Interest and Fees Receivable

Loans, Interest and Fees Receivable, at Fair Value. Loans, interest and fees receivable held at fair value represent receivables underlying credit card securitization trusts, and which qualify as a variable interest entity ("VIE"), that are consolidated onto our consolidated balance sheet, some portfolios of which are unencumbered and some of which are still encumbered under structured financing facilities. Further details concerning our loans, interest and fees receivable held at fair value are presented within Note 6, “Fair Values of Assets and Liabilities.”

Loans, Interest and Fees Receivable. Our loans, interest and fees receivable, gross, currently consist of receivables associated with (a) our U.S. point-of-sale and direct-to-consumer financing and other credit products platform within our Credit and Other Investments segment and (b) our Auto Finance segment’s operations. Our Credit and Other Investments segment loans, interest and fees receivable generally are unsecured, while our Auto Finance segment loans, interest and fees receivable generally are secured by the underlying automobiles in which we hold the vehicle title. We purchased loans with outstanding principal of $182.9 million and $179.4 million for the years ended December 31, 2019 and 2018, respectively, through our pre-qualified network of independent automotive dealers and automotive finance companies.

We show both an allowance for uncollectible loans, interest and fees receivable and unearned fees (or “deferred revenue”) for our loans, interest and fees receivable (i.e., as opposed to those carried at fair value). Our loans, interest and fees receivable consist of smaller-balance, homogeneous loans, divided into two portfolio segments:  Credit and Other Investments; and Auto Finance. While each of these categories has unique features, they share many of the same credit risk characteristics and thus share a similar approach to the establishment of an allowance for loan losses. Each portfolio segment is divided into pools based on common characteristics such as contract or acquisition channel. For each pool, we determine the necessary allowance for uncollectible loans, interest and fees receivable by analyzing some or all of the following unique attributes for each type of receivable pool:  historical loss rates; current delinquency and roll-rate trends; vintage analyses based on the number of months an account has been in existence; the effects of changes in the economy on our customers; changes in underwriting criteria; and estimated recoveries. For our Auto Finance segment we may further reduce the expected charge-off, taking into consideration specific dealer level reserves which may allow us to offset our losses and, in the case of secured loans, the impact of collateral available to offset a potential loss. Conversely, for receivables in our Credit and Other Investments segment, which generally do not have a secured interest in collateral, we look to reserve for the gross expected exposure to charge-offs.

These reserves are considered in conjunction with (and potentially reduced by) any unearned fees and discounts that may be applicable for an outstanding loan receivable. A considerable amount of judgment is required to assess the ultimate amount of uncollectible loans, interest and fees receivable, and we continuously evaluate and update our methodologies to determine the most appropriate allowance necessary. We may individually evaluate a receivable or pool of receivables for impairment if circumstances indicate that the receivable or pool of receivables may be at higher risk for non-performance than other receivables (e.g., if a particular retail or auto-finance partner has indications of non-performance (such as a bankruptcy) that could impact the underlying pool of receivables we purchased from the partner).

Certain of our loans, interest and fees receivable also contain components of deferred revenue including merchant fees on the purchases of receivables for our point-of-sale receivables and annual fee billings for our direct-to-consumer credit card receivables. Our point-of-sale and auto finance loans, interest and fees receivable include principal balances and associated fees and interest due from customers which are earned each period a loan is outstanding, net of the unearned portion of merchant fees and loan discounts. Additionally, many of our direct-to-consumer credit card receivables have an annual membership fee that is billed to the consumer on card activation and for each anniversary of that date thereafter. As of December 31, 2019 and December 31, 2018, the weighted average remaining accretion period for the $90.3 million and $43.9 million of deferred revenue reflected in the consolidated balance sheets was 11 months. Included within deferred revenue, are merchant fees and discounts on purchased loans of $48.1 million and $30.0 million as of December 31, 2019 and December 31, 2018, respectively.

A roll-forward (in millions) of our allowance for uncollectible loans, interest and fees receivable by class of receivable is as follows: 

For the Year ended December 31, 2019	Credit Cards			Auto Finance			Other Unsecured Lending Products			Total
Allowance for uncollectible loans, interest and fees receivable:
Balance at beginning of period	$	(35.4	)	$	(1.3	)	$	(42.5	)	$	(79.2	)
Provision for loan losses		(161.5	)		(3.5	)		(83.4	)		(248.4	)
Charge offs		80.2			4.6			68.1			152.9
Recoveries		(4.6	)		(1.4	)		(5.6	)		(11.6	)
Balance at end of period	$	(121.3	)	$	(1.6	)	$	(63.4	)	$	(186.3	)

F-8

As of December 31, 2019	Credit Cards			Auto Finance			Other Unsecured Lending Products			Total
Allowance for uncollectible loans, interest and fees receivable:
Balance at end of period individually evaluated for impairment	$	—		$	(0.4	)	$	(0.1	)	$	(0.5	)
Balance at end of period collectively evaluated for impairment	$	(121.3	)	$	(1.2	)	$	(63.3	)	$	(185.8	)
Loans, interest and fees receivable:
Loans, interest and fees receivable, gross	$	509.2		$	89.8		$	399.2		$	998.2
Loans, interest and fees receivable individually evaluated for impairment	$	—		$	2.1		$	0.1		$	2.2
Loans, interest and fees receivable collectively evaluated for impairment	$	509.2		$	87.7		$	399.1		$	996.0

For the Year ended December 31, 2018	Credit Cards			Auto Finance			Other Unsecured Lending Products			Total
Allowance for uncollectible loans, interest and fees receivable:
Balance at beginning of period	$	(18.2	)	$	(2.3	)	$	(42.5	)	$	(63.0	)
Provision for loan losses		(46.6	)		(0.3	)		(53.4	)		(100.3	)
Charge offs		29.9			2.2			58.2			90.3
Recoveries		(0.5	)		(0.9	)		(4.8	)		(6.2	)
Balance at end of period	$	(35.4	)	$	(1.3	)	$	(42.5	)	$	(79.2	)

As of December 31, 2018	Credit Cards			Auto Finance			Other Unsecured Lending Products			Total
Allowance for uncollectible loans, interest and fees receivable:
Balance at end of period individually evaluated for impairment	$	—		$	(0.2	)	$	(0.1	)	$	(0.3	)
Balance at end of period collectively evaluated for impairment	$	(35.4	)	$	(1.1	)	$	(42.4	)	$	(78.9	)
Loans, interest and fees receivable:
Loans, interest and fees receivable, gross	$	188.6		$	88.1		$	264.6		$	541.3
Loans, interest and fees receivable individually evaluated for impairment	$	—		$	0.4		$	0.1		$	0.5
Loans, interest and fees receivable collectively evaluated for impairment	$	188.6		$	87.7		$	264.5		$	540.8

F-9

Delinquent loans, interest and fees receivable reflect the principal, fee and interest components of loans we did not collect on or prior to the contractual due date. Amounts we believe we will not ultimately collect are included as a component in our overall allowance for uncollectible loans, interest and fees receivable. For most products we service other than our Auto Finance receivables, interest and fees are discontinued when loans, interest and fees receivable become contractually 90 or more days past due. We charge off our Credit and Other Investments and Auto Finance segment receivables when they become contractually more than 180 days past due. For all of our products, we charge off receivables within 30 days of notification and confirmation of a customer’s bankruptcy or death. However, in some cases of death, we do not charge off receivables if there is a surviving, contractually liable individual or an estate large enough to pay the debt in full.

Recoveries on accounts previously charged off are credited to the allowance for uncollectible loans, interest and fees receivable and effectively offset our provision for losses on loans, interest and fees receivable recorded at net realizable value on our consolidated statements of operations. (All of the above discussion relates only to our loans, interest and fees receivable for which we use net realizable value, as opposed to fair value accounting. For loans, interest and fees receivable recorded at fair value, recoveries offset losses upon impairment of the underlying loans, interest and fees receivable recorded at fair value, net of recoveries on our consolidated statements of operations.)

We consider loan delinquencies a key indicator of credit quality because this measure provides the best ongoing estimate of how a particular class of receivables is performing. An aging of our delinquent loans, interest and fees receivable, gross (in millions) by class of receivable as of December 31, 2019 and December 31, 2018 is as follows:

As of December 31, 2019	Credit Cards		Auto Finance		Other Unsecured Lending Products		Total
30-59 days past due	$	21.7	$	8.1	$	14.0	$	43.8
60-89 days past due		18.5		3.0		11.5		33.0
90 or more days past due		46.6		2.6		27.2		76.4
Delinquent loans, interest and fees receivable, gross		86.8		13.7		52.7		153.2
Current loans, interest and fees receivable, gross		422.4		76.1		346.5		845.0
Total loans, interest and fees receivable, gross	$	509.2	$	89.8	$	399.2	$	998.2
Balance of loans greater than 90-days delinquent still accruing interest and fees	$	—	$	1.9	$	—	$	1.9

As of December 31, 2018	Credit Cards		Auto Finance		Other Unsecured Lending Products		Total
30-59 days past due	$	7.1	$	7.9	$	9.7	$	24.7
60-89 days past due		5.3		2.8		7.6		15.7
90 or more days past due		12.3		2.2		18.5		33.0
Delinquent loans, interest and fees receivable, gross		24.7		12.9		35.8		73.4
Current loans, interest and fees receivable, gross		163.9		75.2		228.8		467.9
Total loans, interest and fees receivable, gross	$	188.6	$	88.1	$	264.6	$	541.3
Balance of loans greater than 90-days delinquent still accruing interest and fees	$	—	$	1.5	$	—	$	1.5

Troubled Debt Restructurings. As part of ongoing collection efforts, once an account in our Credit and Other Investments segment is 90 days or more past due, the account is placed on a non-accrual status. Placement on a non-accrual status results in the use of programs under which the contractual interest associated with a receivable may be reduced or eliminated, or a certain amount of accrued fees is waived, provided a minimum number or amount of payments have been made. Following this adjustment, if a customer demonstrates a willingness and ability to resume making monthly payments and meets certain additional criteria, we will re-age the customer’s account. When we re-age an account, we adjust the status of the account to bring a delinquent account current, but generally do not make any further modifications to the payment terms or amount owed. Once an account is placed on a non-accrual status, it is closed for further purchases. Accounts that are placed on a non-accrual status and thereafter make at least one payment qualify as troubled debt restructurings (“TDRs”).

F-10

The following table details by class of receivable, the number and amount of modified loans, including TDRs that have been re-aged, as of December 31, 2019 and December 31, 2018:

	As of
	December 31, 2019				December 31, 2018
	Point-of-sale		Direct-to-consumer		Point-of-sale		Direct-to-consumer
Number of TDRs		10,682		14,553		6,095		3,584
Number of TDRs that have been re-aged		2,788		2,854		2,759		1,111
Amount of TDRs on non-accrual status (in thousands)	$	14,468	$	13,037	$	4,885	$	1,942
Amount of TDRs on non-accrual status above that have been re-aged (in thousands)	$	5,118	$	3,104	$	3,782	$	955
Carrying value of TDRs (in thousands)	$	8,864	$	7,312	$	3,333	$	1,363
TDRs - Performing (carrying value, in thousands)*	$	6,754	$	6,106	$	2,525	$	1,191
TDRs - Nonperforming (carrying value, in thousands)*	$	2,110	$	1,206	$	808	$	172

*“TDRs - Performing” include accounts that are current on all amounts owed, while “TDRs - Nonperforming” include all accounts with past due amounts owed.

Given that the above TDRs have a high reserve rate prior to modification as TDRs, we do not separately reserve or impair these receivables outside of our general reserve process.

The Company modified 31,409 and 21,997 accounts in the amount of $43.3 million and $33.2 million during the twelve month periods ended December 31, 2019 and December 31, 2018, respectively, that qualified as TDRs. The following table details by class of receivable, the number of accounts and balance of loans that completed a modification (including those that were classified as TDRs) within the prior twelve months and subsequently defaulted.

	Twelve Months Ended
	December 31, 2019				December 31, 2018
	Point-of-sale		Direct-to-consumer		Point-of-sale		Direct-to-consumer
Number of accounts		2,835		3,339		6,903		5,415
Loan balance at time of charge off (in thousands)	$	4,397	$	3,545	$	9,634	$	4,963

Property at Cost, Net of Depreciation

We capitalize costs related to internal development and implementation of software used in our operating activities in accordance with applicable accounting literature. These capitalized costs consist almost exclusively of fees paid to third-party consultants to develop code and install and test software specific to our needs and to customize purchased software to maximize its benefit to us.

We record our property at cost less accumulated depreciation or amortization. We compute depreciation expense using the straight-line method over the estimated useful lives of our assets, which are approximately 5 years for furniture, fixtures and equipment, and 3 years for computers and software. We amortize leasehold improvements over the shorter of their estimated useful lives or the terms of their respective underlying leases.

We periodically review our property to determine if it is impaired. We incurred no impairment costs in 2019 and no impairment costs in 2018.

Investment in Equity-Method Investee

We account for an investment using the equity method of accounting if we have the ability to exercise significant influence, but not control, over the investee. Significant influence is generally deemed to exist based on ownership interest, although other factors, such as representation on an investee’s board of managers, specific voting and veto rights held by each investor and the effects of commercial arrangements, are considered in determining whether equity method accounting is appropriate. We record our interests in the income of our equity-method investee within the equity in income of equity-method investee category on our consolidated statements of operations.

We use the equity method for our 66.7% investment in a limited liability company formed in 2004 to acquire a portfolio of credit card receivables. We account for this investment using the equity method of accounting due to specific voting and veto rights held by each investor, which do not allow us to control this investee.

We evaluate our investments in the equity-method investee for impairment each quarter by comparing the carrying amount of the investment to its fair value. Because no active market exists for the investee’s limited liability company membership interests, we evaluate our investment for impairment based on our evaluation of the fair value of the equity-method investee’s net assets relative to its carrying value. If we ever were to determine that the carrying value of our investment in the equity-method investee was greater than its fair value, we would write the investment down to its fair value.

F-11

Prepaid Expenses and Other Assets

Prepaid expenses and other assets include amounts paid to third parties for marketing and other services as well as amounts owed to us by third parties. Prepaid amounts are expensed as the underlying related services are performed.  Also included are (1) commissions paid associated with our various office leases which we amortize into expense over the lease terms, (2) ongoing deferred costs associated with service contracts and (3) investments in consumer finance technology platforms carried at the lower of cost or market valuation.

Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses reflect both the billed and unbilled amounts owed at the end of a period for services rendered. Commencing in July 2019, accounts payable and accrued expenses includes payments owed under a deferred payment program started with an unrelated third-party for a portion of our marketing expenditures. As a result of this agreement, we were able to extend the payment terms associated with our growing marketing spend between 10-37 months. Also included within accounts payable and accrued expenses are amounts which may be payable in respect of one of our portfolios.

Revenue Recognition and Revenue from Contracts with Customers

Consumer Loans, Including Past Due Fees

Consumer loans, including past due fees reflect interest income, including finance charges, and late fees on loans in accordance with the terms of the related customer agreements. Premiums, discounts and merchant fees paid or received associated with an installment or auto loan are generally deferred and amortized over the average life of the related loans using the effective interest method. Finance charges and fees, net of amounts that we consider uncollectible, are included in loans, interest and fees receivable and revenue when the fees are earned based upon the contractual terms of the loans.

Fees and Related Income on Earning Assets

Fees and related income on earning assets primarily include: (1) fees associated with the credit products, including the receivables underlying our U.S. point-of-sale finance and direct-to-consumer platform, and our legacy credit card receivables; (2) changes in the fair value of loans, interest and fees receivable recorded at fair value; (3) changes in fair value of notes payable associated with structured financings recorded at fair value; and (4) gains or losses associated with our investments in securities. 

We assess fees on credit card accounts underlying our credit card receivables according to the terms of the related cardholder agreements and, except for annual membership fees, we recognize these fees as income when they are charged to the customers’ accounts. We accrete annual membership fees associated with our credit card receivables into income on a straight-line basis over the cardholder privilege period which is generally 12 months. Similarly, fees on our other credit products are recognized when earned, which coincides with the time they are charged to the customer’s account. Fees and related income on earning assets, net of amounts that we consider uncollectible, are included in loans, interest and fees receivable and revenue when the fees are earned based upon the contractual terms of the loans.

F-12

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

	Year Ended December 31,
	2019			2018
Fees on credit products	$	68,639		$	25,694
Changes in fair value of loans, interest and fees receivable recorded at fair value		1,251			606
Changes in fair value of notes payable associated with structured financings recorded at fair value		1,731			3,589
Other		(474	)		103
Total fees and related income on earning assets	$	71,147		$	29,992

The above changes in the fair value of loans, interest and fees receivable recorded at fair value category exclude the impact of current period charge offs associated with these receivables which are separately stated in Net losses upon impairment of loans, interest and fees receivable recorded at fair value on our consolidated statements of operations. See Note 6, “Fair Values of Assets and Liabilities,” for further discussion of these receivables and their effects on our consolidated statements of operations.

Other income

Other income includes revenues associated with ancillary product offerings and interchange revenues.  We recognize these fees as income in the period earned. Included in Other income for 2019 is $105.9 million associated with reductions in accruals related to one of our portfolios. The accrual was based upon our estimate of the amount that may be claimed by customers and was based upon several factors including customer claims volume, average claim amount and a determination of the amount, if any, which may be offered to resolve such claims. The assumptions used in the accrual estimate were subjective, mainly due to uncertainty associated with future claims volumes and the resolution costs, if any, per claim. As of  December 31, 2019, we had no reserves associated with this matter. For 2018, Other income also includes the receipt of £34 million (approximately $42.9 million) in settlement of litigation, resulting in income recognition of approximately $36.2 million after adjusting for amounts previously recorded.  

Revenue from Contracts with Customers

In the first quarter of 2018, we adopted Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers” under the modified retrospective transition method. There was no material change in the timing of revenue recognition upon adoption. The majority of our revenue is earned from financial instruments and is not included within the scope of this standard. We have determined that revenue from contracts with customers would primarily consist of interchange revenues in our Credit and Other Investments segment and servicing revenue and other customer-related fees in both our Credit and Other Investments segment and our Auto Finance segment. Servicing revenue is generated by meeting contractual performance obligations related to the collection of amounts due on receivables, and is settled with the customer net of our fee. Revenue from these contracts with customers is included as a component of Other income on our consolidated statements of operations. Service charges and other customer related fees are earned from customers based on the occurrence of specific services that do not result in an ongoing obligation beyond what has already been rendered. Components (in thousands) of our revenue from contracts with customers is as follows:

	Credit and
For the Year ended December 31, 2019	Other Investments		Auto Finance		Total
Interchange revenues, net (1)	$	8,495	$	—	$	8,495
Servicing income		857		929		1,786
Service charges and other customer related fees		3,407		66		3,473
Total revenue from contracts with customers	$	12,759	$	995	$	13,754

(1) Interchange revenue is presented net of customer reward expense.

	Credit and
For the Year ended December 31, 2018	Other Investments		Auto Finance		Total
Interchange revenues, net (1)	$	2,881	$	—	$	2,881
Servicing income		947		1,022		1,969
Service charges and other customer related fees		637		69		706
Total revenue from contracts with customers	$	4,465	$	1,091	$	5,556

(1) Interchange revenue is presented net of customer reward expense.

Card and Loan Servicing Expenses

Card and loan servicing costs primarily include collections and customer service expenses. Within this category of expenses are personnel, service bureau, cardholder correspondence and other direct costs associated with our collections and customer service efforts. Card and loan servicing costs also include outsourced collections and customer service expenses. We expense card and loan servicing costs as we incur them, with the exception of prepaid costs, which we expense over respective service periods.

Marketing and Solicitation Expenses

We expense product solicitation costs, including printing, credit bureaus, list processing, telemarketing, postage, and internet marketing fees, as we incur these costs or expend resources. 

F-13

Recent Accounting Pronouncements

In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments. The guidance requires an assessment of credit losses based on expected rather than incurred losses (known as the current expected credit loss model). This generally will result in the recognition of allowances for losses earlier than under current accounting guidance for trade and other receivables, held to maturity debt securities and other instruments. The FASB has added several technical amendments (ASU 2018-19, 2019-04, 2019-10 and 2019-11) to clarify technical aspects of the guidance and applicability to specific financial instruments or transactions. In May 2019 the FASB issued ASU 2019-05 which allows entities to measure assets in the scope of ASC 326-20, except held to maturity securities, using the fair value option when they adopt the new credit impairment standard. The election can be made on an instrument by instrument basis. The standard will be adopted on a prospective basis with a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. ASU 2016-13 (and ASU 2019-05) was initially effective for annual and interim periods beginning after December 15, 2019, with early adoption permitted. The FASB recently delayed the effective date of this standard until annual and interim periods beginning after December 15, 2022 for non-accelerated and smaller reporting company filers, with early adoption permitted for smaller reporting companies (among others). We are currently in the process of reviewing accounting interpretations, including the recently added fair value option, expected data requirements and necessary changes to our loss estimation methods, processes and systems. This standard is expected to result in an increase to our allowance for loan losses (unless the fair value option is elected) given the change to expected losses for the estimated life of the financial asset. If the fair value option is elected for some or all of our eligible receivables, we would expect an increase in the recorded value of the assets but more potential volatility as these receivables are remeasured each period. The extent of the financial statement impact will depend on the asset quality of the portfolio, and economic conditions and forecasts at adoption.

In February 2016, the FASB issued ASU No. 2016-02, Leases, along with subsequent guidance, which requires lessees to recognize assets and liabilities for most leases and changes certain aspects of current lessor accounting, among other things. We adopted these standards using a modified retrospective transition approach for leases existing at, or entered into after, January 1, 2019 and did not restate the comparative periods presented in the Consolidated Financial Statements upon adoption.

ASU 2016-02 provides a number of optional practical expedients and policy elections in transition. We elected the ‘package of practical expedients’ under which we did not reassess prior conclusions about lease identification, lease classification and initial direct costs. We did not elect the use-of-hindsight or the practical expedient pertaining to land easements, the latter not being applicable to us. We also elected the short-term lease recognition exemption for all leases that qualify, meaning we do not recognize right-of-use assets or lease liabilities for these short term leases. 

Upon adoption, we recognized additional lease liabilities of $30.2 million and a corresponding right-of-use asset of $18.6 million with a $0.6 million cumulative effect on our opening retained deficit. The impact of our status as a lessor in the sublease arrangements we maintain did not result in a material change upon adoption. See Note 8, "Leases" for additional disclosure.     

Subsequent Events

We evaluate subsequent events that occur after our consolidated balance sheet date but before our consolidated financial statements are issued. There are two types of subsequent events: (1) recognized, or those that provide additional evidence with respect to conditions that existed at the date of the balance sheet, including the estimates inherent in the process of preparing financial statements; and (2) nonrecognized, or those that provide evidence with respect to conditions that did not exist at the date of the balance sheet but arose subsequent to that date. We have evaluated subsequent events occurring after December 31, 2019, and based on our evaluation we did not identify any recognized or nonrecognized subsequent events that would have required further adjustments to our consolidated financial statements other than the development described below.

As of January 1, 2020, we have elected the fair value option to account for certain loans receivable associated with our point-of-sale and direct-to-consumer platform that were originated on or after January 1, 2020 (the "Fair Value Receivables"). We believe the use of fair value for these receivables more closely approximates the true economics of these receivables, better matching the yields and corresponding charge-offs. We believe the fair value option also enables us to report GAAP net income that provides increased transparency into our profitability and asset quality. Receivables acquired prior to January 1, 2020 will continue to be accounted for in our 2020 and subsequent financial statements at amortized cost, net. We will estimate the Fair Value Receivables using a discounted cash flow model, which considers various factors such as expected yields on consumer receivables, customer default rates, the timing of expected payments, estimated costs to service the portfolio, interest rates, and valuations of comparable portfolios. As a result of this fair value adoption, our loans, interest and fees receivable acquired subsequent to January 1, 2020 will be carried at fair value with changes in fair value recognized directly in earnings, and certain fee billings (such as annual membership fees and merchant fees) and origination costs associated with these receivables will no longer be deferred. We will reevaluate the fair value of our Fair Value Receivables at the end of each quarter.

On January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency because of a new strain of coronavirus originating in Wuhan, China (the “COVID-19 outbreak”) and the risks to the international community as the virus spreads globally beyond its point of origin. In March 2020, the WHO classified the COVID-19 outbreak as a pandemic, based on the rapid increase in exposure globally.

The full impact of the COVID-19 outbreak continues to evolve as of the date of this report. As such, it is uncertain as to the magnitude of the effect the pandemic will have on the Company’s financial condition, liquidity, and future results of operations. Management is actively monitoring the global situation on its financial condition, liquidity, operations, industry, and workforce. Given the daily evolution of the COVID-19 outbreak and the global responses to curb its spread, the Company is not able to estimate the effects of the COVID-19 outbreak on its results of operations, financial condition, or liquidity for fiscal year 2020. 

As a result of the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act) signed into law by the President on March 27, 2020, additional avenues of relief will be available to workers and families through enhanced unemployment insurance provisions and to small businesses through programs administered by the Small Business Administration (SBA).  Management is currently assessing the availability of assistance under this program.

3. Segment Reporting

We operate primarily within one industry consisting of two reportable segments by which we manage our business. Our two reportable segments are: Credit and Other Investments, and Auto Finance.

As of both December 31, 2019 and December 31, 2018, we did not have a material amount of long-lived assets located outside of the U.S., and only a negligible portion of our revenues for the years ended December 31, 2019 and 2018 were generated outside of the U.S.

F-14

We measure the profitability of our reportable segments based on their income after allocation of specific costs and corporate overhead; however, our segment results do not reflect any charges for internal capital allocations among our segments. 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:

Year ended December 31, 2019	Credit and Other Investments			Auto Finance			Total
Interest income:
Consumer loans, including past due fees	$	229,388		$	31,444		$	260,832
Other		386			—			386
Total interest income		229,774			31,444			261,218
Interest expense		(49,065	)		(1,665	)		(50,730	)
Net interest income before fees and related income on earning assets and provision for losses on loans, interest and fees receivable	$	180,709		$	29,779		$	210,488
Fees and related income on earning assets	$	70,984		$	163		$	71,147
Servicing income	$	857		$	929		$	1,786
Gain on repurchase of convertible senior notes	$	5,127		$	—		$	5,127
Equity in income of equity-method investee	$	1,001		$	—		$	1,001
Income before income taxes	$	25,005		$	6,758		$	31,763
Income tax expense	$	(3,830	)	$	(1,723	)	$	(5,553	)
Total assets	$	856,354		$	79,912		$	936,266

Year ended December 31, 2018	Credit and Other Investments			Auto Finance			Total
Interest income:
Consumer loans, including past due fees	$	131,096		$	29,872		$	160,968
Other		200			—			200
Total interest income		131,296			29,872			161,168
Interest expense		(35,564	)		(1,332	)		(36,896	)
Net interest income before fees and related income on earning assets and provision for losses on loans, interest and fees receivable	$	95,732		$	28,540		$	124,272
Fees and related income on earning assets	$	29,912		$	80		$	29,992
Servicing income	$	947		$	1,022		$	1,969
Equity in income of equity-method investee	$	581		$	—		$	581
(Loss) income before income taxes	$	(6,767	)	$	10,249		$	3,482
Income tax benefit (expense)	$	6,345		$	(2,215	)	$	4,130
Total assets	$	507,232		$	75,376		$	582,608

F-15

4. Shareholders’ Equity and Preferred Stock

On November 26, 2014, we and certain of our subsidiaries entered into a Loan and Security Agreement with Dove Ventures, LLC, a Nevada limited liability company (“Dove”). The agreement provided for a senior secured term loan facility in an amount of up to $40.0 million at any time outstanding. On December 27, 2019, the Company issued 400,000 shares (10,000,000 shares authorized, 400,000 shares outstanding) of its Series A Preferred Stock with an aggregate initial liquidation preference of $40.0 million, in exchange for full satisfaction of the $40.0 million that the Company owed Dove under the Loan and Security Agreement.  Dividends on the preferred stock are 6% per annum (cumulative, non-compounding) and are payable as declared, and in preference to any common stock dividends, in cash. The Series A Preferred Stock is perpetual and has no maturity date. The Company may, at its option, redeem the shares of Series A Preferred Stock on or after January 1, 2025 at a redemption price equal to $100 per share, plus any accumulated and unpaid dividends. At the request of a majority of the holders of the Series A Preferred Stock, the Company shall offer to redeem all of the Series A Preferred Stock at a redemption price equal to $100 per share, plus any accumulated and unpaid dividends, at the option of the holders thereof, on or after January 1, 2024. Upon the election by the holders of a majority of the Series A Preferred Stock, each share of the Series A Preferred Stock is convertible into the number of shares of the Company’s common stock as is determined by dividing (i) the sum of (a) $100 and (b) any accumulated and unpaid dividends on such share by (ii) an initial conversion price equal to $10 per share, subject to certain adjustment in certain circumstances to prevent dilution. Given the redemption rights contained within the Series A Preferred Stock, we account for the outstanding preferred stock as temporary equity in the consolidated balance sheets.

Dove is a limited liability company owned by three trusts. David G. Hanna is the sole shareholder and the President of the corporation that serves as the sole trustee of one of the trusts, and David G. Hanna and members of his immediate family are the beneficiaries of this trust. Frank J. Hanna, III is the sole shareholder and the President of the corporation that serves as the sole trustee of the other two trusts, and Frank J. Hanna, III and members of his immediate family are the beneficiaries of these other two trusts.

During the years ended December 31, 2019 and 2018, we repurchased and contemporaneously retired 357,461 and 281,787 shares of our common stock at an aggregate cost of $2,517,000 and $723,000, respectively, pursuant to both open market and private purchases and the return of stock by holders of equity incentive awards to pay tax withholding obligations.

We had 1,459,233 loaned shares outstanding at December 31, 2019 and December 31, 2018, which were originally lent in connection with our November 2005 issuance of convertible senior notes. We retire lent shares as they are returned to us.

On November 14, 2019, a wholly-owned subsidiary issued 50.5 million Class B preferred units at a purchase price of $1.00 per unit to an unrelated third party. The units carry a 16% preferred return to be paid quarterly, with up to 6 percentage points of the preferred return to be paid through the issuance of additional units or cash, at our election. The units have both call and put rights and are also subject to various covenants including a minimum book value, which if not satisfied, could allow for the securities to be put back to the subsidiary. Subject to satisfying certain closing conditions, the subsidiary has the right to issue up to 50.5 million additional units on the same terms. The proceeds from the transaction will be used for general corporate purposes.  We have included the issuance of these Class B preferred units as temporary noncontrolling interest on the consolidated balance sheets.

5. Investment in Equity-Method Investee

Our equity-method investment outstanding at December 31, 2019 consists of our 66.7% interest in a joint venture formed to purchase a credit card receivable portfolio.

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

	As of
	December 31, 2019		December 31, 2018
Loans, interest and fees receivables, at fair value	$	2,757	$	3,546
Total assets	$	2,922	$	3,732
Total liabilities	$	13	$	18
Members’ capital	$	2,909	$	3,714

	Year ended December 31,
	2019		2018
Net interest income (loss), fees and related income on earning assets	$	1,505	$	875
Net income	$	1,318	$	613
Net income attributable to investee	$	1,001	$	581

6. Fair Values of Assets and Liabilities

We elected the fair value option with respect to our investments in equity securities, included in other assets, as well as our credit card loans, interest and fees receivable portfolios, the retained interests in which we historically recorded at fair value under securitization structures that were off balance sheet prior to accounting rules changes requiring their consolidation into our financial statements. The legal structure qualifies as a VIE but is consolidated as the Company is the primary beneficiary.  With respect to our

F-16

equity securities, we decided to carry these assets at fair value due to our intent to invest and redeem these investments with expected frequency. For our credit card loans, interest and fees receivable portfolios underlying our formerly off-balance-sheet securitization structures, we elected the fair value option because, at the time of election, in contrast to substantially all of our other assets, we had significant experiences in determining the fair value of these assets in connection with our historical fair value accounting for our retained interests in their associated securitization structures. Because we elected to account for the credit card receivables underlying our formerly off-balance-sheet securitization structures at fair value, accounting rules require that we account for the notes payable issued by such securitization structures at fair value as well. For our other credit card receivables that have never been owned by our formerly off-balance-sheet securitization structures, we have not elected the fair value option, and we record such receivables at net realizable value within loans, interest and fees receivable, net on our consolidated balance sheets. As of January 1, 2020, we have elected the fair value option to account for certain additional loan receivables associated with our point-of-sale and direct-to-consumer platform that were originated on or after January 1, 2020. 

For all of our other debt other than the notes payable underlying our formerly off-balance sheet credit card securitization structures, we have not elected the fair value option. Nevertheless, pursuant to applicable requirements, we include disclosures of the fair value of this other debt to the extent practicable within the disclosures below. Additionally, we have other liabilities, associated with consolidated legacy credit card securitization trusts, that we are required to carry at fair value in our consolidated financial statements, and they also are addressed within the disclosures below.

Where applicable as noted above, we account for our financial assets and liabilities at fair value based upon a three-tiered valuation system. In general, fair values determined by Level 1 inputs use quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access. Fair values determined by Level 2 inputs use inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, and inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability. Where inputs used to measure fair value may fall into different levels of the fair value hierarchy, the level in the fair value hierarchy within which the fair value measurement in its entirety has been determined is based on the lowest level input that is significant to the fair value measurement in its entirety.

Valuations and Techniques for Assets

Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. The table below summarizes (in thousands) by fair value hierarchy the December 31, 2019 and December 31, 2018 fair values and carrying amounts of (1) our assets that are required to be carried at fair value in our consolidated financial statements and (2) our assets not carried at fair value, but for which fair value disclosures are required:

Assets – As of December 31, 2019 (1)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Carrying Amount of Assets
Loans, interest and fees receivable, net for which it is practicable to estimate fair value	$	—	$	—	$	781,208	$	721,573
Loans, interest and fees receivable, at fair value	$	—	$	—	$	4,386	$	4,386

Assets – As of December 31, 2018 (1)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Carrying Amount of Assets
Loans, interest and fees receivable, net for which it is practicable to estimate fair value	$	—	$	—	$	470,496	$	418,236
Loans, interest and fees receivable, at fair value	$	—	$	—	$	6,306	$	6,306

(1) For cash, deposits and investments in equity securities, the carrying amount is a reasonable estimate of fair value.

For those asset classes above that are required to be carried at fair value in our consolidated financial statements, gains and losses associated with fair value changes are detailed on our fees and related income on earning assets table within Note 2, “Significant Accounting Policies and Consolidated Financial Statement Components.” For our loans, interest and fees receivable included in the above tables, we assess the fair value of these assets based on our estimate of future cash flows net of servicing costs, and to the extent that such cash flow estimates change from period to period, any such changes are considered to be attributable to changes in instrument-specific credit risk.

For Level 3 assets carried at fair value measured on a recurring basis using significant unobservable inputs, the following table presents (in thousands) a reconciliation of the beginning and ending balances for the years ended December 31, 2019 and 2018:

	Loans, Interest and Fees Receivables, at Fair Value
	2019			2018
Balance at January 1,	$	6,306		$	11,109
Total gains—realized/unrealized:
Net revaluations of loans, interest and fees receivable, at fair value		1,251			606
Settlements		(3,171	)		(5,395	)
Impact of foreign currency translation		—			(14	)
Balance at December 31,	$	4,386		$	6,306

The unrealized gains and losses for assets within the Level 3 category presented in the tables above include changes in fair value that are attributable to both observable and unobservable inputs. Impacts related to foreign currency translation are included as a component of other operating expense on the consolidated statements of operations when recognized.

F-17

Net Revaluation of Loans, Interest and Fees Receivable. We record the net revaluation of loans, interest and fees receivable (including those pledged as collateral) in the fees and related income on earning assets category in our consolidated statements of operations, specifically as changes in fair value of loans, interest and fees receivable recorded at fair value. The net revaluation of loans, interest and fees receivable is based on the present value of future cash flows using a valuation model of expected cash flows and the estimated cost to service and collect those cash flows. We estimate the present value of these future cash flows using a valuation model consisting of internally developed estimates of assumptions third-party market participants would use in determining fair value, including estimates of net collected yield, principal payment rates, expected principal credit loss rates, costs of funds, discount rates and servicing costs. Interest income on receivables underlying our asset classes that are carried at fair value in our consolidated financial statements is recorded in Interest income - Consumer loans, including past due fees in our Consolidated Statements of Operations.

For Level 3 assets carried at fair value measured on a recurring basis using significant unobservable inputs, the following table presents (in thousands) quantitative information about the valuation techniques and the inputs used in the fair value measurement as of December 31, 2019 and December 31, 2018:

Quantitative Information about Level 3 Fair Value Measurements

Fair Value Measurement	Fair Value at December 31, 2019 (in thousands)		Valuation Technique	Unobservable Input	Range (Weighted Average)
Loans, interest and fees receivable, at fair value	$	4,386	Discounted cash flows	Gross yield		27.5% to 59.4% (31.0%)
				Principal payment rate		2.2% to 5.5% (2.6%)
				Expected credit loss rate		10.5% to 39.4% (13.7%)
				Servicing rate		11.3% to 16.9% (11.9%)
				Discount rate		14.3% to 14.3% (14.3%)

Quantitative Information about Level 3 Fair Value Measurements

Fair Value Measurement	Fair Value at December 31, 2018 (in thousands)		Valuation Technique	Unobservable Input	Range (Weighted Average)
Loans, interest and fees receivable, at fair value	$	6,306	Discounted cash flows	Gross yield		25.8% to 30.8% (26.4%)
				Principal payment rate		2.2% to 3.0% (2.3%)
				Expected credit loss rate		8.7% to 11.3% (9.0%)
				Servicing rate		14.9% to 19.5% (15.5%)
				Discount rate		14.9% to 14.9% (14.9%)

Valuations and Techniques for Liabilities

Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the liability. The table below summarizes (in thousands) by fair value hierarchy the December 31, 2019 and December 31, 2018 fair values and carrying amounts of (1) our liabilities that are required to be carried at fair value in our consolidated financial statements and (2) our liabilities not carried at fair value, but for which fair value disclosures are required:

Liabilities – As of December 31, 2019	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Carrying Amount of Liabilities
Liabilities not carried at fair value
Revolving credit facilities	$	—	$	—	$	720,687	$	720,687
Amortizing debt facilities	$	—	$	—	$	28,522	$	28,522
Notes payable to related parties	$	—	$	—	$	—	$	—
Convertible senior notes	$	—	$	16,920	$	—	$	24,091
Liabilities carried at fair value
Notes payable associated with structured financings, at fair value	$	—	$	—	$	3,920	$	3,920

Liabilities – As of December 31, 2018	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Carrying Amount of Liabilities
Liabilities not carried at fair value
Revolving credit facilities	$	—	$	—	$	389,707	$	389,707
Amortizing debt facilities	$	—	$	—	$	1,220	$	1,220
Notes payable to related parties	$	—	$	—	$	40,000	$	40,000
Convertible senior notes	$	—	$	47,230	$	—	$	62,142
Liabilities carried at fair value
Notes payable associated with structured financings, at fair value	$	—	$	—	$	5,651	$	5,651

F-18

For our notes payable, we assess the fair value of these liabilities based on our estimate of future cash flows generated from their underlying credit card receivables collateral, net of servicing compensation required under the note facilities, and to the extent that such cash flow estimates change from period to period, any such changes are considered to be attributable to changes in instrument-specific credit risk. Gains and losses associated with fair value changes for our notes payable associated with structured financing liabilities that are carried at fair value are detailed on our fees and related income on earning assets table within Note 2, “Significant Accounting Policies and Consolidated Financial Statement Components.” For our 5.875% convertible senior notes due 2035 (“5.875% convertible senior notes”), we assess fair value based upon the most recent trade data available from third-party providers. We have evaluated the fair value of our third party debt by analyzing the expected repayment terms and credit spreads included in our recent financing arrangements obtained with similar terms. These recent financing arrangements provide positive evidence that the underlying data used in our assessment of fair value has not changed relative to the general market and therefore the fair value of our debt continues to be the same as the carrying value. See Note 9, “Notes Payable and Variable Interest Entities,” for further discussion on our other notes payable.

For our material Level 3 liabilities carried at fair value measured on a recurring basis using significant unobservable inputs, the following table presents (in thousands) a reconciliation of the beginning and ending balances for the years ended December 31, 2019 and 2018.

	Notes Payable Associated with Structured Financings, at Fair Value
	2019			2018
Balance at January 1,	$	5,651		$	9,240
Total (gains) losses—realized/unrealized:
Net revaluations of notes payable associated with structured financings, at fair value		(1,731	)		(3,589	)
Repayments on outstanding notes payable, net		—			—
Balance at December 31,	$	3,920		$	5,651

The unrealized gains and losses for liabilities within the Level 3 category presented in the table above include changes in fair value that are attributable to both observable and unobservable inputs. We provide below a brief description of the valuation techniques used for Level 3 liabilities.

Net Revaluation of Notes Payable Associated with Structured Financings, at Fair Value. We record the net revaluations of notes payable associated with structured financings, at fair value, in the changes in fair value of notes payable associated with structured financings line item within the fees and related income on earning assets category of our consolidated statements of operations. The legal entity associated with the securitization transaction is consolidated as a VIE as the Company is deemed the primary beneficiary of the entity.  The Company is not liable for the full face value of the liability in the VIE so it is carried at fair value based upon amounts the borrower will receive from the legal entity. The net revaluation of these notes is based on the present value of future cash flows utilized in repayment of the outstanding principal and interest under the facilities using a valuation model of expected cash flows net of the contractual service expenses within the facilities. We estimate the present value of these future cash flows using a valuation model consisting of internally developed estimates of assumptions third-party market participants would use in determining fair value, including: estimates of net collected yield, principal payment rates and expected principal credit loss rates on the credit card receivables that secure the non-recourse notes payable; costs of funds; discount rates; and contractual servicing fees. Accrued interest expense on notes payable underlying our notes payable associated with structured financings, at fair value is recorded in Interest expense in our consolidated statements of operations.

For material Level 3 liabilities carried at fair value measured on a recurring basis using significant unobservable inputs, the following table presents (in thousands) quantitative information about the valuation techniques and the inputs used in the fair value measurement as of December 31, 2019 and December 31, 2018:

Quantitative Information about Level 3 Fair Value Measurements

Fair Value Measurement	Fair Value at December 31, 2019 (in thousands)		Valuation Technique	Unobservable Input	Weighted Average
Notes payable associated with structured financings, at fair value	$	3,920	Discounted cash flows	Gross yield		27.5	%
				Principal payment rate		2.2	%
				Expected credit loss rate		10.5	%
				Discount rate		14.3	%

Quantitative Information about Level 3 Fair Value Measurements

Fair Value Measurement	Fair Value at December 31, 2018 (in thousands)		Valuation Technique	Unobservable Input	Weighted Average
Notes payable associated with structured financings, at fair value	$	5,651	Discounted cash flows	Gross yield		25.8	%
				Principal payment rate		2.2	%
				Expected credit loss rate		8.7	%
				Discount rate		14.9	%

F-19

Other Relevant Data

Other relevant data (in thousands) as of December 31, 2019 and December 31, 2018 concerning certain assets and liabilities we carry at fair value are as follows:

As of December 31, 2019	Loans, Interest and Fees Receivable at Fair Value		Loans, Interest and Fees Receivable Pledged as Collateral under Structured Financings at Fair Value
Aggregate unpaid principal balance within loans, interest and fees receivable that are reported at fair value	$	644	$	5,280
Aggregate fair value of loans, interest and fees receivable that are reported at fair value	$	466	$	3,920
Aggregate fair value of receivables carried at fair value that are 90 days or more past due (which also coincides with finance charge and fee non-accrual policies)	$	1	$	8
Unpaid principal balance of receivables within loans, interest and fees receivable that are reported at fair value and are 90 days or more past due (which also coincides with finance charge and fee non-accrual policies) over the fair value of such loans, interest and fees receivable	$	28	$	185

As of December 31, 2018	Loans, Interest and Fees Receivable at Fair Value		Loans, Interest and Fees Receivable Pledged as Collateral under Structured Financings at Fair Value
Aggregate unpaid principal balance within loans, interest and fees receivable that are reported at fair value	$	1,160	$	7,708
Aggregate fair value of loans, interest and fees receivable that are reported at fair value	$	655	$	5,651
Aggregate fair value of receivables carried at fair value that are 90 days or more past due (which also coincides with finance charge and fee non-accrual policies)	$	3	$	7
Unpaid principal balance of receivables within loans, interest and fees receivable that are reported at fair value and are 90 days or more past due (which also coincides with finance charge and fee non-accrual policies) over the fair value of such loans, interest and fees receivable	$	35	$	224

Notes Payable	Notes Payable Associated with Structured Financings, at Fair Value as of December 31, 2019		Notes Payable Associated with Structured Financings, at Fair Value as of December 31, 2018
Aggregate unpaid principal balance of notes payable	$	101,314	$	101,314
Aggregate fair value of notes payable	$	3,920	$	5,651

F-20

7. Property

Details (in thousands) of our property on our consolidated balance sheets are as follows: 

	As of December 31,
	2019			2018
Software	$	3,543		$	3,467
Furniture and fixtures		6,431			6,307
Data processing and telephone equipment		7,675			7,625
Leasehold improvements		10,570			10,570
Other		1,156			1,156
Total cost		29,375			29,125
Less accumulated depreciation		(26,637	)		(25,500	)
Property, net	$	2,738		$	3,625

Depreciation expense totaled $1.1 million and $1.0 million for the years ended December 31, 2019 and 2018, respectively.

8. Leases

We lease premises and certain equipment under cancelable and non-cancelable leases, some of which contain renewal options under various terms. Total rental expense associated with these operating leases was $1.7 million in 2019 and $1.7 million in 2018, net of sublease income of $5.1 million and $5.1 million for the years ended December 31, 2019 and 2018, respectively.  During the fourth quarter of 2006, we entered into a 15-year lease for 335,372 square feet in Atlanta, Georgia (net of space which was surrendered to the landlord through our exercise of a termination option and therefore not included in the computed impact of adoption), 254,710 square feet of which we have subleased, and the remainder of which houses our corporate offices. In connection with this lease, we received a $21.2 million construction allowance for the build-out of our corporate offices. We are amortizing the construction allowance as a reduction of rent expense over the term of the lease. The terms of the sublease arrangements generally coincide with the underlying lease.

The components of lease expense associated with our lease liabilities and supplemental cash flow information related to those leases were as follows:

	For the Year ended December 31,
	2019			2018
Operating lease cost, gross	$	6,875		$	6,758
Sublease income		(5,133	)		(5,080	)
Net Operating lease cost	$	1,742		$	1,678
Cash paid under operating leases, gross	$	10,080		$	9,913
Weighted average remaining lease term - months		29
Weighted average discount rate		6.9	%

As of December 31, 2019, maturities of lease liabilities were as follows:

	Gross Lease Payment			Payments received from Sublease			Net Lease Payment
2020	$	10,213		$	(7,115	)	$	3,098
2021		10,221			(7,315	)		2,906
2022		4,407			(3,112	)		1,295
2023		126			—			126
2024		30			—			30
Thereafter		—			—			—
Total lease payments		24,997			(17,542	)		7,455
Less imputed interest		(2,738	)
Total	$	22,259

In addition, we occasionally lease certain equipment under cancelable and non-cancelable leases, which are accounted for as capital leases in our consolidated financial statements. As of December 31, 2019, we had no material non-cancelable capital leases with initial or remaining terms of more than one year.

F-21

9. Notes Payable and Variable Interest Entities

The Company contributes certain receivables to VIEs.  These entities are sometimes established to facilitate third party financing. When assets are contributed to the VIE, they serve as collateral for the debt securities issued by the VIE. The evaluation of whether the entity qualifies as a VIE is based upon the sufficiency of the equity at risk in the legal entity. This evaluation is generally a function of the level of excess collateral in the legal entity. We consolidate VIEs when we hold a variable interest and are the primary beneficiary. We are the primary beneficiary when we have the power to direct activities that most significantly affect the economic performance and have the obligation to absorb the majority of the losses or benefits. In certain circumstances we guarantee the performance of the underlying debt or agree to contribute additional collateral when necessary.  When collateral is pledged it is not available for the general use of the Company and can only be used to satisfy the related debt obligation. The results of operations and financial position of consolidated VIEs are included in our consolidated financial statements.

The following table presents a summary of VIEs in which we had continuing involvement or held a variable interest (in millions):

	As of
	December 31, 2019			December 31, 2018
Unrestricted cash and cash equivalents	$	78.7		$	16.8
Restricted cash and cash equivalents	$	25.9		$	61.0
Loans, interest and fees receivable, at fair value	$	3.9		$	5.7
Loans, interest and fees receivable, gross	$	857.2		$	403.4
Allowances for uncollectible loans, interest and fees receivable	$	(168.8	)	$	(57.4	)
Deferred revenue	$	(40.7	)	$	(13.2	)
Total Assets held by VIEs	$	756.2		$	416.3
Notes Payable, at face value held by VIEs	$	701.1		$	366.7
Notes Payable, at fair value held by VIEs	$	3.9		$	5.7
Maximum exposure to loss due to involvement with VIEs	$	654.3		$	438.5

Notes Payable Associated with Structured Financings, at Fair Value

Scheduled (in millions) in the table below are (1) the carrying amount of our structured financing note secured by certain credit card receivables and reported at fair value as of December 31, 2019 and December 31, 2018, (2) the outstanding face amount of our structured financing note secured by certain credit card receivables and reported at fair value as of December 31, 2019 and December 31, 2018, and (3) the carrying amount of the credit card receivables and restricted cash that provide the exclusive means of repayment for the note (i.e., lenders have recourse only to the specific credit card receivables and restricted cash underlying each respective facility and cannot look to our general credit for repayment) as of December 31, 2019 and December 31, 2018.

	Carrying Amounts at Fair Value as of
	December 31, 2019		December 31, 2018
Securitization facility (stated maturity of December 2021), outstanding face amount of $101.3 million as of December 31, 2019 ($101.3 million as of December 31, 2018) bearing interest at a weighted average 6.9% interest rate, based upon LIBOR, at December 31, 2019 (7.5% at December 31, 2018), which is secured by credit card receivables and restricted cash aggregating $3.9 million as of December 31, 2019 ($5.7 million as of December 31, 2018) in carrying amount	$	3.9	$	5.7

Contractual payment allocations within this credit card receivables structured financing provide for a priority distribution of cash flows to us to service the credit card receivables, a distribution of cash flows to pay interest and principal due on the notes, and a distribution of all excess cash flows (if any) to us. The structured financing facility included in the above table is amortizing down along with collections of the underlying receivables and there are no provisions within the debt agreement that allow for acceleration or bullet repayment of the facility prior to its scheduled expiration date. The aggregate carrying amount of the credit card receivables and restricted cash that provide security for the $3.9 million in fair value of the structured financing facility indicated in the above table is $3.9 million, which means that we have no aggregate exposure to pre-tax equity loss associated with the above structured financing arrangement at December 31, 2019.

As discussed elsewhere, the legal entity holding the securitization facility discussed in the table above, is a VIE.  Beyond our role as servicer of the underlying assets within the credit cards receivables structured financing, we have provided no other financial or other support to the structure, and we have no explicit or implicit arrangements that could require us to provide financial support to the structure.

F-22

Notes Payable, at Face Value and Notes Payable to Related Parties

Other notes payable outstanding as of December 31, 2019 and December 31, 2018 that are secured by the financial and operating assets of either the borrower, another of our subsidiaries or both, include the following, scheduled (in millions); except as otherwise noted, the assets of our holding company (Atlanticus Holdings Corporation) are subject to creditor claims under these scheduled facilities:

	As of
	December 31, 2019			December 31, 2018
Revolving credit facilities at a weighted average interest rate equal to 6.0% at December 31, 2019 (7.6% at December 31, 2018) secured by the financial and operating assets of CAR and/or certain receivables and restricted cash with a combined aggregate carrying amount of $740.4 million as of December 31, 2019 ($468.8 million at December 31, 2018)
Revolving credit facility, not to exceed $55.0 million (expiring November 1, 2021) (1) (2) (3)	$	39.1		$	30.0
Revolving credit facility, not to exceed $50.0 million (expiring October 30, 2022) (2) (3) (4) (5)		40.5			49.9
Revolving credit facility, not to exceed $20.0 million (expiring March 31, 2020) (2) (4) (5)	19.4				—
Revolving credit facility, not to exceed $70.0 million (expiring February 8, 2022) (3) (4) (5) (6)		25.8			61.0
Revolving credit facility, not to exceed $100.0 million (expiring June 11, 2021) (3) (4) (5) (6)		—			80.5
Revolving credit facility, not to exceed $15.0 million (expiring July 15, 2021) (2) (4) (5)		14.6			—
Revolving credit facility, not to exceed $100.0 million (expiring November 16, 2020) (3) (4) (5) (6)		—			8.0
Revolving credit facility, not to exceed $167.3 million (expiring November 15, 2023) (3) (4) (5) (6)		167.3			167.3
Revolving credit facility, not to exceed $200.0 million (expiring December 15, 2022) (3) (4) (5) (6)		200.0			—
Revolving credit facility, not to exceed $200.0 million (expiring May 15, 2024) (3) (4) (5) (6)		200.0			—
Revolving credit facility, not to exceed $15.0 million (expiring December 21, 2020) (2) (3) (4) (5)		8.6			—
Revolving credit facility, not to exceed $50.0 million (expiring September 19, 2021) (2) (3) (4) (5)		15.0			—
Other facilities
Other secured debt (expiring September 8, 2023) that is secured by certain assets of the Company with an annual rate equal to 5.5%		1.2			1.2
Unsecured term debt (expiring August 26, 2024) with an annual rate equal to 8.0% (3)		17.4			—
Amortizing debt facility (expiring September 30, 2021) with an annual rate equal to 6.2% (2) (3) (4) (5)		10.0			—
Senior secured term loan to related parties (paid-off on December 27, 2019) that was secured by certain assets of the Company with an annual rate equal to 9.0% (3)		—			40.0
Total notes payable before unamortized debt issuance costs and discounts		758.9			437.9
Unamortized debt issuance costs and discounts		(9.7	)		(7.0	)
Total notes payable outstanding	$	749.2		$	430.9

(1) Loan is subject to certain affirmative covenants, including a coverage ratio, a leverage ratio and a collateral performance test, the failure of which could result in required early repayment of all or a portion of the outstanding balance by our CAR Auto Finance operations.

(2) These notes reflect modifications to either extend the maturity date, increase the loan amount or both, and are treated as accounting modifications.

(3)	See below for additional information.
(4)	Loans are subject to certain affirmative covenants tied to default rates and other performance metrics the failure of which could result in required early repayment of the remaining unamortized balances of the notes.

(5) Loans are associated with variable interest entities.

(6)	Creditors do not have recourse against the general assets of the Company but only to the collateral within the VIEs.
*	As of December 31, 2019, the LIBOR rate was 1.75% and the prime rate was 4.75%.

F-23

On November 26, 2014, we and certain of our subsidiaries entered into a Loan and Security Agreement with Dove. The agreement provides for a senior secured term loan facility in an amount of up to $40.0 million at any time outstanding. On December 27, 2019, the Company issued 400,000 shares (aggregate initial liquidation preference of $40 million) of its Series A Preferred Stock in exchange for full satisfaction of the $40.0 million that the Company owed Dove under the Loan and Security Agreement. See Note 4 "Shareholders' Equity and Preferred Stock" for additional information. Dove is a limited liability company owned by three trusts. David G. Hanna is the sole shareholder and the President of the corporation that serves as the sole trustee of one of the trusts, and David G. Hanna and members of his immediate family are the beneficiaries of this trust. Frank J. Hanna, III is the sole shareholder and the President of the corporation that serves as the sole trustee of the other two trusts, and Frank J. Hanna, III and members of his immediate family are the beneficiaries of these other two trusts.

In October 2015, we (through a wholly owned subsidiary) entered a revolving credit facility with a (as subsequently amended) $50.0 million revolving borrowing limit that can be drawn to the extent of outstanding eligible principal receivables (of which $40.5 million was drawn as of December 31, 2019). This facility is secured by the loans, interest and fees receivable and related restricted cash and accrues interest at an annual rate equal to LIBOR plus 3.0%. The facility matures on October 30, 2022 and is subject to certain affirmative covenants, including a liquidity test and an eligibility test, the failure of which could result in required early repayment of all or a portion of the outstanding balance. The facility is guaranteed by Atlanticus who is required to maintain certain minimum liquidity levels.

In October 2016, we (through a wholly owned subsidiary) entered a revolving credit facility with an initial $40.0 million borrowing limit available to the extent of outstanding eligible principal receivables of our CAR subsidiary (of which $39.1 million was drawn as of December 31, 2019). This facility is secured by the financial and operating assets of CAR and accrues interest at an annual rate equal to LIBOR plus a range between 2.4% and 3.0% based on certain ratios. The loan is subject to certain affirmative covenants, including a coverage ratio, a leverage ratio and a collateral performance test, the failure of which could result in required early repayment of all or a portion of the outstanding balance. In periods subsequent to October 2016, we amended the original agreement to either extend the maturity date and/or expand the capacity of this revolving credit facility. As of December 31, 2019, the borrowing limit was $55.0 million and the maturity was November 1, 2021. There were no other material changes to the existing terms or conditions as a result of these amendments and the new maturity date and borrowing limit are reflected in the table above.

In December 2016, we (through a wholly owned subsidiary) entered a revolving credit facility with a $20.0 million revolving borrowing limit available to the extent of outstanding eligible principal receivables (of which $19.4 million was drawn as of December 31, 2019). The facility matures on March 31, 2020 and is secured by the loans, interest and fees receivable and related restricted cash and accrues interest at an annual rate equal to LIBOR plus 5.0%. The note is guaranteed by Atlanticus.

In February 2017, we (through a wholly owned subsidiary) established a program under which we sell certain receivables to a consolidated trust in exchange for notes issued by the trust. The notes are secured by the receivables and other assets of the trust. Simultaneously with the establishment of the program, the trust issued a series of variable funding notes and sold an aggregate amount of up to $90.0 million (subsequently reduced to $70.0 million) of such notes (of which $25.8 million was outstanding as of December 31, 2019) to an unaffiliated third party pursuant to a facility that can be drawn upon to the extent of outstanding eligible receivables. The interest rate on the notes is fixed at 14.0%. The facility matures on February 8, 2022 and is subject to certain affirmative covenants and collateral performance tests, the failure of which could result in required early repayment of all or a portion of the outstanding balance of notes. The facility also may be prepaid subject to payment of a prepayment or other fee.

In December 2017, we (through a wholly owned subsidiary) entered a revolving credit facility with a (as subsequently amended) $15.0 million revolving borrowing limit that is available to the extent of outstanding eligible principal receivables (of which $8.6 million was drawn as of December 31, 2019). This facility is secured by the loans, interest and fees receivable and related restricted cash and accrues interest at an annual rate equal to LIBOR plus 3.5%. The facility matures on December 21, 2020 and is subject to certain affirmative covenants, including payment, delinquency and charge-off tests, the failure of which could result in required early repayment of all or a portion of the outstanding balance. The note is guaranteed by Atlanticus.

In 2018, we (through a wholly owned subsidiary) entered into two separate facilities associated with the above mentioned program to sell up to an aggregate $200.0 million of notes which are secured by the receivables and other assets of the trust (of which $0.0 million was outstanding as of December 31, 2019) to separate unaffiliated third parties pursuant to facilities that can be drawn upon to the extent of outstanding eligible receivables. Interest rates on the notes are based on commercial paper rates plus 3.75% and LIBOR plus 4.875%, respectively. The facilities mature on June 11, 2021 and November 16, 2020, respectively, and are subject to certain affirmative covenants and collateral performance tests, the failure of which could result in required early repayment of all or a portion of the outstanding balance of notes. The facilities also may be prepaid subject to payment of a prepayment or other fee.

In September 2018, we (through a wholly owned subsidiary) entered a revolving credit facility with a (as subsequently amended) $50.0 million revolving borrowing limit that is available to the extent of outstanding eligible principal receivables (of which $15.0 million was drawn as of December 31, 2019). This facility is secured by the loans, interest and fees receivable and related restricted cash and accrues interest at an annual rate equal to LIBOR plus 6.5%. The loan is subject to certain affirmative covenants, including a charge-off and delinquency test, the failure of which could result in required early repayment of all or a portion of the outstanding balance. The note is guaranteed by Atlanticus.

In November 2018, we sold $167.3 million of asset backed securities (“ABS”) secured by certain retail point-of-sale receivables. A portion of the proceeds from the sale were used to pay-down our existing term and revolving facilities associated with our point-of-sale receivables, noted in the table above, and the remaining proceeds are available to fund the acquisition of future receivables. The terms of the ABS allow for a two-year revolving structure with a subsequent 18-month amortization period. The weighted average interest rate on the securities is fixed at 5.76%.

In June 2019, we (through a wholly owned subsidiary) entered a revolving credit facility with a $15.0 million revolving borrowing limit that is available to the extent of outstanding eligible principal receivables (of which $14.6 million was drawn as of December 31, 2019). This facility is secured by the loans, interest and fees receivable and related restricted cash and accrues interest at an annual rate equal to the prime rate. The note is guaranteed by Atlanticus.

In June 2019, we sold $200.0 million of ABS secured by certain credit card receivables. A portion of the proceeds from the sale was used to pay-down our existing facilities associated with our credit card receivables. The terms of the ABS allow for a two-year revolving structure with a subsequent 12-month to 18-month amortization period. The weighted average interest rate on the securities is fixed at 5.37%.

In August 2019, we repurchased $54.4 million in face amount of our outstanding convertible senior notes for $16.3 million in cash (including accrued interest) and the issuance of a $17.4 million term note, which bears interest at a fixed rate of 8.0% and is due in August 2024. See Note 10 "Convertible Senior Notes" for additional information.

F-24

In September 2019, we (through a wholly owned subsidiary) entered a term facility with a $30.0 million revolving borrowing limit (of which $10.0 was drawn as of December 31, 2019) that is available to the extent of outstanding eligible principal receivables. This facility is secured by the loans, interest and fees receivable and related restricted cash and accrues interest at an annual rate equal to LIBOR plus 4.5%. The facility matures on September 30, 2021 and is subject to certain affirmative covenants, including a liquidity test and an eligibility test, the failure of which could result in required early repayment of all or a portion of the outstanding balance. The note is guaranteed by Atlanticus, which is required to maintain certain minimum liquidity levels.

In November 2019, we sold $200.0 million of ABS secured by certain credit card receivables. A portion of the proceeds from the sale was used to pay-down our existing facilities associated with our credit card receivables and the remaining proceeds were available to fund the acquisition of future receivables. The terms of the ABS allow for a three-year revolving structure with a subsequent 12-month to 18-month amortization period. The weighted average interest rate on the securities is fixed at 4.91%.

As of December 31, 2019, we are in compliance with the covenants underlying our various notes payable.

10. Convertible Senior Notes

In November 2005, we issued $300.0 million aggregate principal amount of 5.875% convertible senior notes due November 30, 2035. The convertible senior notes are unsecured, subordinate to existing and future secured obligations and structurally subordinate to existing and future claims of our subsidiaries’ creditors. These notes (net of repurchases since the issuance dates) are reflected within convertible senior notes on our consolidated balance sheets. No put rights exist under our convertible senior notes.

On August 26, 2019, we repurchased $54.4 million in face amount of our outstanding convertible senior notes for $16.3 million in cash (including accrued interest) and the issuance of a $17.4 million term note, which bears interest at a fixed rate of 8.0% and is due in August 2024. The repurchase resulted in a gain of approximately $5.1 million (net of the convertible senior notes’ applicable share of deferred costs, which were written off in connection with the repurchase). Upon acquisition, the notes were retired. See Note 9 "Notes Payable and Variable Interest Entities" for further information regarding the note issuance.

The following summarizes (in thousands) components of our consolidated balance sheets associated with our convertible senior notes:

	As of
	December 31, 2019			December 31, 2018
Face amount of convertible senior notes	$	33,839		$	88,280
Discount		(9,748	)		(26,138	)
Net carrying value	$	24,091		$	62,142
Carrying amount of equity component included in paid-in capital	$	108,714		$	108,714
Excess of instruments’ if-converted values over face principal amounts	$	—		$	—

During certain periods and subject to certain conditions, the remaining $33.8 million of outstanding convertible senior notes as of December 31, 2019 (as referenced in the table above) are convertible by holders into cash and, if applicable, shares of our common stock at an adjusted effective conversion rate of 40.63 shares of common stock per $1,000 principal amount of notes, subject to further adjustment; the conversion rate is based on an adjusted conversion price of $24.61 per share of common stock. Upon any conversion of the notes, we will deliver to holders of the notes cash of up to $1,000 per $1,000 aggregate principal amount of notes and, at our option, either cash or shares of our common stock in respect of the remainder of the conversion obligation, if any. The maximum number of shares of common stock that any note holder may receive upon conversion is fixed at 40.63 shares per $1,000 aggregate principal amount of notes, and we have a sufficient number of authorized shares of our common stock to satisfy this conversion obligation. We are required to pay contingent interest on the notes during a 6-month period if the average trading price of the notes is above a specified level. Thus far we have not paid any contingent interest on these notes. In addition, holders of the notes may require us to repurchase the notes for cash upon certain specified events.

In conjunction with the offering of the convertible senior notes, we entered into a 30-year share lending agreement with Bear, Stearns International Limited (“BSIL”) and Bear, Stearns & Co. Inc, as agent for BSIL, pursuant to which we lent BSIL 5,677,950 shares of our common stock. The obligations of Bear Stearns were assumed by JP Morgan in 2008. JP Morgan (as the guarantor of the obligation) is required to return the loaned shares to us at the end of the 30-year term of the share lending agreement or earlier upon the occurrence of specified events. Such events include the bankruptcy of JP Morgan, its failure to make payments when due, its failure to post collateral when required or return loaned shares when due, notice of its inability to perform obligations, or its untrue representations. If an event of default occurs, then the borrower (JP Morgan) may settle the obligation in cash. Further, in the event that JP Morgan’s credit rating drops below A/A2, it would be required to post collateral for the market value of the lent shares ($13.1 million based on the 1,459,233 shares remaining outstanding under the share lending arrangement as of December 31, 2019). JP Morgan has agreed to use the loaned shares for the purpose of directly or indirectly facilitating the hedging of our convertible senior notes by the holders thereof or for such other purpose as reasonably determined by us. We deem it highly remote that any event of default will occur and therefore cash settlement, while an option, is an unlikely scenario. We exclude the loaned shares from earnings per share computations.

We analogize the share lending agreement to a prepaid forward contract, which we have evaluated under applicable accounting guidance. We determined that the instrument was not a derivative in its entirety and that the embedded derivative would not require separate accounting. The net effect on shareholders’ equity of the shares lent pursuant to the share lending agreement, which includes our requirement to lend the shares and the counterparties’ requirement to return the shares, is the fee received upon our lending of the shares.

F-25

Accounting for Convertible Senior Notes

Under applicable accounting literature, the accounting for the issuance of the notes includes (1) allocation of the issuance proceeds between the notes and paid-in capital, (2) establishment of a discount to the face amount of the notes equal to the portion of the issuance proceeds that are allocable to paid-in capital, (3) creation of a deferred tax liability related to the discount on the notes, and (4) an allocation of issuance costs between the portion of such costs considered to be associated with the notes and the portion of such costs considered to be associated with the equity component of the notes’ issuances (i.e., paid-in capital). We are amortizing the discount to the remaining face amount of the notes into interest expense over the expected life of the notes, which results in a corresponding release of associated deferred tax liability. Amortization for the years ended December 31, 2019 and 2018 totaled $0.5 million and $0.6 million, respectively. Actual incurred interest (based on the contractual interest rate) totaled $3.9 million and $5.2 million for the years ended December 31, 2019 and 2018, respectively. We will amortize the discount remaining at December 31, 2019 into interest expense over the expected term of the convertible senior notes (currently expected to be October 2035). The weighted average effective interest rate for the convertible senior notes was 9.2% for all periods presented.

11. Commitments and Contingencies

General

Under finance products available in the point-of-sale and direct-to-consumer channels, consumers have the ability to borrow up to the maximum credit limit assigned to each individual’s account. Unfunded commitments under these products aggregated $1.1 billion at December 31, 2019. We have never experienced a situation in which all borrowers have exercised their entire available lines of credit at any given point in time, nor do we anticipate this will ever occur in the future. Moreover, there would be a concurrent increase in assets should there be any exercise of these lines of credit. We also have the effective right to reduce or cancel these available lines of credit at any time.

Additionally, our CAR operations provide floor-plan financing for a pre-qualified network of independent automotive dealers and automotive finance companies in the buy-here, pay-here used car business. The floor plan financing allows dealers and finance companies to borrow up to the maximum pre-approved credit limit allowed in order to finance ongoing inventory needs. These loans are secured by the underlying auto inventory and, in certain cases where we have other lending products outstanding with the dealer, are secured by the collateral under those lending arrangements as well, including any outstanding dealer reserves. As of December 31, 2019, CAR had unfunded outstanding floor-plan financing commitments totaling $9.2 million. Each draw against unused commitments is reviewed for conformity to pre-established guidelines.

Under agreements with third-party originating and other financial institutions, we have pledged security (collateral) related to their issuance of consumer credit and purchases thereunder, of which $15.1 million remains pledged as of December 31, 2019 to support various ongoing contractual obligations. 

Under agreements with third-party originating and other financial institutions, we have agreed to indemnify the financial institutions for certain liabilities associated with the services we provide on behalf of the financial institutions—such indemnification obligations generally being limited to instances in which we either (a) have been afforded the opportunity to defend against any potentially indemnifiable claims or (b) have reached agreement with the financial institutions regarding settlement of potentially indemnifiable claims. As of December 31, 2019, we have assessed the likelihood of any potential payments related to the aforementioned contingencies as remote. We will accrue liabilities related to these contingencies in any future period if and in which we assess the likelihood of an estimable payment as probable.

We also are subject to certain minimum payments under cancelable and non-cancelable lease arrangements. For further information regarding these commitments, see Note 8, “Leases”.

Litigation

We are involved in various legal proceedings that are incidental to the conduct of our business. There are currently no pending legal proceedings that are expected to be material to us.

F-26

12. Income Taxes

Deferred tax assets and liabilities reflect the effects of tax losses, credits, and the future income tax effects of temporary differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases and are measured using enacted tax rates that apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

The current and deferred portions (in thousands) of federal, foreign and state income tax benefit or expense are as follows:

	For the Year Ended December 31,
	2019			2018
Federal income tax (expense) benefit:
Current tax benefit (expense)	$	279		$	5,932
Deferred tax (expense) benefit		(5,395	)		(1,159	)
Total federal income tax (expense) benefit	$	(5,116	)	$	4,773
Foreign income tax benefit (expense):
Current tax benefit (expense)	$	25		$	(53	)
Deferred tax (expense) benefit		(15	)		3
Total foreign income tax benefit (expense)	$	10		$	(50	)
State and other income tax (expense) benefit:
Current tax expense	$	(709	)	$	(3	)
Deferred tax benefit (expense)		262			(590	)
Total state and other income tax expense	$	(447	)	$	(593	)
Total income tax (expense) benefit	$	(5,553	)	$	4,130

We experienced an effective income tax expense rate of 17.5% for the year ended December 31, 2019, compared to a negative effective income tax expense rate of 118.6% for the year ended December 31, 2018. Our effective income tax expense rate for the year ended December 31, 2019 was below the statutory rate principally as a result of the release of federal valuation allowances. Our negative effective income tax expense rate for the year ended December 31, 2018 was significantly below the statutory rate principally as a result of our settlement during 2018 of an IRS examination of our 2008 tax return and the carryback of its resulting net operating losses to pre-2008 tax years. The settlement resulted in a decrease in our federal tax valuation allowance and net reductions in our accruals of interest on liabilities for uncertain tax positions and unpaid taxes.

We report income tax-related interest and penalties (including those associated with both our accrued liabilities for uncertain tax positions and unpaid tax liabilities) within our income tax line item on our consolidated statements of operations.  We likewise report the reversal of income tax-related interest and penalties within such line item to the extent we resolve our liabilities for uncertain tax positions or unpaid tax liabilities in a manner favorable to our accruals therefor.  For 2019, we reported a net accrual of income tax-related interest and penalties of $0.1 million within our income tax line item, and, for 2018, we reported a net reversal of income tax-related interest and penalties of $1.2 million within our income tax line item.

In December 2014, we reached a settlement with the IRS concerning the tax treatment of net operating losses we incurred in 2007 and 2008 and carried back to obtain refunds of federal income taxes paid in earlier years dating back to 2003. In 2015, we filed an amended return claim that, if accepted, would have eliminated the $7.4 million assessment (and corresponding interest and penalties) under a negotiated provision of the December 2014 IRS settlement. The IRS filed a lien (as is customarily the case) associated with the assessment.  Subsequently, an IRS examination team denied our amended return claims, and we filed a protest with IRS Appeals. Following correspondence and conferences held with IRS Appeals, we received and accepted a settlement offer from IRS Appeals in June 2018 that reduced our $7.4 million net unpaid income tax assessment referenced above to $3.7 million (such $3.7 million remaining unpaid assessment relating to the 2006 year to which we had originally carried back the aforementioned net operating losses). In July 2018, we paid $5.4 million to the IRS to cover the $3.7 million unpaid income tax assessment and most of the interest that had accrued thereon. Subsequently, during the three months ended September 30, 2018, the IRS refunded $0.5 million of our $5.4 million payment, and in 2019, we paid $0.7 million to the IRS to cover the interest on the 2006 income tax liability.  Although we have paid all assessed income taxes related to this matter, we still have an outstanding accrued liability for failure-to-pay penalties (and accrued interest thereon) related to this matter. We are pursuing complete abatement of the failure-to-pay penalties of $0.9 million, and once this matter is resolved through either abatement or payment, we expect the IRS to remove the aforementioned lien in due course.

F-27

The following table reconciles our effective income tax expense or benefit rates for 2019 and 2018:

	For the Year Ended December 31,
	2019			2018
Statutory expense rate		21.0	%		21.0	%
Increase (decrease) in statutory tax expense rate resulting from:
Federal valuation allowance		(4.4	)		(132.0	)
Global intangible low-taxed income		0.8			9.6
Interest and penalties related to uncertain tax positions and IRS settlement adjustment		0.6			(27.2	)
Foreign taxes, net of valuation allowance		(0.5	)		(8.2	)
Permanent and other prior year true ups and tax effect of non-controlling interest		(1.1	)		4.7
State taxes, net of valuation allowance		1.1			13.5
Effective expense (benefit) rate		17.5	%		(118.6	)%

As of December 31, 2019 and December 31, 2018, the respective significant components (in thousands) of our deferred tax assets and liabilities were:

	As of December 31,
	2019			2018
Deferred tax assets:
Software development costs/fixed assets	$	—		$	108
Goodwill and intangible assets		113			895
Provision for loan loss		36,172			19,479
Equity-based compensation		792			748
Accrued expenses		386			307
Accruals for state taxes and interest associated with unrecognized tax benefits		108			87
Federal net operating loss carry-forward		18,643			44,485
Minimum tax credit carry-forward		520			1,015
Foreign net operating loss carry-forward		537			256
Other		40			151
State tax benefits, primarily from net operating losses		40,937			42,318
Deferred tax assets, gross	$	98,248		$	109,849
Valuation allowances		(39,161	)		(40,830	)
Deferred tax assets net of valuation allowance	$	59,087		$	69,019
Deferred tax liabilities:
Prepaid expenses and other	$	(1,217	)	$	(210	)
Software development costs/fixed assets		(176	)		—
Equity in income of equity-method investee		(1,154	)		(1,092	)
Credit card fair value election differences		(21,513	)		(21,021	)
Market discount on loans		(29,834	)		(21,749	)
Deferred costs		(542	)		(469	)
Convertible senior notes		(9,309	)		(22,106	)
Cancellation of indebtedness income		—			(1,882	)
Deferred tax liabilities, gross	$	(63,745	)	$	(68,529	)
Deferred tax (liabilities) assets, net	$	(4,658	)	$	490

F-28

We undertook a detailed review of our deferred taxes and determined that a valuation allowance was required for certain deferred tax assets in the U.S. for states and in the U.K. We reduce our deferred tax assets by a valuation allowance if it is more likely than not that some portion or all of a deferred tax asset will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences are deductible. In making our valuation allowance determinations, we consider all available positive and negative evidence affecting specific deferred tax assets, including our past and anticipated future performance, the reversal of deferred tax liabilities, the length of carry-back and carry-forward periods, and the implementation of tax planning strategies. Because our valuation allowance evaluations require consideration of future events, significant judgment is required in making the evaluations, and our conclusions could be materially different should certain of our expectations not be met. Our valuation allowances totaled $39.2 million and $40.8 million at December 31, 2019 and December 31, 2018, respectively.

Certain of our deferred tax assets relate to federal, foreign and state net operating losses, capital losses, and credits, and we have no other net operating losses, capital losses, or credit carryforwards other than those noted herein. We have recorded a federal deferred tax asset of $18.0 million (based on federal net operating loss carryforwards of $85.6 million, which expire in varying amounts between 2029 and 2037). We have also recorded a federal deferred tax asset of $0.6 million (based on federal capital loss carryovers of $2.8 million, which expire in 2021).

Our subsidiaries file federal, state and/or foreign income tax returns. In the normal course of our business, we are subject to examination by taxing authorities throughout the world, including such major jurisdictions as the U.S., the U.K., and various U.S. states and territories. With a few exceptions of a non-material nature and considering our 2008-related settlement with the IRS discussed previously, we are no longer subject to federal, state, local, or foreign income tax examinations for years prior to 2015.

F-29

Reconciliations (in thousands) of our unrecognized tax benefits from the beginning to the end of 2019 and 2018, respectively, are as follows:

	2019			2018
Balance at January 1,	$	(414	)	$	(373	)
Reductions based on tax positions related to prior years		13			51
Additions based on tax positions related to the current year		(83	)		(71	)
Interest and penalties accrued		(29	)		(21	)
Balance at December 31,	$	(513	)	$	(414	)

Further, our unrecognized tax benefits that, if recognized, would affect the effective tax rate are not material at only $0.5 million and $0.4 million at December 31, 2019, and 2018, respectively.

13. Net Income Attributable to Controlling Interests Per Common Share

We compute net income (loss) attributable to controlling interests per common share by dividing net income (loss) attributable to controlling interests by the weighted-average number of shares of common stock (including participating securities) outstanding during the period, as discussed below. Diluted computations applicable in financial reporting periods in which we report income reflect the potential dilution to the basic income per share of common stock computations that could occur if securities or other contracts to issue common stock were exercised, were converted into common stock or were to result in the issuance of common stock that would share in our results of operations. In performing our net income (loss) attributable to controlling interests per share of common stock computations, we apply accounting rules that require us to include all unvested stock awards that contain non-forfeitable rights to dividends or dividend equivalents, whether paid or unpaid, in the number of shares outstanding in our basic and diluted calculations. Common stock and certain unvested share-based payment awards earn dividends equally, and we have included all outstanding restricted stock awards in our basic and diluted calculations for current and prior periods.

The following table sets forth the computations of net income attributable to controlling interests per share of common stock (in thousands, except per share data): 

	For the Year Ended December 31,
	2019			2018
Numerator:
Net income attributable to controlling interests	$	26,443		$	7,856
Preferred stock dividends and accretion		(1,153	)		—
Net income attributable to common shareholders	$	25,290		$	7,856
Denominator:
Basic (including unvested share-based payment awards) (1)		14,499			13,927
Effect of dilutive stock compensation arrangements		774			75
Diluted (including unvested share-based payment awards) (1)		15,273			14,002
Net income attributable to common shareholders per share—basic	$	1.74		$	0.56
Net income attributable to common shareholders per share—diluted	$	1.66		$	0.56

(1) Shares related to unvested share-based payment awards included in our basic and diluted share counts were 512,636 for the year ended December 31, 2019, compared to 272,172 for the year ended December 31, 2018.

As their effects were anti-dilutive, we excluded stock options to purchase 0.5 million and 2.9 million shares from our net income attributable to controlling interests per share of common stock calculations for the years ended December 31, 2019 and 2018, respectively.  Additionally, as their effects were anti-dilutive, we excluded all shares associated with our Series A Preferred Stock. See Note 16 "Related Party Transactions" for a further discussion of our Series A Preferred Stock.

For the years ended December 31, 2019 and 2018, there were no shares potentially issuable and thus includible in the diluted net income attributable to controlling interests per share of common stock calculations pursuant to our convertible senior notes. However, in future reporting periods during which our closing stock price is above the $24.61 conversion price for the convertible senior notes, and depending on the closing stock price at conversion, the maximum potential dilution under the conversion provisions of such notes is 1.4 million shares, which could be included in diluted share counts in net income per share of common stock calculations. See Note 10, “Convertible Senior Notes,” for a further discussion of these convertible securities.

F-30

14. Stock-Based Compensation

We currently have two stock-based compensation plans, the Second Amended and Restated Employee Stock Purchase Plan (the “ESPP”) and the Fourth Amended and Restated 2014 Equity Incentive Plan (the “Fourth Amended 2014 Plan”). The Fourth Amended 2014 Plan was approved by our shareholders in May 2019. Among other things, the Fourth Amended 2014 Plan (i) increased the number of shares of Common Stock available for issuance under the plan by 2,000,000 shares and (ii) extended the term of the plan by approximately two years. As of December 31, 2019, 65,771 shares remained available for issuance under the ESPP and 1,791,565 shares remained available for issuance under the Fourth Amended 2014 Plan.

Exercises and vestings under our stock-based compensation plans resulted in no income tax-related charges to paid-in capital during the years ended December 31, 2019 and 2018.

Restricted Stock and Restricted Stock Units

During the years ended December 31, 2019 and 2018, we granted 229,500 and 533,177 shares of restricted stock and restricted stock units (net of any forfeitures), respectively, with aggregate grant date fair values of $0.9 million and $1.3 million, respectively. We incurred expenses of $1.0 million and $0.7 million during the years ended December 31, 2019 and 2018, respectively, related to restricted stock awards. When we grant restricted stock and restricted stock units, we defer the grant date value of the restricted stock and restricted stock unit and amortize that value (net of the value of anticipated forfeitures) as compensation expense with an offsetting entry to the paid-in capital component of our consolidated shareholders’ equity. Our restricted stock awards typically vest over a range of 12 to 60 months (or other term as specified in the grant which may include the achievement of performance measures) and are amortized to salaries and benefits expense ratably over applicable vesting periods. As of December 31, 2019, our unamortized deferred compensation costs associated with non-vested restricted stock awards were $0.7 million with a weighted-average remaining amortization period of 2.1 years.

Stock Options

Our Fourth Amended 2014 Plan provides that we may grant options on or shares of our common stock (and other types of equity awards) to members of our Board of Directors, employees, consultants and advisors. The exercise price per share of the options must be equal to or greater than the market price on the date the option is granted. The option period may not exceed 10 years from the date of grant. The vesting requirements for options are determined by the Compensation Committee of the Board of Directors. We had expense of $0.7 million and $0.6 million related to stock option-related compensation costs during the years ended December 31, 2019 and 2018, respectively. When applicable, 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 table below includes additional information about outstanding options:

	Number of Shares			Weighted-Average Exercise Price		Weighted-Average of Remaining Contractual Life (in years)		Aggregate Intrinsic Value
Outstanding at December 31, 2018		3,121,200		$	3.50
Issued		50,000		$	3.13
Exercised		(469,701	)	$	2.59
Cancelled/Forfeited		(14,000	)	$	3.13
Outstanding at December 31, 2019		2,687,499		$	3.66		2.2	$	14,386,956
Exercisable at December 31, 2019		1,076,836		$	3.50		1.5	$	5,930,463

We had $0.5 million and $1.2 million of unamortized deferred compensation costs associated with non-vested stock options as of December 31, 2019 and December 31, 2018, respectively.

F-31

15. Employee Benefit Plans

We maintain a defined contribution retirement plan (“401(k) plan”) for our U.S. employees that provides for a matching contribution by us. All full time U.S. employees are eligible to participate in the 401(k) plan.  Our U.K. credit card subsidiary offers eligible employees membership in a Group Personal Pension Plan which is set up with Friends Provident. This plan is a defined contribution plan in which all permanent employees who have completed 3 months of continuous service are eligible to join the plan. Company matching contributions are available to U.K. employees who contribute a minimum of 3% of their salaries under our Group Personal Pension Plan and to U.S. employees who participate in our 401(k) plan. We made matching contributions under our U.S. and U.K. plans of $285,618 and $285,477 in 2019 and 2018, respectively.

Also, all employees, excluding executive officers, are eligible to participate in the ESPP. Under the ESPP, employees can elect to have up to 10% of their annual wages withheld to purchase our common stock up to a fair market value of $10,000. The amounts deducted and accumulated by each participant are used to purchase shares of common stock on or as promptly as practicable after the last business day of each month. The price of stock purchased under the ESPP is approximately 85% of the fair market value per share of our common stock on the purchase date. Employees contributed $108,466 to purchase 19,641 shares of common stock in 2019 and $51,593 to purchase 23,681 shares of common stock in 2018 under the ESPP. The ESPP covers up to 100,000 shares of common stock. Our charge to expense associated with the ESPP was $31,954 and $28,629 in 2019 and 2018, respectively.

16. Related Party Transactions

Under a shareholders’ agreement which we entered into with certain shareholders, including David G. Hanna, Frank J. Hanna, III and certain trusts that were Hanna affiliates, following our initial public offering (1) if one or more of the shareholders accepts a bona fide offer from a third party to purchase more than 50% of the outstanding common stock, each of the other shareholders that is a party to the agreement may elect to sell his shares to the purchaser on the same terms and conditions, and (2) if shareholders that are a party to the agreement owning more than 50% of the common stock propose to transfer all of their shares to a third party, then such transferring shareholders may require the other shareholders that are a party to the agreement to sell all of the shares owned by them to the proposed transferee on the same terms and conditions.

In June 2007, we entered into a sublease for 1,000 square feet (as later adjusted to 600 square feet) of excess office space at our Atlanta headquarters with HBR Capital, Ltd. (“HBR”), a company co-owned by David G. Hanna and his brother Frank J. Hanna, III. The sublease rate per square foot is the same as the rate that we pay under the prime lease. Under the sublease, HBR paid us $16,627 and $18,089 for 2019 and 2018, respectively. The aggregate amount of payments required under the sublease from January 1, 2020 to the expiration of the sublease in May 2022 is $41,527.

In January 2013, HBR began leasing the services of four employees from us. HBR reimburses us for the full cost of the employees, based on the amount of time devoted to HBR. In the years ended December 31, 2019 and 2018, we received $269,072 and $270,932, respectively, of reimbursed costs from HBR associated with these leased employees.

On November 26, 2014, we and certain of our subsidiaries entered into a Loan and Security Agreement with Dove. The agreement provided for a senior secured term loan facility in an amount of up to $40.0 million at any time outstanding. On December 27, 2019, the Company issued 400,000 shares (aggregate initial liquidation preference of $40 million) of its Series A Preferred Stock in exchange for full satisfaction of the $40.0 million that the Company owed Dove under the Loan and Security Agreement.  Dividends on the preferred stock are 6% per annum (cumulative, non-compounding) and are payable in preference to any common stock dividends, in cash. The Series A Preferred Stock is perpetual and has no maturity date. The Company may, at its option, redeem the shares of Series A Preferred Stock on or after January 1, 2025 at a redemption price equal to $100 per share, plus any accumulated and unpaid dividends. At the request of a majority of the holders of the Series A Preferred Stock, the Company shall offer to redeem all of the Series A Preferred Stock at a redemption price equal to $100 per share, plus any accumulated and unpaid dividends, at the option of the holders thereof, on or after January 1, 2024. Upon the election by the holders of a majority of the Series A Preferred Stock, each share of the Series A Preferred Stock is convertible into the number of shares of the Company’s common stock as is determined by dividing (i) the sum of (a) $100 and (b) any accumulated and unpaid dividends on such share by (ii) an initial conversion price equal to $10 per share, subject to certain adjustment in certain circumstances to prevent dilution. Given the redemption rights contained within the Series A Preferred Stock, we account for the outstanding preferred stock as temporary equity in the consolidated balance sheets.  Dove is a limited liability company owned by three trusts. David G. Hanna is the sole shareholder and the President of the corporation that serves as the sole trustee of one of the trusts, and David G. Hanna and members of his immediate family are the beneficiaries of this trust. Frank J. Hanna, III is the sole shareholder and the President of the corporation that serves as the sole trustee of the other two trusts, and Frank J. Hanna, III and members of his immediate family are the beneficiaries of these other two trusts.

F-32

EX-4.1

Exhibit 4.1

DESCRIPTION OF SECURITIES

REGISTERED PURSUANT TO SECTION 12 OF

THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

The following is a summary description of the common stock, no par value per share, of Atlanticus Holdings Corporation (“Atlanticus”), which is the only security of Atlanticus registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended.

DESCRIPTION OF COMMON STOCK

General

Atlanticus is incorporated in the State of Georgia. The rights of shareholders of Atlanticus are generally governed by Georgia law and Atlanticus’ Articles of Incorporation, as amended (the “Articles of Incorporation”), and Amended and Restated Bylaws (the “Bylaws”).

The following summary highlights selected information regarding Atlanticus’ common stock. It may not contain all of the information that may be important to you. This summary is qualified by reference to Georgia law, including the Georgia Business Corporation Code (the “GBCC”), and the Articles of Incorporation and Bylaws, each of which is filed with the Securities and Exchange Commission (the “SEC”) as an exhibit to Atlanticus’ Annual Report on Form 10-K. You should read our Articles of Incorporation, Bylaws, and the applicable provisions of the GBCC for additional information.

Capitalization

The authorized capital stock of Atlanticus consists of 150,000,000 shares of common stock, no par value per share (the “common stock”), and 10,000,000 shares of preferred stock, no par value per share (the “preferred stock”).

Common Stock

Voting Rights. Holders of Atlanticus common stock are entitled to one vote per share, and, in general, a majority of issued and outstanding shares of Atlanticus common stock is sufficient to authorize action upon all matters submitted for a vote. Directors are elected by a plurality of the votes cast at the annual meeting of the shareholders, and shareholders of Atlanticus do not have the right to cumulate their votes in the election of directors. This means that the holders of a majority of the votes represented by the common stock can elect all of the directors then standing for election.

Dividends. The holders of outstanding shares of Atlanticus common stock are entitled to receive dividends and other distributions legally available therefor in amounts as the Atlanticus Board of Directors may determine from time to time, subject to preferential dividend rights of any outstanding preferred stock, including the Series A Convertible Preferred Stock. All shares of Atlanticus common stock are entitled to participate ratably with respect to dividends or other distributions.

Preemptive Rights. Holders of Atlanticus common stock do not have any preemptive, subscription, redemption or conversion rights and are not entitled to the benefit of any sinking fund.

Liquidation. In the event of liquidation, dissolution or winding up of Atlanticus, the holders of Atlanticus common stock are entitled to receive, after payment or provision for payment of all its debts and liabilities, all of the assets of Atlanticus available for distribution, subject to the prior rights of preferred stock, including the Series A Convertible Preferred Stock, outstanding.

Shareholder Action by Written Consent. Any action which may be taken at a meeting of the shareholders may be taken without a meeting if a written approval and consent, setting forth the action authorized, shall be signed by persons who would be entitled to vote at a meeting shares having voting power to cast not less than the minimum number of votes that would be necessary to authorize or take the action at a meeting at which all shareholders entitled to vote were present and voted.

Transfer Agent and Registrar. The transfer agent and registrar for Atlanticus common stock is American Stock Transfer & Trust Co.

Preferred Stock

Series A Convertible Preferred Stock

On December 27, 2019, Atlanticus issued 400,000 shares of Series A Convertible Preferred Stock (the “Series A Convertible Preferred Stock”). The Articles of Amendment Establishing Cumulative Convertible Preferred Stock, Series A (the “Articles of Amendment”) establishes the rights, preferences, privileges, qualifications, restrictions and limitations relating to the Series A Convertible Preferred Stock. Below is a summary of the terms of the Series A Convertible Preferred Stock that are most relevant to Atlanticus’ common stock.

Liquidation Preference. The Series A Convertible Preferred Stock ranks (i) senior in liquidation to all existing and future classes of common stock and (ii) pari passu or senior to all existing and future classes of preferred stock. The per share liquidation preference of the Series A Convertible Preferred Stock is $100.

Dividends. The holders of the Series A Convertible Preferred Stock are entitled to receive, out of funds legally available therefor, dividends at the rate of 6.0% per year, cumulative, non-compounding, on the liquidation preference of $100 per share. The dividends on the Series A Convertible Preferred Stock are payable in preference and priority to any payment of any cash dividend on common stock.

Redemption. The Series A Convertible Preferred Stock is perpetual and has no maturity date. Atlanticus may, at its option, redeem the shares of Series A Convertible Preferred Stock on or after January 1, 2025 at a redemption price equal to $100 per share, plus any accumulated and unpaid dividends. At the request of a majority of the holders of the Series A Convertible Preferred Stock, Atlanticus will offer to redeem all of the Series A Convertible Preferred Stock at a redemption price equal to $100 per share, plus any accumulated and unpaid dividends, at the option of the holders thereof, on or after January 1, 2024.

Conversion. Upon the election by the holders of a majority of the Series A Convertible Preferred Stock, each share of the Series A Convertible Preferred Stock is convertible into the number of shares of Atlanticus common stock as is determined by dividing (i) the sum of (a) $100 and (b) any accumulated and unpaid dividends on such share by (ii) an initial conversion price equal to $10 per share, subject to certain adjustment in certain circumstances to prevent dilution.

Anti-Dilution Rights. If Atlanticus issues shares of common stock or securities convertible or exercisable for common stock, subject to certain exceptions, for consideration per share less than the applicable conversion price of the Series A Convertible Preferred Stock in effect immediately prior to such issuance, the conversion price of the Series A Convertible Preferred Stock will be reduced pursuant to a weighted average formula provided in the Articles of Amendment.

Voting Rights. Except for approval of adverse changes to the terms of the Series A Convertible Preferred Stock, approval of sale of all or substantially all of Atlanticus’ assets, and triggering redemption or conversion of the Series A Convertible Preferred Stock, the holders of the Series A Convertible Preferred Stock have no voting rights except as required by law.

The terms of the Series A Convertible Preferred Stock are more fully described in the Articles of Amendment. A copy of the Articles of Amendment is included as Exhibit 3.1 to Atlanticus’ Current Report on Form 8-K filed with the SEC on December 30, 2019.

Additional Authorized Preferred Stock

Atlanticus is authorized to issue preferred stock in the future. Atlanticus’ Board of Directors is authorized to determine the following terms for each additional series of preferred stock:

● the offering price at which Atlanticus will issue the preferred stock;

● whether that series of preferred stock will be entitled to receive dividends;

● the dividend rate (or method for determining the rate);

● whether dividends on that series of preferred stock will be cumulative, noncumulative or partially cumulative;

● the liquidation preference of that series of preferred stock, if any;

● the conversion or exchange provisions applicable to that series of preferred stock, if any;

● the redemption or sinking fund provisions applicable to that series of preferred stock, if any;

● the voting rights of that series of preferred stock, if any; and

● the terms of any other preferences, rights, qualifications, limitations or restrictions, if any, applicable to that series of preferred stock.

Purposes and Effects of Certain Provisions of Atlanticus’ Articles of Incorporation and Bylaws

Atlanticus’ Articles of Incorporation and Bylaws contain certain provisions that could make the acquisition of Atlanticus more difficult by means of a tender or exchange offer, a proxy contest or otherwise.

Special Meetings. Special meetings of shareholders may be called by shareholders only upon the written demand of holders of at least 25% of Atlanticus’ outstanding capital stock.

Preferred Stock. As discussed above, Atlanticus’ Board of Directors is authorized pursuant to Atlanticus’ Articles of Incorporation to establish one or more additional series of preferred stock without shareholder approval. The ability of Atlanticus’ Board of Directors to issue one or more series of preferred stock provides Atlanticus with flexibility in structuring possible future financings and acquisitions and in meeting other corporate needs which might arise. The authorized shares of preferred stock, as well as shares of common stock, will be available for issuance without further action by Atlanticus’ shareholders, unless that action is required by applicable law or the rules of any stock exchange on which Atlanticus’ securities may be listed or traded.

GBCC Anti-Takeover Provisions

The GBCC restricts certain business combinations with “interested shareholders” and contains fair price requirements applicable to certain mergers with “interested shareholders” that are summarized below. The restrictions imposed by these statutes do not apply to a corporation unless it elects to be governed by these statutes. Atlanticus has not elected to be covered by such restrictions but may do so in the future.

The Georgia business combination statute (the “Business Combination Statute”) regulates business combinations such as mergers, consolidations, share exchanges and asset purchases where the acquired business has at least 100 shareholders residing in Georgia and has its principal office in Georgia, and where the acquiror became an “interested shareholder” of the corporation, unless either (i) the transaction resulting in such acquiror becoming an “interested shareholder” or the business combination received the approval of the corporation’s board of directors prior to the date on which the acquiror became an “interested shareholder,” or (ii) the acquiror became the owner of at least 90% of the outstanding voting stock of the corporation (excluding shares held by directors, officers and affiliates of the corporation and shares held by certain other persons) in the same transaction in which the acquiror became an “interested shareholder.” For purposes of the Business Combination Statute, an “interested shareholder” generally is any person who directly or indirectly, alone or in concert with others, beneficially owns or controls 10% or more of the voting power of the outstanding voting shares of the corporation. The Business Combination Statute prohibits business combinations with an unapproved “interested shareholder” for a period of five years after the date on which such person became an “interested shareholder.” The Business Combination Statute is broad in its scope and is designed to inhibit unfriendly acquisitions.

The Georgia fair price statute (the “Fair Price Statute”) prohibits certain business combinations between a Georgia business corporation and an “interested shareholder” unless (i) certain “fair price” criteria are satisfied, (ii) the business combination is unanimously approved by the continuing directors, (iii) the business combination is recommended by at least two-thirds of the continuing directors and approved by a majority of the votes entitled to be cast by holders of voting shares, other than voting shares beneficially owned by the “interested shareholder,” or (iv) the “interested shareholder” has been such for at least three years and has not increased this ownership position in such three-year period by more than 1% in any twelve-month period. The Fair Price Statute is designed to inhibit unfriendly acquisitions that do not satisfy the specified “fair price” requirements.

EX-10.11A

CERTAIN INFORMATION, IDENTIFIED BY [*****], HAS BEEN EXCLUDED FROM THE EXHIBIT BECAUSE IT IS BOTH NOT MATERIAL AND WOULD LIKELY CAUSE COMPETITIVE HARM TO THE COMPANY IF PUBLICLY DISCLOSED.

Exhibit 10.11(a)

EXECUTION COPY

AMENDED AND RESTATED

SERIES 2017-ONE INDENTURE SUPPLEMENT

Dated as of June 11, 2018

to

MASTER INDENTURE

Dated as of February 8, 2017

Series 2017-One Asset Backed Notes

Class A Asset Backed Variable Funding Notes

Class B Asset Backed Variable Funding Notes

PERIMETER MASTER NOTE BUSINESS TRUST

SERIES 2017-One

among

PERIMETER MASTER NOTE BUSINESS TRUST

Issuer

ACCESS FINANCING, LLC

Servicer

and

U.S. BANK NATIONAL ASSOCIATION

Indenture Trustee

on behalf of the Series 2017-One Noteholders

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 A-5 Form of Class A-5 Note

Exhibit B Form of Class B Note

Exhibit C Form of Monthly Servicer Statement

Exhibit D Form of Class B Increase Notice

Exhibit E Form of Investment Letter

Schedule 1 Fee Calculations

AMENDED AND RESTATED SERIES 2017-ONE INDENTURE SUPPLEMENT, dated as of June 11, 2018 (this “Supplement”), among PERIMETER MASTER NOTE BUSINESS TRUST, a business trust organized and existing under the laws of the State of Nevada (the “Issuer”), ACCESS FINANCING, LLC, a Georgia limited liability company, as servicer (together with its successors and permitted assigns, the “Servicer”), and U.S. BANK NATIONAL ASSOCIATION, a national banking association, not in its individual capacity, but solely as Indenture Trustee (together with its successors in the trusts thereunder as provided in the Indenture, the “Indenture Trustee”) under the Master Indenture dated as of February 8, 2017 (the “Indenture”) among the Issuer, the Servicer and the Indenture Trustee.

Section 2.10 of the Indenture provides that the Issuer may pursuant to one or more Indenture Supplements direct the Indenture Trustee, on behalf of the Issuer, to issue one or more Series of Notes and to set forth the Principal Terms of such Series. The Issuer, the Servicer and the Indenture Trustee have previously created and issued a Series of Notes pursuant to the Series 2017-One Indenture Supplement to the Master Indenture, dated as of February 8, 2017 (the "Original Supplement").

The Issuer, the Servicer and the Indenture Trustee desire to amend and restate the Original Supplement in accordance with the provisions of Section 9.02 of the Master Indenture to read in its entirety as set forth below.

NOW THEREFORE, pursuant to Section 9.02 of the Master Indenture, the parties hereby agree that effective on and as of the Amendment Date (as defined below), the Original Supplement is hereby amended to read in its entirety as follows:

ARTICLE I

Creation of the Series 2017-One Notes.

Section 1.01.     Designation.

(a)     On the Closing Date the Indenture and the Original Supplement created and designated a Series of Notes issued and known as “Perimeter Master Note Business Trust, Series 2017-One Notes” or the “Series 2017-One Notes.” The Series 2017-One Notes were issued in two Classes, the first of which is known as the “Class A Series 2017-One Asset Backed Variable Funding Notes” and the second of which is known as the “Class B Series 2017-One Asset Backed Variable Funding Notes.” The Class A Notes were divided into five tranches consisting of Class A-1, Class A-2, Class A-3, Class A-4 and Class A-5.

(b)     The Series 2017-One Notes are subordinated in all respects, including any payments of principal and interest, to the Senior Facility; provided, however, the rights of the Noteholders under the Senior Facility against the Series 2017-One Noteholders or to the Collections or Receivables or other property allocated to Series 2017-One are limited to only those rights set forth herein, in any other Transaction Documents, in the Intercreditor Agreement or in the Series 2018-One Indenture Supplement. The Series 2017-One Notes are due and payable on the Stated Maturity Date.

(c)     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, the terms and provisions of this Supplement shall be controlling.

(d)     The Indenture Trustee, the Paying Agent, the Note Registrar, the Transferor, the Issuer and any agent of any of them shall prior to due presentation of a Registered Note for registration of transfer, treat the Person in whose name any Registered Note is registered as the owner of such Registered Note for the purpose of receiving distributions pursuant to the terms of the applicable Indenture Supplement and for all other purposes whatsoever and, 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.

ARTICLE II

Definitions

Section 2.01.     Definitions.

(a)     All capitalized terms used but not otherwise defined herein are defined in the Indenture, the Transfer and Servicing Agreement or the Trust Agreement (including by way of reference to other documents). Each capitalized term defined herein shall relate only to the Series 2017-One Notes and no other Series of Notes issued by the Issuer. Whenever used in this 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.

“Administrative Redemption” shall mean a redemption of the Series 2017-One Notes as specified in subsection 7.01(a).

“Agent” shall have the meaning specified in the Class A Purchase Agreement.

“Allocation Amount” shall mean, as of any date, an amount equal to (a) the sum of all Note Principal Balance Increases prior to such date, minus (b) the Pre-Funding Amount, minus (c) the total amount of principal payments made on the Series 2017-One Notes prior to such date minus (d) the excess, if any, of (i) the total amount of Reduction Amounts for all Distribution Dates prior to such date and Reallocated Principal Collections that under subsections 4.07(b) through (g) were used prior to such date to fund the Series 2018-One Required Amount, the Class A-1 Required Amount, the Class A-2 Required Amount, the Class A-3 Required Amount, the Class A-4 Required Amount, or the Class A-5 Required Amount over (ii) such Reduction Amounts and Reallocated Principal Collections reimbursed pursuant to subsection 4.05(a)(xi)(A) prior to such date, provided that the Allocation Amount shall not be less than zero.

2

"Amendment Date" shall mean June 11, 2018.

“Available Finance Charge Collections” shall mean an amount equal to, with respect to any Monthly Period, the product of (i) the Floating Allocation Percentage for such Monthly Period and (ii) the Series 2017-One Allocable Finance Charge Collections for such Monthly Period.

“Available Funds” shall mean, with respect to any Monthly Period, the sum of (a) Available Finance Charge Collections plus (b) Excess Finance Charge Collections, in each case for such Monthly Period plus (c) any Pre-Funding Investment Proceeds.

“Available Principal Collections” shall mean an amount equal to, with respect to any Monthly Period, (i) the product of (a) the Fixed/Floating Allocation Percentage for such Monthly Period and (b) Series 2017-One Allocable Principal Collections, minus (ii) the amounts with respect to such Monthly Period that pursuant to Section 4.07 are required to fund the Series 2018-One Required Amount, Class A-1 Required Amount, the Class A-2 Required Amount, the Class A-3 Required Amount, the Class A-4 Required Amount, or the Class A-5 Required Amount for such Monthly Period plus (iii) any other amounts which pursuant to subsection 4.05(a) are to be treated as Available Principal Collections for such Monthly Period plus (iv) any Excess Principal Collections for such Monthly Period.

“Average Principal Receivables” shall mean, for any period, the sum of the Principal Receivables for each day in such period divided by the number of days in such period.

“Backup Servicer” shall mean the entity designated by the Servicer to be a backup servicer under the Transfer and Servicing Agreement pursuant to a notice provided to the Indenture Trustee.

“Backup Servicing Fee” shall have the meaning set forth in Schedule 1.

“Capital Stock” means any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation), including, without limitation, partnership interests and membership interests, beneficial interests in a trust, and any and all warrants, rights or options to purchase or other arrangements or rights to acquire any of the foregoing.

“Capped Program Expenses” shall mean, for any Distribution Date, an amount not to exceed $50,000 per year beginning on the Closing Date and ending on each anniversary thereof, equal to the Program Expenses owed to the Owner Trustee.

“Change of Control” shall mean, at any time, any of the following: (a) the Transferor shall cease to beneficially own and control, directly, 100% on a fully diluted basis of the economic and voting interest in the Capital Stock of the Issuer, (b) Holdings shall cease to beneficially own and control, directly or indirectly, 100% on a fully diluted basis of the economic and voting interest in the Capital Stock of the Transferor, or (c) Holdings shall cease to beneficially own and control, directly or indirectly, 51% or more on a fully diluted basis of the Capital Stock of any of the Seller, the Servicer or the Issuer.

3

“Charge-Off Ratio” shall mean, with respect to any Monthly Period, the annualized percentage equivalent of a fraction (a) the numerator of which is the aggregate outstanding principal balance of all Receivables that became Defaulted Receivables during such Monthly Period net of Recoveries and (b) the denominator of which is the Average Principal Receivables for such Monthly Period.

“Class A Costs” shall mean, at any time, any amounts (other than principal payments on the Class A Notes, Class A Monthly Interest, Services Fees or any Target Proceeds Amount) due and owing at such time pursuant to the Class A Purchase Agreement.

“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, the Class A-4 Notes and the Class A-5 Notes.

“Class A Note Principal Balance” shall mean the sum of the Class A-1 Note Principal Balance, the Class A-2 Note Principal Balance, the Class A-3 Note Principal Balance, the Class A-4 Note Principal Balance and the Class A-5 Note Principal Balance.

“Class A Purchase Agreement” shall mean the Purchase Agreement dated as of February 8, 2017 by and among TSO-Fortiva Notes Holdco LP, TSO-Fortiva Certificate Holdco LP, the Transferor, the Servicer and the Issuer, as amended, restated or otherwise modified from time to time in accordance with its terms.

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

“Class A-1 Daily Interest” shall have the meaning specified in subsection 4.02(a).

“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 Principal Balance” shall mean, on any date, (a) the total amount of Class A-1 Note Principal Balance Increases made on or prior to such date, minus (b) the total amount of principal payments made on the Class A-1 Notes on or prior to such date.

“Class A-1 Note Principal Balance Increase” shall have the meaning specified in subsection 4.08(a).

“Class A-1 Note Rate” shall have the meaning specified in the Class A Purchase Agreement.

4

“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 pursuant to the Original Supplement or, with respect to any replacement Notes issued after the Amendment Date, substantially in the form of Exhibit A-1.

“Class A-1 Required Amount” shall have the meaning specified in subsection 4.04(a).

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

“Class A-2 Daily Interest” shall have the meaning specified in subsection 4.02(b).

“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 Principal Balance” shall mean, on any date, (a) the total amount of Class A-2 Note Principal Balance Increases made on or prior to such date, minus (b) the total amount of principal payments made on the Class A-2 Notes on or prior to such date.

“Class A-2 Note Principal Balance Increase” shall have the meaning specified in subsection 4.08(b).

“Class A-2 Note Rate” shall have the meaning specified in the Class A Purchase Agreement.

“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 pursuant to the Original Supplement or, with respect to any replacement Notes issued after the Amendment Date, substantially in the form of Exhibit A-2.

“Class A-2 Required Amount” shall have the meaning specified in subsection 4.04(b).

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

5

“Class A-3 Daily Interest” shall have the meaning specified in subsection 4.02(c).

“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 Principal Balance” shall mean, on any date, (a) the total amount of Class A-3 Note Principal Balance Increases made on or prior to such date, minus (b) the total amount of principal payments made on the Class A-3 Notes on or prior to such date.

“Class A-3 Note Principal Balance Increase” shall have the meaning specified in subsection 4.08(c).

“Class A-3 Note Rate” shall have the meaning specified in the Class A Purchase Agreement.

“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 pursuant to the Original Supplement or, with respect to any replacement Notes issued after the Amendment Date, substantially in the form of Exhibit A-3.

“Class A-3 Required Amount” shall have the meaning specified in subsection 4.04(c).

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

“Class A-4 Daily Interest” shall have the meaning specified in subsection 4.02(d).

“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 Principal Balance” shall mean, on any date, (a) the total amount of Class A-4 Note Principal Balance Increases made on or prior to such date, minus (b) the total amount of principal payments made on the Class A-4 Notes on or prior to such date.

“Class A-4 Note Principal Balance Increase” shall have the meaning specified in subsection 4.08(d).

6

“Class A-4 Note Rate” shall have the meaning specified in the Class A Purchase Agreement.

“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 pursuant to the Original Supplement or, with respect to any replacement Notes issued after the Amendment Date, substantially in the form of Exhibit A-4.

“Class A-4 Required Amount” shall have the meaning specified in subsection 4.04(d).

“Class A-5 Additional Interest” shall have the meaning specified in subsection 4.02(e).

“Class A-5 Daily Interest” shall have the meaning specified in subsection 4.02(e).

“Class A–5 Interest Shortfall” shall have the meaning specified in subsection 4.02(e).

“Class A-5 Monthly Interest” shall have the meaning specified in subsection 4.02(e).

“Class A-5 Note Principal Balance” shall mean, on any date, (a) the total amount of Class A-5 Note Principal Balance Increases made on or prior to such date, minus (b) the total amount of principal payments made on the Class A-5 Notes on or prior to such date.

“Class A-5 Note Principal Balance Increase” shall have the meaning specified in subsection 4.08(e).

“Class A-5 Note Rate” shall have the meaning specified in the Class A Purchase Agreement.

“Class A-5 Noteholder” shall mean the Person in whose name a Class A-5 Note is registered in the Note Register.

“Class A-5 Notes” shall mean any one of the Class A-5 Notes executed by the Issuer and authenticated by or on behalf of the Indenture Trustee pursuant to the Original Supplement or, with respect to any replacement Notes issued after the Amendment Date, substantially in the form of Exhibit A-5.

“Class A-5 Required Amount” shall have the meaning specified in subsection 4.04(e).

“Class A/B Subordination Percentage” shall mean [*****]%.

7

“Class B Additional Interest” shall have the meaning specified in subsection 4.02(f).

“Class B Daily Interest” shall have the meaning specified in subsection 4.02(f).

“Class B Interest Shortfall” shall have the meaning specified in subsection 4.02(f).

“Class B Monthly Interest” shall have the meaning specified in subsection 4.02(f).

“Class B Note Principal Balance” shall mean, on any date, (a) the total amount of Class B Note Principal Balance Increases made on or prior to such date, minus (b) the total amount of principal payments made on the Class B Notes on or prior to such date.

“Class B Note Principal Balance Increase” shall have the meaning specified in subsection 4.08(f).

“Class B Note Purchase Agreement” shall mean the Class B Note Purchase Agreement dated as of February 8, 2017 by and among the Class B Noteholder, the Transferor, the Servicer and the Issuer, as amended, restated or otherwise modified from time to time in accordance with its terms.

“Class B Note Rate” shall have the meaning specified in the Class B Note Purchase Agreement, but in any event shall not be greater than [*****]% per annum.

“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 Notes executed by the Issuer and authenticated by or on behalf of the Indenture Trustee pursuant to the Original Supplement or, with respect to any replacement Notes issued after the Amendment Date, substantially in the form of Exhibit B.

“Class B Subordination Percentage” shall mean [*****]%.

“Closing Date” shall mean February 8, 2017.

“Collection Release Conditions” shall mean, on any day, that each of the following is true before and after giving effect to a release of Collections to the Issuer under Section 4.01:

(a) no Event of Default or Early Redemption Event has occurred and is continuing;

(b) the amount in the Collection Account is at least equal to the amounts required to be paid to the Noteholders pursuant to this Supplement and the other Transaction Documents on the next Distribution Date;

8

(c) the aggregate unpaid principal balance of all Series of Notes issued under the Indenture or any Indenture Supplement shall not exceed the sum of the Net Eligible Receivables Balance plus the Pre-Funding Amount as of such date; provided, however, for purposes of this calculation, clause (b) of the definition of Net Eligible Receivables Balance shall be determined as of the last day of the immediately preceding Monthly Period;

(d) the Transferor Amount on such day is greater than the Series Required Transferor Amount (after giving effect to all Principal Receivables transferred to the Issuer on such day); and

(e) the Collection Release Conditions (as defined in the Series 2018-One Indenture Supplement) have been satisfied.

“Commitment Termination Date” shall mean the earliest to occur of (i) the Stated Maturity Date, (ii) the date specified by the Agent in a written notice to the Issuer at any time (which notice may be issued by the Agent in its sole discretion) after the issuance of a Senior Facility during which the Class A Note Principal Balance is 5% or less of the sum of the Net Eligible Receivables Balance plus the Pre-Funding Amount and (iii) the date on which an Early Redemption Event has occurred.

“Contingent Obligations” shall mean, as to any Person, any obligation of such Person guaranteeing any Indebtedness, leases, dividends or other obligations (“primary obligations”) of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, including, without limitation, any obligation of such Person, (a) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (b) to advance or supply funds (i) for the purchase or payment of any such primary obligation or (ii) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (c) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation, or (d) otherwise to assure or to hold harmless the owner of such primary obligation against loss in respect thereof; provided, however, that the term “Contingent Obligation” shall not include endorsements of instruments for deposit or collection in the ordinary course of business. The amount of any Contingent Obligation shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation in respect of which such Contingent Obligation is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person is required to perform thereunder) as determined by such Person in good faith.

“Delinquency Ratio” shall mean, with respect to any Monthly Period, a ratio, expressed as a percentage, equal to a fraction (a) the numerator of which is the aggregate outstanding principal balance of all Receivables that are Delinquent Receivables as of the end of such Monthly Period and (b) the denominator of which is the aggregate outstanding principal balance of all Receivables as of the end of such Monthly Period.

9

“Delinquent Receivables” shall mean, with respect to any Monthly Period, all Principal Receivables as to which any payment or part thereof remains unpaid for 90 days or more from the original due date therefor and are not Defaulted Receivables

“Determination Date” shall mean the third Business Day preceding each Distribution Date.

“Distribution Date” shall mean the fifteenth day of each calendar month, or if such fifteenth day is not a Business Day, the next succeeding Business Day; provided, that the first Distribution Date for Series 2017-One shall be the Distribution Date occurring in the Monthly Period following the Monthly Period in which the Initial Funding Date occurs.

“Early Redemption Event” shall mean any Early Redemption Event specified in Section 5.01 of the Indenture and any Early Redemption Event specified in Section 6.01 hereof.

“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 with respect to Series 2017-One is deemed to have occurred, and ending on the first to occur of (a) the payment in full of the Note Principal Balance or (b) the Stated Maturity Date.

“Excess Collections” shall have the meaning set forth in subsection 4.05(a)(xvi).

“Excess Concentration Amounts” shall have the meaning set forth in the Class A Purchase Agreement.

“Excess Finance Charge Collections” shall mean, with respect to each Monthly Period, the Series 2018-One Excess Collections and the aggregate amount for all other outstanding Series of Collections of Finance Charge Receivables which the related Indenture Supplements specify are to be distributed to the Transferor after all other Collections of Finance Charge Receivables are applied and distributed in connection with the payment of servicing fees, marketing fees and all non-principal amounts owed to the Noteholders of such Series.

“Excess Principal Collections” shall mean, with respect to each Monthly Period, all Collections of Principal Receivables allocated to the Senior Facility remaining after such Collections of Principal Receivables are applied and distributed in accordance with the Indenture Supplement for the Series related to the Senior Facility.

“Excess Spread Percentage” shall mean, with respect to any Monthly Period, the annualized percentage equivalent of a fraction, (a) the numerator of which is equal to Collections of Finance Charge Receivables minus the Defaulted Amount, in each case for such Monthly Period and (b) the denominator of which is the Average Principal Receivables for such Monthly Period.

10

“Fixed/Floating Allocation Percentage” shall mean, with respect to any day during a Monthly Period, the percentage equivalent (which percentage shall never exceed 100%) of a fraction, the numerator of which is (a) during the Revolving Period, the Series Adjusted Allocation Amount for Series 2017-One plus the Series Adjusted Subordinated Transferor Amount in each case as of the last day of the immediately preceding Monthly Period (or, in the case of the first Monthly Period, the Note Principal Balance as of the Initial Funding Date immediately after giving effect to the initial Note Principal Balance Increase on such date) and (b) during the Redemption Period or Limited Redemption Period, the Series Adjusted Allocation Amount for Series 2017-One plus the Series Adjusted Subordinated Transferor Amount in each case as of the close of business on the date on which the Revolving Period shall have terminated or been suspended, as the case may be, and the denominator of which is the product of (x) the greater of (A) the sum of (i) the total amount of Principal Receivables as of the last day of the immediately preceding Monthly Period (or with respect to the first Monthly Period, the total amount of Principal Receivables as of the Initial Funding Date), (ii) the Special Funding Amount as of such last day (or with respect to the first Monthly Period, the Initial Funding Date), and (iii) the amount of Collections of Principal Receivables on deposit in the Collection Account as of such last day (or with respect to the first Monthly Period, as of the Initial Funding Date) and (B) the sum of the numerators used to determine the series allocation percentages with respect to Collections of Principal Receivables for all Series of Notes Outstanding, and (y) the Series 2017-One Allocation Percentage as of the last day of the immediately preceding Monthly Period; provided, however, that with respect to any Monthly Period in which one or more Reset Dates occurs, the Fixed/Floating Allocation Percentage shall be recalculated as provided above but as of such Reset Date for the period from and including such Reset Date to but excluding the next such Reset Date, if any, or if no other Reset Date occurs during such Monthly Period, to and including the last day of such Monthly Period, as applicable; provided further, that the numerator in clause (b) above shall continue to be the Series Adjusted Allocation Amount for Series 2017-One plus the Series Adjusted Subordinated Transferor Amount in each case as of the close of business on the date on which the Revolving Period shall have terminated unless the Series 2017-One Notes are paid in full on such date; provided further, however, that if Series 2017-One is paired with a Paired Series as provided in Section 9.07 and if an Early Redemption Event (as such term is defined in the Indenture) occurs with respect to the Paired Series, the Issuer may, by written notice to the Indenture Trustee and the Servicer, designate that the numerator in clause (b) above shall be the Series Adjusted Allocation Amount for Series 2017-One plus the Series Adjusted Subordinated Transferor Amount as of the close of business of the last day of the revolving period for such Paired Series.

“Floating Allocation Percentage” shall mean, with respect to any day during a Monthly Period, the percentage equivalent (which percentage shall never exceed 100%) of a fraction, the numerator of which is the Allocation Amount plus, with respect to the allocation of Collections of Finance Charge Receivables only, the Series Adjusted Subordinated Transferor Amount as of the last day of the preceding Monthly Period (or in the case of the first Monthly Period, the Note Principal Balance as of the Initial Funding Date immediately after giving effect to the initial Note Principal Balance Increase on such date) and the denominator of which is the product of (x) the Series 2017-One Allocation Percentage with respect to such Monthly Period and (y) the greater of (A) the sum of (i) the total amount of Principal Receivables as of such day (or with respect to the first Monthly Period, the total amount of Principal Receivables on the Initial Funding Date), (ii) the Special Funding Amount as of such last day (or with respect to the first Monthly Period, the Initial Funding Date) and (iii) the amount of Collections of Principal Receivables on deposit in the Collection Account as of such last day (or with respect to the first Monthly Period, as of the Initial Funding Date) and (B) the sum of the numerators used to determine the series allocation percentages with respect to Collections of Finance Charge Receivables for all Series of Notes Outstanding; provided, however, that with respect to any Monthly Period in which one or more Reset Dates occurs, the Floating Allocation Percentage shall be recalculated as provided above but as of such Reset Date, for the period from and after the date on which any such Reset Date occurs to but excluding the date, if any, that another such Reset Date occurs or, if no other Reset Date occurs during such Monthly Period, to and including the last day of such Monthly Period, as applicable.

11

“GAAP” means generally accepted accounting principles in the United States set forth in the statements and pronouncements of the Financial Accounting Standards Board, that are applicable to the circumstances as of the date of determination, consistently applied.

“Holdings” shall have the meaning specified in the Class A Purchase Agreement.

“Indebtedness” of any Person shall mean, without duplication, (a) all items which, in accordance with GAAP, would be included in determining total liabilities as shown on the liability side of the balance sheet of such Person as of the date as of which Indebtedness is to be determined, including any lease which, in accordance with GAAP would constitute Indebtedness, (b) all indebtedness secured by any mortgage, pledge, security, Lien or conditional sale or other title retention agreement to which any property or asset owned or held by such Person is subject, whether or not the indebtedness secured thereby shall have been assumed, (c) all indebtedness of others which such Person has directly or indirectly guaranteed, endorsed (otherwise than for collection or deposit in the ordinary course of business), discounted or sold with recourse or agreed (contingently or otherwise) to purchase or repurchase or otherwise acquire, or in respect of which such Person has agreed to supply or advance funds (whether by way of loan, equity interests, equity or other ownership interest purchase, capital contribution or otherwise) or otherwise to become directly or indirectly liable and (d) any Contingent Obligations.

“Initial Funding Date” shall mean the date of the initial Note Principal Balance Increase of any Class A Note.

[*****]

“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 Initial Funding Date) to but excluding such Distribution Date.

“Investment Letter” shall have the meaning specified in subsection 9.04(c).

“Limited Redemption Amount” shall mean for any Distribution Date relating to a Limited Redemption Period, the excess, if any, of (i) the initial amount specified in the notice delivered by the Issuer in accordance with Section 4.03(a) over (ii) the aggregate amount of principal paid on the Class A Notes on all prior Distribution Dates, if any, in such Limited Redemption Period.

“Limited Redemption Period” shall mean, unless an Early Redemption Period shall have commenced prior thereto, a period beginning on the first day of the Monthly Period specified in the notice delivered by the Issuer in accordance with subsection 4.03(a), and ending upon the first to occur of (i) the commencement of an Early Redemption Period and (ii) the last day of the Monthly Period related to the Distribution Date on which the aggregate amount distributed pursuant to subsection 4.05(d)(i) equals the Limited Redemption Amount for such Distribution Date.

12

“Marketing Fee” shall have the meaning set forth in Schedule 1 attached hereto and incorporated herein.

“Material Adverse Effect” shall mean, with respect to any Person, any development, event, condition, obligation, liability or circumstance which, or set of events, conditions, obligations, liabilities or circumstances or any change(s) which:

(a)     has had or reasonably could be expected to have a material adverse effect upon or change in (i) the legality, validity or enforceability of any Transaction Document, (ii) the perfection or priority of any Lien granted to the Indenture Trustee under any of the Transaction Documents, (iii) the value, validity, enforceability or collectability of the Receivables or the Trust Estate taken as a whole or a material portion thereof or (iv) the rights of any Class A Noteholder or the Agent;

(b)     has been or reasonably could be expected to be material and adverse to the value of the Trust Estate taken as a whole or a material portion thereof or to the business, operations, properties, assets, liabilities or condition (financial or otherwise) of such Person; or

(c)     has materially impaired or reasonably could be expected to materially impair the ability of such Person to pay when due or perform any of the Secured Obligations, or to consummate the transactions, under the Transaction Documents.

“Measurement Date” shall mean, for each Monthly Period, the third Business Day preceding the Distribution Date for such Monthly Period.

“Monthly Backup Servicing Fee” shall have the meaning specified in subsection 3.01(c).

“Monthly Interest” shall mean, with respect to any Distribution Date, the sum of the Class A-1 Monthly Interest, the Class A-2 Monthly Interest, the Class A-3 Monthly Interest, the Class A-4 Monthly Interest, the Class A-5 Monthly Interest and the Class B Monthly Interest for such Distribution Date.

“Monthly Marketing Fee” shall have the meaning specified in subsection 3.01(b).

“Monthly Servicer Statement” shall have the meaning specified in subsection 5.02(a)(i).

“Monthly Servicing Fee” shall have the meaning specified in subsection 3.01(a).

“Net Eligible Receivables Balance” shall mean, as of any date of determination, (a) an amount equal to the aggregate amount of Principal Receivables that constitute Eligible Receivables as of such date, minus (b) the aggregate amount of any Excess Concentration Amounts as of such date, plus (c) the aggregate amount of funds on deposit in the Special Funding Account as of such date, plus (d) the aggregate amount of Collections of Principal Receivables in the Collection Account as of such date.

13

“Net Eligible Receivables Balance Deficiency” shall mean the amount, if any, by which the Class A Principal Balance minus Pre-Funding Amount as of such date exceeds the amount equal to the product of (i) the Net Eligible Receivables Balance times (ii) the Series 2017-One Allocation Percentage times (iii) the Fixed/Floating Allocation Percentage.

“Note Assignment” shall have the meaning specified in subsection 9.04(e).

“Note Principal Balance” shall mean, for any date of determination, the sum of the Class A Note Principal Balance and the Class B Note Principal Balance.

“Note Principal Balance Increase” shall mean a Class A-1 Note Principal Balance Increase, a Class A-2 Note Principal Balance Increase, a Class A-3 Note Principal Balance Increase, a Class A-4 Note Principal Balance Increase, a Class A-5 Note Principal Balance Increase, or a Class B Note Principal Balance Increase, as applicable.

“Optional Redemption Amount” shall have the meaning specified in subsection 4.03(b).

“Optional Redemption Date” shall have the meaning specified in subsection 4.03(b).

“Optional Redemption Notice” shall have the meaning specified in subsection 4.03(b).

“Paired Series” shall have the meaning specified in Section 9.07.

“Participant” shall have the meaning specified in subsection 9.04(f).

“Payment Date” shall mean, with respect to Series 2017-One, a Distribution Date.

“Permit” shall mean collectively all licenses, leases, powers, permits, franchises, certificates, authorizations and approvals.

“Pre-Funding Account” shall have the meaning specified in subsection 4.10(a).

“Pre-Funding Amount” shall mean, for any date of determination, the amount on deposit in the Pre-Funding Account.

“Pre-Funding Investment Proceeds” shall have the meaning set forth in subsection 4.10(b).

“Program Expenses” shall mean an amount equal to one-twelfth the product of (i) the Floating Allocation Percentage, (ii) the Series 2017-One Allocation Percentage and (iii) indemnification amounts owed to the Indenture Trustee and the Owner Trustee pursuant to the Transaction Documents.

14

“Program Fees” shall mean, with respect to each Distribution Date occurring in March commencing with the March 2017 Distribution Date, an amount equal to the product of (i) the Floating Allocation Percentage, (ii) the Series 2017-One Allocation Percentage and (iii) the fees of the Indenture Trustee and the Owner Trustee as specified in each of the related fee agreements with each such party.

“Rating Agency Condition” shall mean, with respect to Series 2017-One, the consent of the Agent.

“Reallocated Principal Collections” shall mean, with respect to any Distribution Date, an amount equal to the lesser of (I) the product of (a) the sum of (i) Allocable Principal Collections (as defined in the Series 2018–One Indenture Supplement) plus (ii) the product of (A) the Series 2017-One Allocable Principal Collections deposited in the Collection Account for the related Monthly Period times (B) the excess of the Fixed/Floating Allocation Percentage over the Required Subordinate Transferor Percentage for the related Monthly Period, (b) the Fixed/Floating Allocation Percentage for the related Monthly Period, and (c) the Class A/B Subordination Percentage, and (II) the greater of (x) the Note Principal Balance (prior to any distributions on such Distribution Date), minus the excess, if any, of the total amount of Reduction Amounts for all prior Distribution Dates and the Reallocated Principal Collections that under subsections 4.07(b) through (g) were used to fund the Series 2018-One Required Amount, Class A-1 Required Amount, the Class A-2 Required Amount, the Class A-3 Required Amount, the Class A-4 Required Amount, or the Class A-5 Required Amount on all prior Distribution Dates over such Reduction Amounts and Reallocated Principal Collections reimbursed pursuant to subsection 4.05(a)(xi)(A) prior to such date and (y) zero.

“Reallocated Class B Principal Collections” shall mean, with respect to any Distribution Date, an amount equal to the lesser of (I) the product of (a) the sum of (i) Allocable Principal Collections (as defined in the Series 2018–One Indenture Supplement) plus (ii) the product of (A) the Series 2017-One Allocable Principal Collections deposited in the Collection Account for the related Monthly Period times (B) the excess of the Fixed/Floating Allocation Percentage over the Required Subordinate Transferor Percentage for the related Monthly Period, (b) the Fixed/Floating Allocation Percentage for the related Monthly Period, and (c) the Class B Subordination Percentage, and (II) the greater of (x) the Class B Note Principal Balance (prior to any distributions on such Distribution Date), minus the excess, if any, of the total amount of Reduction Amounts for all prior Distribution Dates and the Reallocated Principal Collections that under subsections 4.07(b) through (g) were used to fund the Series 2018-One Required Amount, Class A-1 Required Amount, the Class A-2 Required Amount, the Class A-3 Required Amount, the Class A-4 Required Amount, or the Class A-5 Required Amount on all prior Distribution Dates over such Reduction Amounts and Reallocated Principal Collections reimbursed pursuant to subsection 4.05(a)(xi)(A) prior to such date and (y) zero.

“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 (a) the Class A Note Principal Balance plus (b) Series 2017-One Monthly Interest for such Distribution Date plus (c) any accrued but unpaid Services Fees and Target Proceeds Amount plus (d) any Series 2017-One Monthly Fees for such Distribution Date plus (e) the Class B Note Principal Balance and any interest accrued thereon plus (f) any other amounts owed to the Series 2017-One Noteholders and any other Class A Costs owed under the Transaction Documents related to Series 2017-One.

15

“Redemption Date” shall mean, with respect to Series 2017-One, the Optional Redemption Date.

“Redemption Period” shall mean, with respect to Series 2017-One, an Early Redemption Period.

“Reduction Amount” shall have the meaning specified in Section 4.06.

“Regulatory Event” shall mean the occurrence of a change in law (whether by statute, rule or court order) that would reasonably be expected to materially and adversely impact the enforceability of the Receivables taken as a whole or any material portion thereof or any Transaction Party’s ability to sell, purchase, own or service the Receivables.

“Required Senior Note Subordination Amount” shall mean an amount equal to [*****]% of the sum of the (a) Note Principal Balance, (b) the Series Required Transferor Amount and (c) the Series 2018-One Principal Balance.

“Required Senior Subordination Amount” shall mean an amount equal to [*****]% of the sum of the (a) Note Principal Balance, (b) the Series Required Transferor Amount and (c) the Series 2018-One Principal Balance.

“Required Subordinate Transferor Percentage” shall mean, with respect to any day during a Monthly Period, the percentage equivalent (which percentage shall never exceed 100%) of a fraction, the numerator of which is the Series Adjusted Subordinated Transferor Amount as of the last day of the preceding Monthly Period (or in the case of the first Monthly Period, the Series Adjusted Subordinated Transferor Amount as of the Initial Funding Date) and the denominator of which is the product of (x) the Series 2017-One Allocation Percentage with respect to such Monthly Period and (y) the greater of (A) the sum of (i) the total amount of Principal Receivables as of such day (or with respect to the first Monthly Period, the total amount of Principal Receivables on the Initial Funding Date), (ii) the Special Funding Amount as of such last day (or with respect to the first Monthly Period, the Initial Funding Date) and (iii) the amount of Collections of Principal Receivables on deposit in the Collection Account as of such last day (or with respect to the first Monthly Period, as of the Initial Funding Date) and (B) (i) with respect to Collections of Finance Charge Receivables, the sum of the numerators used to determine the series allocation percentages with respect to Collections of Finance Charge Receivables for all Series of Notes Outstanding and (ii) with respect to Collections of Principal Receivables, the sum of the numerators used to determine the series allocation percentages with respect to Collections of Principal Receivables for all Series of Notes Outstanding; provided, however, that with respect to any Monthly Period in which one or more Reset Dates occurs, the Required Subordinate Transferor Percentage shall be recalculated as provided above but as of such Reset Date, for the period from and after the date on which any such Reset Date occurs to but excluding the date, if any, that another such Reset Date occurs or, if no other Reset Date occurs during such Monthly Period, to and including the last day of such Monthly Period, as applicable.

16

“Reset Date” shall mean each of (a) an Addition Cut-Off Date, (b) a date on which a Note Principal Balance Increase occurs, (c) the date of any increase or decrease (other than regularly scheduled redemptions or early redemptions but including any optional redemption or limited redemption in the principal balance of the Notes of any Series) in the note principal balance or allocation amount for another variable funding Series, (d) any date on which a new Series is issued, (e) an Optional Redemption Date, and (f) any date on which any funds are withdrawn from the Pre-Funding Account.

“Revolving Period” shall mean the period beginning at the close of business on the Closing Date and ending on the earlier of (a) the Commitment Termination Date and (b) the close of business on the day immediately preceding the day the Early Redemption Period commences; provided, however, that the Revolving Period shall be temporarily suspended for the duration of any Limited Redemption Period.

“Senior Facility” shall mean (i) for so long as the Series 2018-One Notes remain outstanding, Series 2018-One and (ii) otherwise, any Series of Notes which is issued by the Issuer to finance the purchase of Receivables which the Transferor has certified satisfies the requirements set forth on Exhibit D to the Class A Purchase Agreement; provided that no more than one Series of Notes which constitutes a Senior Facility may be outstanding at one time. On the Amendment Date, the Senior Facility shall be the Series 2018-One Notes.

“Senior Facility First FC Amount” shall mean, on any Distribution Date, an amount equal to the amount required pursuant to the Series 2018-One Indenture Supplement for payment of amounts pursuant to Section 4.05(a)(i)-(ii) of the Series 2018-One Indenture Supplement over the Available Finance Charge Collections (as defined in the Series 2018-One Supplement), in each case as of such Distribution Date.

“Senior Facility Principal Amount” shall mean, on any Distribution Date, an amount equal to the amount required pursuant to the Series 2018-One Indenture Supplement for payment of Class A Note Principal Balance plus the Series 2018-One Required Amounts plus the Series 2018-One Borrowing Base Deficiency over the Allocable Principal Collections (as defined in the Series 2018-One Supplement), in each case as of such Distribution Date.

“Senior Facility Second FC Amount” shall mean, on any Distribution Date, an amount equal to the amount required pursuant to the Series 2018-One Indenture Supplement for payment of amounts pursuant to Section 4.05(a)(iii)-(vii) of the Series 2018-One Indenture Supplement over the Available Finance Charge Collections (as defined in the Series 2018-One Supplement), in each case as of such Distribution Date.

“Series 2017-One” shall mean the Series of Notes the terms of which are specified in this Supplement.

“Series 2017-One Allocable Defaulted Amount” shall mean the Series Allocable Defaulted Amount with respect to Series 2017-One.

17

“Series 2017-One Allocable Finance Charge Collections” shall mean the Series Allocable Finance Charge Collections with respect to Series 2017-One.

“Series 2017-One Allocable Principal Collections” shall mean the Series Allocable Principal Collections with respect to Series 2017-One.

“Series 2017-One Allocation Percentage” shall mean the Series Allocation Percentage with respect to Series 2017-One.

“Series 2017-One Distribution Account” shall have the meaning set forth in subsection 4.09(a).

“Series 2017-One Monthly Fees” shall mean, with respect to any Distribution Date, the amounts determined pursuant to subsection 4.05(a)(i) and subsection 4.05(a)(xii)

“Series 2017-One Monthly Interest” shall mean the amounts determined pursuant to subsections 4.02(a) through (f).

“Series 2017-One Note” shall mean a Class A Note or a Class B Note.

“Series 2017-One Noteholder” shall mean a Class A Noteholder or a Class B Noteholder.

“Series 2018-One Available Funds” shall have the meaning given to “Available Funds” in the Series 2018-One Indenture Supplement.

“Series 2018-One Borrowing Base Deficiency” shall have the meaning given to the term “Borrowing Base Deficiency” in the Series 2018-One Indenture Supplement.

“Series 2018-One Excess Collections” shall have the meaning given to the term “Series 2018-One Excess Collections” in the Series 2018-One Indenture Supplement

“Series 2018-One Indenture Supplement” shall mean the Series 2018-One Indenture Supplement to the Master Indenture dated as of June 11, 2018 among the Issuer, the Servicer and the Indenture Trustee, as amended, restated or otherwise modified from time to time in accordance with its terms.

“Series 2018-One Notes” shall mean the Series of Notes the terms of which are specified in the Series 2018-One Indenture Supplement.

“Series 2018-One Principal Balance” shall have the meaning given to the term “Class A Note Principal Balance” in the Series 2018-One Indenture Supplement.

“Series 2018-One Required Amount” shall have the meaning specified in subsection 4.04(f).

“Series Adjusted Allocation Amount” shall have the meaning specified in the Transfer and Servicing Agreement.

18

“Series Adjusted Subordinated Transferor Amount” shall mean, as of any date, an amount equal to the lesser of (I) (x) the product of (i) 5.0% and (ii) an amount equal to the greater of (A) the sum of the Net Eligible Receivables Balance plus the Pre-Funding Amount and (B) the sum of the Note Principal Balance plus the Series 2018-One Principal Balance, in each case as of the last day of the prior Monthly Period minus (y) the excess, if any, of the total amount of Transferor Reduction Amounts for all prior Distribution Dates and the amounts that under subsection 4.07(a) were used to fund the Series 2018-One Required Amount, Class A-1 Required Amount, the Class A-2 Required Amount, the Class A-3 Required Amount, the Class A-4 Required Amount, or the Class A-5 Required Amount on all prior Distribution Dates over amounts reimbursed pursuant to subsection 4.05(a)(xi)(B) prior to such date and (II) the Transferor Amount as of the last day of the prior Monthly Period.

“Series Allocation Amount” shall mean, for Series 2017-One, the total amount of any Note Principal Balance Increases minus the total amount of any payments of principal paid on the Class A Notes at any time other than during an Early Redemption Period, minus the Pre-Funding Amount; provided, however, that if Series 2017-One is paired with a Paired Series as provided in Section 9.07, then the Series Allocation Amount shall mean the total amount of any Note Principal Balance Increases minus (but only for purposes of the definition of the Series Adjusted Allocation Amount and the Trust Adjusted Allocation Amount used in the definition of Series 2017-One Allocable Finance Charge Collections, Series 2017-One Allocable Defaulted Amount and Floating Allocation Percentage (but only to the extent the definition of Floating Allocation Percentage is used in the definitions of Series Finance Charge Collections and Series Default Amount)) the total amount of principal payments made on the Series 2017-One Notes; provided, further, however, that if Series 2017-One is paired with a Paired Series as provided in Section 9.07 and if an Early Redemption Event (as such term is defined in the Indenture) occurs with respect to the Paired Series, the Issuer may, by written notice to the Indenture Trustee and the Servicer, reduce the Series Allocation Amount (for all purposes of this Supplement, the Indenture and the Transfer and Servicing Agreement) to a lower amount provided that such amount is not less than the greater of (I) the total amount of all Note Principal Balance Increases minus the total amount of principal payments made on the Series 2017-Notes and (II) the Series Allocation Amount (as such term is defined in the Indenture) for such Paired Series.

“Series Allocation Percentage” shall have the meaning specified in the Transfer and Servicing Agreement.

“Series Default Amount” shall mean, with respect to any Monthly Period, an amount equal to the product of (a) the Series 2017-One Allocable Defaulted Amount for the related Monthly Period and (b) the Floating Allocation Percentage for such Monthly Period.

“Series Required Transferor Amount” shall mean, with respect to any date of determination, an amount equal to the product of (i) 5.0% and (ii) the greater of (A) the sum of the Net Eligible Receivables Balance plus the Pre-Funding Amount and (B) the sum of the Note Principal Balance plus the Series 2018-One Principal Balance, in each case as of the last day of the prior Monthly Period.

“Services Fees” shall have the meaning specified in the Class A Purchase Agreement.

19

“Servicing Fee” shall have the meaning set forth in Schedule 1.

“Special Payment Date” shall mean each Distribution Date with respect to any Redemption Period or Limited Redemption Period.

“Stapled Transfer” shall have the meaning set forth in Section 9.04(g).

“Stated Maturity Date” shall mean the date which is five years from the Closing Date.

“Target Proceeds Amount” shall have the meaning specified in the Class A Purchase Agreement.

“Tax Opinion” means, with respect to any action, an Opinion of Counsel to the effect that, for United States federal income tax purposes, (a) such action will not adversely affect the tax characterization as debt of any Series or Class of Notes Outstanding that were characterized as debt at the time of their issuance, (b) such action will not cause the Issuer to be treated as an association (or publicly traded partnership) taxable as a corporation and (c) such action will not cause or constitute an event in which gain or loss would be recognized by any Holder of any such Notes.

“Three-Month Charge-Off Ratio” shall mean, for any Monthly Period on and after the third full Monthly Period after the Initial Funding Date, the average of the Charge-Off Ratios for such Monthly Period and the two immediately preceding Monthly Periods.

“Three-Month Delinquency Ratio” shall mean, for any Monthly Period on and after the third full Monthly Period after the Initial Funding Date, the average of the Delinquency Ratios for such Monthly Period and the two immediately preceding Monthly Periods.

“Three-Month Excess Spread Percentage” shall mean, for any Monthly Period on and after the third full Monthly Period after the Initial Funding Date, the average of the Excess Spread Percentages for such Monthly Period and the two immediately preceding Monthly Periods.

“Transaction Documents” shall have the meaning set forth in the Class A Purchase Agreement.

“Transaction Party” shall mean any of the Seller, the Transferor, the Issuer and the Servicer.

“Transferor Amount” shall mean, on any date of determination, an amount equal to (a) the sum of the Net Eligible Receivables Balance plus the Pre-Funding Amount minus (b) the sum of the Note Principal Balance plus the Series 2018-One Principal Balance, in each case as of the last day of the prior Monthly Period.

“Transferor Available Principal Collections” shall mean, with respect to any Distribution Date, an amount equal to the lesser of (i) the product of (A) the sum of the Series 2017-One Allocable Principal Collections plus the Allocable Principal Collections (as defined in the Series 2018–One Indenture Supplement) deposited in the Collection Account for the related Monthly Period and (B) the Required Subordinate Transferor Percentage, and (ii) the greater of (A) the Series Adjusted Subordinated Transferor Amount and (B) zero.

20

“Transferor Percentage” shall mean 100% minus (a) the Floating Allocation Percentage, when used as of any date with respect to Defaulted Receivables or with respect to Collections of Finance Charge Receivables or (b) the Fixed/Floating Allocation Percentage, when used as of any date with respect to Collections of Principal Receivables.

“Transferor Reduction Amounts” shall have the meaning specified in Section 4.06.

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

21

ARTICLE III

Fees

Section 3.01.     Servicing Compensation; Marketing Fee.

(a)     Servicing Fee. The share of the Servicing Fee allocable to the Series 2017-One Noteholders with respect to any Distribution Date (the “Monthly Servicing Fee”) shall mean (i) so long as no other Series other than the Senior Facility is outstanding, an amount equal to (A) the product of (x) the Servicing Fee for the most recent Monthly Period preceding such Distribution Date times (y) the Floating Allocation Percentage minus (B) the portion of the Servicing Fee paid or payable pursuant to the Senior Facility for such Monthly Period, and (ii) otherwise, an amount equal to the product of (1) the Floating Allocation Percentage, (2) the Series 2017-One Allocation Percentage and (3) the Servicing Fee for the most recent Monthly Period preceding such Distribution Date. The remainder of the Servicing Fee, if any, shall be paid by the Issuer or the holders of the Transferor Certificate and the Noteholders of other Series (as provided in the Transfer and Servicing Agreement and the related Supplements) and in no event shall the Indenture Trustee or the Series 2017-One Noteholders be liable for the share of the Servicing Fee to be paid by the Issuer or the holders of the Transferor Certificate or the Noteholders of any other Series.

(b)     Marketing Fee. The share of the Marketing Fee allocable to the Series 2017-One Noteholders with respect to any Distribution Date (the “Monthly Marketing Fee”) shall mean (i) so long as no other Series other than the Senior Facility is outstanding, an amount equal to (A) the product of (x) the Marketing Fee for the most recent Monthly Period preceding such Distribution Date times (y) the Floating Allocation Percentage minus (B) the portion of the Marketing Fee paid or payable pursuant to the Senior Facility for such Monthly Period, and (ii) otherwise, an amount equal to the product of (1) the Floating Allocation Percentage, (2) the Series 2017-One Allocation Percentage and (3) the Marketing Fee for the most recent Monthly Period preceding such Distribution Date. The remainder of the Marketing Fee, if any, shall be paid by the Issuer or the holders of the Transferor Certificate and the Noteholders of other Series (as provided in the Transfer and Servicing Agreement and the related Supplements) and in no event shall the Indenture Trustee or the Series 2017-One Noteholders be liable for the share of the Marketing Fee to be paid by the Issuer or the holders of the Transferor Certificate or the Noteholders of any other Series.

(c)     Backup Servicing Fee. The share of the Backup Servicing Fee allocable to the Series 2017-One Noteholders with respect to any Distribution Date (the “Monthly Backup Servicing Fee”) shall mean (i) so long as no other Series other than the Senior Facility is outstanding, an amount equal to (A) the product of (x) the Backup Servicing Fee for the most recent Monthly Period preceding such Distribution Date times (y) the Floating Allocation Percentage minus (B) the portion of the Backup Servicing Fee paid or payable pursuant to the Senior Facility for such Monthly Period, and (ii) otherwise, an amount equal to the product of (1) the Floating Allocation Percentage, (2) the Series 2017-One Allocation Percentage and (3) the Backup Servicing Fee for the most recent Monthly Period preceding such Distribution Date. The remainder of the Backup Servicing Fee, if any, shall be paid by the Issuer or the holders of the Transferor Certificate and the Noteholders of other Series (as provided in the Transfer and Servicing Agreement and the related Supplements) and in no event shall the Indenture Trustee or the Series 2017-One Noteholders be liable for the share of the Backup Servicing Fee to be paid by the Issuer or the holders of the Transferor Certificate or the Noteholders of any other Series.

22

ARTICLE IV

Rights of Series 2017-One Noteholders and
Allocation and Application of Collections

Section 4.01.     Collections and Allocations.

(a)        Allocations. Collections of Finance Charge Receivables and Principal Receivables and Defaulted Receivables allocated to Series 2017-One pursuant to Section 4.01 of the Transfer and Servicing Agreement shall be allocated and distributed as set forth in this Article.

(b)        Allocations of Collections to the Issuer.

(i)     On each Deposit Date in any Monthly Period, an amount equal to the Transferor Percentage for the related Monthly Period of Series 2017-One Allocable Finance Charge Collections deposited in the Collection Account shall be retained in the Collection Account and paid to the Issuer on the applicable Distribution Date for application as provided in the Trust Agreement but only if the Collection Release Conditions are satisfied (after giving effect to all Principal Receivables transferred to the Issuer on such day) and otherwise shall be deposited in the Special Funding Account; and

(ii)     On each Deposit Date in any Monthly Period, an amount equal to the Transferor Percentage for the related Monthly Period of Series 2017-One Allocable Principal Collections deposited in the Collection Account shall be allocated to the Issuer and retained in the Collection Account and paid to the Issuer for application as provided in the Trust Agreement on the applicable Distribution Date for such Monthly Period but only if the Collection Release Conditions are satisfied (after giving effect to all Principal Receivables transferred to the Issuer on such day) and otherwise shall be deposited in the Special Funding Account; provided, however, in the event that a Series 2018-One Borrowing Base Deficiency or Net Eligible Receivables Balance Deficiency exists on any Business Day, the Servicer shall direct the Indenture Trustee in writing to withdraw from the Collection Account an amount equal to the lesser of (x) the sum of such Series 2018-One Borrowing Base Deficiency and Net Eligible Receivables Balance Deficiency and (y) the amount calculated prior to the proviso in this clause (ii), and distribute such amount on the following Business Day in the following order of priority: first, to the Series 2018-One Notes in reduction of any Series 2018-One Borrowing Base Deficiency; and second, the balance, if any, pro rata to the Class A Noteholders, in reduction of the Net Eligible Receivables Balance Deficiency.

23

The withdrawals to be made from the Collection Account pursuant to this subsection 4.01(b) do not apply to deposits into the Collection Account that do not represent Collections, including payment for the reassignment of the Receivables pursuant to Section 2.04(c) or Section 2.05 of the Transfer and Servicing Agreement, payment of the purchase price for the Series 2017-One Notes pursuant to Section 8.01 of the Transfer and Servicing Agreement, payment of the Redemption Amount for the Series 2017-One Notes pursuant to Section 7.01 or Section 8.01 of this Supplement and proceeds from the sale, disposition or liquidation of Receivables pursuant to Section 5.05 of the Indenture.

(c)  Allocations of Collections to the Series 2017-One Noteholders.

(i) Allocations of Finance Charge Receivables. The Servicer shall, prior to the close of business on any Deposit Date, allocate to Series 2017-One and retain in the Collection Account for application as provided herein an amount equal to the product of (A) the Floating Allocation Percentage, (B) the Series 2017-One Allocation Percentage, and (C) 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 allocate to Series 2017-One the following amounts as set forth below:

1.     Allocations During the Revolving Period. With respect to any Deposit Date during the Revolving Period, an amount equal to the product of (I) the Fixed/Floating Allocation Percentage, (II) the Series 2017-One Allocation Percentage and (III) the aggregate amount of Collections of Principal Receivables deposited in the Collection Account with respect to such Deposit Date shall be allocated to the Series 2017-One Noteholders and retained in the Collection Account and paid to the Issuer on the applicable Distribution Date for application as provided in the Trust Agreement, but only if the Collection Release Conditions are satisfied (after giving effect to all Principal Receivables transferred to the Issuer on such day) and otherwise shall be applied as provided herein.

2.     Allocations During the Limited Redemption Period. With respect to any Deposit Date during the Limited Redemption Period, an amount equal to the product of (I) the Fixed/Floating Allocation Percentage and (II) the Series 2017-One Allocation Percentage and (III) the aggregate amount of Collections of Principal Receivables deposited to the Collection Account with respect to such Deposit Date shall be allocated to the Series 2017-One Noteholders and retained in the Collection Account until applied as provided herein.

3.     Allocations During a Redemption Period. With respect to any Deposit Date during a Redemption Period, an amount equal to the product of (I) the Fixed/Floating Allocation Percentage and (II) the Series 2017-One Allocation Percentage and (III) the aggregate amount of Collections of Principal Receivables deposited to the Collection Account with respect to such Deposit Date shall be allocated to the Series 2017-One Noteholders and retained in the Collection Account until applied as provided herein.

24

(d)     Daily Deposit of Collections. Notwithstanding any provision of any Transaction Document to the contrary, including Section 4.01 of the Transfer and Servicing Agreement, the Servicer shall deposit all Collections into the Collection Account no later than the first (1st) Business Day immediately following the Date of Processing.

(e)     Credit Risk Retention Considerations. For the avoidance of doubt, the gross up of the numerator in the definitions of Fixed/Floating Allocation Percentage and Floating Allocation Percentage by the amount of the Series Adjusted Subordinated Transferor Amount is intended to collapse into one step that which would otherwise have been accomplished in two steps, as follows: First, the allocation of Collections of Finance Charge Receivables and Collections of Principal Receivables to the Transferor and, second, the reallocation and subordination of all or a portion of those Collections from the Transferor to the Series 2017-One Noteholders. For the further avoidance of doubt, this gross up of the numerator in those definitions does not affect the allocation of Defaulted Receivables to the Transferor, which remain pari passu with each Series of Notes.

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 sum of the Class A-1 Daily Interest for each day in such Interest Period. The amount of interest (the “Class A-1 Daily Interest”) allocable to the Class A-1 Notes with respect to any day falling in any Interest Period shall be an amount equal to the product of (i) the Class A-1 Note Rate for that Interest Period, (ii) a fraction the numerator of which is 1 and the denominator of which is 360 and (iii) the Class A-1 Note Principal Balance as of the close of business on such day.

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 360, 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.

25

(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 sum of the Class A-2 Daily Interest for each day in such Interest Period. The amount of interest (the “Class A-2 Daily Interest”) allocable to the Class A-2 Notes with respect to any day falling in any Interest Period shall be an amount equal to the product of (i) the Class A-2 Note Rate for that Interest Period, (ii) a fraction the numerator of which is 1 and the denominator of which is 360 and (iii) the Class A-2 Note Principal Balance as of the close of business on such day.

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 360, 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 sum of the Class A-3 Daily Interest for each day in such Interest Period. The amount of interest (the “Class A-3 Daily Interest”) allocable to the Class A-3 Notes with respect to any day falling in any Interest Period shall be an amount equal to the product of (i) the Class A-3 Note Rate for that Interest Period, (ii) a fraction the numerator of which is 1 and the denominator of which is 360 and (iii) the Class A-3 Note Principal Balance as of the close of business on such day.

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 360, 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.

26

(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 sum of the Class A-4 Daily Interest for each day in such Interest Period. The amount of interest (the “Class A-4 Daily Interest”) allocable to the Class A-4 Notes with respect to any day falling in any Interest Period shall be an amount equal to the product of (i) the Class A-4 Note Rate for that Interest Period, (ii) a fraction the numerator of which is 1 and the denominator of which is 360 and (iii) the Class A-4 Note Principal Balance as of the close of business on such day.

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 360, 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 A-5 Notes on any Distribution Date (“Class A-5 Monthly Interest”) shall be an amount equal to the sum of the Class A-5 Daily Interest for each day in such Interest Period. The amount of interest (the “Class A-5 Daily Interest”) allocable to the Class A-5 Notes with respect to any day falling in any Interest Period shall be an amount equal to the product of (i) the Class A-5 Note Rate for that Interest Period, (ii) a fraction the numerator of which is 1 and the denominator of which is 360 and (iii) the Class A-5 Note Principal Balance as of the close of business on such day.

On the Determination Date preceding each Distribution Date, the Servicer shall determine the excess, if any (the “Class A-5 Interest Shortfall”), of (x) the Class A-5 Monthly Interest for such Distribution Date over (y) the aggregate amount of funds allocated and available to pay such Class A-5 Monthly Interest on such Distribution Date. If the Class A-5 Interest Shortfall with respect to any Distribution Date is greater than zero, on each subsequent Distribution Date until such Class A-5 Interest Shortfall is fully paid, an additional amount (“Class A-5 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 360, times (B) the Class A-5 Note Rate and (ii) such Class A-5 Interest Shortfall (or the portion thereof which has not been paid on the Class A-5 Notes) shall be payable as provided herein with respect to the Class A-5 Notes. Notwithstanding anything to the contrary herein, Class A-5 Additional Interest shall be payable or distributed on the Class A-5 Notes only to the extent permitted by applicable law.

27

(f)     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 sum of the Class B Daily Interest for each day in such Interest Period. The amount of interest (the “Class B Daily Interest”) allocable to the Class B Notes with respect to any day falling in any Interest Period shall be an amount equal to the product of (i) the Class B Note Rate for that Interest Period, (ii) a fraction the numerator of which is 1 and the denominator of which is 360 and (iii) the Class B Note Principal Balance as of the close of business on such day.

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 360, 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.

Section 4.03.     Limited Redemption; Optional Redemption.

(a)     The Issuer may from time to time at its sole discretion, unless an Early Redemption Event shall have occurred prior thereto, suspend the Revolving Period and cause a Limited Redemption Period to commence for one or more Monthly Periods by delivering to the Servicer, the Indenture Trustee and the Agent written notice at least five (5) Business Days prior to the first day of the Monthly Period in which such Limited Redemption Period is scheduled to commence, which notice shall specify the initial Limited Redemption Amount for such Limited Redemption Period; provided that the Issuer may not cause a Limited Redemption Period to commence unless, in the reasonable belief of the Issuer, such Limited Redemption Period would not result in the occurrence of an Early Redemption Event; provided further that, for so long as the Series 2018-One Notes remain outstanding, both before and immediately following any amount paid in such Limited Redemption Period, (x) the Collection Release Conditions shall have been satisfied, (y) the Note Principal Balance shall be no less than the Required Senior Note Subordination Amount, and (z) the sum of the Note Principal Balance and the Transferor Amount shall be no less than the Required Senior Subordination Amount.

28

(b)     On any Business Day during the Revolving Period, the Issuer may cause the Servicer to provide written notice to the Indenture Trustee, the Agent and the Series 2017-One Noteholders (an “Optional Redemption Notice”) at least two Business Days prior to any Business Day (the “Optional Redemption Date”) stating its intention to cause a full or partial redemption of the Series 2017-One Notes on the Optional Redemption Date in the amount (the “Optional Redemption Amount”) set forth on such Optional Redemption Notice. The Optional Redemption Amount shall be paid from any Available Principal Collections on deposit in the Collection Account, from the proceeds of the issuance of one or more new Series of Notes issued substantially contemporaneously with such full redemption, or from any other monies available to the Issuer or the Transferor including the proceeds of a Senior Facility (or any combination of the above); provided that, for so long as the Series 2018-One Notes remain outstanding, both before and immediately following payment of all or any portion of such Optional Redemption Amount, (x) if any portion of the Optional Redemption Amount is to be paid from Available Principal Collections on deposit in the Collection Account, the Collection Release Conditions shall have been satisfied, and (y) either (A) the Series 2018-One Notes shall have first been redeemed in full in accordance with the terms set forth in Section 4.04 of the Series 2018-One Indenture Supplement or (B)(i) the Note Principal Balance shall be no less than the Required Senior Note Subordination Amount and (ii) the sum of the Note Principal Balance and the Transferor Amount shall be no less than the Required Senior Subordination Amount. On the Optional Redemption Date the Servicer shall pay, or shall cause the Paying Agent to apply by written instruction to the Paying Agent, (1) the Optional Redemption Amount with respect to the Class A Notes to the Agent for the benefit of the Class A Noteholders, and (2) the Optional Redemption Amount with respect to the Class B Notes to the Class B Noteholders, as applicable. The Servicer shall provide notice to the Indenture Trustee of the payment of any Optional Redemption Amount.

(c)     Any Limited Redemption Amount or Optional Redemption Amount with respect to Class A Notes shall be applied as repayments of principal of the Class A Notes in accordance with Section 2.2(c) of the Class A Purchase Agreement. In connection with each Limited Redemption or Optional Redemption, all Series 2017-One Monthly Interest on such repaid principal amounts, and all other amounts (including any accrued but unpaid Services Fees and Target Proceeds Amount) due in respect of such repayments under any Transaction Document, shall be paid at the time the related Limited Redemption Amount or Optional Redemption Amount is paid.

Section 4.04.     Required Amounts.

(a)     With respect to each Distribution Date, on the related Determination Date, the Servicer shall determine the amount (the “Class A-1 Required Amount”), if any, by which (x) the amount required pursuant to subsections 4.05(a)(i) and 4.05(a)(iii) for such Distribution Date exceeds (y) the Available Finance Charge Collections for such Distribution Date available to fund such amount. In the event that the Class A-1 Required Amount for such Distribution Date is greater than zero, the Servicer shall give written notice to the Indenture Trustee of such Class A-1 Required Amount on the date of computation.

(b)     With respect to each Distribution Date, on the related Determination Date, the Servicer shall determine the amount (the “Class A-2 Required Amount”), if any, by which (x) the amount required pursuant to subsection 4.05(a)(iv) for such Distribution Date exceeds (y) the Available Finance Charge Collections for such Distribution Date available to fund such amount. In the event that the Class A-2 Required Amount for such Distribution Date is greater than zero, the Servicer shall give written notice to the Indenture Trustee of such Class A-2 Required Amount on the date of computation.

29

(c)     With respect to each Distribution Date, on the related Determination Date, the Servicer shall determine the amount (the “Class A-3 Required Amount”), if any, by which (x) the amount required pursuant to subsection 4.05(a)(v) for such Distribution Date exceeds (y) the Available Finance Charge Collections for such Distribution Date available to fund such amount. In the event that the Class A-3 Required Amount for such Distribution Date is greater than zero, the Servicer shall give written notice to the Indenture Trustee of such Class A-3 Required Amount on the date of computation.

(d)     With respect to each Distribution Date, on the related Determination Date, the Servicer shall determine the amount (the “Class A-4 Required Amount”), if any, by which (x) the amount required pursuant to subsection 4.05(a)(vi) for such Distribution Date exceeds (y) the Available Finance Charge Collections for such Distribution Date available to fund such amount. In the event that the Class A-4 Required Amount for such Distribution Date is greater than zero, the Servicer shall give written notice to the Indenture Trustee of such Class A-4 Required Amount on the date of computation.

(e)     With respect to each Distribution Date, on the related Determination Date, the Servicer shall determine the amount (the “Class A-5 Required Amount”), if any, by which (x) the amount required pursuant to subsection 4.05(a)(vii) for such Distribution Date exceeds (y) the Available Finance Charge Collections for such Distribution Date available to fund such amount. In the event that the Class A-5 Required Amount for such Distribution Date is greater than zero, the Servicer shall give written notice to the Indenture Trustee of such Class A-5 Required Amount on the date of computation.

(f)     With respect to each Distribution Date, on the related Determination Date, the Servicer shall determine the amount (the “Series 2018-One Required Amount”), if any, by which (x) the amount required pursuant to subsections 4.05(a)(i) through 4.05(a)(ii) of the Series 2018-One Indenture Supplement for such Distribution Date exceeds (y) the Series 2018-One Available Funds for such Distribution Date available to fund such amount. In the event that the Series 2018-One Required Amount for such Distribution Date is greater than zero, the Servicer shall give written notice to the Indenture Trustee of such Series 2018-One Required Amount on the date of computation.

Section 4.05.     Application of Available Funds and Available Principal Collections. The Servicer shall apply, or shall cause the Indenture Trustee to apply by written instruction to the Indenture Trustee pursuant to the Monthly Servicer Statement, on each Distribution Date, Available Funds and Available Principal Collections on deposit in the Collection Account with respect to such Distribution Date to make the following distributions:

(a)     On each Distribution Date, an amount equal to the Available Funds with respect to such Distribution Date will be distributed in the following priority:

(i)     an amount equal to the sum of the Monthly Servicing Fee, the Program Fees, the Capped Program Expenses and the Monthly Backup Servicing Fee, if any, for the related Distribution Date plus the sum of the amount of any Monthly Servicing Fee, the Program Fees, the Capped Program Expenses and any Monthly Backup Servicing Fee previously due but not distributed to the Servicer, the Owner Trustee, the Indenture Trustee or the Backup Servicer, if any respectively, on a prior Distribution Date, shall be distributed pro rata to the Servicer, the Owner Trustee, the Indenture Trustee and the Backup Servicer, if any;

30

(ii)     if and for so long as Series 2018-One remains outstanding, an amount equal to the Senior Facility First FC Amount, if any, shall be distributed to Series 2018-One to be paid in accordance with the terms of the Series 2018-One Indenture Supplement;

(iii)     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;

(iv)     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;

(v)     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;

(vi)     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;

(vii)     an amount equal to Class A-5 Monthly Interest for the related Distribution Date plus an amount equal to any Class A-5 Interest Shortfall not distributed on a prior Distribution Date plus the amount of any Class A-5 Additional Interest for such Distribution Date plus any Class A-5 Additional Interest previously due but not distributed to Class A-5 Noteholders on a prior Distribution Date, shall be distributed to the Class A-5 Noteholders;

(viii)     if and for so long as Series 2018-One remains outstanding, an amount equal to the Senior Facility Second FC Amount, if any, shall be distributed to Series 2018-One to be paid in accordance with the terms of the Series 2018-One Indenture Supplement;

31

(ix)     an amount equal to the Services Fees, Target Proceeds Amount and Class A Costs accrued for or otherwise due on such Distribution Date plus any Services Fees, Target Proceeds Amount and Class A Costs previously due but not distributed to the Agent on a prior Distribution Date shall be distributed to the Paying Agent for distribution to the Agent;

(x)     an amount equal to the Series Default Amount for such Distribution Date shall be treated as a portion of Available Principal Collections for such Distribution Date;

(xi)     (A) an amount equal to the aggregate amount of Reduction Amounts and amounts that under subsections 4.07(b) through (g) were used to fund the Series 2018-One Required Amount, the Class A-1 Required Amount, the Class A-2 Required Amount, the Class A-3 Required Amount, the Class A-4 Required Amount or the Class A-5 Required Amount which have not been previously reimbursed shall be treated as a portion of Available Principal Collections for such Distribution Date;

(B) an amount equal to the aggregate amount of Transferor Reduction Amounts and amounts that under subsection 4.07(a) were used to fund the Series 2018-One Required Amount, the Class A-1 Required Amount, the Class A-2 Required Amount, the Class A-3 Required Amount, the Class A-4 Required Amount or the Class A-5 Required Amount which have not been previously reimbursed shall be treated as a portion of Available Principal Collections for such Distribution Date;

(xii)     if an Early Redemption Event has occurred on or prior to such Distribution Date, an amount up to the Class A Note Principal Balance on such Distribution Date shall be treated as a portion of Available Principal Collections for such Distribution Date;

(xiii)     an amount equal to the Monthly Marketing Fee for such Distribution Date, plus the amount of any Monthly Marketing Fee previously due but not distributed to the Seller on a prior Distribution Date, shall be distributed to the Seller;

(xiv)     an amount equal to Class B Monthly Interest for such Distribution Date plus an amount equal to 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;

(xv)     an amount equal to the Program Expenses for such Distribution Date, plus the amount of any Program Expenses previously due but not distributed to the Owner Trustee or Indenture Trustee on a prior Distribution Date, shall be distributed pro rata to the Owner Trustee and the Indenture Trustee;

(xvi)     the balance of such Available Funds (“Excess Collections”) shall be distributed as follows: [*****].

32

(b)     On each Distribution Date with respect to the Revolving Period, an amount equal to the Available Principal Collections deposited in the Collection Account for the related Monthly Period shall be distributed in the following order of priority:

(i)     if and for so long as Series 2018-One remains outstanding, an amount equal to the Senior Facility Principal Amount shall be distributed to Series 2018-One to be paid in accordance with the terms of the Series 2018-One Indenture Supplement;

(ii)     an amount equal to the Net Eligible Receivables Balance Deficiency, if any, shall be distributed pro rata to the Class A Noteholders in reduction of the Class A Note Principal Balance;

(iii)     an amount, to the extent available, equal to the Target Proceeds Amount, if any, shall be distributed to the Agent; and

(iv)     an amount equal to the balance, if any, of such Available Principal Collections shall be distributed to the Transferor, but only if the Transferor Amount is on such date is greater than the Series Required Transferor Amount (after giving effect to all Principal Receivables transferred to the Issuer on such day) and otherwise shall be deposited in the Special Funding Account.

(c)     On each Distribution Date with respect to an Early Redemption Period, an amount equal to the Available Principal Collections deposited in the Collection Account for the related Monthly Period shall be distributed in the following order of priority:

(i)     if and for so long as Series 2018-One remains outstanding, an amount equal to the Senior Facility Principal Amount shall first be distributed to Series 2018-One to be paid in accordance with the terms of the Series 2018-One Indenture Supplement;

(ii)     an amount, to the extent available, equal to the Class A-1 Note Principal Balance shall be distributed to the Class A-1 Noteholders;

(iii)     for each Distribution Date beginning on the Distribution Date on which the Class A-1 Notes have been paid in full, an amount, to the extent available, equal to the Class A-2 Note Principal Balance shall be distributed to the Class A-2 Noteholders;

(iv)     for each Distribution Date beginning on the Distribution Date on which the Class A-2 Notes have been paid in full, an amount, to the extent available, equal to the Class A-3 Note Principal Balance shall be distributed to the Class A-3 Noteholders;

(v)     for each Distribution Date beginning on the Distribution Date on which the Class A-3 Notes have been paid in full, an amount, to the extent available, equal to the Class A-4 Note Principal Balance shall be distributed to the Class A-4 Noteholders;

(vi)     for each Distribution Date beginning on the Distribution Date on which the Class A-4 Notes have been paid in full, an amount, to the extent available, equal to the Class A-5 Note Principal Balance shall be distributed to the Class A-5 Noteholders;

33

(vii)     for each Distribution Date beginning on the Distribution Date on which the Class A-5 Notes have been paid in full, an amount, to the extent available, equal to the Class B Note Principal Balance shall be distributed to the Class B Noteholders;

(viii)     an amount, to the extent available, equal to the Target Proceeds Amount, if any, shall be distributed to the Agent; and

(ix)     for each Distribution Date beginning on the Distribution Date on which the Class B Notes are paid in full, an amount equal to the balance, if any, of such Available Principal Collections shall be distributed to the Transferor, but only if the Transferor Amount is on such date is greater than the Series Required Transferor Amount (after giving effect to all Principal Receivables transferred to the Issuer on such day) and otherwise shall be deposited in the Special Funding Account.

(d)     On each Distribution Date with respect to the Limited Redemption Period, an amount equal to the Available Principal Collections deposited in the Collection Account for the related Monthly Period shall be distributed in the following order of priority:

(i)     if and for so long as Series 2018-One remains outstanding, an amount equal to the Senior Facility Principal Amount shall first be distributed to Series 2018-One to be paid in accordance with the terms of the Series 2018-One Indenture Supplement;

(ii)     an amount equal to the Limited Redemption Amount shall be distributed to the Noteholders in accordance with the priority set forth in the Limited Redemption Notice;

(iii)     an amount, to the extent available, equal to the Target Proceeds Amount, if any, shall be distributed to the Agent; and

(iv)     the balance of such Available Principal Collections shall be distributed to the Transferor, but only if the Transferor Amount is on such date is greater than the Series Required Transferor Amount (after giving effect to all Principal Receivables transferred to the Issuer on such day) and otherwise shall be deposited in the Special Funding Account.

Section 4.06.     Defaulted Amounts; Reduction Amounts.

On each Determination Date, the Servicer shall calculate the Series Default Amount for the related Distribution Date. If, on any Distribution Date, the Series Default Amount for the related Monthly Period exceeds the Available Finance Charge Collections allocated and available for that purpose pursuant to subsection 4.05(a)(x) for such Distribution Date,

(a) first, the Series Adjusted Subordinated Transferor Amount (after giving effect to any reductions for Transferor Available Principal Collections that under subsection 4.07(a) were used to fund the Series 2018-One Required Amount, the Class A-1 Required Amount, the Class A-2 Required Amount, the Class A-3 Required Amount, the Class A-4 Required Amount or the Class A-5 Required Amount on such Distribution Date), will be reduced, subject to the succeeding sentence, by the amount of such excess, but not by more than the Series Default Amount for such Distribution Date (a “Transferor Reduction Amount”). In the event that such reduction would cause the Series Adjusted Subordinated Transferor Amount to be a negative number, the Series Adjusted Subordinated Transferor Amount shall be reduced to zero. Transferor Reduction Amounts shall thereafter be reimbursed and the Series Adjusted Subordinated Transferor Amount increased (but not by an amount in excess of the aggregate unreimbursed Transferor Reduction Amounts) on any Distribution Date by the amount of Available Finance Charge Collections allocated and available for that purpose pursuant to subsection 4.05(a)(xi)(B),

34

(b) second, in the event, the Series Adjusted Subordinated Transferor Amount has been reduced to zero in accordance with clause (a) above, the Allocation Amount (after giving effect to any reductions for Reallocated Principal Collections that under subsections 4.07(b) through (g) were used to fund the Series 2018-One Required Amount, the Class A-1 Required Amount, the Class A-2 Required Amount, Class A-3 Required Amount, the Class A-4 Required Amount or the Class A-5 Required Amount on such Distribution Date), will be reduced, subject to the succeeding sentence, by the amount of such excess, but not by more than the Series Default Amount for such Distribution Date (a “Reduction Amount”). In the event that such reduction would cause the Allocation Amount to be a negative number, the Allocation Amount shall be reduced to zero. Reduction Amounts shall thereafter be reimbursed and the Allocation Amount increased (but not by an amount in excess of the aggregate unreimbursed Reduction Amounts) on any Distribution Date by the amount of Available Finance Charge Collections allocated and available for that purpose pursuant to subsection 4.05(a)(xi)(A).

Section 4.07.     Reallocated Principal Collections.

(a)     On each Distribution Date, prior to the application of Reallocated Principal Collections in accordance with subsections (b) through (g) below, the Servicer shall apply, or shall direct the Indenture Trustee to apply by written instruction to the Indenture Trustee pursuant to the related Monthly Servicer Statement, Transferor Available Principal Collections with respect to such Distribution Date, to fund, in the following order of priority, the Series 2018-One Required Amount, the Class A-1 Required Amount, the Class A-2 Required Amount, the Class A-3 Required Amount, the Class A-4 Required Amount and the Class A-5 Required Amount. On each Distribution Date, the Series Adjusted Subordinated Transferor Amount shall be reduced by the amount of Transferor Available Principal Collections used to fund the Series 2018-One Required Amount, the Class A-1 Required Amount, the Class A-2 Required Amount, the Class A-3 Required Amount, the Class A-4 Required Amount and the Class A-5 Required Amount for such Distribution Date, but in any event the Series Adjusted Subordinated Transferor Amount shall not be reduced by operation of this subsection 4.07(a) to an amount less than zero.

(b)     On each Distribution Date, the Servicer shall apply, or shall direct the Indenture Trustee to apply by written instruction to the Indenture Trustee pursuant to the related Monthly Servicer Statement, Reallocated Principal Collections with respect to such Distribution Date, to fund the excess, if any, of the Series 2018-One Required Amount over the amount funded in accordance with subsection 4.07(a). On each Distribution Date, the Allocation Amount shall be reduced by the amount of Reallocated Principal Collections used to fund the Series 2018-One Required Amount for such Distribution Date, but in any event the Allocation Amount shall not be reduced by operation of this subsection 4.07(b) to an amount less than the Note Principal Balance.

35

(c)     On each Distribution Date, the Servicer shall apply, or shall direct the Indenture Trustee to apply by written instruction to the Indenture Trustee pursuant to the related Monthly Servicer Statement, Reallocated Principal Collections with respect to such Distribution Date remaining after application in accordance with subsection 4.07(b), to fund the excess, if any, of the Class A-1 Required Amount over the amount funded in accordance with subsection 4.07(a); provided, however, that the amount of Reallocated Principal Collections applied in accordance with this subsection 4.07(c) shall not exceed an amount equal to Reallocated Class B Principal Collections with respect to such Distribution Date remaining after application in accordance with subsection 4.07(b). On each Distribution Date, the Allocation Amount shall be reduced by the amount of Reallocated Principal Collections used to fund the Class A-1 Required Amount for such Distribution Date, but in any event the Allocation Amount shall not be reduced by operation of this subsection 4.07(c) to an amount less than the Class A-1 Note Principal Balance.

(d)     On each Distribution Date, the Servicer shall apply, or shall direct the Indenture Trustee to apply by written instruction to the Indenture Trustee pursuant to the Monthly Servicer Statement, Reallocated Principal Collections with respect to such Distribution Date remaining after application in accordance with subsection 4.07(c), to fund the excess, if any, of the Class A-2 Required Amount over the amount funded in accordance with subsection 4.07(a); provided, however, that the amount of Reallocated Principal Collections applied in accordance with this subsection 4.07(d) shall not exceed an amount equal to Reallocated Class B Principal Collections with respect to such Distribution Date remaining after application in accordance with subsection 4.07(c). On each Distribution Date, the Allocation Amount shall be reduced by the amount of Reallocated Principal Collections used to fund the Class A-2 Required Amount for such Distribution Date, but in any event the Allocation Amount shall not be reduced by operation of this subsection 4.07(d) to an amount less than the sum of the Class A-1 Note Principal Balance and the Class A-2 Note Principal Balance.

(e)     On each Distribution Date, the Servicer shall apply, or shall direct the Indenture Trustee to apply by written instruction to the Indenture Trustee pursuant to the Monthly Servicer Statement, Reallocated Principal Collections with respect to such Distribution Date remaining after application in accordance with subsection 4.07(d), to fund the excess, if any, of the Class A-3 Required Amount over the amount funded in accordance with subsection 4.07(a); provided, however, that the amount of Reallocated Principal Collections applied in accordance with this subsection 4.07(e) shall not exceed an amount equal to Reallocated Class B Principal Collections with respect to such Distribution Date remaining after application in accordance with subsection 4.07(d). On each Distribution Date, the Allocation Amount shall be reduced by the amount of Reallocated Principal Collections used to fund the Class A-3 Required Amount for such Distribution Date, but in any event the Allocation Amount shall not be reduced by operation of this subsection 4.07(e) to an amount less than the sum of the Class A-1 Note Principal Balance, the Class A-2 Note Principal Balance and the Class A-3 Note Principal Balance.

36

(f)     On each Distribution Date, the Servicer shall apply, or shall direct the Indenture Trustee to apply by written instruction to the Indenture Trustee pursuant to the Monthly Servicer Statement, Reallocated Principal Collections with respect to such Distribution Date remaining after application in accordance with subsection 4.07(e), to fund the excess, if any, of the Class A-4 Required Amount over the amount funded in accordance with subsection 4.07(a); provided, however, that the amount of Reallocated Principal Collections applied in accordance with this subsection 4.07(f) shall not exceed an amount equal to Reallocated Class B Principal Collections with respect to such Distribution Date remaining after application in accordance with subsection 4.07(e). On each Distribution Date, the Allocation Amount shall be reduced by the amount of Reallocated Principal Collections used to fund the Class A-4 Required Amount for such Distribution Date, but in any event the Allocation Amount shall not be reduced by operation of this subsection 4.07(f) to an amount less than the sum of the Class A-1 Note Principal Balance, the Class A-2 Note Principal Balance, the Class A-3 Note Principal Balance and the Class A-4 Note Principal Balance.

(g)     On each Distribution Date, the Servicer shall apply, or shall direct the Indenture Trustee to apply by written instruction to the Indenture Trustee pursuant to the Monthly Servicer Statement, Reallocated Principal Collections with respect to such Distribution Date remaining after application in accordance with subsection 4.07(f), to fund the excess, if any, of the Class A-5 Required Amount over the amount funded in accordance with subsection 4.07(a); provided, however, that the amount of Reallocated Principal Collections applied in accordance with this subsection 4.07(g) shall not exceed an amount equal to Reallocated Class B Principal Collections with respect to such Distribution Date remaining after application in accordance with subsection 4.07(f). On each Distribution Date, the Allocation Amount shall be reduced by the amount of Reallocated Principal Collections used to fund the Class A-5 Required Amount for such Distribution Date, but in any event the Allocation Amount shall not be reduced by operation of this subsection 4.07(g) to an amount less than the sum of the Class A-1 Note Principal Balance, the Class A-2 Note Principal Balance, the Class A-3 Note Principal Balance, the Class A-4 Note Principal Balance and the Class A-5 Note Principal Balance.

Section 4.08.     Principal Amount Increases.

(a)     The Class A-1 Noteholders agree, by acceptance of the Class A-1 Notes, that the Issuer may from time to time, during the Revolving Period, request upon ten (10) Business Days prior irrevocable written notice to each of the Indenture Trustee, the Servicer and the Class A-1 Noteholders substantially in the form of Exhibit A to the Class A Purchase Agreement that the Class A-1 Noteholders fund increases in the outstanding principal balance of the Class A-1 Notes in the specified amounts (each such amount, a “Class A-1 Note Principal Balance Increase”); provided, however, that any applicable conditions and limits on increases set forth in the Class A Purchase Agreement shall have been satisfied or waived as provided therein. The Class A-1 Noteholders shall fund a Class A-1 Note Principal Balance Increase, upon payment, in same day funds, to the Issuer of the amount of such Class A-1 Note Principal Balance Increase, in accordance with the payment instructions specified in the notice delivered with respect to such Class A-1 Note Principal Increase.

37

(b)     The Class A-2 Noteholders agree, by acceptance of the Class A-2 Notes, that the Issuer may from time to time, during the Revolving Period, request upon ten (10) Business Days prior irrevocable written notice to each of the Indenture Trustee, the Servicer and the Class A-2 Noteholders substantially in the form of Exhibit A to the Class A Purchase Agreement that the Class A-2 Noteholders fund increases in the outstanding principal balance of the Class A-2 Notes in the specified amounts (each such amount, a “Class A-2 Note Principal Balance Increase”); provided, however, that any applicable conditions and limits on increases set forth in the Class A Purchase Agreement shall have been satisfied or waived as provided therein. The Class A-2 Noteholders shall fund a Class A-2 Note Principal Balance Increase, upon payment, in same day funds, to the Issuer of the amount of such Class A-2 Note Principal Balance Increase, in accordance with the payment instructions specified in the notice delivered with respect to such Class A-2 Note Principal Increase.

(c)     The Class A-3 Noteholders agree, by acceptance of the Class A-3 Notes, that the Issuer may from time to time, during the Revolving Period, request upon ten (10) Business Days prior irrevocable written notice to each of the Indenture Trustee, the Servicer and the Class A-3 Noteholders substantially in the form of Exhibit A to the Class A Purchase Agreement that the Class A-3 Noteholders fund increases in the outstanding principal balance of the Class A-3 Notes in the specified amounts (each such amount, a “Class A-3 Note Principal Balance Increase”); provided, however, that any applicable conditions and limits on increases set forth in the Class A Purchase Agreement shall have been satisfied or waived as provided therein. The Class A-3 Noteholders shall fund a Class A-3 Note Principal Balance Increase, upon payment, in same day funds, to the Issuer of the amount of such Class A-3 Note Principal Balance Increase, in accordance with the payment instructions specified in the notice delivered with respect to such Class A-3 Note Principal Increase.

(d)     The Class A-4 Noteholders agree, by acceptance of the Class A-4 Notes, that the Issuer may from time to time, during the Revolving Period, request upon ten (10) Business Days prior irrevocable written notice to each of the Indenture Trustee, the Servicer and the Class A-4 Noteholders substantially in the form of Exhibit A to the Class A Purchase Agreement that the Class A-4 Noteholders fund increases in the outstanding principal balance of the Class A-4 Notes in the specified amounts (each such amount, a “Class A-4 Note Principal Balance Increase”); provided, however, that any applicable conditions and limits on increases set forth in the Class A Purchase Agreement shall have been satisfied or waived as provided therein. The Class A-4 Noteholders shall fund a Class A-4 Note Principal Balance Increase, upon payment, in same day funds, to the Issuer of the amount of such Class A-4 Note Principal Balance Increase, in accordance with the payment instructions specified in the notice delivered with respect to such Class A-4 Note Principal Increase.

(e)     The Class A-5 Noteholders agree, by acceptance of the Class A-5 Notes, that the Issuer may from time to time, during the Revolving Period, request upon ten (10) Business Days prior irrevocable written notice to each of the Indenture Trustee, the Servicer and the Class A-5 Noteholders substantially in the form of Exhibit A to the Class A Purchase Agreement that the Class A-5 Noteholders fund increases in the outstanding principal balance of the Class A-5 Notes in the specified amounts (each such amount, a “Class A-5 Note Principal Balance Increase”); provided, however, that any applicable conditions and limits on increases set forth in the Class A Purchase Agreement shall have been satisfied or waived as provided therein. The Class A-5 Noteholders shall fund a Class A-5 Note Principal Balance Increase, upon payment, in same day funds, to the Issuer of the amount of such Class A-5 Note Principal Balance Increase, in accordance with the payment instructions specified in the notice delivered with respect to such Class A-5 Note Principal Increase.

38

(f)     The Class B Noteholders agree, by acceptance of the Class B Notes, that the Issuer may from time to time, during the Revolving Period, request upon two (2) Business Days prior irrevocable written notice to each of the Indenture Trustee, the Servicer and the Class B Noteholders substantially in the form of Exhibit D that the Class B Noteholders fund increases in the outstanding principal balance of the Class B Notes in the specified amounts (each such amount, a “Class B Note Principal Balance Increase”).

(g)     Other than as provided in the Class A Purchase Agreement, no decrease in the outstanding principal balance of the Class A Notes pursuant to Section 4.03 shall limit the ability of the Issuer to increase the outstanding principal balance of the Class A Notes pursuant to this Section 4.08.

Section 4.09.     Series 2017-One Distribution Account.

(a)     The Servicer shall establish and maintain, in the name of the Indenture Trustee, for the benefit of the Series 2017-One Noteholders, a Series Account (the “Series 2017-One Distribution Account”) bearing a designation clearly indicating that the funds deposited therein are held for the benefit of the Series 2017-One Noteholders. The Series 2017-One Distribution Account shall be established and maintained with the Paying Agent on behalf of and in the name of the Indenture Trustee. The Indenture Trustee shall possess all right, title and interest in all funds on deposit from time to time in the Series 2017-One Distribution Account and in all proceeds thereof. The Series 2017-One Distribution Account shall be under the sole dominion and control of the Indenture Trustee for the benefit of the Series 2017-One Noteholders. Funds on deposit in the Series 2017-One Distribution Account shall not be subject to investment. If at any time the Series 2017-One Distribution Account ceases to be an Eligible Deposit Account, the Indenture Trustee (or the Servicer on its behalf) shall within 10 Business Days (or such longer period, not to exceed 30 calendar days, as to which the Series 2017-One Noteholders shall consent) establish a new Series 2017-One Distribution Account meeting the conditions specified above as an Eligible Deposit Account, and shall transfer any cash or any investments to such new Series 2017-One Distribution Account.

(b)     On each Distribution Date, the Indenture Trustee, solely in accordance with the Monthly Servicer Statement, shall withdraw from the Collection Account and deposit into the Series 2017-One Distribution Account Collections of Finance Charge Receivables and Principal Receivables allocated to Series 2017-One on such Distribution Date for application pursuant to Section 4.05.

39

Section 4.10.     Pre-Funding Account.

(a)     The Servicer shall establish and maintain, in the name of the Indenture Trustee, for the benefit of the Noteholders, an Eligible Deposit Account (the “Pre-Funding Account”) bearing a designation clearly indicating that the funds deposited therein are held for the benefit of the Class A Noteholders and the Class B Noteholders. The Pre-Funding Account shall be established and maintained with the Paying Agent on behalf of and in the name of the Indenture Trustee. The Indenture Trustee shall possess all right, title and interest in all funds on deposit from time to time in the Pre-Funding Account and in all proceeds thereof. The Pre-Funding Account shall be under the sole dominion and control of the Indenture Trustee for the benefit of the Class A Noteholders and the Class B Noteholders. If at any time the Pre-Funding Account ceases to be an Eligible Deposit Account, the Indenture Trustee (or the Servicer on its behalf) shall within 10 Business Days (or such longer period if necessary, not to exceed 30 calendar days) establish a new Pre-Funding Account meeting the conditions specified above as an Eligible Deposit Account, and shall transfer any cash or any investments to such new Pre-Funding Account. The Indenture Trustee, at the written direction of the Servicer, shall (i) make withdrawals from the Pre-Funding Account from time to time for the purposes set forth in this Supplement, and (ii) on a date on which a Note Principal Balance Increase occurs, if directed to by the Servicer, make a deposit into the Pre-Funding Account from the money received in payment of the purchase price for such Note Principal Balance Increase in the amount specified by the Servicer, equal to the least of (1) the sum of the Class A-1 Note Principal Balance Increase, the Class A-2 Note Principal Balance Increase, the Class A-3 Note Principal Balance Increase, the Class A-4 Note Principal Balance Increase, the Class A-5 Note Principal Balance Increase, and the Class B Note Principal Balance Increase, (2) the amount specified by the Servicer equal to the positive difference between the Note Principal Balance and the Allocation Amount (after giving effect to such Note Principal Balance Increase), and (3) an amount equal to the product of (x) 0.10 and (y) the Note Principal Balance (after giving effect to such Note Principal Balance Increase).

(b)     Funds on deposit in the Pre-Funding Account shall be invested at the written direction of the Servicer by the Indenture Trustee in Eligible Investments. In no event shall the Indenture Trustee be liable for the selection of Eligible Investments or for investment losses incurred thereon, except with respect to investments on which the institution acting as the Indenture Trustee is an obligor. The Indenture Trustee shall have no liability in respect of 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. The Indenture Trustee shall have no obligation to invest or reinvest any amounts held hereunder in the absence of written investment direction. Funds on deposit in the Pre-Funding Account on any Transfer Date, after giving effect to any withdrawals from the Pre-Funding Account on such Transfer Date, shall be invested in such investments that will mature so that such funds will be available for withdrawal on or prior to the following Transfer Date. The Indenture Trustee shall hold such Eligible Investments as provided in Section 6.15 of the Indenture. 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. On each Distribution Date, all interest and earnings (net of losses and investment expenses) accrued since the preceding Distribution Date on funds on deposit in the Pre-Funding Account (“Pre-Funding Investments Proceeds”) shall be deposited in the Collection Account and treated as a portion of Available Funds for that Distribution Date. For purposes of determining the availability of funds or the balance in the Pre-Funding Account for any reason under this Supplement, except as otherwise provided in the preceding sentence, investment earnings on such funds shall be deemed not to be available or on deposit.

40

(c)     On any Deposit Date in a Monthly Period during the Revolving Period, the Servicer may withdraw from the Pre-Funding Account an amount not to exceed the lesser of (1) the positive difference, if any, between (I) the Transferor Amount and (II) the Series Required Transferor Amount, and (2) the amount on deposit in the Pre-Funding Account, and pay such amount to the Issuer for application pursuant to the Trust Agreement.

(d)     In the event that there are funds on deposit in the Pre-Funding Account on the earlier to occur of (1) the first Distribution Date following the end of the Revolving Period, and (2) the second Distribution Date following the date on which the most recent Note Principal Balance Increase occurred, the Servicer shall cause the Indenture Trustee to apply all amounts on deposit in the Pre-Funding Account to the Paying Agent for pro rata payment of principal on the Class A Notes and the Class B Notes. For the avoidance of doubt, the application of any funds from the Pre-Funding Account to any payment of principal of Series 2017-One Notes shall be considered a prepayment of principal.

(e)     Notwithstanding anything to the contrary in any Transaction Document related to the Senior Facility or otherwise, the funds on deposit in the Pre-Funding Account shall not be available for any payment due under the Senior Facility or any other Series except Series 2017-One.

ARTICLE V

Distributions and Reports to
Series 2017-One Noteholders

Section 5.01.     Distributions.

(a)     On each Distribution Date, the Paying Agent, solely in accordance with the Monthly Servicer Statement, shall distribute to Series 2018-One (other than as provided in Section 10.02 of the Indenture) such amounts held by the Paying Agent that are allocated and available on such Distribution Date to pay Senior Facility First FC Amounts and Senior Facility Second FC Amounts.

(b)     On each Distribution Date, the Paying Agent, solely in accordance with the Monthly Servicer Statement, shall distribute to Series 2018-One (other than as provided in Section 10.02 of the Indenture) such amounts held by the Paying Agent that are allocated and available on such Distribution Date to pay Senior Facility Principal Amounts.

(c)     On each Distribution Date, the Paying Agent, solely in accordance with the Monthly Servicer Statement, shall distribute to each Class A-1 Noteholder (other than as provided in Section 10.02 of the Indenture) such amounts held by the Paying Agent that are allocated and available on such Distribution Date to pay interest on the Class A-1 Notes.

(d)     On each Special Payment Date, the Paying Agent, solely in accordance with the Monthly Servicer Statement, shall distribute to each Class A-1 Noteholder of record on the related Record Date (other than as provided in Section 10.02 of the Indenture) such amounts held by the Paying Agent that are allocated and available on such date to pay principal of the Class A-1 Notes pursuant to this Supplement up to a maximum amount on any such date equal to the Class A-1 Note Principal Balance on such date.

41

(e)     On each Distribution Date, the Paying Agent, solely in accordance with the Monthly Servicer Statement, shall distribute to each Class A-2 Noteholder (other than as provided in Section 10.02 of the Indenture) such amounts held by the Paying Agent that are allocated and available on such Distribution Date to pay interest on the Class A-2 Notes.

(f)     On each Special Payment Date, the Paying Agent, solely in accordance with the Monthly Servicer Statement, shall distribute to each Class A-2 Noteholder of record on the related Record Date (other than as provided in Section 10.02 of the Indenture) such amounts held by the Paying Agent that are allocated and available on such date to pay principal of the Class A-2 Notes pursuant to this Supplement up to a maximum amount on any such date equal to the Class A-2 Note Principal Balance on such date.

(g)     On each Distribution Date, the Paying Agent, solely in accordance with the Monthly Servicer Statement, shall distribute to each Class A-3 Noteholder (other than as provided in Section 10.02 of the Indenture) such amounts held by the Paying Agent that are allocated and available on such Distribution Date to pay interest on the Class A-3 Notes.

(h)     On each Special Payment Date, the Paying Agent, solely in accordance with the Monthly Servicer Statement, shall distribute to each Class A-3 Noteholder of record on the related Record Date (other than as provided in Section 10.02 of the Indenture) such amounts held by the Paying Agent that are allocated and available on such date to pay principal of the Class A-3 Notes pursuant to this Supplement up to a maximum amount on any such date equal to the Class A-3 Note Principal Balance on such date.

(i)     On each Distribution Date, the Paying Agent, solely in accordance with the Monthly Servicer Statement, shall distribute to each Class A-4 Noteholder (other than as provided in Section 10.02 of the Indenture) such amounts held by the Paying Agent that are allocated and available on such Distribution Date to pay interest on the Class A-4 Notes.

(j)     On each Special Payment Date, the Paying Agent, solely in accordance with the Monthly Servicer Statement, shall distribute to each Class A-4 Noteholder of record on the related Record Date (other than as provided in Section 10.02 of the Indenture) such amounts held by the Paying Agent that are allocated and available on such date to pay principal of the Class A-4 Notes pursuant to this Supplement up to a maximum amount on any such date equal to the Class A-4 Note Principal Balance on such date.

(k)     On each Distribution Date, the Paying Agent, solely in accordance with the Monthly Servicer Statement, shall distribute to each Class A-5 Noteholder (other than as provided in Section 10.02 of the Indenture) such amounts held by the Paying Agent that are allocated and available on such Distribution Date to pay interest on the Class A-5 Notes.

(l)     On each Special Payment Date, the Paying Agent, solely in accordance with the Monthly Servicer Statement, shall distribute to each Class A-5 Noteholder of record on the related Record Date (other than as provided in Section 10.02 of the Indenture) such amounts held by the Paying Agent that are allocated and available on such date to pay principal of the Class A-5 Notes pursuant to this Supplement up to a maximum amount on any such date equal to the Class A-5 Note Principal Balance on such date.

42

(m)     On each Distribution Date, the Paying Agent, solely in accordance with the Monthly Servicer Statement, shall distribute to the Agent such amounts held by the Paying Agent that are allocated and available on such Distribution Date to pay Services Fees, Target Proceeds Amounts and Class A Costs.

(n)     On each Distribution Date, the Paying Agent, solely in accordance with the Monthly Servicer Statement, shall distribute to each Class B Noteholder of record on the related Record Date (other than as provided in Section 10.02 of the Indenture) such amounts held by the Paying Agent that are allocated and available on such Distribution Date to pay interest on the Class B Notes pursuant to this Supplement.

(o)     On each Special Payment Date, the Paying Agent, solely in accordance with the Monthly Servicer Statement, shall distribute to each Class B Noteholder of record on the related Record Date (other than as provided in Section 10.02 of the Indenture) such amounts held by the Paying Agent that are allocated and available on such date to pay principal of the Class B Notes pursuant to this Supplement up to a maximum amount on any such date equal to the Class B Note Principal Balance on such date.

(p)     On each Distribution Date, the Paying Agent, solely in accordance with the Monthly Servicer Statement, shall distribute to each Servicer, Backup Servicer, Owner Trustee, Indenture Trustee and Seller such amounts held by the Paying Agent that are allocated and available on such Distribution Date to pay the Servicing Fee, the Backup Servicing Fee, the Program Fees, the Program Expenses and the Marketing Fee, respectively.

(q)     The distributions to be made pursuant to this Section 5.01 are subject to the provisions of Section 8.01 of the Transfer and Servicing Agreement, Section 5.05 of the Indenture and Section 8.01 of this Supplement.

(r)     Except as provided in Section 10.02 of the Indenture with respect to a final distribution, distributions to Series 2017-One Noteholders hereunder shall be made by wire transfer of same day funds to the account that has been designated by the applicable Noteholders not less than ten Business Days prior to such Distribution Date.

Section 5.02.     Reports and Statements to Series 2017-One Noteholders.

(a)     Not later than each Determination Date, the Servicer shall deliver to the Indenture Trustee, the Paying Agent and the Agent (i) a statement substantially in the form of Exhibit C prepared by the Servicer (the “Monthly Servicer Statement”) and (ii) a certificate of a Servicing Officer substantially in the form attached thereto.

(b)     A copy of each statement or certificate provided pursuant to subsection 5.02(a) may be obtained by any Series 2017-One Noteholder or any beneficial owner thereof by a request in writing to the Servicer.

43

(c)     On or before January 31 of each calendar year, 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 2017-One Noteholder, a statement prepared by the Servicer containing the information which is required to be contained in the statement to Series 2017-One Noteholders, as set forth in paragraph (a) above aggregated for such calendar year or the applicable portion thereof during which such Person was a Series 2017-One Noteholder, together with other information as is required to be provided by an issuer of indebtedness under the Code. Such obligation of the Servicer 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.

44

ARTICLE VI

Early Redemption Events; Events of Default

Section 6.01.     Early Redemption Events. If any one of the following events shall occur with respect to the Series 2017-One Notes:

(a)     (i) failure on the part of the Seller, the Transferor or the Issuer to make any payment or deposit required by the terms of any Transaction Document on or before the date occurring five (5) Business Days after the date such payment or deposit is required to be made therein or herein or (ii) failure on the part of the Seller, the Transferor or the Issuer duly to observe or perform any other covenants or agreements in any Transaction Document which continues unremedied for a period of thirty (30) days after the date on which the Seller, the Issuer or the Transferor, as applicable, obtains actual knowledge of such failure or on which written notice of such failure requiring the same to be remedied, shall have been given to the Seller, the Transferor or the Issuer by the Indenture Trustee, or to, the Seller, the Transferor, or the Issuer and the Indenture Trustee by the Agent or any Holder of a Class A Note;

(b)     any representation or warranty made by the Seller, the Transferor or the Issuer under any Transaction Document which continues to be incorrect for a period of thirty (30) days after the date on which the Seller, the Issuer or the Transferor, as applicable, obtains actual knowledge of such failure or on which written notice of such failure requiring the same to be remedied, shall have been given to the Seller, the Transferor or the Issuer by the Indenture Trustee, or to the Seller, the Transferor or the Issuer and the Indenture Trustee by the Agent or any Holder of a Class A Note; 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;

(c)     the occurrence of a Servicer Default;

(d)     the Indenture Trustee shall, for any reason, fail to have a valid and perfected first priority security interest in the Trust Estate;

(e)     without limiting any of the foregoing, the occurrence of an Event of Default with respect to Series 2017-One;

(f)     the Class A Notes are not paid in full on or before the Commitment Termination Date;

(g)     any of the following occurs for any Determination Date:

(i) the Three-Month Charge-Off Ratio exceeds [*****]%;

(ii) the Three-Month Delinquency Ratio exceeds [*****]%;

(iii) the Three-Month Excess Spread Percentage is less than [*****]%; or

45

(h)     No Account Owner is originating Receivables;

(i)     (i) any of the Transaction Documents ceases to be in full force and effect (other than in accordance with its terms) or (ii) the Trust Agreement is terminated or the Owner Trustee resigns or is removed under the Trust Agreement and not replaced with a replacement trustee satisfying the eligibility criteria thereunder within the time period prescribed therein;

(j)     one or more judgments or decrees is rendered against the Seller, the Issuer or the Transferor in an amount in excess of $[*****], individually or in the aggregate, by a court of final adjudication, which is/are not bonded pending appeal, satisfied, stayed, vacated or discharged of record within ninety (90) consecutive calendar days of being rendered;

(k)     (i) any default or breach occurs, which is not cured within any applicable grace period or waived, (x) in the payment of any amount with respect to any Indebtedness (other than Notes issued under the Indenture) of the Issuer or the Transferor for borrowed money having an aggregate principal amount in excess of $[*****], individually or in the aggregate, or (y) in the performance, observance or fulfillment of any provision contained in any agreement, contract, document or instrument to which the Issuer or the Transferor is a party or to which any of their properties or assets are subject or bound under or pursuant to which any Indebtedness (other than Notes issued under the Indenture) having an aggregate principal amount in excess of $[*****], individually or in the aggregate, was issued, created, assumed, guaranteed or secured and such default or breach continues for more than any applicable grace period and permits the holder of any such Indebtedness to accelerate the maturity thereof;

(l)     the Internal Revenue Service shall file notice of a lien pursuant to Section 6323 of the Internal Revenue Code with regard to any of the assets of the Issuer or the Transferor and such lien shall not have been released within thirty (30) Business Days, or the Pension Benefit Guaranty Corporation shall, or shall indicate its intention to, file notice of a lien pursuant to Section 4068 of ERISA with regard to any of the assets of the Issuer or any of its Affiliates and such lien shall not have been released within thirty (30) Business Days;

(m)     Change of Control of the Issuer, Transferor, the Seller or the Servicer;

(n)     removal (by any Person other than the Agent or an affiliate of the Agent) of the member of the Board of the Transferor selected by the Agent;

(o)     (i) the Issuer, the Seller or the Transferor is or becomes party to any material pending or threatened in writing action, suit, proceeding or investigation related to the business of the Issuer, (ii) there exists or occurs any pending or threatened in writing, action, suit, proceeding, arbitration or investigation involving the Issuer, the Seller, the Transferor or the Account Owner or their respective businesses that, in any case that could reasonably be expected to prevent or materially delay the consummation by the Issuer of the transactions contemplated herein or in the Indenture, (iii)  the Issuer, the Seller, the Transferor or the Account Owner is or becomes a party or is or becomes subject to any order, writ, injunction, judgment or decree of any Governmental Authority, or there exists or occurs any action, suit, proceeding, inquiry or investigation by any Governmental Authority, in either case, that could reasonably be expected to prevent or materially delay the consummation of the transactions contemplated herein or in the Indenture, or (iv) the Issuer, the Seller or the Transferor has incurred or incurs any accrued and/or unpaid penalties, fines or sanctions imposed by and owing to any Governmental Authority or any other governmental payee;

46

(p)     any litigation, action, suit, arbitration, proceeding, inquiry or investigation at law or in equity or before or by any court, public board or body is pending or overtly threatened in writing against or affecting any of the Issuer, the Seller, the Servicer, the Transferor or the Account Owner (i) that questions the validity or enforceability of any Transaction Document or any action to be taken in connection with the transactions contemplated hereby or thereby or (ii) which, individually or in the aggregate, if adversely determined, could reasonably be expected to have a Material Adverse Effect on such Person;

(q)     at any time (i) the Issuer, the Servicer, the Seller, the Transferor or the Account Owner is not in compliance with or does not have all Permits necessary or required by Requirements of Law or any Governmental Authority for the operation of its respective business as presently conducted and as proposed to be conducted except where noncompliance, violation or lack thereof is not reasonably expected to have or result in an Adverse Effect or a Material Adverse Effect on such Person or (ii) any Permits necessary or required by Requirements of Law or any Governmental Authority for the operation of the respective businesses of the Issuer, the Servicer, the Seller, the Transferor or the Account Owner are in known conflict with the rights of others and such conflict could reasonably be expected to have or result in an Adverse Effect or a Material Adverse Effect on such Person;

(r)     the occurrence of a Regulatory Event;

(s)     the Transferor shall fail to convey Receivables in additional Eligible Accounts to be included as Accounts to the Issuer, as required by Section 9.09 of this Supplement; or

(t)     the occurrence of any Event of Default (as such term is defined in the Indenture or the related Indenture Supplement with respect to the Senior Facility);

then, in the case of any event described in subparagraphs other than (d), (e) or (f) after the applicable grace period, if any, set forth in such subparagraphs, either the Indenture Trustee at the direction of the Holders of Class A Notes evidencing more than 50% of the Class A Note Principal Balance or such Holders, by notice then given in writing to the Issuer, the Servicer and the Indenture Trustee may declare that an Early Redemption Event has occurred with respect to Series 2017-One as of the date of such notice, and, in the case of any event described in subparagraph (d), (e) or (f), an Early Redemption Event shall occur with respect to Series 2017-One without any notice or other action on the part of the Indenture Trustee or the Series 2017-One Noteholders immediately upon the occurrence of such event, unless such Early Redemption Event is waived by the Holders of Class A Notes evidencing more than 50% of the Class A Note Principal Balance, by notice given in writing to the Indenture Trustee, the Issuer and the Servicer.

47

Section 6.02.     Events of Default. In addition to the Events of Default set forth in Section 5.02 of the Indenture, any of the Early Redemption Events described in Section 6.01(t) shall constitute an Event of Default under the Indenture with respect to Series 2017-One.

Section 6.03.     Acceleration. Section 5.03(a) and (c) of the Indenture shall be applicable to Section 6.02 above and any other Event of Default pursuant to Section 5.02(e) of the Indenture.

ARTICLE VII

Administrative Redemption; Series Termination

Section 7.01.     Administrative Redemption.

(a)     On any day occurring on or after the date on which the Note Principal Balance is reduced to 20% or less of the highest Note Principal Balance at any time on or after the Initial Funding Date and so long as the Series 2018-One Notes shall have first been redeemed in accordance with the terms set forth in Section 7.01 of the Series 2018-One Indenture Supplement, the Issuer, at the direction of the Transferor, shall have the option to redeem the Series 2017-One Notes, at a redemption 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 and the Indenture Trustee at least 30 days prior written notice of the date on which the Issuer intends to exercise such redemption option. The Issuer shall deposit the Redemption Amount into the Collection Account in same day funds on the Business Day prior to such scheduled redemption. Such redemption option is subject to payment in full of the Redemption Amount. Following the deposit of the Redemption Amount into the Collection Amount in accordance with the foregoing, the Allocation Amount for Series 2017-One shall be reduced to zero and following the payment in full of such Redemption Amount to the Series 2017-One Noteholders and other parties entitled to any of such amount, the Series 2017-One Noteholders shall have no further interest in the Trust Estate. The Redemption Amount shall be distributed as set forth in subsection 8.01(b).

Section 7.02.     Repayment.

The Class A Notes shall be due and payable in full on the Commitment Termination Date; provided, however, that, in the event that the Commitment Termination Date occurs while the Series 2018-One Notes remain outstanding, no amounts shall be paid in respect of the Class A Notes until the Note Principal Balance (as defined in the Series 2018-One Indenture Supplement), all Series 2018-One Monthly Interest (as defined in the Series 2018-One Indenture Supplement) on such unpaid principal amounts, and all other amounts due in respect thereof under the Series 2018-One Indenture Supplement or any other Transaction Document have been paid in full.

48

ARTICLE VIII

Redemption of Series 2017-One Notes; Final Distributions

Section 8.01.     Sale of Receivables or Redemption of the Notes pursuant to Section 2.04(c) or 8.01 of the Transfer and Servicing Agreement and Sections 5.05 and 5.17 of the Indenture and Section 7.01 of this Supplement.

(a)     (i)     The amount to be paid by the Transferor with respect to Series 2017-One in connection with a reassignment of Receivables to the Transferor pursuant to Section 2.04(c) 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.

(ii)     The amount to be paid by the Transferor with respect to Series 2017-One in connection with any purchase of the Notes, pursuant to the exercise of a right of first refusal contained in Section 8.01 of the Transfer and Servicing Agreement shall be an amount equal to the Redemption Amount for the Distribution Date of any such purchase.

(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 2017-One Notes 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 2:30 p.m., New York City 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 solely in accordance with the Monthly Servicer Statement:

i. the Series 2018-One Note Principal Balance on such Distribution Date plus an amount equal to the sum of (A) the Class A Monthly Interest and Unused Fee (each as defined in the Series 2018-One Indenture Supplement) for such Distribution Date, (B) any Class A Monthly Interest and Unused Fee (each as defined in the Series 2018-One Indenture Supplement) previously due but not distributed to the holders of the Series 2018-One Notes on a prior Distribution Date, (C) any Class A Additional Interest and Unused Fee Interest (each as defined in the Series 2018-One Indenture Supplement) for such Distribution Date and any Class A Additional Interest and Unused Fee Interest (each as defined in the Series 2018-One Indenture Supplement) previously due but not distributed to the holders of the Series 2018-One Notes on a prior Distribution Date, (D) any Class A Costs (as defined in the Series 2018-One Indenture Supplement) for such Distribution Date and any Class A Costs (as defined in the Series 2018-One Indenture Supplement) previously due but not distributed to the holders of the Series 2018-One Notes on a prior Distribution Date shall be distributed to the Paying Agent for payment to the holders of the Series 2018-One Notes;

49

ii. the Class A-1 Note Principal Balance on such Distribution Date plus an amount equal to the sum of (A) the Class A-1 Monthly Interest for such Distribution Date, (B) any Class A-1 Monthly Interest previously due but not distributed to the Class A-1 Noteholders on a prior Distribution Date, (C) any Class A-1 Additional Interest for such Distribution Date and any Class A-1 Additional Interest previously due but not distributed to the Class A-1 Noteholders on a prior Distribution Date shall be distributed to the Paying Agent for payment to the Class A-1 Noteholders;

iii. the Class A-2 Note Principal Balance on such Distribution Date plus an amount equal to the sum of (A) the Class A-2 Monthly Interest for such Distribution Date, (B) any Class A-2 Monthly Interest previously due but not distributed to the Class A-2 Noteholders on a prior Distribution Date, (C) any Class A-2 Additional Interest for such Distribution Date and any Class A-2 Additional Interest previously due but not distributed to the Class A-2 Noteholders on a prior Distribution Date shall be distributed to the Paying Agent for payment to the Class A-2 Noteholders;

iv. the Class A-3 Note Principal Balance on such Distribution Date plus an amount equal to the sum of (A) the Class A-3 Monthly Interest for such Distribution Date, (B) any Class A-3 Monthly Interest previously due but not distributed to the Class A-3 Noteholders on a prior Distribution Date, (C) any Class A-3 Additional Interest for such Distribution Date and any Class A-3 Additional Interest previously due but not distributed to the Class A-3 Noteholders on a prior Distribution Date shall be distributed to the Paying Agent for payment to the Class A-3 Noteholders;

v. the Class A-4 Note Principal Balance on such Distribution Date plus an amount equal to the sum of (A) the Class A-4 Monthly Interest for such Distribution Date, (B) any Class A-4 Monthly Interest previously due but not distributed to the Class A-4 Noteholders on a prior Distribution Date, (C) any Class A-4 Additional Interest for such Distribution Date and any Class A-4 Additional Interest previously due but not distributed to the Class A-4 Noteholders on a prior Distribution Date shall be distributed to the Paying Agent for payment to the Class A-4 Noteholders;

vi. the Class A-5 Note Principal Balance on such Distribution Date plus an amount equal to the sum of (A) the Class A-5 Monthly Interest for such Distribution Date, (B) any Class A-5 Monthly Interest previously due but not distributed to the Class A-5 Noteholders on a prior Distribution Date, (C) any Class A-5 Additional Interest for such Distribution Date and any Class A-5 Additional Interest previously due but not distributed to the Class A-5 Noteholders on a prior Distribution Date shall be distributed to the Paying Agent for payment to the Class A-5 Noteholders;

50

vii. any Services Fees, Target Proceeds Amount and other Class A Costs due and unpaid shall be distributed to the Paying Agent for payment to the Agent;

viii. the Series 2017-One Monthly Fees, Program Expenses and Program Fees previously due but not distributed shall be distributed to the Paying Agent for payment to the Servicer, the Backup Servicer, the Indenture Trustee, the Owner Trustee and the Seller; and

ix. the Class B Note Principal Balance on such Distribution Date plus an amount equal to the sum of (A) the Class B Monthly Interest for such Distribution Date, (B) any Class B Monthly Interest previously due but not distributed to the Class B Noteholders on a prior Distribution Date and (C) the amount of Class B Additional Interest for such Distribution Date and any Class B Additional Interest previously due but not distributed to the Class B Noteholders on a prior Distribution Date shall be distributed to the Paying Agent for payment to the Class B Noteholders.

(c)     Notwithstanding anything to the contrary in this Supplement or the Indenture, all amounts distributed to the Paying Agent pursuant to subsection 8.01(b) for payment to the Series 2017-One Noteholders shall be deemed distributed in full to the Series 2017-One Noteholders on the date on which such funds are distributed to the Paying Agent pursuant to this Section and the Series 2017-One Notes shall be deemed to be no longer Outstanding as such term is defined in Section 1.01 of the Indenture.

(d)     The Servicer shall promptly give the Holders of the Series 2018-One Notes written notice upon becoming aware of the occurrence of an Early Redemption Event or Event of Default with respect to Series 2017-One.

ARTICLE IX

Miscellaneous Provisions

Section 9.01.     Ratification of Agreement. As supplemented by this Supplement, the Indenture is in all respects ratified and confirmed and the Indenture as so supplemented by this Supplement shall be read, taken and construed as one and the same instrument.

Section 9.02.     Counterparts. This Supplement 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 shall constitute one and the same instrument.

51

Section 9.03.     Governing Law; Submission to Jurisdiction; Waiver of Jury Trial. THIS SUPPLEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN WITHOUT REFERENCE TO ITS CONFLICT OF LAWS PROVISIONS (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW). EACH OF THE PARTIES HERETO HEREBY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE COURT SITTING IN THE CITY OF NEW YORK FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. NOTHING IN THIS SECTION 9.03 SHALL AFFECT THE RIGHT OF ANY PARTY TO BRING ANY ACTION OR PROCEEDING AGAINST ANY OF THE PARTIES HERETO OR ANY OF THEIR RESPECTIVE PROPERTY IN THE COURTS OF OTHER JURISDICTIONS.

EACH OF THE PARTIES HERETO HEREBY WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, AMONG ANY OF THEM ARISING OUT OF, CONNECTED WITH, RELATING TO OR INCIDENTAL TO THE RELATIONSHIP BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT OR THE OTHER TRANSACTION DOCUMENTS.

Section 9.04.     Certain Tax Matters; Stapled Transfer.

(a)     Notwithstanding anything to the contrary herein, each of the Paying Agent, the Servicer and the Indenture Trustee shall be entitled to withhold any amount that it reasonably determines is required to be withheld pursuant to Section 1446 or any other provision of the Code and such amount shall be deemed to have been paid for all purposes of the Indenture.

52

(b)     Each of the Series 2017-One Noteholders agrees that prior to the date on which the first interest payment hereunder is due thereto, it will provide to the Servicer, the Paying Agent 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. Each Series 2017-One Noteholder agrees to provide to the Servicer, the Paying Agent and Indenture Trustee like additional subsequent duly completed forms (subject to like consent) satisfactory to the Servicer, the Paying Agent and 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, the Paying Agent or Indenture Trustee. Without limiting the foregoing, if a payment made under this Supplement or the Indenture would be subject to United States federal withholding tax imposed by FATCA if the recipient of such payment were to fail to comply with FATCA (including the requirements of Section 1471(b) or 1472(b) of the Code, as applicable), such recipient shall deliver to the Servicer, the Paying Agent and the Indenture Trustee, at the time or times prescribed by the Code and at such time or times reasonably requested by the Servicer or the Indenture Trustee, such documentation prescribed by the Code (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Servicer, the Paying Agent or the Indenture Trustee to comply with their respective obligations under FATCA, to determine that such recipient has complied with such recipient’s obligations under FATCA, or to determine the amount to deduct and withhold from such payment. For these purposes, “FATCA” means Section 1471 through 1474 of the Code and any regulations or official interpretations thereof (including any revenue ruling, revenue procedure, notice or similar guidance issued by the United States Internal Revenue Service thereunder as a precondition to relief or exemption from taxes under such Sections, regulations and interpretations), any agreements entered into pursuant to Section 1471(b)(1) of the Code, and including any amendments made to FATCA after the date of this Supplement. Each Series 2017-One Noteholder certifies, represents and warrants that as of the date of this Agreement, or in the case of a Series 2017-One Noteholder which is an assignee as of the date of such Note Assignment, that it is entitled (x) to receive payments under this Supplement without deduction or withholding (other than pursuant to Section 1446 of the Code, if applicable) of any United States federal income taxes and (y) to an exemption from United States backup withholding tax. Each Series 2017-One Noteholder represents and warrants that it shall pay any taxes imposed on such Series 2017-One Noteholder attributable to its interest in the Series 2017-One Notes.

(c)     Each Class A Noteholder agrees with the Issuer that: (i) such Class A Noteholder will deliver to the Issuer 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 E, executed by such assignee Class A Noteholder, 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 or Participant of a portion of an interest relating to the Class A Notes and (ii) all of the statements made by such Class A Noteholder or Participant, as applicable in its Investment Letter shall be true and correct as of the date made.

53

(d)     Each Series 2017-One Noteholder, by its holding of an interest in the Series 2017-One Notes, hereby severally represents, warrants and covenants, and each Series 2017-One Noteholder that acquires an interest in the Series 2017-One Notes by Note Assignment shall be deemed to have severally represented, warranted and covenanted upon such Note Assignment that: (i) such Series 2017-One Noteholder has not acquired and shall not sell, trade or transfer any interest in the Series 2017-One Notes, nor cause any interest in the Series 2017-One Notes to be marketed, readily available or readily tradeable, on or through either (A) an “established securities market” 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 Series 2017-One Notes 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 Series 2017-One Notes and stands ready to effect buy or sell transactions at the quoted prices for itself or on behalf of others), (ii) either (A) it is not, and will not become, a partnership, Subchapter S corporation, grantor trust or an entity disregarded as a separate entity from any such entity for U.S. federal income tax purposes or (B) it is such an entity, but (x) either (1) none of the direct or indirect beneficial owners of any of the interests in the Series 2017-One Noteholder have allowed or caused, or will allow or cause, 50% or more (or such other percentage as the Issuer may establish prior to the time of such proposed transfer) of the value of such interests to be attributable to the Series 2017-One Noteholder’s ownership of Series 2017-One Notes and any other interests in the Issuer or (2) no more than the number of persons specified in clause (i)(B)(2) of its Investment Letter will be treated as “partners” in the Issuer under Treasury Regulation section 1.7704-1(h)(3) solely by reason of the Series 2017-One Noteholder’s ownership of the Series 2017-One Notes and (y) it is not and will not be a principal purpose of the arrangement involving the Series 2017-One Noteholder’s beneficial interest in any Series 2017-One Notes to permit any partnership to satisfy the 100 partner limitation of Treasury Regulation Section 1.7704-1(h)(1)(ii) necessary for such partnership not to be classified as a publicly traded partnership under the Code and (iii) such Series 2017-One Noteholder is a “United States person” for U.S. federal income tax purposes. Each Class A Noteholder further 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 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 a foregoing representation, warranty or covenant of a Series 2017-One Noteholder or its Participant, such Series 2017-One Noteholder shall notify the Issuer promptly upon such Series 2017-One Noteholder’s becoming aware of such breach, and thereupon the Series 2017-One Noteholder hereby agrees to use reasonable efforts to procure a replacement investor which is acceptable to the Issuer not so affected to replace such affected Series 2017-One Noteholder or Participant. In any such event, the Issuer shall also have the right to procure a replacement investor. Each affected Series 2017-One Noteholder agrees to take all actions necessary to permit a replacement investor to success to its rights and obligations hereunder.

(e)     Subject to the provisions of subsection 9.04(g), each Class A Noteholder may at any time sell, assign or otherwise transfer, to the extent of such Class A Noteholder’s interest in the Class A Notes (each, a “Note Assignment”), to any Permitted Transferee (as defined in the Class A Purchase Agreement), all or part of its interest in the Class A Notes; provided, however, that any Note Assignment shall be void unless (i) the minimum amount of such Note Assignment shall be $5,000,000, except as the Issuer may otherwise agree and (ii) such assignee Class A Noteholder shall comply with this Section 9.04 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 has made the representations, warranties and covenants required to be made pursuant to this Section 9.04, (iii) following the Note Assignment there shall not be in the aggregate more than 10 beneficial owners of an interest or Participants holding an interest in the Class A Notes (for these purposes including in the number of beneficial owners the aggregate number of persons designated in clause (i)(B)(2) of the Investment Letters for each Class A Noteholder and Participant), and (iv) such proposed assignee shall provide the forms described in subsection 9.04(b) (subject to the Issuer’s consent, as applicable and as set forth therein) in the manner described therein. In connection with any Note Assignment, the assignor Class A Noteholder shall request in writing to the Indenture Trustee (who shall promptly deliver it to the Issuer) for the consent of the Issuer (the Issuer shall respond to any such request within ten (10) Business Days after its receipt and the Issuer will not unreasonably withhold such consent) it being understood that, except in the case of a Note Assignment to a Permitted Transferee, the obtaining of such consent is a condition to the effectiveness of the Note Assignment. Notwithstanding the forgoing, no consent of the Issuer shall be required for any such assignments made after the occurrence of an Early Redemption Event. Each assignee Class A Noteholder is subject to the terms and conditions of subsection 9.04(b) on an ongoing basis and hereby makes the certifications, representations and warranties contained therein.

54

(f)     Subject to the provisions of subsection 9.04(g), any Class A Noteholder may at any time grant a participation in all or part of its interest in Class A Notes to any Permitted Transferee (each such Person, a “Participant”); provided, however, that such participation shall be void, unless (i) such Participant complies with the applicable provisions of this Section 9.04, (ii) such Class A Noteholder 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 9.04, and (iii) following the participation there would not be in the aggregate more than 10 beneficial owners of an interest or Participants holding an interest in the Class A Notes (for these purposes including in the number of beneficial owners the aggregate number of persons designated in clause (i)(B)(2) of the Investment Letters for each Class A Noteholder and Participant). Each Class A Noteholder hereby acknowledges and agrees that any such participation will not alter or affect in any way whatsoever such Class A Noteholder’s direct obligations hereunder and that the Issuer shall have no obligation to have any communication or relationship whatsoever with any Participant of such Class A Noteholder in order to enforce the obligations of such Class A Noteholder hereunder. Each Class A Noteholder shall promptly notify the Indenture Trustee (which shall promptly notify the Issuer) 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 hereby agrees to deliver to the Issuer 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 Series 2017-One Noteholder will provide to the Servicer and Indenture Trustee, the forms described in subsection 9.04(b) (subject to the Issuer’s consent, as applicable and as set forth therein) as though the Participant were a Class A Noteholder, (iii) such Series 2017-One Noteholder similarly will provide subsequent forms as described in subsection 9.04(b) with respect to such Participant as though it were a Class A Noteholder, and (iv) such Participant will pay any taxes imposed on its participation interest in the Class A Notes.

(g)     Except (i) as provided in subsections 9.04(e) and (f) above and (ii) in connection with any pledge to any Federal Reserve Bank to secure any obligation of a Class A Noteholder, no Class A Noteholder may sell, transfer, assign, exchange, participate or otherwise convey or pledge, hypothecate, rehypothecate, or otherwise grant a security interest in a Class A Note and any such attempted sale, transfer, assignment, exchange, participation, conveyance, pledge, hypothecation, rehypothecation or grant shall be void. Notwithstanding the foregoing, no Class A Note may be transferred other than pursuant to a transfer of a pro rata portion of the Class A-1 Notes, Class A-2 Notes, Class A-3 Notes, Class A-4 Notes, and Class A-5 Notes (a “Stapled Transfer”).

55

(h)     The Parties agree to (i) treat the Class A Notes as debt of the Issuer for federal income tax purposes and the Class B Notes as equity in the Issuer for federal income tax purposes and (ii) take no action inconsistent with such treatment unless required by law.

(i)     Each Class A Noteholder represents, warrants and covenants that, in the event the Class A Notes are re-characterized as equity in the Issuer for federal income tax purposes, it consents to, and will comply with, all of the tax-related provisions in the Trust Agreement as if it were a Certificateholder thereunder, including all provisions relating to subchapter C of chapter 63 of subtitle F of the Code as amended by the Bipartisan Budget Act of 2015.

Section 9.05.     Transfer of Class B Notes. Notwithstanding anything to the contrary in this Supplement, no interest in the Class B Notes may be, directly or indirectly, sold, transferred, assigned, exchanged, participated or otherwise conveyed, pledged, hypothecated or re-hypothecated or made the subject of a security interest (each such transaction for purposes of this Section 9.05, a “Transfer”) (i) without the prior written consent of the Agent and (ii) except to a Person who is a “United States person” for United States federal income tax purposes, and only upon the prior delivery of a Tax Opinion to the Indenture Trustee with respect to such Transfer, and any Transfer in violation of these requirements shall be null and void ab initio.

Section 9.06.     Limitation of Liability. It is expressly understood and agreed by the parties hereto that (a) this Supplement is executed and delivered by Wilmington Trust, National Association, 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, National Association but is made and intended for the purpose of binding only the Issuer, (c) nothing herein contained shall be construed as creating any liability on Wilmington Trust, National Association, individually or personally, to perform any covenant either expressed or implied contained herein, all such liability, if any, being expressly waived by the parties to this Agreement and by any person claiming by, through or under the parties to this Agreement, (d) Wilmington Trust, National Association has not verified and has conducted no investigation as to the accuracy or completeness of any representation, warranty or covenant of the Issuer and (e) under no circumstances shall Wilmington Trust, National Association 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 Supplement or any other document to which the Issuer is a party.

Section 9.07.     Paired Series. With the prior written consent of the Agent, prior to the start of the Early Redemption Period, the Series 2017-One Notes may be paired with one or more other Series such that the allocation amount of the paired Series will increase proportionately to the decrease in the Adjusted Allocation Amount for Series 2017-One (each, a “Paired Series”); provided that no Series shall be deemed to be a Paired Series with Series 2017-One unless the related Indenture Supplement shall explicitly state that it is a Paired Series with Series 2017-One.

56

Section 9.08.     Additional Eligibility Criteria. (a) For so long as the Series 2017-One Notes remain Outstanding, in addition to the eligibility criteria set forth in the definition of “Eligible Account” in the Transfer and Servicing Agreement, an Eligible Account shall also only include consumer revolving credit card accounts which, as of the Cut-Off Date have the following characteristics:

[*****]

(b) For so long as the Series 2017-One Notes remain Outstanding, in addition to the eligibility criteria set forth in the definition of “Eligible Receivable” in the Transfer and Servicing Agreement, an Eligible Receivable shall also have the following characteristics:

[*****]

(c) To the extent that as of the applicable Cut-Off Date, any Account transferred to the Issuer was not an Eligible Account or any Receivable contained in such Account was not an Eligible Receivable, such Account or Receivable, as applicable, shall be subject to reassignment in accordance with Section 2.05 of the Transfer and Servicing Agreement.

(d)     For so long as the Series 2017-One Notes remain Outstanding, the Transferor shall have the option, in its sole discretion, to designate as an Ineligible Receivable any Receivable whose principal balance constitutes a portion of an Excess Concentration Amount. If at any time after such designation the principal balance then outstanding of such Receivable no longer constitutes a portion of an Excess Concentration Amount and such Receivable meets all of the criteria to be an Eligible Receivable at such time, such Receivable shall be designated an Eligible Receivable and if not owned by the Issuer at such time, acquired by the Issuer from the Transferor.

Section 9.09.     Transferor Amount. (a) For so long as the Series 2017-One Notes remain Outstanding, notwithstanding anything to the contrary in the Transaction Documents, the term “Transferor Amount“ has the meaning set forth in this Indenture Supplement for all purposes under the Transaction Documents.

(b) On each Measurement Date, the Servicer shall determine the Series Required Transferor Amount and the Transferor Amount as of the last day of the related Monthly Period. Notwithstanding anything in the Transaction Documents to the contrary, if the Servicer determines that the Transferor Amount is less than the Series Required Transferor Amount, the Transferor shall cause to be designated additional Eligible Accounts to be included as Accounts in a sufficient amount such that the Transferor Amount is at least equal to the Series Required Transferor Amount. Receivables from such additional Eligible Accounts shall be transferred to the Issuer on or before the last Business Day of the Monthly Period in which such Measurement Date takes place.

57

IN WITNESS WHEREOF, the Issuer, the Servicer and the Indenture Trustee have caused this Indenture Supplement to be duly executed by their respective officers thereunto duly authorized, all as of the date first above written.

PERIMETER MASTER NOTE BUSINESS TRUST, Issuer
By: Wilmington Trust, National association
not in its individual capacity, but solely as Owner Trustee
By:	/s/ Roseline K. Maney
	Name: Roseline K. Maney Title: Administrative Vice President
U.S. BANK NATIONAL ASSOCIATION, not in its individual capacity, but solely as Indenture Trustee
By:	/s/ Tamara Schultz-Fugh
	Name: Tamara Schultz-Fugh Title: Vice President
ACCESS FINANCING, LLC, Servicer
By:	/s/ Brian Stone
	Name: Brian Stone Title: President

For purposes of Section 9.08 only:

Perimeter Funding Corporation,

as Transferor

By:	/s/ William R. McCamey
	Name: William R. McCamey   Title: President

[Signature Page to Series 2017-One Indenture Supplement]

ACKNOWLEDGMENT AND CONSENT OF SERIES 2017-ONE NOTEHOLDERS:

TSO-FORTIVA NOTES HOLDCO LP,

as Agent and Holder of 100% of the Series 2017-One Class A Notes

By: TowerBrook TSO GP (Alberta), L.P.,

its General Partner

By: TowerBrook Investors, Ltd.,

its General Partner

By:	/s/ Glenn F. Miller
	Name: Glenn F. Miller      Title: Attorney-in-Fact

CCFC CORP.,

as Holder of 100% of the Class B Notes

By:	/s/ Mitch Saunders
	Name: Mitch Saunders      Title: Treasurer

[Consent Page to Series 2017-One Indenture Supplement]

Schedule 1

“Backup Servicing Fee” shall mean the fee payable pursuant to a backup servicing agreement to be entered into by the Servicer, the Issuer, the Backup Servicer and the Indenture Trustee.

“Servicing Fee” shall mean, for any Monthly Period, [*****].

“Marketing Fee” shall mean, for any Monthly Period, [*****].

“Delinquent Account” shall [*****].

TABLE OF CONTENTS

Page

ARTICLE I
Creation of the Series 2017-One Notes
Section 1.01.	Designation	1
ARTICLE II
Definitions
Section 2.01.	Definitions	2
ARTICLE III
Fees
Section 3.01.	Servicing Compensation; Marketing Fee	22
ARTICLE IV
Rights of Series 2017-One Noteholders and Allocation and Application of Collections
Section 4.01.	Collections and Allocations	23
Section 4.02.	Determination of Monthly Interest	25
Section 4.03.	Limited Redemption; Optional Redemption	28
Section 4.04.	Class A Required Amount	29
Section 4.05.	Application of Available Funds and Available Principal Collections	30
Section 4.06.	Defaulted Amounts; Reduction Amounts	34
Section 4.07	Reallocated Principal Collections	35
Section 4.08	Principal Amount Increases	37
Section 4.09.	Series 2017-One Distribution Account	39
Section 4.10.	Pre-Funding Account	40
ARTICLE V
Distributions and Reports to Series 2017-One Noteholders
Section 5.01.	Distributions	41
Section 5.02.	Reports and Statements to Series 2017-One Noteholders	43
ARTICLE VI
Early Redemption Events; Events of Default
Section 6.01.	Early Redemption Events	45
Section 6.02.	Events of Default	48
ARTICLE VII
Administrative Redemption; Series Termination
Section 7.01.	Administrative Redemption	48
Section 7.02.	Repayment	48

-i-

TABLE OF CONTENTS
(continued)

Page

ARTICLE VIII
Redemption of Series 2017-One Notes; Final Distributions
Section 8.01.	Sale of Receivables or Redemption of the Notes pursuant to Section 2.04 (c) or 8.01 of the Transfer and Servicing Agreement and Sections 5.05 and 5.17 of the Indenture and Section 7.01 of this Supplement	49
ARTICLE IX
Miscellaneous Provisions
Section 9.01.	Ratification of Agreement	51
Section 9.02.	Counterparts	51
Section 9.03.	Governing Law	52
Section 9.04.	Certain Tax Matters; Stapled Transfer	52
Section 9.05.	Transfer of Class B Notes	56
Section 9.06.	Limitation of Liability	56
Section 9.07.	Paired Series	56
Section 9.08.	Additional Eligibility Criteria	57
Section 9.09.	Transferor Amount	57

-ii-

EX-10.11B

CERTAIN INFORMATION, IDENTIFIED BY [*****], HAS BEEN EXCLUDED FROM THE EXHIBIT BECAUSE IT IS BOTH NOT MATERIAL AND WOULD LIKELY CAUSE COMPETITIVE HARM TO THE COMPANY IF PUBLICLY DISCLOSED.

Exhibit 10.11(b)

EXECUTION COPY

FIRST AMENDMENT TO THE

AMENDED AND RESTATED SERIES 2017-ONE INDENTURE

SUPPLEMENT

This First Amendment to the Amended and Restated Series 2017-One Indenture Supplement (the “Amendment”), dated as of November 16, 2018, among Perimeter Master Note Business Trust, a business trust organized and existing under the laws of the State of Nevada (herein, the “Issuer” or the “Trust”), Access Financing, LLC, a Georgia limited liability company (the “Servicer”) and U.S. Bank National Association, 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 February 8, 2017 (as amended, restated, supplemented or otherwise modified from time to time, the “Indenture”) among the Issuer, the Servicer and the Indenture Trustee.

Capitalized terms used herein shall have the meanings assigned to such terms in the Supplement (as defined below).

WITNESSETH:

WHEREAS, the Issuer, the Servicer and the Indenture Trustee executed the Amended and Restated Series 2017-One Indenture Supplement, dated as of June 11, 2018 (the “Supplement”); and

WHEREAS, the parties hereto have agreed to amend the Supplement on the terms and conditions hereinafter set forth in accordance with Section 9.02 of the Indenture;

NOW, THEREFORE, in consideration of the promises and of the mutual covenants and agreements hereinafter set forth, the parties hereto hereby agree as follows:

SECTION 1. Amendments of the Supplement.

1.1      The definition of Class B Note Rate is hereby deleted in its entirety and replaced with the following:

“Class B Note Rate” shall have the meaning specified in the Class B Note Purchase Agreement, but in any event shall not be greater than [*****]% per annum.

1.2     Paragraphs (c) and (d) of the definition of Collection Release Conditions are hereby deleted in their entirety and replaced with the following:

(c) the aggregate unpaid principal balance of all Series of Notes issued under the Indenture or any Indenture Supplement shall not exceed the sum of the Net Eligible Receivables Balance plus the Pre-Funding Amount as of such date plus the aggregate pre-funding amounts of other Series of Notes issued and outstanding on such date; provided, however, for purposes of this calculation, clause (b) of the definition of Net Eligible Receivables Balance shall be determined as of the last day of the immediately preceding Monthly Period;

(d) the Transferor Amount on such day is greater than the Required Transferor Amount (after giving effect to all Principal Receivables transferred to the Issuer on such day); and

1.3     The definition of Excess Finance Charge Collections is hereby deleted in its entirety and replaced with the following definition:

“Excess Finance Charge Collections” shall mean, with respect to each Monthly Period, the sum of (i) the Series 2018-One Excess Collections and (ii) the product of (a) the aggregate amount for all other outstanding Series of Collections of Finance Charge Receivables which the related Indenture Supplements specify are to be distributed to the Transferor after all other Collections of Finance Charge Receivables are applied and distributed in connection with the payment of servicing fees, marketing fees and all non-principal amounts owed to the Noteholders of such Series and (b) the percentage equivalent of a fraction, (x) the numerator of which is equal to the Series 2017-One Allocation Percentage for such Monthly Period and (y) the denominator of which is the sum of the Series 2017-One Allocation Percentage and the Series 2018-Three Allocation Percentage for such Monthly Period; provided that any Excess Finance Charge Collections (as defined in the Series 2018-Three Supplement) that are not required to make a payment under Section 4.05(a)(i)-(xiii) of the Series 2018-Three Supplement shall constitute Excess Finance Charge Collections if there are insufficient Available Funds to make the payments under Section 4.05(a)(i)-(xv) hereof.

2

1.4     The definition of Excess Principal Collections is hereby deleted in its entirety and replaced with the following definition:

“Excess Principal Collections” shall mean, with respect to each Monthly Period, all Collections of Principal Receivables allocated to the Senior Facility remaining after such Collections of Principal Receivables are applied and distributed in accordance with the Indenture Supplement for the Series related to the Senior Facility; provided that any Excess Principal Collections (as defined in the Series 2018-Three Supplement) that are not required to make a payment under Section 4.05(b)(i)-(iii), 4.05(c)(i)-(vi) or 4.05(d)(i)-(iii) of the Series 2018-Three Supplement shall constitute Excess Principal Collections if there are insufficient Available Principal Collections to make the payments under Sections 4.05(b)(i)-(iii), 4.05(c)(i)-(viii) or 4.05(d)(i)-(iii) hereof.

1.5     The definitions of Reallocated Principal Collections and Reallocated Class B Principal Collections are hereby deleted in their entirety and replaced with the following definitions:

“Reallocated Principal Collections” shall mean, with respect to any Distribution Date, an amount equal to the lesser of (I) the product of (a) the sum of (i) Allocable Principal Collections (as defined in the Series 2018–One Indenture Supplement) plus (ii) the product of (A) the Series 2017-One Allocable Principal Collections deposited in the Collection Account for the related Monthly Period and (B) the Fixed/Floating Allocation Percentage for the related Monthly Period, and (b) the Class A/B Subordination Percentage, and (II) the greater of (x) the Note Principal Balance (prior to any distributions on such Distribution Date), minus the excess, if any, of the total amount of Reduction Amounts for all prior Distribution Dates and the Reallocated Principal Collections that under subsections 4.07(b) through (g) were used to fund the Series 2018-One Required Amount, the Class A-1 Required Amount, the Class A-2 Required Amount, the Class A-3 Required Amount, the Class A-4 Required Amount, or the Class A-5 Required Amount on all prior Distribution Dates over such Reduction Amounts and Reallocated Principal Collections reimbursed pursuant to subsection 4.05(a)(xi)(A) prior to such date and (y) zero.

“Reallocated Class B Principal Collections” shall mean, with respect to any Distribution Date, an amount equal to the lesser of of (I) the product of (a) the sum of (i) Allocable Principal Collections (as defined in the Series 2018–One Indenture Supplement) plus (ii) the product of (A) the Series 2017-One Allocable Principal Collections deposited in the Collection Account for the related Monthly Period and (B) the Fixed/Floating Allocation Percentage for the related Monthly Period, and (b) the Class B Subordination Percentage, and (II) the greater of (x) the Class B Note Principal Balance (prior to any distributions on such Distribution Date), minus the excess, if any, of the total amount of Reduction Amounts for all prior Distribution Dates and the Reallocated Principal Collections that under subsections 4.07(b) through (g) were used to fund the Series 2018-One Required Amount, the Class A-1 Required Amount, the Class A-2 Required Amount, the Class A-3 Required Amount, the Class A-4 Required Amount, or the Class A-5 Required Amount on all prior Distribution Dates over such Reduction Amounts and Reallocated Principal Collections reimbursed pursuant to subsection 4.05(a)(xi)(A) prior to such date and (y) zero.

3

1.6     The definition of Series Adjusted Subordinated Transferor Amount is hereby deleted in its entirety and replaced with the following definition:

“Series Adjusted Subordinated Transferor Amount” shall mean, as of any date, an amount equal to (a) the Series Required Transferor Amount as of the last day of the prior Monthly Period minus (b) the excess, if any, of the total amount of Transferor Reduction Amounts for all prior Distribution Dates and the amounts that under subsection 4.07(a) were used to fund the Series 2018-One Required Amount, Class A-1 Required Amount, the Class A-2 Required Amount, the Class A-3 Required Amount, the Class A-4 Required Amount or the Class A-5 Required Amount on all prior Distribution Dates over amounts reimbursed pursuant to subsection 4.05(a)(xi)(B) prior to such date.

1.7     The definition of Series Required Transferor Amount is hereby deleted in its entirety and replaced with the following definition.

“Series Required Transferor Amount” shall mean, with respect to any date of determination, an amount equal (a)(i) the sum of the Note Principal Balance plus the Series 2018-One Principal Balance, in each case as of the last day of the prior Monthly Period divided by (ii) 95.0% minus (b) the sum of the Note Principal Balance plus the Series 2018-One Principal Balance, in each case as of the last day of the prior Monthly Period.

1.8     The definition of Transferor Available Principal Collections is hereby deleted in its entirety and replaced with the following definition:

“Transferor Available Principal Collections” shall mean, with respect to any Distribution Date, an amount equal to the lesser of (i) the product of (A) the sum of (1) the product of the Series 2017-One Allocable Principal Collections times the Fixed/Floating Allocation Percentage for such Monthly Period plus (2) the Allocable Principal Collections (as defined in the Series 2018–One Indenture Supplement), in each case deposited in the Collection Account for the related Monthly Period and (B) 5.0%, and (ii) the greater of (A) the Series Adjusted Subordinated Transferor Amount and (B) zero.

4

1.9      The definitions of Required Subordinate Transferor Percentage and Transferor Amount are hereby deleted in their entirety.

1.10     The following definitions are hereby inserted in the appropriate alphabetical order:

“Regulation RR” shall mean Part 244 – Credit Risk Retention (Regulation RR), 12 C.F.R. §§244.1-244.22, as the same may be amended from time to time.

“Series 2018-Three Allocation Percentage” shall have the meaning given to such term in the Series 2018-Three Supplement.

“Series 2018-Three Supplement” shall mean the Series 2018-Three Indenture Supplement to the Master Indenture, dated as of November 16, 2018, among the Issuer, the Servicer and the Indenture Trustee, as amended, restated or otherwise modified from time to time in accordance with its terms.

“Series 2018-One Allocation Percentage” shall have the meaning given to such term in the Series 2018-One Indenture Supplement.

“Transferor’s Interest” shall have the meaning specified in Section 9.09.

1.11     Section 3.01 of the Supplement is hereby amended by deleting it in its entirety and replacing it with the following:

(a)     Servicing Fee. The share of the Servicing Fee allocable to the Series 2017-One Noteholders with respect to any Distribution Date (the “Monthly Servicing Fee”) shall mean an amount equal to the product of (1) the Floating Allocation Percentage, (2) the Series 2017-One Allocation Percentage and (3) the Servicing Fee for the most recent Monthly Period preceding such Distribution Date. The remainder of the Servicing Fee, if any, shall be paid by the Issuer or the holders of the Transferor Certificate and the Noteholders of other Series (as provided in the Transfer and Servicing Agreement and the related Supplements) and in no event shall the Indenture Trustee or the Series 2017-One Noteholders be liable for the share of the Servicing Fee to be paid by the Issuer or the holders of the Transferor Certificate or the Noteholders of any other Series.

5

(b)     Marketing Fee. The share of the Marketing Fee allocable to the Series 2017-One Noteholders with respect to any Distribution Date (the “Monthly Marketing Fee”) shall mean an amount equal to (A) the product of (x) the Marketing Fee for the most recent Monthly Period preceding such Distribution Date times (y) the Floating Allocation Percentage times (z) the sum of the Series 2018-One Allocation Percentage and the Series 2017-One Allocation Percentage. The remainder of the Marketing Fee, if any, shall be paid by the Issuer or the holders of the Transferor Certificate and the Noteholders of other Series (as provided in the Transfer and Servicing Agreement and the related Supplements) and in no event shall the Indenture Trustee or the Series 2017-One Noteholders be liable for the share of the Marketing Fee to be paid by the Issuer or the holders of the Transferor Certificate or the Noteholders of any other Series.

(c)     Backup Servicing Fee. The share of the Backup Servicing Fee allocable to the Series 2017-One Noteholders with respect to any Distribution Date (the “Monthly Backup Servicing Fee”) shall mean an amount equal to the product of (1) the Floating Allocation Percentage, (2) the Series 2017-One Allocation Percentage and (3) the Backup Servicing Fee for the most recent Monthly Period preceding such Distribution Date. The remainder of the Backup Servicing Fee, if any, shall be paid by the Issuer or the holders of the Transferor Certificate and the Noteholders of other Series (as provided in the Transfer and Servicing Agreement and the related Supplements) and in no event shall the Indenture Trustee or the Series 2017-One Noteholders be liable for the share of the Backup Servicing Fee to be paid by the Issuer or the holders of the Transferor Certificate or the Noteholders of any other Series.

1.12     Section 4.03(a) of the Supplement is hereby amended by deleting clause (z) and replacing it with the following:

and (z) the sum of the Note Principal Balance and the Series Adjusted Subordinated Transferor Amount shall be no less than the Required Senior Subordination Amount.

1.13     Section 4.03(b) is hereby amended by deleting clause (b)(ii) and replacing it with the following:

(ii) the sum of the Note Principal Balance and the Series Adjusted Subordinated Transferor Amount shall be no less than the Required Senior Subordination Amount.

1.14     Section 4.05(a)(xv) is hereby amended by deleting it in its entirety and replacing it with the following:

(xv)     an amount equal to the Program Expenses for such Distribution Date minus any Capped Program Expenses paid in clause (i) above for such Distribution Date, plus the amount of any Program Expenses previously due but not distributed to the Owner Trustee or Indenture Trustee on a prior Distribution Date, shall be distributed pro rata to the Owner Trustee and the Indenture Trustee;

6

1.15     Section 4.05(a)(xvi) is hereby amended by deleting it in its entirety and replacing it with the following:

(xvi)     [*****].

1.16     Section 4.05(b)(iv) is hereby amended by deleting it in its entirety and replacing it with the following:

(iv) an amount equal to the balance, if any, of such Available Principal Collections shall be distributed to the Transferor, but only if the Transferor Amount on such date is greater than the Required Transferor Amount (after giving effect to all Principal Receivables transferred to the Issuer on such day) and otherwise shall be deposited in the Special Funding Account.

1.17     Section 4.05(c)(ix) is hereby amended by deleting it in its entirety and replacing it with the following:

(ix)     for each Distribution Date beginning on the Distribution Date on which the Class B Notes are paid in full, an amount equal to the balance, if any, of such Available Principal Collections shall be distributed to the Transferor, but only if the Transferor Amount on such date is greater than the Required Transferor Amount (after giving effect to all Principal Receivables transferred to the Issuer on such day) and otherwise shall be deposited in the Special Funding Account.

1.18     Section 4.05(d)(iv) is hereby amended by deleting it in its entirety and replacing it with the following:

(iv)      the balance of such Available Principal Collections shall be distributed to the Transferor, but only if the Transferor Amount on such date is greater than the Required Transferor Amount (after giving effect to all Principal Receivables transferred to the Issuer on such day) and otherwise shall be deposited in the Special Funding Account

1.19     Section 4.10(c) is hereby amended by deleting it in its entirety and replacing it with the following:

(c)     On any Deposit Date in a Monthly Period during the Revolving Period, the Servicer may withdraw from the Pre-Funding Account an amount not to exceed the lesser of (1) the positive difference, if any, between (I) the Transferor Amount and (II) the Required Transferor Amount, and (2) the amount on deposit in the Pre-Funding Account, and pay such amount to the Issuer for application pursuant to the Trust Agreement.

7

1.20     Section 6.01(c) of the Supplement is hereby amended by adding the following at the end thereof:

or Access Financing, LLC resigns as Servicer

1.21      Section 6.01(s) of the Supplement is hereby deleted in its entirety and replaced with the following:

(s) (i) the Transferor shall fail to cause the amount of the Transferor’s Interest, when measured in a manner consistent with the requirements of Regulation RR, to satisfy the requirements of Regulation RR as required by Section 9.09 of this Supplement or (ii) if, for any Measurement Date, the Servicer determined that the Transferor Amount is less than the Required Transferor Amount, the Transferor shall fail to cause to be designated additional Eligible Accounts to be included as Accounts in a sufficient amount such that the Transferor Amount is at least equal to the Required Transferor Amount on or before the last Business Day of the Monthly Period in which such Measurement Date takes place;

1.22     Section 6.01 of the Supplement is hereby amended by deleting the period at the end of clause (t) and inserting “; or” therefor and inserting the following new clause (u) at the end thereof:

(u) the occurrence of any Early Redemption Event (as such term is defined in the Series 2018-Three Supplement);

1.23     Section 6.02 of the Supplement is hereby amended by deleting it in its entirety and replacing it with the following:

Section 6.02     Events of Default. In addition to the Events of Default set forth in Section 5.02 of the Indenture, any Event of Default with respect to Series 2018-Three and any of the Early Redemption Events described in Section 6.01(t) shall constitute an Event of Default under the Indenture with respect to Series 2017-One.

8

1.24     Section 9.09 is hereby amended by deleting it in its entirety and replacing it with the following:

Section 9.09      Measuring the Transferor’s Interest for Purposes of Regulation RR. In order to facilitate the obligation of Fortiva Funding, LLC, a Georgia limited liability company, to comply with Regulation RR, the Servicer shall, on each Measurement Date and on the issuance date of any Notes under the Indenture, measure the interest of the Transferor in the Transferred Assets represented by the Transferor Certificate (the “Transferor’s Interest”) in a manner consistent with the requirements of Regulation RR. If on any Measurement Date the amount of the Transferor’s Interest, when measured in a manner consistent with the requirements of Regulation RR, does not satisfy the requirements of Regulation RR, the Transferor shall cause the amount of the Transferor’s Interest, when measured in a manner consistent with the requirements of Regulation RR, to satisfy the requirements of Regulation RR as soon as practicable thereafter but, in any event, no later than the immediately subsequent Measurement Date. For purposes of this Section 9.09, the Transferor’s Interest shall constitute a “seller’s interest” for purposes of Regulation RR.

The Servicer shall indicate in each Monthly Servicer Statement whether the amount of the Transferor’s Interest, when measured in a manner consistent with the requirements of Regulation RR, satisfies the requirements of Regulation RR.

In no event shall the Indenture Trustee have any responsibility to monitor compliance with or enforce compliance with Regulation RR. The Indenture Trustee shall not be charged with knowledge of such rules, nor shall it be liable to any Noteholder or other party for violation of such rules now or hereinafter in effect.

SECTION 2. Miscellaneous

2.1     Ratification. As amended hereby, the Supplement is in all respects ratified and confirmed and the Supplement as so supplemented by this Amendment shall be read, taken and construed as one and the same instrument.

2.2     Counterparts. This Amendment 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 shall constitute one and the same instrument.

2.3     Governing Law. THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES THEREOF (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW).

9

2.4     Successors and Assigns. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective permitted successors and assigns.

2.5     Effectiveness. This Amendment shall be effective as of the date first above written.

2.6     Limitation of Liability. It is expressly understood and agreed by the parties hereto that (a) this Amendment is executed and delivered by Wilmington Trust, National Association, 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, National Association, but is made and intended for the purpose of binding only the Issuer and (c) under no circumstances shall Wilmington Trust, National Association 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.

2.7     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).

10

IN WITNESS WHEREOF, the undersigned have caused this Amendment to be duly executed and delivered by their respective duly authorized officers on the day and year first above written.

PERIMETER MASTER NOTE BUSINESS TRUST, as Issuer
By:	Wilmington Trust, National Association, not in its individual capacity, but solely as Owner Trustee
By:	/s/ Robert P. Hines Jr.
	Name: Robert P. Hines Jr. Title: Vice President
U.S. BANK NATIONAL ASSOCIATION, not in its individual capacity, but solely as Indenture Trustee
By:	/s/ Mirtza J. Escobar
	Name: Mirtza J. Escobar Title: Vice President
ACCESS FINANCING, LLC, Servicer
By:	/s/ Brian Stone
	Name: Brian Stone Title: President

11

Consent of Series 2017-One Noteholders:

TSO-FORTIVA NOTES HOLDCO LP,

as holder of 100% of Class A Notes

By: TowerBrook TSO GP (Alberta), L.P., its

General Partner

By: TowerBrook Investors, Ltd., its General

Partner

By:	/s/ Glenn F. Miller
	Name: Glenn F. Miller    Title: Attorney-in-fact

CCFC CORP.,

as holder of 100% of Class B Notes

By:	/s/ Joshua C. Miller
	Name: Joshua C. Miller    Title: Assistant Vice President

Consent of Administrative Agent on behalf of Series 2018-One

Noteholders:

Credit Suisse AG, New York Branch, As

Administrative Agent, on behalf of the holders of

100% of Class A Notes

By:	/s/ Michael Eaton
	Name: Michael Eaton    Title: Vice President
By:	/s/ Erin McCutcheon
	Name: Erin McCutcheon    Title: Director

12

EX-10.11C

CERTAIN INFORMATION, IDENTIFIED BY [*****], HAS BEEN EXCLUDED FROM THE EXHIBIT BECAUSE IT IS BOTH NOT MATERIAL AND WOULD LIKELY CAUSE COMPETITIVE HARM TO THE COMPANY IF PUBLICLY DISCLOSED.

Exhibit 10.11(c)

SECOND AMENDMENT TO THE

AMENDED AND RESTATED SERIES 2017-ONE INDENTURE SUPPLEMENT

This Second Amendment to the Amended and Restated Series 2017-One Indenture Supplement (the “Amendment”), dated as of September 20, 2019, among Perimeter Master Note Business Trust, a business trust organized and existing under the laws of the State of Nevada (herein, the “Issuer” or the “Trust”), Access Financing, LLC, a Georgia limited liability company (the “Servicer”), and U.S. Bank National Association, 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 February 8, 2017 (as amended, restated, supplemented or otherwise modified from time to time, the “Indenture”) among the Issuer, the Servicer and the Indenture Trustee.

Capitalized terms used herein shall have the meanings assigned to such terms in the Supplement (as defined below).

WITNESSETH:

WHEREAS, the Issuer, the Servicer and the Indenture Trustee executed the Amended and Restated Series 2017-One Indenture Supplement, dated as of June 11, 2018, and the First Amendment to the Amended and Restated Series 2017-One Indenture Supplement, dated as of November 16, 2018 (as so amended, the “Supplement”); and

WHEREAS, the parties hereto have agreed to further amend the Supplement on the terms and conditions hereinafter set forth in accordance with Section 9.02 of the Indenture;

NOW, THEREFORE, in consideration of the promises and of the mutual covenants and agreements hereinafter set forth, the parties hereto hereby agree as follows:

SECTION 1. Amendments of the Supplement.

1.1      The definitions of “Class A/B Subordination Percentage,” “Required Senior Note Subordination Amount” and “Required Subordination Amount” are hereby deleted in their entirety and replaced with the following:

“Class A/B Subordination Percentage” shall mean [*****]%.

“Required Senior Note Subordination Amount” shall mean an amount equal to [*****]% of the sum of the (a) Note Principal Balance, (b) the Series Required Transferor Amount and (c) the Series 2018-One Principal Balance.

“Required Senior Subordination Amount” shall mean an amount equal to [*****]% of the sum of the (a) Note Principal Balance, (b) the Series Required Transferor Amount and (c) the Series 2018-One Principal Balance.

SECTION 2. Miscellaneous

2.1     Ratification. As amended hereby, the Supplement is in all respects ratified and confirmed and the Supplement as so supplemented by this Amendment shall be read, taken and construed as one and the same instrument.

2.2     Counterparts. This Amendment 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 shall constitute one and the same instrument.

2.3     Governing Law. THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES THEREOF (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW).

2.4     Successors and Assigns. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective permitted successors and assigns.

2.5     Effectiveness. This Amendment shall be effective as of the date first above written.

2.6     Limitation of Liability. It is expressly understood and agreed by the parties hereto that (a) this Amendment is executed and delivered by Wilmington Trust, National Association, 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, National Association, but is made and intended for the purpose of binding only the Issuer and (c) under no circumstances shall Wilmington Trust, National Association 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.

2

2.7     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).

3

IN WITNESS WHEREOF, the undersigned have caused this Amendment to be duly executed and delivered by their respective duly authorized officers on the day and year first above written.

PERIMETER MASTER NOTE BUSINESS TRUST, as Issuer
By:	Wilmington Trust, National Association, not in its individual capacity, but solely as Owner Trustee
By:	/s/ Robert P. Hines Jr.
	Name: Robert P. Hines Jr. Title: Vice President
U.S. BANK NATIONAL ASSOCIATION, not in its individual capacity, but solely as Indenture Trustee
By:	/s/ Mirtza J. Escobar
	Name: Mirtza J. Escobar Title: Vice President
ACCESS FINANCING, LLC, Servicer
By:	/s/ Brian Stone
	Name: Brian Stone Title: Chief Risk Officer

[Second Amendment to A/R 2017-One Supplement]

Consent of Series 2017-One Noteholders:

TSO-FORTIVA NOTES HOLDCO LP,

as holder of 100% of Class A Notes

By: TowerBrook TSO GP (Alberta), L.P., its

General Partner

By: TowerBrook Investors, Ltd., its General

Partner

By:	/s/ Glenn F. Miller
	Name: Glenn F. Miller    Title: Attorney-in-fact

CCFC CORP.,

as holder of 100% of Class B Notes

By:	/s/ Mitch Saunders
	Name: Mitch Saunders    Title: Treasurer

Consent of Administrative Agent on behalf of Series 2018-One Noteholders:

Credit Suisse AG, New York Branch, As Administrative Agent, on behalf of the holders of 100% of Class A Notes

By:	/s/ Erin McCutcheon
	Name: Erin McCutcheon    Title: Director
By:	/s/ Jeffrey Traola
	Name: Jeffrey Traola    Title: Director

[Second Amendment to A/R 2017-One Supplement]

EX-10.11D

Exhibit 10.11(d)

THIRD AMENDMENT TO THE

AMENDED AND RESTATED SERIES 2017-ONE INDENTURE SUPPLEMENT

This Third Amendment to the Amended and Restated Series 2017-One Indenture Supplement (the “Amendment”), dated as of November 13, 2019, among Perimeter Master Note Business Trust, a business trust organized and existing under the laws of the State of Nevada (herein, the “Issuer” or the “Trust”), Access Financing, LLC, a Georgia limited liability company (the “Servicer”), and U.S. Bank National Association, 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 February 8, 2017 (as amended, restated, supplemented or otherwise modified from time to time, the “Indenture”) among the Issuer, the Servicer and the Indenture Trustee.

Capitalized terms used herein shall have the meanings assigned to such terms in the Supplement (as defined below).

WITNESSETH:

WHEREAS, the Issuer, the Servicer and the Indenture Trustee executed the Amended and Restated Series 2017-One Indenture Supplement, dated as of June 11, 2018, the First Amendment to the Amended and Restated Series 2017-One Indenture Supplement, dated as of November 16, 2018 and the Second Amendment to the Amended and Restated Series 2017-One Indenture Supplement, dated as of September 20, 2019 (as so amended, the “Supplement”); and

WHEREAS, the parties hereto have agreed to further amend the Supplement on the terms and conditions hereinafter set forth in accordance with Section 9.02 of the Indenture;

NOW, THEREFORE, in consideration of the promises and of the mutual covenants and agreements hereinafter set forth, the parties hereto hereby agree as follows:

SECTION 1. Amendments of the Supplement.

1.1      The definition of “Capital Stock” is hereby deleted in its entirety and replaced with the following:

“Capital Stock” means any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation), including, without limitation, partnership interests and membership interests, beneficial interests in a trust, and any and all warrants, rights or options to purchase or other arrangements or rights to acquire any of the foregoing; provided, however, the foregoing shall not include any shares, interests, participations or other equivalent ownership interests structured as preferred interests but which do not participate in the profits of the Person.

SECTION 2. Miscellaneous

2.1     Ratification. As amended hereby, the Supplement is in all respects ratified and confirmed and the Supplement as so supplemented by this Amendment shall be read, taken and construed as one and the same instrument.

2.2     Counterparts. This Amendment 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 shall constitute one and the same instrument.

2.3     Governing Law. THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES THEREOF (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW).

2.4     Successors and Assigns. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective permitted successors and assigns.

2.5     Effectiveness. This Amendment shall be effective as of the date first above written.

2.6     Limitation of Liability. It is expressly understood and agreed by the parties hereto that (a) this Amendment is executed and delivered by Wilmington Trust, National Association, 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, National Association, but is made and intended for the purpose of binding only the Issuer and (c) under no circumstances shall Wilmington Trust, National Association 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.

2.7     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).

IN WITNESS WHEREOF, the undersigned have caused this Amendment to be duly executed and delivered by their respective duly authorized officers on the day and year first above written.

PERIMETER MASTER NOTE BUSINESS TRUST, as Issuer
By:	Wilmington Trust, National Association, not in its individual capacity, but solely as Owner Trustee
By:	/s/ Patricia A. Bradenburg
	Name: Patricia A. Bradenburg Title: Banking Officer
U.S. BANK NATIONAL ASSOCIATION, not in its individual capacity, but solely as Indenture Trustee
By:	/s/ Mirtza J. Escobar
	Name: Mirtza J. Escobar Title: Vice President

ACCESS FINANCING, LLC, Servicer
By:	/s/ Brian Stone
	Name: Brian Stone Title: Chief Risk Officer

[Third Amendment to A/R 2017-One Supplement]

Consent of Series 2017-One Noteholders:

TSO-FORTIVA NOTES HOLDCO LP,

as holder of 100% of Class A Notes

By: TowerBrook TSO GP (Alberta), L.P., its

General Partner

By: TowerBrook Investors, Ltd., its General

Partner

By:	/s/ Glenn F. Miller
	Name: Glenn F. Miller      Title: Authorized Signatory

CCFC CORP.,

as holder of 100% of Class B Notes

By:	/s/ Mitch Saunders
	Name: Mitch Saunders      Title: Treasurer

[Third Amendment to A/R 2017-One Supplement]

Consent of Administrative Agent on behalf of Series 2018-One Noteholders:

Credit Suisse AG, New York Branch, As Administrative Agent,

on behalf of the holders of 100% of Class A Notes

By:	/s/ Patrick Duggan
	Name: Patrick Duggan      Title: Vice President
By:	/s/ Kevin Quinn
	Name: Kevin Quinn      Title: Vice President

[Third Amendment to A/R 2017-One Supplement]

EX-10.11E

CERTAIN INFORMATION, IDENTIFIED BY [*****], HAS BEEN EXCLUDED FROM THE EXHIBIT BECAUSE IT IS BOTH NOT MATERIAL AND WOULD LIKELY CAUSE COMPETITIVE HARM TO THE COMPANY IF PUBLICLY DISCLOSED.

Exhibit 10.11(e)

FOURTH AMENDMENT TO

THE AMENDED AND RESTATED SERIES 2017-ONE INDENTURE SUPPLEMENT

This Fourth Amendment to the Amended and Restated Series 2017-One Indenture Supplement (the “Amendment”), dated as of January 23, 2020, among Perimeter Master Note Business Trust, a business trust organized and existing under the laws of the State of Nevada (herein, the “Issuer” or the “Trust”), Access Financing, LLC, a Georgia limited liability company (the “Servicer”) and U.S. Bank National Association, 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 February 8, 2017 (as amended, restated, supplemented or otherwise modified from time to time, the “Indenture”) among the Issuer, the Servicer and the Indenture Trustee.

Capitalized terms used herein shall have the meanings assigned to such terms in the Supplement (as defined below).

WITNESSETH:

WHEREAS, the Issuer, the Servicer and the Indenture Trustee executed the Amended and Restated Series 2017-One Indenture Supplement, dated as of June 11, 2018, the First Amendment to the Amended and Restated Series 2017-One Indenture Supplement, dated as of November 16, 2018, the Second Amendment to the Amended and Restated Series 2017-One Indenture Supplement, dated as of September 20, 2019 and the Third Amendment to the Amended and Restated Series 2017-One Indenture Supplement, dated as of November 13, 2019 (as so amended, the “Supplement”); and

WHEREAS, the parties hereto have agreed to amend the Supplement on the terms and conditions hereinafter set forth in accordance with Section 9.02 of the Indenture;

NOW, THEREFORE, in consideration of the promises and of the mutual covenants and agreements hereinafter set forth, the parties hereto hereby agree as follows:

SECTION 1. Amendments of the Supplement.

1.1 The Supplement is hereby amended as follows:

(a) The definitions of “Commitment Termination Date” and
“Target Proceeds Amount” are hereby deleted in their entirety and replaced with the following:

“Commitment Termination Date” shall mean the earliest to occur of (i) the Stated Maturity Date and (ii) the date on which an Early Redemption Event has occurred.

“Target Proceeds Amount” shall have the meaning specified in the Class A Purchase Agreement.

(b) Section 4.05(a) of the Supplement is amended hereby by deleting paragraph (xiii) in its entirety and inserting the following in its place:

(xiii) [Reserved].

(c) Section 4.05(a) of the Supplement is further amended hereby by deleting paragraph (xvi) in its entirety and inserting the following in its place:

(xvi) the balance of such Available Funds (“Excess Collections”) shall be distributed to the Issuer and applied in accordance with the Trust Agreement.

(d) Section 5.01(p) of the Supplement is amended hereby by deleting it in its entirety and inserting the following in its place:

(p) On each Distribution Date, the Paying Agent, solely in accordance with the Monthly Servicer Statement, shall distribute to each of the Servicer, Backup Servicer, Owner Trustee and Indenture Trustee such amounts held by the Paying Agent that are allocated and available on such Distribution Date to pay the Servicing Fee, the Backup Servicing Fee, the Program Fees and the Program Expenses, respectively.

(e) Section 6.01(g) of the Supplement is amended hereby by deleting paragraph (ii) in in its entirety and inserting the following in its place:

(ii) the Three-Month Delinquency Ratio exceeds [*****]%;

SECTION 2. Miscellaneous

2.1     Ratification. As amended hereby, the Supplement is in all respects ratified and confirmed and the Supplement as so supplemented by this Amendment shall be read, taken and construed as one and the same instrument.

2.2     Counterparts. This Amendment 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 shall constitute one and the same instrument.

2.3     Governing Law. THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES THEREOF (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW).

2

2.4     Successors and Assigns. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective permitted successors and assigns.

2.5     Effectiveness. This Amendment shall be effective as of the date first above written.

2.6     Limitation of Liability. It is expressly understood and agreed by the parties hereto that (a) this Amendment is executed and delivered by Wilmington Trust, National Association, 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, National Association, but is made and intended for the purpose of binding only the Issuer and (c) under no circumstances shall Wilmington Trust, National Association 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.

2.7     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).

3

IN WITNESS WHEREOF, the undersigned have caused this Amendment to be duly executed and delivered by their respective duly authorized officers on the day and year first above written.

PERIMETER MASTER NOTE BUSINESS TRUST, as Issuer
By:	Wilmington Trust, National Association, not in its individual capacity, but solely as Owner Trustee
By:	/s/ Nancy E. Hagner
	Name: Nancy E. Hagner Title: Assistant Vice President
U.S. BANK NATIONAL ASSOCIATION, not in its individual capacity, but solely as Indenture Trustee
By:	/s/ Mirtza J. Escobar
	Name: Mirtza J. Escobar Title: Vice President
ACCESS FINANCING, LLC, Servicer
By:	/s/ Bettie Lass
	Name: Bettie Lass Title: Treasurer

[Fourth Amendment to A/R 2017-One Supplement]

Consent of Series 2017-One Noteholders:

TSO-FORTIVA NOTES HOLDCO LP,

as holder of 100% of Class A Notes

By: TowerBrook TSO GP (Alberta), L.P., its

General Partner

By: TowerBrook Investors, Ltd., its General

Partner

By:	/s/ Glenn F. Miller
	Name: Glenn F. Miller      Title: Authorized Signatory
CCFC CORP., as holder of 100% of Class B Notes
By:	/s/ Mitch Saunders
	Name: Mitch Saunders      Title: Treasurer

[Fourth Amendment to A/R 2017-One Supplement]

Consent of Administrative Agent on behalf of Series 2018-One Noteholders:

Credit Suisse AG, New York Branch, As Administrative Agent,

on behalf of the holders of 100% of Class A Notes

By:	/s/ Patrick Duggan
	Name: Patrick Duggan      Title: Vice President
By:	/s/ Erin McCutcheon
	Name: Erin McCutcheon      Title: Director

[Fourth Amendment to A/R 2017-One Supplement]

EX-10.11F

CERTAIN INFORMATION, IDENTIFIED BY [*****], HAS BEEN EXCLUDED FROM THE EXHIBIT BECAUSE IT IS BOTH NOT MATERIAL AND WOULD LIKELY CAUSE COMPETITIVE HARM TO THE COMPANY IF PUBLICLY DISCLOSED.

Exhibit 10.11(f)

SERIES 2018-THREE INDENTURE SUPPLEMENT

Dated as of November 16, 2018

to

MASTER INDENTURE

Dated as of February 8, 2017

Series 2018-Three Asset Backed Notes

Class A Asset Backed Variable Funding Notes

Class B Asset Backed Variable Funding Notes

PERIMETER MASTER NOTE BUSINESS TRUST

SERIES 2018-THREE

among

PERIMETER MASTER NOTE BUSINESS TRUST

Issuer

ACCESS FINANCING, LLC

Servicer

and

U.S. BANK NATIONAL ASSOCIATION

Indenture Trustee

on behalf of the Series 2018-Three Noteholders

EXHIBITS

Exhibit A-1 Form of Class A-3 Note

Exhibit A-2 Form of Class A-4 Note

Exhibit A-3 Form of Class A-5 Note

Exhibit B Form of Class B Note

Exhibit C Form of Monthly Servicer Statement

Exhibit D Form of Class B Increase Notice

Exhibit E Form of Investment Letter

Schedule 1 Fee Calculations

SERIES 2018-THREE INDENTURE SUPPLEMENT, dated as of November 16, 2018 (this “Supplement”), among PERIMETER MASTER NOTE BUSINESS TRUST, a business trust organized and existing under the laws of the State of Nevada (the “Issuer”), ACCESS FINANCING, LLC, a Georgia limited liability company, as servicer (together with its successors and permitted assigns, the “Servicer”), and U.S. BANK NATIONAL ASSOCIATION, a national banking association, not in its individual capacity, but solely as Indenture Trustee (together with its successors in the trusts thereunder as provided in the Indenture, the “Indenture Trustee”) under the Master Indenture dated as of February 8, 2017 (the “Indenture”) among the Issuer, the Servicer and the Indenture Trustee.

Section 2.10 of the Indenture provides that the Issuer may pursuant to one or more Indenture Supplements direct the Indenture Trustee, on behalf of the Issuer, to issue one or more Series of Notes and to set forth the Principal Terms of such Series.

Pursuant to this Supplement, the Issuer and the Indenture Trustee shall hereby create a new Series of Notes and specify the Principal Terms thereof.

ARTICLE I

Creation of the Series 2018-Three Notes.

Section 1.01.     Designation.

(a)     There is hereby created and designated a Series of Notes to be issued pursuant to the Indenture and this Supplement to be known as “Perimeter Master Note Business Trust, Series 2018-Three Notes” or the “Series 2018-Three Notes.” The Series 2018-Three Notes shall be issued in two Classes, the first of which shall be known as the “Class A Series 2018-Three Asset Backed Variable Funding Notes” and the second of which shall be known as the “Class B Series 2018-Three Asset Backed Variable Funding Notes.” The Class A Notes shall be divided into three tranches consisting of Class A-3, Class A-4 and Class A-5.

(b)     The Series 2018-Three Notes are subordinated in all respects, including any payments of principal and interest, to the Senior Facility; provided, however, the rights of the Noteholders under the Senior Facility against the Series 2018-Three Noteholders or to the Collections or Receivables or other property allocated to Series 2018-Three are limited to only those rights set forth herein, in any other Transaction Documents or in the Series 2018-Two Indenture Supplement. The Series 2018-Three Notes are due and payable on the Stated Maturity Date.

(c)     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, the terms and provisions of this Supplement shall be controlling.

(d)     The Indenture Trustee, the Paying Agent, the Note Registrar, the Transferor, the Issuer and any agent of any of them shall prior to due presentation of a Registered Note for registration of transfer, treat the Person in whose name any Registered Note is registered as the owner of such Registered Note for the purpose of receiving distributions pursuant to the terms of the applicable Indenture Supplement and for all other purposes whatsoever and, none of the Indenture Trustee, the Paying Agent, the Note Registrar, the Transferor, the Issuer or any agent of any of them shall be affected by any notice to the contrary.

ARTICLE II

Definitions

Section 2.01.     Definitions.

(a)     All capitalized terms used but not otherwise defined herein are defined in the Indenture, the Transfer and Servicing Agreement or the Trust Agreement (including by way of reference to other documents). Each capitalized term defined herein shall relate only to the Series 2018-Three Notes and no other Series of Notes issued by the Issuer. Whenever used in this 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.

“Administrative Redemption” shall mean a redemption of the Series 2018-Three Notes as specified in subsection 7.01(a).

“Agent” shall have the meaning specified in the Class A Purchase Agreement.

“Allocation Amount” shall mean, as of any date, an amount equal to (a) the sum of all Note Principal Balance Increases prior to such date, minus (b) the Pre-Funding Amount, minus (c) the total amount of principal payments made on the Series 2018-Three Notes prior to such date minus (d) the excess, if any, of (i) the total amount of Reduction Amounts for all Distribution Dates prior to such date and Reallocated Principal Collections that under subsections 4.07(b) through (e) were used prior to such date to fund the Series 2018-Two Required Amount, the Class A-3 Required Amount, the Class A-4 Required Amount, or the Class A-5 Required Amount over (ii) such Reduction Amounts and Reallocated Principal Collections reimbursed pursuant to subsection 4.05(a)(ix)(A) prior to such date, provided that the Allocation Amount shall not be less than zero.

“Available Finance Charge Collections” shall mean an amount equal to, with respect to any Monthly Period, the product of (i) the Floating Allocation Percentage for such Monthly Period and (ii) the Series 2018-Three Allocable Finance Charge Collections for such Monthly Period.

“Available Funds” shall mean, with respect to any Monthly Period, the sum of (a) Available Finance Charge Collections plus (b) Excess Finance Charge Collections, in each case for such Monthly Period plus (c) any Pre-Funding Investment Proceeds.

2

“Available Principal Collections” shall mean an amount equal to, with respect to any Monthly Period, (i) the product of (a) the Fixed/Floating Allocation Percentage for such Monthly Period and (b) Series 2018-Three Allocable Principal Collections, minus (ii) the amounts with respect to such Monthly Period that pursuant to Section 4.07 are required to fund the Series 2018-Two Required Amount, the Class A-3 Required Amount, the Class A-4 Required Amount, or the Class A-5 Required Amount for such Monthly Period plus (iii) any other amounts which pursuant to subsection 4.05(a) are to be treated as Available Principal Collections for such Monthly Period plus (iv) any Excess Principal Collections for such Monthly Period.

“Average Principal Receivables” shall mean, for any period, the sum of the Principal Receivables for each day in such period divided by the number of days in such period.

“Backup Servicer” shall mean the entity designated by the Servicer to be a backup servicer under the Transfer and Servicing Agreement pursuant to a notice provided to the Indenture Trustee.

“Backup Servicing Fee” shall have the meaning set forth in Schedule 1.

“Capital Stock” means any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation), including, without limitation, partnership interests and membership interests, beneficial interests in a trust, and any and all warrants, rights or options to purchase or other arrangements or rights to acquire any of the foregoing.

“Capped Program Expenses” shall mean, for any Distribution Date, an amount not to exceed $50,000 per year beginning on the Closing Date and ending on each anniversary thereof, equal to the Program Expenses owed to the Owner Trustee.

“Change of Control” shall mean, at any time, any of the following: (a) the Transferor shall cease to beneficially own and control, directly, 100% on a fully diluted basis of the economic and voting interest in the Capital Stock of the Issuer, (b) Holdings shall cease to beneficially own and control, directly or indirectly, 100% on a fully diluted basis of the economic and voting interest in the Capital Stock of the Transferor, or (c) Holdings shall cease to beneficially own and control, directly or indirectly, 51% or more on a fully diluted basis of the Capital Stock of any of the Seller, the Servicer or the Issuer.

“Charge-Off Ratio” shall mean, with respect to any Monthly Period, the annualized percentage equivalent of a fraction (a) the numerator of which is the aggregate outstanding principal balance of all Receivables that became Defaulted Receivables during such Monthly Period net of Recoveries and (b) the denominator of which is the Average Principal Receivables for such Monthly Period.

3

“Class A Costs” shall mean, at any time, any amounts (other than principal payments on the Class A Notes, Class A Monthly Interest, Services Fees or any Target Proceeds Amount) due and owing at such time pursuant to the Class A Purchase Agreement.

“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-3 Notes, the Class A-4 Notes and the Class A-5 Notes.

“Class A Note Principal Balance” shall mean the sum of the Class A-3 Note Principal Balance, the Class A-4 Note Principal Balance and the Class A-5 Note Principal Balance.

“Class A Purchase Agreement” shall mean the Purchase Agreement dated as of November 16, 2018 by and among TSO-Fortiva Notes Holdco LP, the Transferor, the Servicer and the Issuer, as amended, restated or otherwise modified from time to time in accordance with its terms.

“Class A-3 Additional Interest” shall have the meaning specified in subsection 4.02(a).

“Class A-3 Daily Interest” shall have the meaning specified in subsection 4.02(a).

“Class A-3 Interest Shortfall” shall have the meaning specified in subsection 4.02(a).

“Class A-3 Monthly Interest” shall have the meaning specified in subsection 4.02(a).

“Class A-3 Note Principal Balance” shall mean, on any date, (a) the total amount of Class A-3 Note Principal Balance Increases made on or prior to such date, minus (b) the total amount of principal payments made on the Class A-3 Notes on or prior to such date.

“Class A-3 Note Principal Balance Increase” shall have the meaning specified in subsection 4.08(a).

“Class A-3 Note Rate” shall have the meaning specified in the Class A Purchase Agreement.

“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-1.

4

“Class A-3 Required Amount” shall have the meaning specified in subsection 4.04(a).

“Class A-4 Additional Interest” shall have the meaning specified in subsection 4.02(b).

“Class A-4 Daily Interest” shall have the meaning specified in subsection 4.02(b).

“Class A-4 Interest Shortfall” shall have the meaning specified in subsection 4.02(b).

“Class A-4 Monthly Interest” shall have the meaning specified in subsection 4.02(b).

“Class A-4 Note Principal Balance” shall mean, on any date, (a) the total amount of Class A-4 Note Principal Balance Increases made on or prior to such date, minus (b) the total amount of principal payments made on the Class A-4 Notes on or prior to such date.

“Class A-4 Note Principal Balance Increase” shall have the meaning specified in subsection 4.08(b).

“Class A-4 Note Rate” shall have the meaning specified in the Class A Purchase Agreement.

“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-2.

“Class A-4 Required Amount” shall have the meaning specified in subsection 4.04(b).

“Class A-5 Additional Interest” shall have the meaning specified in subsection 4.02(c).

“Class A-5 Daily Interest” shall have the meaning specified in subsection 4.02(c).

“Class A–5 Interest Shortfall” shall have the meaning specified in subsection 4.02(c).

“Class A-5 Monthly Interest” shall have the meaning specified in subsection 4.02(c).

5

“Class A-5 Note Principal Balance” shall mean, on any date, (a) the total amount of Class A-5 Note Principal Balance Increases made on or prior to such date, minus (b) the total amount of principal payments made on the Class A-5 Notes on or prior to such date.

“Class A-5 Note Principal Balance Increase” shall have the meaning specified in subsection 4.08(c).

“Class A-5 Note Rate” shall have the meaning specified in the Class A Purchase Agreement.

“Class A-5 Noteholder” shall mean the Person in whose name a Class A-5 Note is registered in the Note Register.

“Class A-5 Notes” shall mean any one of the Class A-5 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-5 Required Amount” shall have the meaning specified in subsection 4.04(c).

“Class A/B Subordination Percentage” shall mean [*****]%.

“Class B Additional Interest” shall have the meaning specified in subsection 4.02(d).

“Class B Daily Interest” shall have the meaning specified in subsection 4.02(d).

“Class B Interest Shortfall” shall have the meaning specified in subsection 4.02(d).

“Class B Monthly Interest” shall have the meaning specified in subsection 4.02(d).

“Class B Note Principal Balance” shall mean, on any date, (a) the total amount of Class B Note Principal Balance Increases made on or prior to such date, minus (b) the total amount of principal payments made on the Class B Notes on or prior to such date.

“Class B Note Principal Balance Increase” shall have the meaning specified in subsection 4.08(d).

“Class B Note Purchase Agreement” shall mean the Class B Note Purchase Agreement dated as of November 16, 2018 by and among the Class B Noteholder, the Transferor, the Servicer and the Issuer, as amended, restated or otherwise modified from time to time in accordance with its terms.

“Class B Note Rate” shall have the meaning specified in the Class B Note Purchase Agreement, but in any event shall not be greater than [*****]% per annum.

6

“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 Notes executed by the Issuer and authenticated by or on behalf of the Indenture Trustee, substantially in the form of Exhibit B.

“Class B Subordination Percentage” shall mean 5%.

“Closing Date” shall mean November 16, 2018.

“Collection Release Conditions” shall mean, on any day, that each of the following is true before and after giving effect to a release of Collections to the Issuer under Section 4.01:

(a) no Event of Default or Early Redemption Event has occurred and is continuing;

(b) the amount in the Collection Account is at least equal to the amounts required to be paid to the Noteholders pursuant to this Supplement and the other Transaction Documents on the next Distribution Date;

(c) the aggregate unpaid principal balance of all Series of Notes issued under the Indenture or any Indenture Supplement shall not exceed the sum of the Net Eligible Receivables Balance plus the Pre-Funding Amount as of such date plus the aggregate pre-funding amounts of other Series of Notes issued and outstanding on such date; provided, however, for purposes of this calculation, clause (b) of the definition of Net Eligible Receivables Balance shall be determined as of the last day of the immediately preceding Monthly Period;

(d) the Transferor Amount on such day is greater than the Required Transferor Amount (after giving effect to all Principal Receivables transferred to the Issuer on such day); and

(e) the Collection Release Conditions (as defined in the Series 2018-Two Indenture Supplement) have been satisfied.

“Commitment Termination Date” shall mean the earliest to occur of (i) the Stated Maturity Date, (ii) the date specified by the Agent in a written notice to the Issuer at any time (which notice may be issued by the Agent in its sole discretion) after the issuance of a Senior Facility during which the Class A Note Principal Balance is 5% or less of the sum of the Net Eligible Receivables Balance plus the Pre-Funding Amount and (iii) the date on which an Early Redemption Event has occurred.

7

“Contingent Obligations” shall mean, as to any Person, any obligation of such Person guaranteeing any Indebtedness, leases, dividends or other obligations (“primary obligations”) of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, including, without limitation, any obligation of such Person, (a) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (b) to advance or supply funds (i) for the purchase or payment of any such primary obligation or (ii) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (c) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation, or (d) otherwise to assure or to hold harmless the owner of such primary obligation against loss in respect thereof; provided, however, that the term “Contingent Obligation” shall not include endorsements of instruments for deposit or collection in the ordinary course of business. The amount of any Contingent Obligation shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation in respect of which such Contingent Obligation is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person is required to perform thereunder) as determined by such Person in good faith.

“Delinquency Ratio” shall mean, with respect to any Monthly Period, a ratio, expressed as a percentage, equal to a fraction (a) the numerator of which is the aggregate outstanding principal balance of all Receivables that are Delinquent Receivables as of the end of such Monthly Period and (b) the denominator of which is the aggregate outstanding principal balance of all Receivables as of the end of such Monthly Period.

“Delinquent Receivables” shall mean, with respect to any Monthly Period, all Principal Receivables as to which any payment or part thereof remains unpaid for 90 days or more from the original due date therefor and are not Defaulted Receivables

“Determination Date” shall mean the third Business Day preceding each Distribution Date.

“Distribution Date” shall mean the fifteenth day of each calendar month, or if such fifteenth day is not a Business Day, the next succeeding Business Day; provided, however, the first Distribution Date shall occur in the first Monthly Period immediately succeeding the Monthly Period in which the Initial Funding Date occurs.

“Early Redemption Event” shall mean any Early Redemption Event specified in Section 5.01 of the Indenture and any Early Redemption Event specified in Section 6.01 hereof.

“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 with respect to Series 2018-Three is deemed to have occurred, and ending on the first to occur of (a) the payment in full of the Note Principal Balance or (b) the Stated Maturity Date.

“Excess Collections” shall have the meaning set forth in subsection 4.05(a)(xiv).

“Excess Concentration Amounts” shall mean, the sum, without duplication, of the following amounts:

[*****].

8

“Excess Finance Charge Collections” shall mean, with respect to each Monthly Period, the sum of (i) the Series 2018-Two Excess Collections and (ii) the product of (a) the aggregate amount for all other outstanding Series of Collections of Finance Charge Receivables which the related Indenture Supplements specify are to be distributed to the Transferor after all other Collections of Finance Charge Receivables are applied and distributed in connection with the payment of servicing fees, marketing fees and all non-principal amounts owed to the Noteholders of such Series and (b) the percentage equivalent of a fraction, (a) the numerator of which is equal to the Series 2018-Three Allocation Percentage for such Monthly Period and (b) the denominator of which is the sum of the Series 2018-Three Allocation Percentage and the Series 2017-One Allocation Percentage for such Monthly Period; provided that any Excess Finance Charge Collections (as defined in the Series 2017-One Supplement) that are not required to make a payment under Section 4.05(a)(i)-(xv) of the Series 2017-One Supplement shall constitute Excess Finance Charge Collections if there are insufficient Available Funds to make the payments under Section 4.05(a)(i)-(xiii) hereof.

“Excess Principal Collections” shall mean, with respect to each Monthly Period, all Collections of Principal Receivables allocated to the Senior Facility remaining after such Collections of Principal Receivables are applied and distributed in accordance with the Indenture Supplement for the Series related to the Senior Facility; provided that any Excess Principal Collections (as defined in the Series 2017-One Supplement) that are not required to make a payment under Section 4.05(b)(i)-(iii), 4.05(c)(i)-(viii) or 4.05(d)(i)-(iii) of the Series 2017-One Supplement shall constitute Excess Principal Collections if there are insufficient Available Principal Collections to make the payments under Sections 4.05(b)(i)-(iii), 4.05(c)(i)-(vi) or 4.05(d)(i)-(iii) hereof.

“Excess Spread Percentage” shall mean, with respect to any Monthly Period, the annualized percentage equivalent of a fraction, (a) the numerator of which is equal to Collections of Finance Charge Receivables minus the Defaulted Amount, in each case for such Monthly Period and (b) the denominator of which is the Average Principal Receivables for such Monthly Period.

“Fixed/Floating Allocation Percentage” shall mean, with respect to any day during a Monthly Period, the percentage equivalent (which percentage shall never exceed 100%) of a fraction, the numerator of which is (a) during the Revolving Period, the Series Adjusted Allocation Amount for Series 2018-Three plus the Series Adjusted Subordinated Transferor Amount in each case as of the last day of the immediately preceding Monthly Period (or, in the case of the first Monthly Period, the Note Principal Balance as of the Initial Funding Date immediately after giving effect to the initial Note Principal Balance Increase on such date) and (b) during the Redemption Period or Limited Redemption Period, the Series Adjusted Allocation Amount for Series 2018-Three plus the Series Adjusted Subordinated Transferor Amount in each case as of the close of business on the date on which the Revolving Period shall have terminated or been suspended, as the case may be, and the denominator of which is the product of (x) the greater of (A) the sum of (i) the total amount of Principal Receivables as of the last day of the immediately preceding Monthly Period (or with respect to the first Monthly Period, the total amount of Principal Receivables as of the Initial Funding Date), (ii) the Special Funding Amount as of such last day (or with respect to the first Monthly Period, the Initial Funding Date), and (iii) the amount of Collections of Principal Receivables on deposit in the Collection Account as of such last day (or with respect to the first Monthly Period, as of the Initial Funding Date) and (B) the sum of the numerators used to determine the series allocation percentages with respect to Collections of Principal Receivables for all Series of Notes Outstanding, and (y) the Series 2018-Three Allocation Percentage as of the last day of the immediately preceding Monthly Period; provided, however, that with respect to any Monthly Period in which one or more Reset Dates occurs, the Fixed/Floating Allocation Percentage shall be recalculated as provided above but as of such Reset Date for the period from and including such Reset Date to but excluding the next such Reset Date, if any, or if no other Reset Date occurs during such Monthly Period, to and including the last day of such Monthly Period, as applicable; provided further, that the numerator in clause (b) above shall continue to be the Series Adjusted Allocation Amount for Series 2018-Three plus the Series Adjusted Subordinated Transferor Amount in each case as of the close of business on the date on which the Revolving Period shall have terminated unless the Series 2018-Three Notes are paid in full on such date; provided further, however, that if Series 2018-Three is paired with a Paired Series as provided in Section 9.07 and if an Early Redemption Event (as such term is defined in the Indenture) occurs with respect to the Paired Series, the Issuer may, by written notice to the Indenture Trustee and the Servicer, designate that the numerator in clause (b) above shall be the Series Adjusted Allocation Amount for Series 2018-Three plus the Series Adjusted Subordinated Transferor Amount as of the close of business of the last day of the revolving period for such Paired Series.

9

“Floating Allocation Percentage” shall mean, with respect to any day during a Monthly Period, the percentage equivalent (which percentage shall never exceed 100%) of a fraction, the numerator of which is the Allocation Amount plus, with respect to the allocation of Collections of Finance Charge Receivables only, the Series Adjusted Subordinated Transferor Amount as of the last day of the preceding Monthly Period (or in the case of the first Monthly Period, the Note Principal Balance as of the Initial Funding Date immediately after giving effect to the initial Note Principal Balance Increase on such date) and the denominator of which is the product of (x) the Series 2018-Three Allocation Percentage with respect to such Monthly Period and (y) the greater of (A) the sum of (i) the total amount of Principal Receivables as of such day (or with respect to the first Monthly Period, the total amount of Principal Receivables on the Initial Funding Date), (ii) the Special Funding Amount as of such last day (or with respect to the first Monthly Period, the Initial Funding Date) and (iii) the amount of Collections of Principal Receivables on deposit in the Collection Account as of such last day (or with respect to the first Monthly Period, as of the Initial Funding Date) and (B) the sum of the numerators used to determine the series allocation percentages with respect to Collections of Finance Charge Receivables for all Series of Notes Outstanding; provided, however, that with respect to any Monthly Period in which one or more Reset Dates occurs, the Floating Allocation Percentage shall be recalculated as provided above but as of such Reset Date, for the period from and after the date on which any such Reset Date occurs to but excluding the date, if any, that another such Reset Date occurs or, if no other Reset Date occurs during such Monthly Period, to and including the last day of such Monthly Period, as applicable.

“GAAP” means generally accepted accounting principles in the United States set forth in the statements and pronouncements of the Financial Accounting Standards Board, that are applicable to the circumstances as of the date of determination, consistently applied.

“Holdings” shall have the meaning specified in the Class A Purchase Agreement.

10

“Indebtedness” of any Person shall mean, without duplication, (a) all items which, in accordance with GAAP, would be included in determining total liabilities as shown on the liability side of the balance sheet of such Person as of the date as of which Indebtedness is to be determined, including any lease which, in accordance with GAAP would constitute Indebtedness, (b) all indebtedness secured by any mortgage, pledge, security, Lien or conditional sale or other title retention agreement to which any property or asset owned or held by such Person is subject, whether or not the indebtedness secured thereby shall have been assumed, (c) all indebtedness of others which such Person has directly or indirectly guaranteed, endorsed (otherwise than for collection or deposit in the ordinary course of business), discounted or sold with recourse or agreed (contingently or otherwise) to purchase or repurchase or otherwise acquire, or in respect of which such Person has agreed to supply or advance funds (whether by way of loan, equity interests, equity or other ownership interest purchase, capital contribution or otherwise) or otherwise to become directly or indirectly liable and (d) any Contingent Obligations.

“Initial Funding Date” shall mean the date of the initial Note Principal Balance Increase of any Class A Note.

“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 Initial Funding Date) to but excluding such Distribution Date.

“Investment Letter” shall have the meaning specified in subsection 9.04(c).

“Limited Redemption Amount” shall mean for any Distribution Date relating to a Limited Redemption Period, the excess, if any, of (i) the initial amount specified in the notice delivered by the Issuer in accordance with Section 4.03(a) over (ii) the aggregate amount of principal paid on the Class A Notes on all prior Distribution Dates, if any, in such Limited Redemption Period.

“Limited Redemption Period” shall mean, unless an Early Redemption Period shall have commenced prior thereto, a period beginning on the first day of the Monthly Period specified in the notice delivered by the Issuer in accordance with subsection 4.03(a), and ending upon the first to occur of (i) the commencement of an Early Redemption Period and (ii) the last day of the Monthly Period related to the Distribution Date on which the aggregate amount distributed pursuant to subsection 4.05(d)(i) equals the Limited Redemption Amount for such Distribution Date.

“Marketing Fee” shall have the meaning set forth in Schedule 1 attached hereto and incorporated herein.

“Material Adverse Effect” shall mean, with respect to any Person, any development, event, condition, obligation, liability or circumstance which, or set of events, conditions, obligations, liabilities or circumstances or any change(s) which:

(a)     has had or reasonably could be expected to have a material adverse effect upon or change in (i) the legality, validity or enforceability of any Transaction Document, (ii) the perfection or priority of any Lien granted to the Indenture Trustee under any of the Transaction Documents, (iii) the value, validity, enforceability or collectability of the Receivables or the Trust Estate taken as a whole or a material portion thereof or (iv) the rights of any Class A Noteholder or the Agent;

11

(b)     has been or reasonably could be expected to be material and adverse to the value of the Trust Estate taken as a whole or a material portion thereof or to the business, operations, properties, assets, liabilities or condition (financial or otherwise) of such Person; or

(c)     has materially impaired or reasonably could be expected to materially impair the ability of such Person to pay when due or perform any of the Secured Obligations, or to consummate the transactions, under the Transaction Documents.

“Measurement Date” shall mean, for each Monthly Period, the third Business Day preceding the Distribution Date for such Monthly Period.

“Monthly Backup Servicing Fee” shall have the meaning specified in subsection 3.01(c).

“Monthly Interest” shall mean, with respect to any Distribution Date, the sum of the Class A-3 Monthly Interest, the Class A-4 Monthly Interest, the Class A-5 Monthly Interest and the Class B Monthly Interest for such Distribution Date.

“Monthly Marketing Fee” shall have the meaning specified in subsection 3.01(b).

“Monthly Servicer Statement” shall have the meaning specified in subsection 5.02(a)(i).

“Monthly Servicing Fee” shall have the meaning specified in subsection 3.01(a).

“Net Eligible Receivables Balance” shall mean, as of any date of determination, (a) an amount equal to the aggregate amount of Principal Receivables that constitute Eligible Receivables as of such date, minus (b) the aggregate amount of any Excess Concentration Amounts as of such date, plus (c) the aggregate amount of funds on deposit in the Special Funding Account as of such date, plus (d) the aggregate amount of Collections of Principal Receivables in the Collection Account as of such date.

“Net Eligible Receivables Balance Deficiency” shall mean the amount, if any, by which the Class A Principal Balance minus Pre-Funding Amount as of such date exceeds the amount equal to the product of (i) the Net Eligible Receivables Balance times (ii) the Series 2018-Three Allocation Percentage times (iii) the Fixed/Floating Allocation Percentage.

“Note Assignment” shall have the meaning specified in subsection 9.04(e).

“Note Principal Balance” shall mean, for any date of determination, the sum of the Class A Note Principal Balance and the Class B Note Principal Balance.

“Note Principal Balance Increase” shall mean a Class A-3 Note Principal Balance Increase, a Class A-4 Note Principal Balance Increase, a Class A-5 Note Principal Balance Increase, or a Class B Note Principal Balance Increase, as applicable.

12

“Optional Redemption Amount” shall have the meaning specified in subsection 4.03(b).

“Optional Redemption Date” shall have the meaning specified in subsection 4.03(b).

“Optional Redemption Notice” shall have the meaning specified in subsection 4.03(b).

“Paired Series” shall have the meaning specified in Section 9.07.

“Participant” shall have the meaning specified in subsection 9.04(f).

“Payment Date” shall mean, with respect to Series 2018-Three, a Distribution Date.

“Permit” shall mean collectively all licenses, leases, powers, permits, franchises, certificates, authorizations and approvals.

“Pre-Funding Account” shall have the meaning specified in subsection 4.10(a).

“Pre-Funding Amount” shall mean, for any date of determination, the amount on deposit in the Pre-Funding Account.

“Pre-Funding Investment Proceeds” shall have the meaning set forth in subsection 4.10(b).

“Program Expenses” shall mean an amount equal to one-twelfth the product of (i) the Floating Allocation Percentage, (ii) the Series 2018-Three Allocation Percentage and (iii) indemnification amounts owed to the Indenture Trustee and the Owner Trustee pursuant to the Transaction Documents.

“Program Fees” shall mean, with respect to each Distribution Date occurring in March, commencing with the March 2019 Distribution Date, an amount equal to the product of (i) the Floating Allocation Percentage, (ii) the Series 2018-Three Allocation Percentage and (iii) the fees of the Indenture Trustee and the Owner Trustee as specified in each of the related fee agreements with each such party.

“Rating Agency Condition” shall mean, with respect to Series 2018-Three, the consent of the Agent.

“Reallocated Principal Collections” shall mean, with respect to any Distribution Date, an amount equal to the lesser of (I) the product of (a) the sum of (i) Allocable Principal Collections (as defined in the Series 2018–Two Indenture Supplement) plus (ii) the product of (A) the Series 2018-Three Allocable Principal Collections deposited in the Collection Account for the related Monthly Period and (B) the Fixed/Floating Allocation Percentage for the related Monthly Period, and (b) the Class A/B Subordination Percentage, and (II) the greater of (x) the Note Principal Balance (prior to any distributions on such Distribution Date), minus the excess, if any, of the total amount of Reduction Amounts for all prior Distribution Dates and the Reallocated Principal Collections that under subsections 4.07(b) through (e) were used to fund the Series 2018-Two Required Amount, the Class A-3 Required Amount, the Class A-4 Required Amount, or the Class A-5 Required Amount on all prior Distribution Dates over such Reduction Amounts and Reallocated Principal Collections reimbursed pursuant to subsection 4.05(a)(ix)(A) prior to such date and (y) zero.

13

“Reallocated Class B Principal Collections” shall mean, with respect to any Distribution Date, an amount equal to the lesser of (I) the product of (a) the sum of (i) Allocable Principal Collections (as defined in the Series 2018–Two Indenture Supplement) plus (ii) the product of (A) the Series 2018-Three Allocable Principal Collections deposited in the Collection Account for the related Monthly Period and (B) the Fixed/Floating Allocation Percentage for the related Monthly Period, and (b) the Class B Subordination Percentage, and (II) the greater of (x) the Class B Note Principal Balance (prior to any distributions on such Distribution Date), minus the excess, if any, of the total amount of Reduction Amounts for all prior Distribution Dates and the Reallocated Principal Collections that under subsections 4.07(b) through (e) were used to fund the Series 2018-Two Required Amount, the Class A-3 Required Amount, the Class A-4 Required Amount, or the Class A-5 Required Amount on all prior Distribution Dates over such Reduction Amounts and Reallocated Principal Collections reimbursed pursuant to subsection 4.05(a)(ix)(A) prior to such date and (y) zero.

“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 (a) the Class A Note Principal Balance plus (b) Series 2018-Three Monthly Interest for such Distribution Date plus (c) any accrued but unpaid Target Proceeds Amount plus (d) any Series 2018-Three Monthly Fees for such Distribution Date plus (e) the Class B Note Principal Balance and any interest accrued thereon plus (f) any other amounts owed to the Series 2018-Three Noteholders and any other Class A Costs owed under the Transaction Documents related to Series 2018-Three.

“Redemption Date” shall mean, with respect to Series 2018-Three, the Optional Redemption Date.

“Redemption Period” shall mean, with respect to Series 2018-Three, an Early Redemption Period.

“Reduction Amount” shall have the meaning specified in Section 4.06.

“Regulation RR” shall mean Part 244 – Credit Risk Retention (Regulation RR), 12 C.F.R. §§244.1-244.22, as the same may be amended from time to time.

“Regulatory Event” shall mean the occurrence of a change in law (whether by statute, rule or court order) that would reasonably be expected to materially and adversely impact the enforceability of the Receivables taken as a whole or any material portion thereof or any Transaction Party’s ability to sell, purchase, own or service the Receivables.

14

“Required Senior Subordination Amount” shall mean an amount equal to [*****]% of the sum of the (a) Note Principal Balance, (b) the Series Required Transferor Amount and (c) the Series 2018-Two Principal Balance.

“Reset Date” shall mean each of (a) an Addition Cut-Off Date, (b) a date on which a Note Principal Balance Increase occurs, (c) the date of any increase or decrease (other than regularly scheduled redemptions or early redemptions but including any optional redemption or limited redemption in the principal balance of the Notes of any Series) in the note principal balance or allocation amount for another variable funding Series, (d) any date on which a new Series is issued, (e) an Optional Redemption Date, and (f) any date on which any funds are withdrawn from the Pre-Funding Account.

“Revolving Period” shall mean the period beginning at the close of business on the Closing Date and ending on the earlier of (a) the Commitment Termination Date and (b) the close of business on the day immediately preceding the day the Early Redemption Period commences; provided, however, that the Revolving Period shall be temporarily suspended for the duration of any Limited Redemption Period.

“Senior Facility” shall mean (i) for so long as the Series 2018-Two Notes remain outstanding, Series 2018-Two and (ii) otherwise, any Series of Notes which is issued by the Issuer to finance the purchase of Receivables which the Transferor has certified satisfies the requirements set forth on Exhibit D to the Class A Purchase Agreement; provided that no more than one Series of Notes which constitutes a Senior Facility may be outstanding at one time. On the Closing Date, the Senior Facility shall be the Series 2018-Two Notes.

“Senior Facility First FC Amount” shall mean, on any Distribution Date, an amount equal to the amount required pursuant to the Series 2018-Two Indenture Supplement for payment of amounts pursuant to Section 4.05(a)(i)-(ii) of the Series 2018-Two Indenture Supplement over the Available Finance Charge Collections (as defined in the Series 2018-Two Supplement), in each case as of such Distribution Date.

“Senior Facility Principal Amount” shall mean, on any Distribution Date, an amount equal to the amount required pursuant to the Series 2018-Two Indenture Supplement for payment of Class A Note Principal Balance plus the Series 2018-Two Required Amounts plus the Series 2018-Two Borrowing Base Deficiency over the Allocable Principal Collections (as defined in the Series 2018-Two Supplement), in each case as of such Distribution Date.

“Senior Facility Second FC Amount” shall mean, on any Distribution Date, an amount equal to the amount required pursuant to the Series 2018-Two Indenture Supplement for payment of amounts pursuant to Section 4.05(a)(iii)-(vi) of the Series 2018-Two Indenture Supplement over the Available Finance Charge Collections (as defined in the Series 2018-Two Supplement), in each case as of such Distribution Date.

“Series 2017-One Allocation Percentage” shall have the meaning given to such term in the Series 2017-One Supplement.

“Series 2017-One Supplement” shall mean the Amended and Restated Series 2017-One Indenture Supplement to the Master Indenture dated as of June 11, 2018 among the Issuer, the Servicer and the Indenture Trustee, as amended, restated or otherwise modified from time to time in accordance with its terms.

15

“Series 2018-Three” shall mean the Series of Notes the terms of which are specified in this Supplement.

“Series 2018-Three Allocable Defaulted Amount” shall mean the Series Allocable Defaulted Amount with respect to Series 2018-Three.

“Series 2018-Three Allocable Finance Charge Collections” shall mean the Series Allocable Finance Charge Collections with respect to Series 2018-Three.

“Series 2018-Three Allocable Principal Collections” shall mean the Series Allocable Principal Collections with respect to Series 2018-Three.

“Series 2018-Three Allocation Percentage” shall mean the Series Allocation Percentage with respect to Series 2018-Three.

“Series 2018-Three Distribution Account” shall have the meaning set forth in subsection 4.09(a).

“Series 2018-Three Monthly Fees” shall mean, with respect to any Distribution Date, the amounts determined pursuant to subsection 4.05(a)(i) and subsection 4.05(a)(xi)

“Series 2018-Three Monthly Interest” shall mean the amounts determined pursuant to subsections 4.02(a) through (e).

“Series 2018-Three Note” shall mean a Class A Note or a Class B Note.

“Series 2018-Three Noteholder” shall mean a Class A Noteholder or a Class B Noteholder.

“Series 2018-Two Allocation Percentage” shall have the meaning given to such term in the Series 2018-Two Indenture Supplement.

“Series 2018-Two Available Funds” shall have the meaning given to “Available Funds” in the Series 2018-Two Indenture Supplement.

“Series 2018-Two Borrowing Base Deficiency” shall have the meaning given to the term “Borrowing Base Deficiency” in the Series 2018-Two Indenture Supplement.

“Series 2018-Two Excess Collections” shall have the meaning given to the term “Series 2018-Two Excess Collections” in the Series 2018-Two Indenture Supplement

“Series 2018-Two Indenture Supplement” shall mean the Series 2018-Two Indenture Supplement to the Master Indenture dated as of November 16, 2018 among the Issuer, the Servicer and the Indenture Trustee, as amended, restated or otherwise modified from time to time in accordance with its terms.

16

“Series 2018-Two Notes” shall mean the Series of Notes the terms of which are specified in the Series 2018-Two Indenture Supplement.

“Series 2018-Two Principal Balance” shall have the meaning given to the term “Class A Note Principal Balance” in the Series 2018-Two Indenture Supplement.

“Series 2018-Two Required Amount” shall have the meaning specified in subsection 4.04(d).

“Series Adjusted Allocation Amount” shall have the meaning specified in the Transfer and Servicing Agreement.

“Series Adjusted Subordinated Transferor Amount” shall mean, as of any date, an amount equal to (a) the Series Required Transferor Amount on such date, minus (b) the excess, if any, of the total amount of Transferor Reduction Amounts for all prior Distribution Dates and the amounts that under subsection 4.07(a) were used to fund the Series 2018-Two Required Amount, the Class A-3 Required Amount, the Class A-4 Required Amount, or the Class A-5 Required Amount on all prior Distribution Dates over amounts reimbursed pursuant to subsection 4.05(a)(ix)(B) prior to such date.

“Series Allocation Amount” shall mean, for Series 2018-Three, the total amount of any Note Principal Balance Increases minus the total amount of any payments of principal paid on the Class A Notes at any time other than during an Early Redemption Period, minus the Pre-Funding Amount; provided, however, that if Series 2018-Three is paired with a Paired Series as provided in Section 9.07, then the Series Allocation Amount shall mean the total amount of any Note Principal Balance Increases minus (but only for purposes of the definition of the Series Adjusted Allocation Amount and the Trust Adjusted Allocation Amount used in the definition of Series 2018-Three Allocable Finance Charge Collections, Series 2018-Three Allocable Defaulted Amount and Floating Allocation Percentage (but only to the extent the definition of Floating Allocation Percentage is used in the definitions of Series Finance Charge Collections and Series Default Amount)) the total amount of principal payments made on the Series 2018-Three Notes; provided, further, however, that if Series 2018-Three is paired with a Paired Series as provided in Section 9.07 and if an Early Redemption Event (as such term is defined in the Indenture) occurs with respect to the Paired Series, the Issuer may, by written notice to the Indenture Trustee and the Servicer, reduce the Series Allocation Amount (for all purposes of this Supplement, the Indenture and the Transfer and Servicing Agreement) to a lower amount provided that such amount is not less than the greater of (I) the total amount of all Note Principal Balance Increases minus the total amount of principal payments made on the Series 2018-Three Notes and (II) the Series Allocation Amount (as such term is defined in the Indenture) for such Paired Series.

“Series Allocation Percentage” shall have the meaning specified in the Transfer and Servicing Agreement.

“Series Default Amount” shall mean, with respect to any Monthly Period, an amount equal to the product of (a) the Series 2018-Three Allocable Defaulted Amount for the related Monthly Period and (b) the Floating Allocation Percentage for such Monthly Period.

17

“Series Required Transferor Amount” shall mean, with respect to any date of determination, an amount equal to (a)(i) the sum of the Note Principal Balance plus the Series 2018-Two Principal Balance, in each case as of the last day of the prior Monthly Period divided by (ii) 95.0% minus (b) the sum of the Note Principal Balance plus the Series 2018-Two Principal Balance, in each case as of the last day of the prior Monthly Period.

“Servicing Fee” shall have the meaning set forth in Schedule 1.

“Special Payment Date” shall mean each Distribution Date with respect to any Redemption Period or Limited Redemption Period.

“Stapled Transfer” shall have the meaning set forth in Section 9.04(g).

“Stated Maturity Date” shall mean February 8, 2022.

“Target Proceeds Amount” shall have the meaning specified in the Class A Purchase Agreement.

“Tax Opinion” means, with respect to any action, an Opinion of Counsel to the effect that, for United States federal income tax purposes, (a) such action will not adversely affect the tax characterization as debt of any Series or Class of Notes Outstanding that were characterized as debt at the time of their issuance, (b) such action will not cause the Issuer to be treated as an association (or publicly traded partnership) taxable as a corporation and (c) such action will not cause or constitute an event in which gain or loss would be recognized by any Holder of any such Notes.

“Three-Month Charge-Off Ratio” shall mean, for any Monthly Period on and after the third full Monthly Period after the Initial Funding Date, the average of the Charge-Off Ratios for such Monthly Period and the two immediately preceding Monthly Periods.

“Three-Month Delinquency Ratio” shall mean, for any Monthly Period on and after the third full Monthly Period after the Initial Funding Date, the average of the Delinquency Ratios for such Monthly Period and the two immediately preceding Monthly Periods.

“Three-Month Excess Spread Percentage” shall mean, for any Monthly Period on and after the third full Monthly Period after the Initial Funding Date, the average of the Excess Spread Percentages for such Monthly Period and the two immediately preceding Monthly Periods.

“Transaction Documents” shall have the meaning set forth in the Class A Purchase Agreement.

“Transaction Party” shall mean any of the Seller, the Transferor, the Issuer and the Servicer.

“Transferor Available Principal Collections” shall mean, with respect to any Distribution Date, an amount equal to the lesser of (i) the product of (A) the sum of (1) the product of the Series 2018-Three Allocable Principal Collections times  the Fixed/Floating Allocation Percentage for such Monthly Period plus (2) the Allocable Principal Collections (as defined in the Series 2018–Two Indenture Supplement), in each case deposited in the Collection Account for the related Monthly Period and (B) 5.0%, and (ii) the greater of (A) the Series Adjusted Subordinated Transferor Amount and (B) zero.

18

“Transferor Percentage” shall mean 100% minus (a) the Floating Allocation Percentage, when used as of any date with respect to Defaulted Receivables or with respect to Collections of Finance Charge Receivables or (b) the Fixed/Floating Allocation Percentage, when used as of any date with respect to Collections of Principal Receivables.

“Transferor Reduction Amounts” shall have the meaning specified in Section 4.06.

“Transferor’s Interest” shall have the meaning specified in Section 9.09.

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

ARTICLE III

Fees

Section 3.01.     Servicing Compensation; Marketing Fee.

(a)     Servicing Fee. The share of the Servicing Fee allocable to the Series 2018-Three Noteholders with respect to any Distribution Date (the “Monthly Servicing Fee”) shall mean an amount equal to the product of (1) the Floating Allocation Percentage, (2) the Series 2018-Three Allocation Percentage and (3) the Servicing Fee for the most recent Monthly Period preceding such Distribution Date. The remainder of the Servicing Fee, if any, shall be paid by the Issuer or the holders of the Transferor Certificate and the Noteholders of other Series (as provided in the Transfer and Servicing Agreement and the related Supplements) and in no event shall the Indenture Trustee or the Series 2018-Three Noteholders be liable for the share of the Servicing Fee to be paid by the Issuer or the holders of the Transferor Certificate or the Noteholders of any other Series.

(b)     Marketing Fee. The share of the Marketing Fee allocable to the Series 2018-Three Noteholders with respect to any Distribution Date (the “Monthly Marketing Fee”) shall mean an amount equal to (A) the product of (x) the Marketing Fee for the most recent Monthly Period preceding such Distribution Date times (y) the Floating Allocation Percentage times (z) the sum of the Series 2018-Two Allocation Percentage and the Series 2018-Three Allocation Percentage. The remainder of the Marketing Fee, if any, shall be paid by the Issuer or the holders of the Transferor Certificate and the Noteholders of other Series (as provided in the Transfer and Servicing Agreement and the related Supplements) and in no event shall the Indenture Trustee or the Series 2018-Three Noteholders be liable for the share of the Marketing Fee to be paid by the Issuer or the holders of the Transferor Certificate or the Noteholders of any other Series.

19

(c)     Backup Servicing Fee. The share of the Backup Servicing Fee allocable to the Series 2018-Three Noteholders with respect to any Distribution Date (the “Monthly Backup Servicing Fee”) shall mean an amount equal to the product of (1) the Floating Allocation Percentage, (2) the Series 2018-Three Allocation Percentage and (3) the Backup Servicing Fee for the most recent Monthly Period preceding such Distribution Date. The remainder of the Backup Servicing Fee, if any, shall be paid by the Issuer or the holders of the Transferor Certificate and the Noteholders of other Series (as provided in the Transfer and Servicing Agreement and the related Supplements) and in no event shall the Indenture Trustee or the Series 2018-Three Noteholders be liable for the share of the Backup Servicing Fee to be paid by the Issuer or the holders of the Transferor Certificate or the Noteholders of any other Series.

ARTICLE IV

Rights of Series 2018-Three Noteholders and
Allocation and Application of Collections

Section 4.01.     Collections and Allocations.

(a)     Allocations. Collections of Finance Charge Receivables and Principal Receivables and Defaulted Receivables allocated to Series 2018-Three pursuant to Section 4.01 of the Transfer and Servicing Agreement shall be allocated and distributed as set forth in this Article.

(b)     Allocations of Collections to the Issuer.

(i)     On each Deposit Date in any Monthly Period, an amount equal to the Transferor Percentage for the related Monthly Period of Series 2018-Three Allocable Finance Charge Collections deposited in the Collection Account shall be retained in the Collection Account and paid to the Issuer on the applicable Distribution Date for application as provided in the Trust Agreement but only if the Collection Release Conditions are satisfied (after giving effect to all Principal Receivables transferred to the Issuer on such day) and otherwise shall be deposited in the Special Funding Account; and

(ii)     On each Deposit Date in any Monthly Period, an amount equal to the Transferor Percentage for the related Monthly Period of Series 2018-Three Allocable Principal Collections deposited in the Collection Account shall be allocated to the Issuer and retained in the Collection Account and paid to the Issuer for application as provided in the Trust Agreement on the applicable Distribution Date for such Monthly Period but only if the Collection Release Conditions are satisfied (after giving effect to all Principal Receivables transferred to the Issuer on such day) and otherwise shall be deposited in the Special Funding Account; provided, however, in the event that a Series 2018-Two Borrowing Base Deficiency or Net Eligible Receivables Balance Deficiency exists on any Business Day, the Servicer shall direct the Indenture Trustee in writing to withdraw from the Collection Account an amount equal to the lesser of (x) the sum of such Series 2018-Two Borrowing Base Deficiency and Net Eligible Receivables Balance Deficiency and (y) the amount calculated prior to the proviso in this clause (ii), and distribute such amount on the following Business Day in the following order of priority: first, to the Series 2018-Two Notes in reduction of any Series 2018-Two Borrowing Base Deficiency; and second, the balance, if any, pro rata to the Class A Noteholders, in reduction of the Net Eligible Receivables Balance Deficiency.

20

The withdrawals to be made from the Collection Account pursuant to this subsection 4.01(b) do not apply to deposits into the Collection Account that do not represent Collections, including payment for the reassignment of the Receivables pursuant to Section 2.04(c) or Section 2.05 of the Transfer and Servicing Agreement, payment of the purchase price for the Series 2018-Three Notes pursuant to Section 8.01 of the Transfer and Servicing Agreement, payment of the Redemption Amount for the Series 2018-Three Notes pursuant to Section 7.01 or Section 8.01 of this Supplement and proceeds from the sale, disposition or liquidation of Receivables pursuant to Section 5.05 of the Indenture.

(c)     Allocations of Collections to the Series 2018-Three Noteholders.

(i) Allocations of Finance Charge Receivables. The Servicer shall, prior to the close of business on any Deposit Date, allocate to Series 2018-Three and retain in the Collection Account for application as provided herein an amount equal to the product of (A) the Floating Allocation Percentage, (B) the Series 2018-Three Allocation Percentage, and (C) 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 allocate to Series 2018-Three the following amounts as set forth below:

1.     Allocations During the Revolving Period. With respect to any Deposit Date during the Revolving Period, an amount equal to the product of (I) the Fixed/Floating Allocation Percentage, (II) the Series 2018-Three Allocation Percentage and (III) the aggregate amount of Collections of Principal Receivables deposited in the Collection Account with respect to such Deposit Date shall be allocated to the Series 2018-Three Noteholders and retained in the Collection Account and paid to the Issuer on the applicable Distribution Date for application as provided in the Trust Agreement, but only if the Collection Release Conditions are satisfied (after giving effect to all Principal Receivables transferred to the Issuer on such day) and otherwise shall be applied as provided herein.

2.     Allocations During the Limited Redemption Period. With respect to any Deposit Date during the Limited Redemption Period, an amount equal to the product of (I) the Fixed/Floating Allocation Percentage and (II) the Series 2018-Three Allocation Percentage and (III) the aggregate amount of Collections of Principal Receivables deposited to the Collection Account with respect to such Deposit Date shall be allocated to the Series 2018-Three Noteholders and retained in the Collection Account until applied as provided herein.

21

3.     Allocations During a Redemption Period. With respect to any Deposit Date during a Redemption Period, an amount equal to the product of (I) the Fixed/Floating Allocation Percentage and (II) the Series 2018-Three Allocation Percentage and (III) the aggregate amount of Collections of Principal Receivables deposited to the Collection Account with respect to such Deposit Date shall be allocated to the Series 2018-Three Noteholders and retained in the Collection Account until applied as provided herein.

(d)     Daily Deposit of Collections. Notwithstanding any provision of any Transaction Document to the contrary, including Section 4.01 of the Transfer and Servicing Agreement, the Servicer shall deposit all Collections into the Collection Account no later than the first (1st) Business Day immediately following the Date of Processing.

Section 4.02.     Determination of Monthly Interest.

(a)     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 sum of the Class A-3 Daily Interest for each day in such Interest Period. The amount of interest (the “Class A-3 Daily Interest”) allocable to the Class A-3 Notes with respect to any day falling in any Interest Period shall be an amount equal to the product of (i) the Class A-3 Note Rate for that Interest Period, (ii) a fraction the numerator of which is 1 and the denominator of which is 360 and (iii) the Class A-3 Note Principal Balance as of the close of business on such day.

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 360, 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.

(b)     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 sum of the Class A-4 Daily Interest for each day in such Interest Period. The amount of interest (the “Class A-4 Daily Interest”) allocable to the Class A-4 Notes with respect to any day falling in any Interest Period shall be an amount equal to the product of (i) the Class A-4 Note Rate for that Interest Period, (ii) a fraction the numerator of which is 1 and the denominator of which is 360 and (iii) the Class A-4 Note Principal Balance as of the close of business on such day.

22

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 360, 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.

(c)     The amount of monthly interest distributable from the Collection Account with respect to the Class A-5 Notes on any Distribution Date (“Class A-5 Monthly Interest”) shall be an amount equal to the sum of the Class A-5 Daily Interest for each day in such Interest Period. The amount of interest (the “Class A-5 Daily Interest”) allocable to the Class A-5 Notes with respect to any day falling in any Interest Period shall be an amount equal to the product of (i) the Class A-5 Note Rate for that Interest Period, (ii) a fraction the numerator of which is 1 and the denominator of which is 360 and (iii) the Class A-5 Note Principal Balance as of the close of business on such day.

On the Determination Date preceding each Distribution Date, the Servicer shall determine the excess, if any (the “Class A-5 Interest Shortfall”), of (x) the Class A-5 Monthly Interest for such Distribution Date over (y) the aggregate amount of funds allocated and available to pay such Class A-5 Monthly Interest on such Distribution Date. If the Class A-5 Interest Shortfall with respect to any Distribution Date is greater than zero, on each subsequent Distribution Date until such Class A-5 Interest Shortfall is fully paid, an additional amount (“Class A-5 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 360, times (B) the Class A-5 Note Rate and (ii) such Class A-5 Interest Shortfall (or the portion thereof which has not been paid on the Class A-5 Notes) shall be payable as provided herein with respect to the Class A-5 Notes. Notwithstanding anything to the contrary herein, Class A-5 Additional Interest shall be payable or distributed on the Class A-5 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 B Notes on any Distribution Date (“Class B Monthly Interest”) shall be an amount equal to the sum of the Class B Daily Interest for each day in such Interest Period. The amount of interest (the “Class B Daily Interest”) allocable to the Class B Notes with respect to any day falling in any Interest Period shall be an amount equal to the product of (i) the Class B Note Rate for that Interest Period, (ii) a fraction the numerator of which is 1 and the denominator of which is 360 and (iii) the Class B Note Principal Balance as of the close of business on such day.

23

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 360, 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.

Section 4.03.     Limited Redemption; Optional Redemption.

(a)     The Issuer may from time to time at its sole discretion, unless an Early Redemption Event shall have occurred prior thereto, suspend the Revolving Period and cause a Limited Redemption Period to commence for one or more Monthly Periods by delivering to the Servicer, the Indenture Trustee and the Agent written notice at least five (5) Business Days prior to the first day of the Monthly Period in which such Limited Redemption Period is scheduled to commence, which notice shall specify the initial Limited Redemption Amount for such Limited Redemption Period; provided that the Issuer may not cause a Limited Redemption Period to commence unless, in the reasonable belief of the Issuer, such Limited Redemption Period would not result in the occurrence of an Early Redemption Event; provided further that, for so long as the Series 2018-Two Notes remain outstanding, both before and immediately following any amount paid in such Limited Redemption Period, (y) the Collection Release Conditions shall have been satisfied, and (z) the sum of the Note Principal Balance and the Series Adjusted Subordinated Transferor Amount shall be no less than the Required Senior Subordination Amount.

(b)     On any Business Day during the Revolving Period, the Issuer may cause the Servicer to provide written notice to the Indenture Trustee, the Agent and the Series 2018-Three Noteholders (an “Optional Redemption Notice”) at least two Business Days prior to any Business Day (the “Optional Redemption Date”) stating its intention to cause a full or partial redemption of the Series 2018-Three Notes on the Optional Redemption Date in the amount (the “Optional Redemption Amount”) set forth on such Optional Redemption Notice. The Optional Redemption Amount shall be paid from any Available Principal Collections on deposit in the Collection Account, from the proceeds of the issuance of one or more new Series of Notes issued substantially contemporaneously with such full redemption, or from any other monies available to the Issuer or the Transferor including the proceeds of a Senior Facility (or any combination of the above); provided that, for so long as the Series 2018-Two Notes remain outstanding, both before and immediately following payment of all or any portion of such Optional Redemption Amount, (x) if any portion of the Optional Redemption Amount is to be paid from Available Principal Collections on deposit in the Collection Account, the Collection Release Conditions shall have been satisfied, and (y) either (A) the Series 2018-Two Notes shall have first been redeemed in full in accordance with the terms set forth in Section 4.04 of the Series 2018-Two Indenture Supplement or (B) the sum of the Note Principal Balance and the Series Adjusted Subordinated Transferor Amount shall be no less than the Required Senior Subordination Amount. On the Optional Redemption Date the Servicer shall pay, or shall cause the Paying Agent to apply by written instruction to the Paying Agent, (1) the Optional Redemption Amount with respect to the Class A Notes to the Agent for the benefit of the Class A Noteholders, and (2) the Optional Redemption Amount with respect to the Class B Notes to the Class B Noteholders, as applicable. The Servicer shall provide notice to the Indenture Trustee of the payment of any Optional Redemption Amount.

24

(c)     Any Limited Redemption Amount or Optional Redemption Amount with respect to Class A Notes shall be applied as repayments of principal of the Class A Notes in accordance with Section 2.2(c) of the Class A Purchase Agreement. In connection with each Limited Redemption or Optional Redemption, all Series 2018-Three Monthly Interest on such repaid principal amounts, and all other amounts (including any accrued but unpaid Target Proceeds Amount) due in respect of such repayments under any Transaction Document, shall be paid at the time the related Limited Redemption Amount or Optional Redemption Amount is paid.

Section 4.04.     Required Amounts.

(a)     With respect to each Distribution Date, on the related Determination Date, the Servicer shall determine the amount (the “Class A-3 Required Amount”), if any, by which (x) the amount required pursuant to subsections 4.05(a)(i) and 4.05(a)(iii) for such Distribution Date exceeds (y) the Available Finance Charge Collections for such Distribution Date available to fund such amount. In the event that the Class A-3 Required Amount for such Distribution Date is greater than zero, the Servicer shall give written notice to the Indenture Trustee of such Class A-3 Required Amount on the date of computation.

(b)     With respect to each Distribution Date, on the related Determination Date, the Servicer shall determine the amount (the “Class A-4 Required Amount”), if any, by which (x) the amount required pursuant to subsection 4.05(a)(iv) for such Distribution Date exceeds (y) the Available Finance Charge Collections for such Distribution Date available to fund such amount. In the event that the Class A-4 Required Amount for such Distribution Date is greater than zero, the Servicer shall give written notice to the Indenture Trustee of such Class A-4 Required Amount on the date of computation.

(c)     With respect to each Distribution Date, on the related Determination Date, the Servicer shall determine the amount (the “Class A-5 Required Amount”), if any, by which (x) the amount required pursuant to subsection 4.05(a)(v) for such Distribution Date exceeds (y) the Available Finance Charge Collections for such Distribution Date available to fund such amount. In the event that the Class A-5 Required Amount for such Distribution Date is greater than zero, the Servicer shall give written notice to the Indenture Trustee of such Class A-5 Required Amount on the date of computation.

25

(d)     With respect to each Distribution Date, on the related Determination Date, the Servicer shall determine the amount (the “Series 2018-Two Required Amount”), if any, by which (x) the amount required pursuant to subsections 4.05(a)(i) through 4.05(a)(ii) of the Series 2018-Two Indenture Supplement for such Distribution Date exceeds (y) the Series 2018-Two Available Funds for such Distribution Date available to fund such amount. In the event that the Series 2018-Two Required Amount for such Distribution Date is greater than zero, the Servicer shall give written notice to the Indenture Trustee of such Series 2018-Two Required Amount on the date of computation.

Section 4.05.     Application of Available Funds and Available Principal Collections. The Servicer shall apply, or shall cause the Paying Agent to apply by written instruction to the Paying Agent pursuant to the Monthly Servicer Statement, on each Distribution Date, Available Funds and Available Principal Collections on deposit in the Collection Account with respect to such Distribution Date to make the following distributions:

(a)     On each Distribution Date, an amount equal to the Available Funds with respect to such Distribution Date will be distributed in the following priority:

(i)     an amount equal to the sum of the Monthly Servicing Fee, the Program Fees, the Capped Program Expenses and the Monthly Backup Servicing Fee, if any, for the related Distribution Date plus the sum of the amount of any Monthly Servicing Fee, the Program Fees, the Capped Program Expenses and any Monthly Backup Servicing Fee previously due but not distributed to the Servicer, the Owner Trustee, the Indenture Trustee or the Backup Servicer, if any respectively, on a prior Distribution Date, shall be distributed pro rata to the Servicer, the Owner Trustee, the Indenture Trustee and the Backup Servicer, if any;

(ii)     if and for so long as Series 2018-Two remains outstanding, an amount equal to the Senior Facility First FC Amount, if any, shall be distributed to Series 2018-Two Noteholders to be paid in accordance with the terms of the Series 2018-Two Indenture Supplement;

(iii)     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;

(iv)     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;

26

(v)     an amount equal to Class A-5 Monthly Interest for the related Distribution Date plus an amount equal to any Class A-5 Interest Shortfall not distributed on a prior Distribution Date plus the amount of any Class A-5 Additional Interest for such Distribution Date plus any Class A-5 Additional Interest previously due but not distributed to Class A-5 Noteholders on a prior Distribution Date, shall be distributed to the Class A-5 Noteholders;

(vi)     if and for so long as Series 2018-Two remains outstanding, an amount equal to the Senior Facility Second FC Amount, if any, shall be distributed to Series 2018-Two to be paid in accordance with the terms of the Series 2018-Two Indenture Supplement;

(vii)     an amount equal to the Target Proceeds Amount and Class A Costs accrued for or otherwise due on such Distribution Date plus any Target Proceeds Amount and Class A Costs previously due but not distributed to the Agent on a prior Distribution Date shall be distributed to the Agent;

(viii)     an amount equal to the Series Default Amount for such Distribution Date shall be treated as a portion of Available Principal Collections for such Distribution Date;

(ix)     (A) an amount equal to the aggregate amount of Reduction Amounts and amounts that under subsections 4.07(b) through (e) were used to fund the Series 2018-Two Required Amount, the Class A-3 Required Amount, the Class A-4 Required Amount or the Class A-5 Required Amount which have not been previously reimbursed shall be treated as a portion of Available Principal Collections for such Distribution Date;

(B) an amount equal to the aggregate amount of Transferor Reduction Amounts and amounts that under subsection 4.07(a) were used to fund the Series 2018-Two Required Amount, the Class A-3 Required Amount, the Class A-4 Required Amount or the Class A-5 Required Amount which have not been previously reimbursed shall be treated as a portion of Available Principal Collections for such Distribution Date;

(x)     if an Early Redemption Event has occurred on or prior to such Distribution Date, an amount up to the Class A Note Principal Balance on such Distribution Date shall be treated as a portion of Available Principal Collections for such Distribution Date;

(xi)     an amount equal to the Monthly Marketing Fee for such Distribution Date, plus the amount of any Monthly Marketing Fee previously due but not distributed to the Seller on a prior Distribution Date, shall be distributed to the Seller;

27

(xii)     an amount equal to Class B Monthly Interest for such Distribution Date plus an amount equal to 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;

(xiii)     an amount equal to the Program Expenses for such Distribution Date minus any Capped Program Expenses paid in clause (i) above for such Distribution Date, plus the amount of any Program Expenses previously due but not distributed to the Owner Trustee or Indenture Trustee on a prior Distribution Date, shall be distributed pro rata to the Owner Trustee and the Indenture Trustee;

(xiv)     the balance of such Available Funds (“Excess Collections”) shall be distributed as follows: [*****].

(b)     On each Distribution Date with respect to the Revolving Period, an amount equal to the Available Principal Collections deposited in the Collection Account for the related Monthly Period shall be distributed in the following order of priority:

(i)     if and for so long as Series 2018-Two remains outstanding, an amount equal to the Senior Facility Principal Amount shall be distributed to Series 2018-Two to be paid in accordance with the terms of the Series 2018-Two Indenture Supplement;

(ii)     an amount equal to the Net Eligible Receivables Balance Deficiency, if any, shall be distributed pro rata to the Class A Noteholders in reduction of the Class A Note Principal Balance;

(iii)     an amount, to the extent available, equal to the Target Proceeds Amount, if any, shall be distributed to the Agent; and

(iv)     an amount equal to the balance, if any, of such Available Principal Collections shall be distributed to the Transferor, but only if the Transferor Amount on such date is greater than the Required Transferor Amount (after giving effect to all Principal Receivables transferred to the Issuer on such day) and otherwise shall be deposited in the Special Funding Account.

(c)     On each Distribution Date with respect to an Early Redemption Period, an amount equal to the Available Principal Collections deposited in the Collection Account for the related Monthly Period shall be distributed in the following order of priority:

(i)     if and for so long as Series 2018-Two remains outstanding, an amount equal to the Senior Facility Principal Amount shall first be distributed to Series 2018-Two to be paid in accordance with the terms of the Series 2018-Two Indenture Supplement;

(ii)     an amount, to the extent available, equal to the Class A-3 Note Principal Balance shall be distributed to the Class A-3 Noteholders;

28

(iii)     for each Distribution Date beginning on the Distribution Date on which the Class A-3 Notes have been paid in full, an amount, to the extent available, equal to the Class A-4 Note Principal Balance shall be distributed to the Class A-4 Noteholders;

(iv)     for each Distribution Date beginning on the Distribution Date on which the Class A-4 Notes have been paid in full, an amount, to the extent available, equal to the Class A-5 Note Principal Balance shall be distributed to the Class A-5 Noteholders;

(v)     for each Distribution Date beginning on the Distribution Date on which the Class A-5 Notes have been paid in full, an amount, to the extent available, equal to the Class B Note Principal Balance shall be distributed to the Class B Noteholders;

(vi)     an amount, to the extent available, equal to the Target Proceeds Amount, if any, shall be distributed to the Agent; and

(vii)     for each Distribution Date beginning on the Distribution Date on which the Class B Notes are paid in full, an amount equal to the balance, if any, of such Available Principal Collections shall be distributed to the Transferor, but only if the Transferor Amount on such date is greater than the Required Transferor Amount (after giving effect to all Principal Receivables transferred to the Issuer on such day) and otherwise shall be deposited in the Special Funding Account.

(d)     On each Distribution Date with respect to the Limited Redemption Period, an amount equal to the Available Principal Collections deposited in the Collection Account for the related Monthly Period shall be distributed in the following order of priority:

(i)     if and for so long as Series 2018-Two remains outstanding, an amount equal to the Senior Facility Principal Amount shall first be distributed to Series 2018-Two Noteholders to be paid in accordance with the terms of the Series 2018-Two Indenture Supplement;

(ii)     an amount equal to the Limited Redemption Amount shall be distributed to the Noteholders in accordance with the priority set forth in the Limited Redemption Notice;

(iii)     an amount, to the extent available, equal to the Target Proceeds Amount, if any, shall be distributed to the Agent; and

(iv)     the balance of such Available Principal Collections shall be distributed to the Transferor, but only if the Transferor Amount on such date is greater than the Required Transferor Amount (after giving effect to all Principal Receivables transferred to the Issuer on such day) and otherwise shall be deposited in the Special Funding Account.

29

Section 4.06.     Defaulted Amounts; Reduction Amounts.

On each Determination Date, the Servicer shall calculate the Series Default Amount for the related Distribution Date. If, on any Distribution Date, the Series Default Amount for the related Monthly Period exceeds the Available Finance Charge Collections allocated and available for that purpose pursuant to subsection 4.05(a)(viii) for such Distribution Date,

(a) first, the Series Adjusted Subordinated Transferor Amount (after giving effect to any reductions for Transferor Available Principal Collections that under subsection 4.07(a) were used to fund the Series 2018-Two Required Amount, the Class A-3 Required Amount, the Class A-4 Required Amount or the Class A-5 Required Amount on such Distribution Date), will be reduced, subject to the succeeding sentence, by the amount of such excess, but not by more than the Series Default Amount for such Distribution Date (a “Transferor Reduction Amount”). In the event that such reduction would cause the Series Adjusted Subordinated Transferor Amount to be a negative number, the Series Adjusted Subordinated Transferor Amount shall be reduced to zero. Transferor Reduction Amounts shall thereafter be reimbursed and the Series Adjusted Subordinated Transferor Amount increased (but not by an amount in excess of the aggregate unreimbursed Transferor Reduction Amounts) on any Distribution Date by the amount of Available Finance Charge Collections allocated and available for that purpose pursuant to subsection 4.05(a)(ix)(B).

(b) second, in the event, the Series Adjusted Subordinated Transferor Amount has been reduced to zero in accordance with clause (a) above, the Allocation Amount (after giving effect to any reductions for Reallocated Principal Collections that under subsections 4.07(b) through (e) were used to fund the Series 2018-Two Required Amount, the Class A-3 Required Amount, the Class A-4 Required Amount or the Class A-5 Required Amount on such Distribution Date), will be reduced, subject to the succeeding sentence, by the amount of such excess, but not by more than the Series Default Amount for such Distribution Date (a “Reduction Amount”). In the event that such reduction would cause the Allocation Amount to be a negative number, the Allocation Amount shall be reduced to zero. Reduction Amounts shall thereafter be reimbursed and the Allocation Amount increased (but not by an amount in excess of the aggregate unreimbursed Reduction Amounts) on any Distribution Date by the amount of Available Finance Charge Collections allocated and available for that purpose pursuant to subsection 4.05(a)(ix)(A).

Section 4.07.     Reallocated Principal Collections.

(a)     On each Distribution Date, prior to the application of Reallocated Principal Collections in accordance with subsections (b) through (f) below, the Servicer shall direct the Paying Agent to apply by written instruction to the Paying Agent pursuant to the related Monthly Servicer Statement, Transferor Available Principal Collections with respect to such Distribution Date, to fund, in the following order of priority, the Series 2018-Two Required Amount, the Class A-3 Required Amount, the Class A-4 Required Amount and the Class A-5 Required Amount. On each Distribution Date, the Series Adjusted Subordinated Transferor Amount shall be reduced by the amount of Transferor Available Principal Collections used to fund the Series 2018-Two Required Amount, the Class A-3 Required Amount, the Class A-4 Required Amount and the Class A-5 Required Amount for such Distribution Date, but in any event the Series Adjusted Subordinated Transferor Amount shall not be reduced by operation of this subsection 4.07(a) to an amount less than zero.

30

(b)     On each Distribution Date, the Servicer shall direct the Paying Agent to apply by written instruction to the Paying Agent pursuant to the related Monthly Servicer Statement, Reallocated Principal Collections with respect to such Distribution Date, to fund the excess, if any, of the Series 2018-Two Required Amount over the amount funded in accordance with subsection 4.07(a). On each Distribution Date, the Allocation Amount shall be reduced by the amount of Reallocated Principal Collections used to fund the Series 2018-Two Required Amount for such Distribution Date, but in any event the Allocation Amount shall not be reduced by operation of this subsection 4.07(b) to an amount less than the Note Principal Balance.

(c)     On each Distribution Date, the Servicer shall direct the Paying Agent to apply by written instruction to the Paying Agent pursuant to the Monthly Servicer Statement, Reallocated Principal Collections with respect to such Distribution Date remaining after application in accordance with subsection 4.07(b), to fund the excess, if any, of the Class A-3 Required Amount over the amount funded in accordance with subsection 4.07(a); provided, however, that the amount of Reallocated Principal Collections applied in accordance with this subsection 4.07(c) shall not exceed an amount equal to Reallocated Class B Principal Collections with respect to such Distribution Date remaining after application in accordance with subsection 4.07(b). On each Distribution Date, the Allocation Amount shall be reduced by the amount of Reallocated Principal Collections used to fund the Class A-3 Required Amount for such Distribution Date, but in any event the Allocation Amount shall not be reduced by operation of this subsection 4.07(c) to an amount less than the Class A-3 Note Principal Balance.

(d)     On each Distribution Date, the Servicer shall direct the Paying Agent to apply by written instruction to the Paying Agent pursuant to the Monthly Servicer Statement, Reallocated Principal Collections with respect to such Distribution Date remaining after application in accordance with subsection 4.07(c), to fund the excess, if any, of the Class A-4 Required Amount over the amount funded in accordance with subsection 4.07(a); provided, however, that the amount of Reallocated Principal Collections applied in accordance with this subsection 4.07(d) shall not exceed an amount equal to Reallocated Class B Principal Collections with respect to such Distribution Date remaining after application in accordance with subsection 4.07(c). On each Distribution Date, the Allocation Amount shall be reduced by the amount of Reallocated Principal Collections used to fund the Class A-4 Required Amount for such Distribution Date, but in any event the Allocation Amount shall not be reduced by operation of this subsection 4.07(d) to an amount less than the sum of the Class A-3 Note Principal Balance and the Class A-4 Note Principal Balance.

(e)     On each Distribution Date, the Servicer shall direct the Paying Agent to apply by written instruction to the Paying Agent pursuant to the Monthly Servicer Statement, Reallocated Principal Collections with respect to such Distribution Date remaining after application in accordance with subsection 4.07(d), to fund the excess, if any, of the Class A-5 Required Amount over the amount funded in accordance with subsection 4.07(a); provided, however, that the amount of Reallocated Principal Collections applied in accordance with this subsection 4.07(e) shall not exceed an amount equal to Reallocated Class B Principal Collections with respect to such Distribution Date remaining after application in accordance with subsection 4.07(d). On each Distribution Date, the Allocation Amount shall be reduced by the amount of Reallocated Principal Collections used to fund the Class A-5 Required Amount for such Distribution Date, but in any event the Allocation Amount shall not be reduced by operation of this subsection 4.07(e) to an amount less than the sum of the Class A-3 Note Principal Balance, the Class A-4 Note Principal Balance and the Class A-5 Note Principal Balance.

31

Section 4.08.     Principal Amount Increases.

(a)     The Class A-3 Noteholders agree, by acceptance of the Class A-3 Notes, that the Issuer may from time to time, during the Revolving Period, request upon ten (10) Business Days prior irrevocable written notice to each of the Indenture Trustee, the Servicer and the Class A-3 Noteholders substantially in the form of Exhibit A to the Class A Purchase Agreement that the Class A-3 Noteholders fund increases in the outstanding principal balance of the Class A-3 Notes in the specified amounts (each such amount, a “Class A-3 Note Principal Balance Increase”); provided, however, that any applicable conditions and limits on increases set forth in the Class A Purchase Agreement shall have been satisfied or waived as provided therein. The Class A-3 Noteholders shall fund a Class A-3 Note Principal Balance Increase, upon payment, in same day funds, to the Issuer of the amount of such Class A-3 Note Principal Balance Increase, in accordance with the payment instructions specified in the notice delivered with respect to such Class A-3 Note Principal Increase.

(b)     The Class A-4 Noteholders agree, by acceptance of the Class A-4 Notes, that the Issuer may from time to time, during the Revolving Period, request upon ten (10) Business Days prior irrevocable written notice to each of the Indenture Trustee, the Servicer and the Class A-4 Noteholders substantially in the form of Exhibit A to the Class A Purchase Agreement that the Class A-4 Noteholders fund increases in the outstanding principal balance of the Class A-4 Notes in the specified amounts (each such amount, a “Class A-4 Note Principal Balance Increase”); provided, however, that any applicable conditions and limits on increases set forth in the Class A Purchase Agreement shall have been satisfied or waived as provided therein. The Class A-4 Noteholders shall fund a Class A-4 Note Principal Balance Increase, upon payment, in same day funds, to the Issuer of the amount of such Class A-4 Note Principal Balance Increase, in accordance with the payment instructions specified in the notice delivered with respect to such Class A-4 Note Principal Increase.

(c)     The Class A-5 Noteholders agree, by acceptance of the Class A-5 Notes, that the Issuer may from time to time, during the Revolving Period, request upon ten (10) Business Days prior irrevocable written notice to each of the Indenture Trustee, the Servicer and the Class A-5 Noteholders substantially in the form of Exhibit A to the Class A Purchase Agreement that the Class A-5 Noteholders fund increases in the outstanding principal balance of the Class A-5 Notes in the specified amounts (each such amount, a “Class A-5 Note Principal Balance Increase”); provided, however, that any applicable conditions and limits on increases set forth in the Class A Purchase Agreement shall have been satisfied or waived as provided therein. The Class A-5 Noteholders shall fund a Class A-5 Note Principal Balance Increase, upon payment, in same day funds, to the Issuer of the amount of such Class A-5 Note Principal Balance Increase, in accordance with the payment instructions specified in the notice delivered with respect to such Class A-5 Note Principal Increase.

(d)     The Class B Noteholders agree, by acceptance of the Class B Notes, that the Issuer may from time to time, during the Revolving Period, request upon two (2) Business Days prior irrevocable written notice to each of the Indenture Trustee, the Servicer and the Class B Noteholders substantially in the form of Exhibit D that the Class B Noteholders fund increases in the outstanding principal balance of the Class B Notes in the specified amounts (each such amount, a “Class B Note Principal Balance Increase”).

32

(e)     Other than as provided in the Class A Purchase Agreement, no decrease in the outstanding principal balance of the Class A Notes pursuant to Section 4.03 shall limit the ability of the Issuer to increase the outstanding principal balance of the Class A Notes pursuant to this Section 4.08.

Section 4.09.     Series 2018-Three Distribution Account.

(a)     The Servicer shall establish and maintain with the Paying Agent, in the name of the Indenture Trustee, for the benefit of the Series 2018-Three Noteholders, a Series Account (the “Series 2018-Three Distribution Account”) bearing a designation clearly indicating that the funds deposited therein are held for the benefit of the Series 2018-Three Noteholders. The Series 2018-Three Distribution Account shall be established and maintained with the Paying Agent on behalf of and in the name of the Indenture Trustee. The Indenture Trustee shall possess all right, title and interest in all funds on deposit from time to time in the Series 2018-Three Distribution Account and in all proceeds thereof. The Series 2018-Three Distribution Account shall be under the sole dominion and control of the Indenture Trustee for the benefit of the Series 2018-Three Noteholders. Funds on deposit in the Series 2018-Three Distribution Account shall not be subject to investment. If at any time the Series 2018-Three Distribution Account ceases to be an Eligible Deposit Account, the Indenture Trustee (or the Servicer on its behalf) shall within 10 Business Days (or such longer period, not to exceed 30 calendar days, as to which the Series 2018-Three Noteholders shall consent) establish a new Series 2018-Three Distribution Account meeting the conditions specified above as an Eligible Deposit Account, and shall transfer any cash or any investments to such new Series 2018-Three Distribution Account.

(b)     On each Distribution Date, the Indenture Trustee, solely in accordance with the Monthly Servicer Statement, shall withdraw from the Collection Account and deposit into the Series 2018-Three Distribution Account Collections of Finance Charge Receivables and Principal Receivables allocated to Series 2018-Three on such Distribution Date for application pursuant to Section 4.05.

Section 4.10.     Pre-Funding Account.

(a)     The Servicer shall establish and maintain with the Paying Agent, in the name of the Indenture Trustee, for the benefit of the Noteholders, an Eligible Deposit Account (the “Pre-Funding Account”) bearing a designation clearly indicating that the funds deposited therein are held for the benefit of the Class A Noteholders and the Class B Noteholders. The Pre-Funding Account shall be established and maintained with the Paying Agent on behalf of and in the name of the Indenture Trustee. The Indenture Trustee shall possess all right, title and interest in all funds on deposit from time to time in the Pre-Funding Account and in all proceeds thereof. The Pre-Funding Account shall be under the sole dominion and control of the Indenture Trustee for the benefit of the Class A Noteholders and the Class B Noteholders. If at any time the Pre-Funding Account ceases to be an Eligible Deposit Account, the Indenture Trustee (or the Servicer on its behalf) shall within 10 Business Days (or such longer period if necessary, not to exceed 30 calendar days) establish a new Pre-Funding Account meeting the conditions specified above as an Eligible Deposit Account, and shall transfer any cash or any investments to such new Pre-Funding Account. The Paying Agent on behalf of the Indenture Trustee, at the written direction of the Servicer, shall (i) make withdrawals from the Pre-Funding Account from time to time for the purposes set forth in this Supplement, and (ii) on a date on which a Note Principal Balance Increase occurs, if directed to by the Servicer, make a deposit into the Pre-Funding Account from the money received in payment of the purchase price for such Note Principal Balance Increase in the amount specified by the Servicer, equal to the least of (1) the sum of the Class A-3 Note Principal Balance Increase, the Class A-4 Note Principal Balance Increase, the Class A-5 Note Principal Balance Increase, and the Class B Note Principal Balance Increase, (2) the amount specified by the Servicer equal to the positive difference between the Note Principal Balance and the Allocation Amount (after giving effect to such Note Principal Balance Increase), and (3) an amount equal to the product of (x) 0.10 and (y) the Note Principal Balance (after giving effect to such Note Principal Balance Increase).

33

(b)     Funds on deposit in the Pre-Funding Account shall be invested at the written direction of the Servicer by the Indenture Trustee in Eligible Investments. In no event shall the Paying Agent or the Indenture Trustee be liable for the selection of Eligible Investments or for investment losses incurred thereon, except with respect to investments on which the institution acting as the Indenture Trustee is an obligor. The Indenture Trustee and the Paying Agent shall have no liability in respect of 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. The Indenture Trustee and the Paying Agent shall have no obligation to invest or reinvest any amounts held hereunder in the absence of written investment direction. Funds on deposit in the Pre-Funding Account on any Transfer Date, after giving effect to any withdrawals from the Pre-Funding Account on such Transfer Date, shall be invested in such investments that will mature so that such funds will be available for withdrawal on or prior to the following Transfer Date. The Indenture Trustee shall hold such Eligible Investments as provided in Section 6.15 of the Indenture. 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. On each Distribution Date, all interest and earnings (net of losses and investment expenses) accrued since the preceding Distribution Date on funds on deposit in the Pre-Funding Account (“Pre-Funding Investments Proceeds”) shall be deposited in the Collection Account and treated as a portion of Available Funds for that Distribution Date. For purposes of determining the availability of funds or the balance in the Pre-Funding Account for any reason under this Supplement, except as otherwise provided in the preceding sentence, investment earnings on such funds shall be deemed not to be available or on deposit.

(c)     On any Deposit Date in a Monthly Period during the Revolving Period, the Servicer may withdraw from the Pre-Funding Account an amount not to exceed the lesser of (1) the positive difference, if any, between (I) the Transferor Amount and (II) the Required Transferor Amount, and (2) the amount on deposit in the Pre-Funding Account, and pay such amount to the Issuer for application pursuant to the Trust Agreement.

34

(d)     In the event that there are funds on deposit in the Pre-Funding Account on the earlier to occur of (1) the first Distribution Date following the end of the Revolving Period, and (2) the second Distribution Date following the date on which the most recent Note Principal Balance Increase occurred, the Servicer shall cause the Paying Agent on behalf of the Indenture Trustee to apply all amounts on deposit in the Pre-Funding Account to the Paying Agent for pro rata payment of principal on the Class A Notes and the Class B Notes. For the avoidance of doubt, the application of any funds from the Pre-Funding Account to any payment of principal of Series 2018-Three Notes shall be considered a prepayment of principal.

(e)     Notwithstanding anything to the contrary in any Transaction Document related to the Senior Facility or otherwise, the funds on deposit in the Pre-Funding Account shall not be available for any payment due under the Senior Facility or any other Series except Series 2018-Three.

35

ARTICLE V

Distributions and Reports to
Series 2018-Three Noteholders

Section 5.01.     Distributions.

(a)     On each Distribution Date, the Paying Agent, solely in accordance with the Monthly Servicer Statement, shall distribute to Series 2018-Two (other than as provided in Section 10.02 of the Indenture) such amounts held by the Paying Agent that are allocated and available on such Distribution Date to pay Senior Facility First FC Amounts and Senior Facility Second FC Amounts.

(b)     On each Distribution Date, the Paying Agent, solely in accordance with the Monthly Servicer Statement, shall distribute to Series 2018-Two (other than as provided in Section 10.02 of the Indenture) such amounts held by the Paying Agent that are allocated and available on such Distribution Date to pay Senior Facility Principal Amounts.

(c)     On each Distribution Date, the Paying Agent, solely in accordance with the Monthly Servicer Statement, shall distribute to each Class A-3 Noteholder (other than as provided in Section 10.02 of the Indenture) such amounts held by the Paying Agent that are allocated and available on such Distribution Date to pay interest on the Class A-3 Notes.

(d)     On each Special Payment Date, the Paying Agent, solely in accordance with the Monthly Servicer Statement, shall distribute to each Class A-3 Noteholder of record on the related Record Date (other than as provided in Section 10.02 of the Indenture) such amounts held by the Paying Agent that are allocated and available on such date to pay principal of the Class A-3 Notes pursuant to this Supplement up to a maximum amount on any such date equal to the Class A-3 Note Principal Balance on such date.

(e)     On each Distribution Date, the Paying Agent, solely in accordance with the Monthly Servicer Statement, shall distribute to each Class A-4 Noteholder (other than as provided in Section 10.02 of the Indenture) such amounts held by the Paying Agent that are allocated and available on such Distribution Date to pay interest on the Class A-4 Notes.

(f)     On each Special Payment Date, the Paying Agent, solely in accordance with the Monthly Servicer Statement, shall distribute to each Class A-4 Noteholder of record on the related Record Date (other than as provided in Section 10.02 of the Indenture) such amounts held by the Paying Agent that are allocated and available on such date to pay principal of the Class A-4 Notes pursuant to this Supplement up to a maximum amount on any such date equal to the Class A-4 Note Principal Balance on such date.

(g)     On each Distribution Date, the Paying Agent, solely in accordance with the Monthly Servicer Statement, shall distribute to each Class A-5 Noteholder (other than as provided in Section 10.02 of the Indenture) such amounts held by the Paying Agent that are allocated and available on such Distribution Date to pay interest on the Class A-5 Notes.

36

(h)     On each Special Payment Date, the Paying Agent, solely in accordance with the Monthly Servicer Statement, shall distribute to each Class A-5 Noteholder of record on the related Record Date (other than as provided in Section 10.02 of the Indenture) such amounts held by the Paying Agent that are allocated and available on such date to pay principal of the Class A-5 Notes pursuant to this Supplement up to a maximum amount on any such date equal to the Class A-5 Note Principal Balance on such date.

(i)     On each Distribution Date, the Paying Agent, solely in accordance with the Monthly Servicer Statement, shall distribute to the Agent such amounts held by the Paying Agent that are allocated and available on such Distribution Date to pay Services Fees, Target Proceeds Amounts and Class A Costs.

(j)     On each Distribution Date, the Paying Agent, solely in accordance with the Monthly Servicer Statement, shall distribute to each Class B Noteholder of record on the related Record Date (other than as provided in Section 10.02 of the Indenture) such amounts held by the Paying Agent that are allocated and available on such Distribution Date to pay interest on the Class B Notes pursuant to this Supplement.

(k)     On each Special Payment Date, the Paying Agent, solely in accordance with the Monthly Servicer Statement, shall distribute to each Class B Noteholder of record on the related Record Date (other than as provided in Section 10.02 of the Indenture) such amounts held by the Paying Agent that are allocated and available on such date to pay principal of the Class B Notes pursuant to this Supplement up to a maximum amount on any such date equal to the Class B Note Principal Balance on such date.

(l)     On each Distribution Date, the Paying Agent, solely in accordance with the Monthly Servicer Statement, shall distribute to each of the Servicer, Backup Servicer, Owner Trustee, Indenture Trustee and Seller such amounts held by the Paying Agent that are allocated and available on such Distribution Date to pay the Servicing Fee, the Backup Servicing Fee, the Program Fees, the Program Expenses and the Marketing Fee, respectively.

(m)     The distributions to be made pursuant to this Section 5.01 are subject to the provisions of Section 8.01 of the Transfer and Servicing Agreement, Section 5.05 of the Indenture and Section 8.01 of this Supplement.

(n)     Except as provided in Section 10.02 of the Indenture with respect to a final distribution, distributions to Series 2018-Three Noteholders hereunder shall be made by wire transfer of same day funds to the account that has been designated by the applicable Noteholders not less than ten Business Days prior to such Distribution Date.

Section 5.02.     Reports and Statements to Series 2018-Three Noteholders.

(a)     Not later than each Determination Date, the Servicer shall deliver to the Indenture Trustee, the Paying Agent and the Agent (i) a statement substantially in the form of Exhibit C prepared by the Servicer (the “Monthly Servicer Statement”) and (ii) a certificate of a Servicing Officer substantially in the form attached thereto.

37

(b)     A copy of each statement or certificate provided pursuant to subsection 5.02(a) may be obtained by any Series 2018-Three Noteholder or any beneficial owner thereof by a request in writing to the Servicer.

(c)     On or before January 31 of each calendar year, beginning with calendar year 2019, 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 2018-Three Noteholder, a statement prepared by the Servicer containing the information which is required to be contained in the statement to Series 2018-Three Noteholders, as set forth in paragraph (a) above aggregated for such calendar year or the applicable portion thereof during which such Person was a Series 2018-Three Noteholder, together with other information as is required to be provided by an issuer of indebtedness under the Code. Such obligation of the Servicer 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.

38

ARTICLE VI

Early Redemption Events; Events of Default

Section 6.01.     Early Redemption Events. If any one of the following events shall occur with respect to the Series 2018-Three Notes:

(a)     (i) failure on the part of the Seller, the Transferor or the Issuer to make any payment or deposit required by the terms of any Transaction Document on or before the date occurring five (5) Business Days after the date such payment or deposit is required to be made therein or herein or (ii) failure on the part of the Seller, the Transferor or the Issuer duly to observe or perform any other covenants or agreements in any Transaction Document which continues unremedied for a period of thirty (30) days after the date on which the Seller, the Issuer or the Transferor, as applicable, obtains actual knowledge of such failure or on which written notice of such failure requiring the same to be remedied, shall have been given to the Seller, the Transferor or the Issuer by the Indenture Trustee, or to, the Seller, the Transferor, or the Issuer and the Indenture Trustee by the Agent or any Holder of a Class A Note;

(b)     any representation or warranty made by the Seller, the Transferor or the Issuer under any Transaction Document which continues to be incorrect for a period of thirty (30) days after the date on which the Seller, the Issuer or the Transferor, as applicable, obtains actual knowledge of such failure or on which written notice of such failure requiring the same to be remedied, shall have been given to the Seller, the Transferor or the Issuer by the Indenture Trustee, or to the Seller, the Transferor or the Issuer and the Indenture Trustee by the Agent or any Holder of a Class A Note; 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;

(c)     the occurrence of a Servicer Default or Access Financing, LLC resigns as Servicer;

(d)     the Indenture Trustee shall, for any reason, fail to have a valid and perfected first priority security interest in the Trust Estate;

(e)     without limiting any of the foregoing, the occurrence of an Event of Default with respect to Series 2018-Three;

(f)     the Class A Notes are not paid in full on or before the Commitment Termination Date;

(g)     any of the following occurs for any Determination Date:

(i) the Three-Month Charge-Off Ratio exceeds [*****]%;

(ii) the Three-Month Delinquency Ratio exceeds [*****]%;

(iii) the Three-Month Excess Spread Percentage is less than [*****]%; or

39

(h)     No Account Owner is originating Receivables;

(i)     (i) any of the Transaction Documents ceases to be in full force and effect (other than in accordance with its terms) or (ii) the Trust Agreement is terminated or the Owner Trustee resigns or is removed under the Trust Agreement and not replaced with a replacement trustee satisfying the eligibility criteria thereunder within the time period prescribed therein;

(j)     one or more judgments or decrees is rendered against the Seller, the Issuer or the Transferor in an amount in excess of $[*****], individually or in the aggregate, by a court of final adjudication, which is/are not bonded pending appeal, satisfied, stayed, vacated or discharged of record within ninety (90) consecutive calendar days of being rendered;

(k)     (i) any default or breach occurs, which is not cured within any applicable grace period or waived, (x) in the payment of any amount with respect to any Indebtedness (other than Notes issued under the Indenture) of the Issuer or the Transferor for borrowed money having an aggregate principal amount in excess of $[*****], individually or in the aggregate, or (y) in the performance, observance or fulfillment of any provision contained in any agreement, contract, document or instrument to which the Issuer or the Transferor is a party or to which any of their properties or assets are subject or bound under or pursuant to which any Indebtedness (other than Notes issued under the Indenture) having an aggregate principal amount in excess of $[*****], individually or in the aggregate, was issued, created, assumed, guaranteed or secured and such default or breach continues for more than any applicable grace period and permits the holder of any such Indebtedness to accelerate the maturity thereof;

(l)     the Internal Revenue Service shall file notice of a lien pursuant to Section 6323 of the Internal Revenue Code with regard to any of the assets of the Issuer or the Transferor and such lien shall not have been released within thirty (30) Business Days, or the Pension Benefit Guaranty Corporation shall, or shall indicate its intention to, file notice of a lien pursuant to Section 4068 of ERISA with regard to any of the assets of the Issuer or any of its Affiliates and such lien shall not have been released within thirty (30) Business Days;

(m)     Change of Control of the Issuer, Transferor, the Seller or the Servicer;

(n)     removal (by any Person other than the Agent or an affiliate of the Agent) of the member of the Board of the Transferor selected by the Agent;

(o)     (i) the Issuer, the Seller or the Transferor is or becomes party to any material pending or threatened in writing action, suit, proceeding or investigation related to the business of the Issuer, (ii) there exists or occurs any pending or threatened in writing, action, suit, proceeding, arbitration or investigation involving the Issuer, the Seller, the Transferor or the Account Owner or their respective businesses that, in any case that could reasonably be expected to prevent or materially delay the consummation by the Issuer of the transactions contemplated herein or in the Indenture, (iii)  the Issuer, the Seller, the Transferor or the Account Owner is or becomes a party or is or becomes subject to any order, writ, injunction, judgment or decree of any Governmental Authority, or there exists or occurs any action, suit, proceeding, inquiry or investigation by any Governmental Authority, in either case, that could reasonably be expected to prevent or materially delay the consummation of the transactions contemplated herein or in the Indenture, or (iv) the Issuer, the Seller or the Transferor has incurred or incurs any accrued and/or unpaid penalties, fines or sanctions imposed by and owing to any Governmental Authority or any other governmental payee;

40

(p)     any litigation, action, suit, arbitration, proceeding, inquiry or investigation at law or in equity or before or by any court, public board or body is pending or overtly threatened in writing against or affecting any of the Issuer, the Seller, the Servicer, the Transferor or the Account Owner (i) that questions the validity or enforceability of any Transaction Document or any action to be taken in connection with the transactions contemplated hereby or thereby or (ii) which, individually or in the aggregate, if adversely determined, could reasonably be expected to have a Material Adverse Effect on such Person;

(q)     at any time (i) the Issuer, the Servicer, the Seller, the Transferor or the Account Owner is not in compliance with or does not have all Permits necessary or required by Requirements of Law or any Governmental Authority for the operation of its respective business as presently conducted and as proposed to be conducted except where noncompliance, violation or lack thereof is not reasonably expected to have or result in an Adverse Effect or a Material Adverse Effect on such Person or (ii) any Permits necessary or required by Requirements of Law or any Governmental Authority for the operation of the respective businesses of the Issuer, the Servicer, the Seller, the Transferor or the Account Owner are in known conflict with the rights of others and such conflict could reasonably be expected to have or result in an Adverse Effect or a Material Adverse Effect on such Person;

(r)     the occurrence of a Regulatory Event;

(s)     (i) the Transferor shall fail to cause the amount of the Transferor’s Interest, when measured in a manner consistent with the requirements of Regulation RR, to satisfy the requirements of Regulation RR as required by Section 9.09 of this Supplement or (ii) if, for any Measurement Date, the Servicer determined that the Transferor Amount is less than the Required Transferor Amount, the Transferor shall fail to cause to be designated additional Eligible Accounts to be included as Accounts in a sufficient amount such that the Transferor Amount is at least equal to the Required Transferor Amount on or before the last Business Day of the Monthly Period in which such Measurement Date takes place;

(t)     the occurrence of any Event of Default (as such term is defined in the Indenture or the related Indenture Supplement with respect to the Senior Facility); or

(u)     the occurrence of any Early Redemption Event (as such term is defined in the Series 2017-One Supplement);

then, in the case of any event described in subparagraphs other than (d), (e) or (f) after the applicable grace period, if any, set forth in such subparagraphs, either the Indenture Trustee at the direction of the Holders of Class A Notes evidencing more than 50% of the Class A Note Principal Balance or such Holders, by notice then given in writing to the Issuer, the Servicer and the Indenture Trustee may declare that an Early Redemption Event has occurred with respect to Series 2018-Three as of the date of such notice, and, in the case of any event described in subparagraph (d), (e) or (f), an Early Redemption Event shall occur with respect to Series 2018-Three without any notice or other action on the part of the Indenture Trustee or the Series 2018-Three Noteholders immediately upon the occurrence of such event, unless such Early Redemption Event is waived by the Holders of Class A Notes evidencing more than 50% of the Class A Note Principal Balance, by notice given in writing to the Indenture Trustee, the Issuer and the Servicer.

41

Section 6.02.     Events of Default. In addition to the Events of Default set forth in Section 5.02 of the Indenture, any Event of Default with respect to Series 2017-One and any of the Early Redemption Events described in Section 6.01(t) shall constitute an Event of Default under the Indenture with respect to Series 2018-Three.

Section 6.03.     Acceleration. Section 5.03(a) and (c) of the Indenture shall be applicable to Section 6.02 above and any other Event of Default pursuant to Section 5.02(e) of the Indenture.

ARTICLE VII

Administrative Redemption; Series Termination

Section 7.01.     Administrative Redemption.

(a)     On any day occurring on or after the date on which the Note Principal Balance is reduced to 20% or less of the highest Note Principal Balance at any time on or after the Initial Funding Date and so long as the Series 2018-Two Notes shall have first been redeemed in accordance with the terms set forth in Section 7.01 of the Series 2018-Two Indenture Supplement, the Issuer, at the direction of the Transferor, shall have the option to redeem the Series 2018-Three Notes, at a redemption 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 and the Indenture Trustee at least 30 days irrevocable prior written notice of the date on which the Issuer intends to exercise such redemption option. The Issuer shall deposit the Redemption Amount into the Collection Account in same day funds on the Business Day prior to such scheduled redemption. Such redemption option is subject to payment in full of the Redemption Amount. Following the deposit of the Redemption Amount into the Collection Amount in accordance with the foregoing, the Allocation Amount for Series 2018-Three shall be reduced to zero and following the payment in full of such Redemption Amount to the Series 2018-Three Noteholders and other parties entitled to any of such amount, the Series 2018-Three Noteholders shall have no further interest in the Trust Estate. The Redemption Amount shall be distributed as set forth in subsection 8.01(b).

42

Section 7.02.     Repayment.

The Class A Notes shall be due and payable in full on the Commitment Termination Date; provided, however, that, in the event that the Commitment Termination Date occurs while the Series 2018-Two Notes remain outstanding, no amounts shall be paid in respect of the Class A Notes until the Note Principal Balance (as defined in the Series 2018-Two Indenture Supplement), all Series 2018-Two Monthly Interest (as defined in the Series 2018-Two Indenture Supplement) on such unpaid principal amounts, and all other amounts due in respect thereof under the Series 2018-Two Indenture Supplement or any other Transaction Document have been paid in full.

ARTICLE VIII

Redemption of Series 2018-Three Notes; Final Distributions

Section 8.01.     Sale of Receivables or Redemption of the Notes pursuant to Section 2.04(c) or 8.01 of the Transfer and Servicing Agreement and Sections 5.05 and 5.17 of the Indenture and Section 7.01 of this Supplement.

(a)     (i)     The amount to be paid by the Transferor with respect to Series 2018-Three in connection with a reassignment of Receivables to the Transferor pursuant to Section 2.04(c) 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.

(ii)     The amount to be paid by the Transferor with respect to Series 2018-Three in connection with any purchase of the Notes, pursuant to the exercise of a right of first refusal contained in Section 8.01 of the Transfer and Servicing Agreement shall be an amount equal to the Redemption Amount for the Distribution Date of any such purchase.

(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 2018-Three Notes 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 2:30 p.m., New York City 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 solely in accordance with the Monthly Servicer Statement:

i. the Series 2018-Two Note Principal Balance on such Distribution Date plus an amount equal to the sum of (A) the Class A Monthly Interest and Unused Fee (each as defined in the Series 2018-Two Indenture Supplement) for such Distribution Date, (B) any Class A Monthly Interest and Unused Fee (each as defined in the Series 2018-Two Indenture Supplement) previously due but not distributed to the holders of the Series 2018-Two Notes on a prior Distribution Date, (C) any Class A Additional Interest and Unused Fee Interest (each as defined in the Series 2018-Two Indenture Supplement) for such Distribution Date and any Class A Additional Interest and Unused Fee Interest (each as defined in the Series 2018-Two Indenture Supplement) previously due but not distributed to the holders of the Series 2018-Two Notes on a prior Distribution Date, (D) any Class A Costs (as defined in the Series 2018-Two Indenture Supplement) for such Distribution Date and any Class A Costs (as defined in the Series 2018-Two Indenture Supplement) previously due but not distributed to the holders of the Series 2018-Two Notes on a prior Distribution Date shall be distributed to the Paying Agent for payment to the holders of the Series 2018-Two Notes;

43

ii. the Class A-3 Note Principal Balance on such Distribution Date plus an amount equal to the sum of (A) the Class A-3 Monthly Interest for such Distribution Date, (B) any Class A-3 Monthly Interest previously due but not distributed to the Class A-3 Noteholders on a prior Distribution Date, (C) any Class A-3 Additional Interest for such Distribution Date and any Class A-3 Additional Interest previously due but not distributed to the Class A-3 Noteholders on a prior Distribution Date shall be distributed to the Paying Agent for payment to the Class A-3 Noteholders;

iii. the Class A-4 Note Principal Balance on such Distribution Date plus an amount equal to the sum of (A) the Class A-4 Monthly Interest for such Distribution Date, (B) any Class A-4 Monthly Interest previously due but not distributed to the Class A-4 Noteholders on a prior Distribution Date, (C) any Class A-4 Additional Interest for such Distribution Date and any Class A-4 Additional Interest previously due but not distributed to the Class A-4 Noteholders on a prior Distribution Date shall be distributed to the Paying Agent for payment to the Class A-4 Noteholders;

iv. the Class A-5 Note Principal Balance on such Distribution Date plus an amount equal to the sum of (A) the Class A-5 Monthly Interest for such Distribution Date, (B) any Class A-5 Monthly Interest previously due but not distributed to the Class A-5 Noteholders on a prior Distribution Date, (C) any Class A-5 Additional Interest for such Distribution Date and any Class A-5 Additional Interest previously due but not distributed to the Class A-5 Noteholders on a prior Distribution Date shall be distributed to the Paying Agent for payment to the Class A-5 Noteholders;

v. any Services Fees, Target Proceeds Amount and other Class A Costs due and unpaid shall be distributed to the Paying Agent for payment to the Agent;

vi. the Series 2018-Three Monthly Fees, Program Expenses and Program Fees previously due but not distributed shall be distributed to the Paying Agent for payment to the Servicer, the Backup Servicer, the Indenture Trustee, the Owner Trustee and the Seller; and

vii. the Class B Note Principal Balance on such Distribution Date plus an amount equal to the sum of (A) the Class B Monthly Interest for such Distribution Date, (B) any Class B Monthly Interest previously due but not distributed to the Class B Noteholders on a prior Distribution Date and (C) the amount of Class B Additional Interest for such Distribution Date and any Class B Additional Interest previously due but not distributed to the Class B Noteholders on a prior Distribution Date shall be distributed to the Paying Agent for payment to the Class B Noteholders.

44

(c)     Notwithstanding anything to the contrary in this Supplement or the Indenture, all amounts distributed to the Paying Agent pursuant to subsection 8.01(b) for payment to the Series 2018-Three Noteholders shall be deemed distributed in full to the Series 2018-Three Noteholders on the date on which such funds are distributed to the Paying Agent pursuant to this Section and the Series 2018-Three Notes shall be deemed to be no longer Outstanding as such term is defined in Section 1.01 of the Indenture.

(d)     The Servicer shall promptly give the Holders of the Series 2018-Two Notes written notice upon becoming aware of the occurrence of an Early Redemption Event or Event of Default with respect to Series 2018-Three.

ARTICLE IX

Miscellaneous Provisions

Section 9.01.     Ratification of Agreement. As supplemented by this Supplement, the Indenture is in all respects ratified and confirmed and the Indenture as so supplemented by this Supplement shall be read, taken and construed as one and the same instrument.

Section 9.02.     Counterparts. This Supplement 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 shall constitute one and the same instrument.

Section 9.03.     Governing Law; Submission to Jurisdiction; Waiver of Jury Trial. THIS SUPPLEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN WITHOUT REFERENCE TO ITS CONFLICT OF LAWS PROVISIONS (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW). EACH OF THE PARTIES HERETO HEREBY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE COURT SITTING IN THE CITY OF NEW YORK FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. NOTHING IN THIS SECTION 9.03 SHALL AFFECT THE RIGHT OF ANY PARTY TO BRING ANY ACTION OR PROCEEDING AGAINST ANY OF THE PARTIES HERETO OR ANY OF THEIR RESPECTIVE PROPERTY IN THE COURTS OF OTHER JURISDICTIONS.

45

EACH OF THE PARTIES HERETO HEREBY WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, AMONG ANY OF THEM ARISING OUT OF, CONNECTED WITH, RELATING TO OR INCIDENTAL TO THE RELATIONSHIP BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT OR THE OTHER TRANSACTION DOCUMENTS.

Section 9.04.     Certain Tax Matters; Stapled Transfer.

(a)     Notwithstanding anything to the contrary herein, each of the Paying Agent, the Servicer and the Indenture Trustee shall be entitled to withhold any amount that it reasonably determines is required to be withheld pursuant to Section 1446 or any other provision of the Code and such amount shall be deemed to have been paid for all purposes of the Indenture.

(b)     Each of the Series 2018-Three Noteholders agrees that prior to the date on which the first interest payment hereunder is due thereto, it will provide to the Servicer, the Paying Agent 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. Each Series 2018-Three Noteholder agrees to provide to the Servicer, the Paying Agent and Indenture Trustee like additional subsequent duly completed forms (subject to like consent) satisfactory to the Servicer, the Paying Agent and 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, the Paying Agent or Indenture Trustee. Without limiting the foregoing, if a payment made under this Supplement or the Indenture would be subject to United States federal withholding tax imposed by FATCA if the recipient of such payment were to fail to comply with FATCA (including the requirements of Section 1471(b) or 1472(b) of the Code, as applicable), such recipient shall deliver to the Servicer, the Paying Agent and the Indenture Trustee, at the time or times prescribed by the Code and at such time or times reasonably requested by the Servicer or the Indenture Trustee, such documentation prescribed by the Code (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Servicer, the Paying Agent or the Indenture Trustee to comply with their respective obligations under FATCA, to determine that such recipient has complied with such recipient’s obligations under FATCA, or to determine the amount to deduct and withhold from such payment. For these purposes, “FATCA” means Section 1471 through 1474 of the Code and any regulations or official interpretations thereof (including any revenue ruling, revenue procedure, notice or similar guidance issued by the United States Internal Revenue Service thereunder as a precondition to relief or exemption from taxes under such Sections, regulations and interpretations), any agreements entered into pursuant to Section 1471(b)(1) of the Code, and including any amendments made to FATCA after the date of this Supplement. Each Series 2018-Three Noteholder certifies, represents and warrants that as of the date of this Agreement, or in the case of a Series 2018-Three Noteholder which is an assignee as of the date of such Note Assignment, that it is entitled (x) to receive payments under this Supplement without deduction or withholding (other than pursuant to Section 1446 of the Code, if applicable) of any United States federal income taxes and (y) to an exemption from United States backup withholding tax. Each Series 2018-Three Noteholder represents and warrants that it shall pay any taxes imposed on such Series 2018-Three Noteholder attributable to its interest in the Series 2018-Three Notes.

46

(c)     Each Class A Noteholder agrees with the Issuer that: (i) such Class A Noteholder will deliver to the Issuer 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 E, executed by such assignee Class A Noteholder, 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 or Participant of a portion of an interest relating to the Class A Notes and (ii) all of the statements made by such Class A Noteholder or Participant, as applicable in its Investment Letter shall be true and correct as of the date made.

(d)     Each Series 2018-Three Noteholder, by its holding of an interest in the Series 2018-Three Notes, hereby severally represents, warrants and covenants, and each Series 2018-Three Noteholder that acquires an interest in the Series 2018-Three Notes by Note Assignment shall be deemed to have severally represented, warranted and covenanted upon such Note Assignment that: (i) such Series 2018-Three Noteholder has not acquired and shall not sell, trade or transfer any interest in the Series 2018-Three Notes, nor cause any interest in the Series 2018-Three Notes to be marketed, readily available or readily tradeable, on or through either (A) an “established securities market” 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 Series 2018-Three Notes 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 Series 2018-Three Notes and stands ready to effect buy or sell transactions at the quoted prices for itself or on behalf of others), (ii) either (A) it is not, and will not become, a partnership, Subchapter S corporation, grantor trust or an entity disregarded as a separate entity from any such entity for U.S. federal income tax purposes or (B) it is such an entity, but (x) either (1) none of the direct or indirect beneficial owners of any of the interests in the Series 2018-Three Noteholder have allowed or caused, or will allow or cause, 50% or more (or such other percentage as the Issuer may establish prior to the time of such proposed transfer) of the value of such interests to be attributable to the Series 2018-Three Noteholder’s ownership of Series 2018-Three Notes and any other interests in the Issuer or (2) no more than the number of persons specified in clause (i)(B)(2) of its Investment Letter will be treated as “partners” in the Issuer under Treasury Regulation section 1.7704-1(h)(3) solely by reason of the Series 2018-Three Noteholder’s ownership of the Series 2018-Three Notes and (y) it is not and will not be a principal purpose of the arrangement involving the Series 2018-Three Noteholder’s beneficial interest in any Series 2018-Three Notes to permit any partnership to satisfy the 100 partner limitation of Treasury Regulation Section 1.7704-1(h)(1)(ii) necessary for such partnership not to be classified as a publicly traded partnership under the Code and (iii) such Series 2018-Three Noteholder is a “United States person” for U.S. federal income tax purposes. Each Class A Noteholder further 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 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 a foregoing representation, warranty or covenant of a Series 2018-Three Noteholder or its Participant, such Series 2018-Three Noteholder shall notify the Issuer promptly upon such Series 2018-Three Noteholder’s becoming aware of such breach, and thereupon the Series 2018-Three Noteholder hereby agrees to use reasonable efforts to procure a replacement investor which is acceptable to the Issuer not so affected to replace such affected Series 2018-Three Noteholder or Participant. In any such event, the Issuer shall also have the right to procure a replacement investor. Each affected Series 2018-Three Noteholder agrees to take all actions necessary to permit a replacement investor to success to its rights and obligations hereunder.

47

(e)     Subject to the provisions of subsection 9.04(g), each Class A Noteholder may at any time sell, assign or otherwise transfer, to the extent of such Class A Noteholder’s interest in the Class A Notes (each, a “Note Assignment”), to any Permitted Transferee (as defined in the Class A Purchase Agreement), all or part of its interest in the Class A Notes; provided, however, that any Note Assignment shall be void unless (i) the minimum amount of such Note Assignment shall be $5,000,000, except as the Issuer may otherwise agree and (ii) such assignee Class A Noteholder shall comply with this Section 9.04 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 has made the representations, warranties and covenants required to be made pursuant to this Section 9.04, (iii) following the Note Assignment there shall not be in the aggregate more than ten (10) beneficial owners of an interest or Participants holding an interest in the Class A Notes (for these purposes including in the number of beneficial owners the aggregate number of persons designated in clause (i)(B)(2) of the Investment Letters for each Class A Noteholder and Participant), and (iv) such proposed assignee shall provide the forms described in subsection 9.04(b) (subject to the Issuer’s consent, as applicable and as set forth therein) in the manner described therein. In connection with any Note Assignment, the assignor Class A Noteholder shall request in writing to the Indenture Trustee (who shall promptly deliver it to the Issuer) for the consent of the Issuer (the Issuer shall respond to any such request within ten (10) Business Days after its receipt and the Issuer will not unreasonably withhold such consent) it being understood that, except in the case of a Note Assignment to a Permitted Transferee, the obtaining of such consent is a condition to the effectiveness of the Note Assignment. Notwithstanding the forgoing, no consent of the Issuer shall be required for any such assignments made after the occurrence of an Early Redemption Event. Each assignee Class A Noteholder is subject to the terms and conditions of subsection 9.04(b) on an ongoing basis and hereby makes the certifications, representations and warranties contained therein.

48

(f)     Subject to the provisions of subsection 9.04(g), any Class A Noteholder may at any time grant a participation in all or part of its interest in Class A Notes to any Permitted Transferee (each such Person, a “Participant”); provided, however, that such participation shall be void, unless (i) such Participant complies with the applicable provisions of this Section 9.04, (ii) such Class A Noteholder 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 9.04, and (iii) following the participation there would not be in the aggregate more than ten (10) beneficial owners of an interest or Participants holding an interest in the Class A Notes (for these purposes including in the number of beneficial owners the aggregate number of persons designated in clause (i)(B)(2) of the Investment Letters for each Class A Noteholder and Participant). Each Class A Noteholder hereby acknowledges and agrees that any such participation will not alter or affect in any way whatsoever such Class A Noteholder’s direct obligations hereunder and that the Issuer shall have no obligation to have any communication or relationship whatsoever with any Participant of such Class A Noteholder in order to enforce the obligations of such Class A Noteholder hereunder. Each Class A Noteholder shall promptly notify the Indenture Trustee (which shall promptly notify the Issuer) 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 hereby agrees to deliver to the Issuer 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 Series 2018-Three Noteholder will provide to the Servicer and Indenture Trustee, the forms described in subsection 9.04(b) (subject to the Issuer’s consent, as applicable and as set forth therein) as though the Participant were a Class A Noteholder, (iii) such Series 2018-Three Noteholder similarly will provide subsequent forms as described in subsection 9.04(b) with respect to such Participant as though it were a Class A Noteholder, and (iv) such Participant will pay any taxes imposed on its participation interest in the Class A Notes.

(g)     Except (i) as provided in subsections 9.04(e) and (f) above and (ii) in connection with any pledge to any Federal Reserve Bank to secure any obligation of a Class A Noteholder, no Class A Noteholder may sell, transfer, assign, exchange, participate or otherwise convey or pledge, hypothecate, rehypothecate, or otherwise grant a security interest in a Class A Note and any such attempted sale, transfer, assignment, exchange, participation, conveyance, pledge, hypothecation, rehypothecation or grant shall be void. Notwithstanding the foregoing, no Class A Note may be transferred other than pursuant to a transfer of a pro rata portion of the Class A-3 Notes, the Class A-4 Notes, and the Class A-5 Notes (a “Stapled Transfer”).

(h)     The Parties agree to (i) treat the Class A Notes as debt of the Issuer for federal income tax purposes and the Class B Notes as equity in the Issuer for federal income tax purposes and (ii) take no action inconsistent with such treatment unless required by law.

(i)     Each Class A Noteholder represents, warrants and covenants that, in the event the Class A Notes are re-characterized as equity in the Issuer for federal income tax purposes, it consents to, and will comply with, all of the tax-related provisions in the Trust Agreement as if it were a Certificateholder thereunder, including all provisions relating to subchapter C of chapter 63 of subtitle F of the Code as amended by the Bipartisan Budget Act of 2015.

49

Section 9.05.     Transfer of Class B Notes. Notwithstanding anything to the contrary in this Supplement, no interest in the Class B Notes may be, directly or indirectly, sold, transferred, assigned, exchanged, participated or otherwise conveyed, pledged, hypothecated or re-hypothecated or made the subject of a security interest (each such transaction for purposes of this Section 9.05, a “Transfer”) (i) without the prior written consent of the Agent and (ii) except to a Person who is a “United States person” for United States federal income tax purposes, and only upon the prior delivery of a Tax Opinion to the Indenture Trustee with respect to such Transfer, and any Transfer in violation of these requirements shall be null and void ab initio.

Section 9.06.     Limitation of Liability. It is expressly understood and agreed by the parties hereto that (a) this Supplement is executed and delivered by Wilmington Trust, National Association, 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, National Association but is made and intended for the purpose of binding only the Issuer, (c) nothing herein contained shall be construed as creating any liability on Wilmington Trust, National Association, individually or personally, to perform any covenant either expressed or implied contained herein, all such liability, if any, being expressly waived by the parties to this Agreement and by any person claiming by, through or under the parties to this Agreement, (d) Wilmington Trust, National Association has not verified and has conducted no investigation as to the accuracy or completeness of any representation, warranty or covenant of the Issuer and (e) under no circumstances shall Wilmington Trust, National Association 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 Supplement or any other document to which the Issuer is a party.

Section 9.07.     Paired Series. With the prior written consent of the Agent, prior to the start of the Early Redemption Period, the Series 2018-Three Notes may be paired with one or more other Series such that the allocation amount of the paired Series will increase proportionately to the decrease in the Adjusted Allocation Amount for Series 2018-Three (each, a “Paired Series”); provided that no Series shall be deemed to be a Paired Series with Series 2018-Three unless the related Indenture Supplement shall explicitly state that it is a Paired Series with Series 2018-Three.

Section 9.08.     Additional Eligibility Criteria. (a) For so long as the Series 2018-Three Notes remain Outstanding, in addition to the eligibility criteria set forth in the definition of “Eligible Account” in the Transfer and Servicing Agreement, an Eligible Account shall also only include consumer revolving credit card accounts which, as of the Cut-Off Date have the following characteristics:

[*****].

(b) For so long as the Series 2018-Three Notes remain Outstanding, in addition to the eligibility criteria set forth in the definition of “Eligible Receivable” in the Transfer and Servicing Agreement, an Eligible Receivable shall also have the following characteristics:

[*****].

50

(c) To the extent that as of the applicable Cut-Off Date, any Account transferred to the Issuer was not an Eligible Account or any Receivable contained in such Account was not an Eligible Receivable, such Account or Receivable, as applicable, shall be subject to reassignment in accordance with Section 2.05 of the Transfer and Servicing Agreement.

(d)     For so long as the Series 2018-Three Notes remain Outstanding, the Transferor shall have the option, in its sole discretion, to designate as an Ineligible Receivable any Receivable whose principal balance constitutes a portion of an Excess Concentration Amount. If at any time after such designation the principal balance then outstanding of such Receivable no longer constitutes a portion of an Excess Concentration Amount and such Receivable meets all of the criteria to be an Eligible Receivable at such time, such Receivable shall be designated an Eligible Receivable and if not owned by the Issuer at such time, acquired by the Issuer from the Transferor.

Section 9.09.     Measuring the Transferor’s Interest for Purposes of Regulation RR. In order to facilitate the obligation of Fortiva Funding, LLC, a Georgia limited liability company, to comply with Regulation RR, the Servicer shall, on each Measurement Date and on the issuance date of any Notes under the Indenture, measure the interest of the Transferor in the Transferred Assets represented by the Transferor Certificate (the “Transferor’s Interest”) in a manner consistent with the requirements of Regulation RR. If on any Measurement Date the amount of the Transferor’s Interest, when measured in a manner consistent with the requirements of Regulation RR, does not satisfy the requirements of Regulation RR, the Transferor shall cause the amount of the Transferor’s Interest, when measured in a manner consistent with the requirements of Regulation RR, to satisfy the requirements of Regulation RR as soon as practicable thereafter but, in any event, no later than the immediately subsequent Measurement Date. For purposes of this Section 9.09, the Transferor’s Interest shall constitute a “seller’s interest” for purposes of Regulation RR.

The Servicer shall indicate in each Monthly Servicer Statement whether the amount of the Transferor’s Interest, when measured in a manner consistent with the requirements of Regulation RR, satisfies the requirements of Regulation RR.

In no event shall the Indenture Trustee have any responsibility to monitor compliance with or enforce compliance with Regulation RR. The Indenture Trustee shall not be charged with knowledge of such rules, nor shall it be liable to any Noteholder or other party for violation of such rules now or hereinafter in effect.

Section 9.10.     Notices. The Servicer shall provide a contemporaneous copy of any notices and other communications which are delivered pursuant to the Series 2018-Two Supplement to the Agent.

Section 9.11.     Indenture Trustee. The Indenture Trustee shall be entitled to the same rights, protections and indemnities under this Supplement that it is afforded pursuant to the Indenture.

51

IN WITNESS WHEREOF, the Issuer, the Servicer and the Indenture Trustee have caused this Indenture Supplement to be duly executed by their respective officers thereunto duly authorized, all as of the date first above written.

PERIMETER MASTER NOTE BUSINESS TRUST, Issuer
By: Wilmington Trust, National association
	not in its individual capacity, but solely as Owner Trustee
By:	/s/ Robert P. Hines Jr.
	Name: Robert P. Hines Jr. Title: Vice President
U.S. BANK NATIONAL ASSOCIATION, not in its individual capacity, but solely as Indenture Trustee
By:	/s/ Mirtza J. Escobar
	Name: Mirtza J. Escobar Title: Vice President
ACCESS FINANCING, LLC, Servicer
By:	/s/ Brian Stone
	Name: Brian Stone Title: President

For purposes of Section 9.08 only:

Perimeter Funding Corporation,

as Transferor

By:	/s/ Joshua C. Miller
	Name: Joshua C. Miller      Title: Assistant Secretary

[Signature Page to Series 2018-Three Indenture Supplement]

Schedule 1

“Backup Servicing Fee” shall mean the fee payable pursuant to a backup servicing agreement entered into by the Servicer, the Issuer, the Backup Servicer and the Indenture Trustee.

“Servicing Fee” shall mean, for any Monthly Period, [*****].

“Marketing Fee” shall mean, for any Monthly Period, [*****].

“Delinquent Account” shall mean [*****].

TABLE OF CONTENTS

Page

ARTICLE I
Creation of the Series 2018-Three Notes
Section 1.01.	Designation	1
ARTICLE II
Definitions
Section 2.01.	Definitions	2
ARTICLE III
Fees
Section 3.01.	Servicing Compensation; Marketing Fee	19
ARTICLE IV
Rights of Series 2018-Three Noteholders and Allocation and Application of Collections
Section 4.01.	Collections and Allocations	20
Section 4.02.	Determination of Monthly Interest	22
Section 4.03.	Limited Redemption; Optional Redemption	24
Section 4.04.	Required Amounts	25
Section 4.05.	Application of Available Funds and Available Principal Collections	26
Section 4.06.	Defaulted Amounts; Reduction Amounts	30
Section 4.07	Reallocated Principal Collections	30
Section 4.08	Principal Amount Increases	32
Section 4.09.	Series 2018-Three Distribution Account	33
Section 4.10.	Pre-Funding Account	33
ARTICLE V
Distributions and Reports to Series 2018-Three Noteholders
Section 5.01.	Distributions	36
Section 5.02.	Reports and Statements to Series 2018-Three Noteholders	37
ARTICLE VI
Early Redemption Events; Events of Default
Section 6.01.	Early Redemption Events	39
Section 6.02.	Events of Default	42
ARTICLE VII
Administrative Redemption; Series Termination
Section 7.01.	Administrative Redemption	42
Section 7.02.	Repayment	43

-i-

TABLE OF CONTENTS

(continued)

Page

ARTICLE VIII
Redemption of Series 2018-Three Notes; Final Distributions
Section 8.01.	Sale of Receivables or Redemption of the Notes pursuant to Section 2.06 or 8.01 of the Transfer and Servicing Agreement and Sections 5.05 and 5.17 of the Indenture and Section 7.01 of this Supplement	43
ARTICLE IX
Miscellaneous Provisions
Section 9.01.	Ratification of Agreement	45
Section 9.02.	Counterparts	45
Section 9.03.	Governing Law	45
Section 9.04.	Certain Tax Matters; Stapled Transfer	46
Section 9.05.	Transfer of Class B Notes	50
Section 9.06.	Limitation of Liability	50
Section 9.07.	Paired Series	50
Section 9.08.	Additional Eligibility Criteria	50
Section 9.09.	Measuring Transferor’s Interest for Purposes of Regulation RR	51
Section 9.10.	Notices	51
Section 9.11.	Indenture Trustee	51

-ii-

EX-10.11G

CERTAIN INFORMATION, IDENTIFIED BY [*****], HAS BEEN EXCLUDED FROM THE EXHIBIT BECAUSE IT IS BOTH NOT MATERIAL AND WOULD LIKELY CAUSE COMPETITIVE HARM TO THE COMPANY IF PUBLICLY DISCLOSED.

Exhibit 10.11(g)

FIRST AMENDMENT TO

THE SERIES 2018-THREE INDENTURE SUPPLEMENT

This First Amendment to the Series 2018-Three Indenture Supplement (the “Amendment”), dated as of October 9, 2019, among Perimeter Master Note Business Trust, a business trust organized and existing under the laws of the State of Nevada (herein, the “Issuer” or the “Trust”), Access Financing, LLC, a Georgia limited liability company (the “Servicer”) and U.S. Bank National Association, 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 February 8, 2017 (as amended, restated, supplemented or otherwise modified from time to time, the “Indenture”) among the Issuer, the Servicer and the Indenture Trustee.

Capitalized terms used herein shall have the meanings assigned to such terms in the Supplement (as defined below).

WITNESSETH:

WHEREAS, the Issuer, the Servicer and the Indenture Trustee executed the Series 2018-Three Indenture Supplement, dated as November 16, 2018 (the “Supplement”); and

WHEREAS, the parties hereto have agreed to amend the Supplement on the terms and conditions hereinafter set forth in accordance with Section 9.02 of the Indenture;

NOW, THEREFORE, in consideration of the promises and of the mutual covenants and agreements hereinafter set forth, the parties hereto hereby agree as follows:

SECTION 1. Amendments of the Supplement.

1.1      The definitions of “Class A/B Subordination Percentage” and “Required Senior Subordination Amount” are hereby deleted in their entirety and replaced with the following:

“Class A/B Subordination Percentage” shall mean [*****]%.

“Required Senior Subordination Amount” shall mean an amount equal to [*****]% of the sum of the (a) Note Principal Balance, (b) the Series Required Transferor Amount and (c) the Series 2018-Two Principal Balance.

SECTION 2. Miscellaneous

2.1     Ratification. As amended hereby, the Supplement is in all respects ratified and confirmed and the Supplement as so supplemented by this Amendment shall be read, taken and construed as one and the same instrument.

2.2     Counterparts. This Amendment 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 shall constitute one and the same instrument.

2.3     Governing Law. THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES THEREOF (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW).

2.4     Successors and Assigns. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective permitted successors and assigns.

2.5     Effectiveness. This Amendment shall be effective as of the date first above written.

2.6     Limitation of Liability. It is expressly understood and agreed by the parties hereto that (a) this Amendment is executed and delivered by Wilmington Trust, National Association, 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, National Association, but is made and intended for the purpose of binding only the Issuer and (c) under no circumstances shall Wilmington Trust, National Association 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.

2.7     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).

2

IN WITNESS WHEREOF, the undersigned have caused this Amendment to be duly executed and delivered by their respective duly authorized officers on the day and year first above written.

PERIMETER MASTER NOTE BUSINESS TRUST, as Issuer
By:	Wilmington Trust, National Association, not in its individual capacity, but solely as Owner Trustee
By:	/s/ Robert P. Hines Jr.
	Name:  Robert P. Hines Jr. Title:  Vice President
U.S. BANK NATIONAL ASSOCIATION, not in its individual capacity, but solely as Indenture Trustee
By:	/s/ Mirtza J. Escobar
	Name:  Mirtza J. Escobar Title:  Vice President
ACCESS FINANCING, LLC, Servicer
By:	/s/ Brian Stone
	Name:  Brian Stone Title:  Chief Risk Officer

[First Amendment to 2018-Three Supplement]

Consent of Series 2018-Three Noteholders:

TSO-FORTIVA NOTES HOLDCO LP,

as holder of 100% of Class A Notes

By: TowerBrook TSO GP (Alberta), L.P., its

General Partner

By: TowerBrook Investors, Ltd., its General

Partner

By: /s/ Glenn F. Miller                                 
     Name: Glenn F. Miller
     Title: Attorney-in-Fact

CCFC CORP.,

as holder of 100% of Class B Notes

By: /s/ Joshua C. Miller                             
     Name: Joshua C. Miller
     Title: Assistant Vice President

Consent of Administrative Agent on behalf of Series 2018-Two Noteholders:

JPMORGAN CHASE BANK, N.A., As

Administrative Agent, on behalf of the holders

of 100% of Class A Notes

By: /s/ Chuckie Reddy                            
     Name: Chuckie Reddy
     Title: Managing Director

[First Amendment to 2018-Three Supplement]

EX-10.11H

Exhibit 10.11(h)

SECOND AMENDMENT TO

THE SERIES 2018-THREE INDENTURE SUPPLEMENT

This Second Amendment to the Series 2018-Three Indenture Supplement (the “Amendment”), dated as of November 13, 2019, among Perimeter Master Note Business Trust, a business trust organized and existing under the laws of the State of Nevada (herein, the “Issuer” or the “Trust”), Access Financing, LLC, a Georgia limited liability company (the “Servicer”) and U.S. Bank National Association, 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 February 8, 2017 (as amended, restated, supplemented or otherwise modified from time to time, the “Indenture”) among the Issuer, the Servicer and the Indenture Trustee.

Capitalized terms used herein shall have the meanings assigned to such terms in the Supplement (as defined below).

WITNESSETH:

WHEREAS, the Issuer, the Servicer and the Indenture Trustee executed the Series 2018-Three Indenture Supplement, dated as November 16, 2018 and the First Amendment to the Series 2018-Three Indenture Supplement, dated as of October 9, 2019 (as so amended, the “Supplement”); and

WHEREAS, the parties hereto have agreed to amend the Supplement on the terms and conditions hereinafter set forth in accordance with Section 9.02 of the Indenture;

NOW, THEREFORE, in consideration of the promises and of the mutual covenants and agreements hereinafter set forth, the parties hereto hereby agree as follows:

SECTION 1. Amendments of the Supplement.

1.1      The definition of “Capital Stock” is hereby deleted in its entirety and replaced with the following:

“Capital Stock” means any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation), including, without limitation, partnership interests and membership interests, beneficial interests in a trust, and any and all warrants, rights or options to purchase or other arrangements or rights to acquire any of the foregoing; provided, however, the foregoing shall not include any shares, interests, participations or other equivalent ownership interests structured as preferred interests but which do not participate in the profits of the Person.

SECTION 2. Miscellaneous

2.1     Ratification. As amended hereby, the Supplement is in all respects ratified and confirmed and the Supplement as so supplemented by this Amendment shall be read, taken and construed as one and the same instrument.

2.2     Counterparts. This Amendment 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 shall constitute one and the same instrument.

2.3     Governing Law. THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES THEREOF (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW).

2.4     Successors and Assigns. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective permitted successors and assigns.

2.5     Effectiveness. This Amendment shall be effective as of the date first above written.

2.6     Limitation of Liability. It is expressly understood and agreed by the parties hereto that (a) this Amendment is executed and delivered by Wilmington Trust, National Association, 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, National Association, but is made and intended for the purpose of binding only the Issuer and (c) under no circumstances shall Wilmington Trust, National Association 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.

2.7     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).

2

IN WITNESS WHEREOF, the undersigned have caused this Amendment to be duly executed and delivered by their respective duly authorized officers on the day and year first above written.

PERIMETER MASTER NOTE BUSINESS TRUST, as Issuer
By:	Wilmington Trust, National Association, not in its individual capacity, but solely as Owner Trustee
By:	/s/ Patricia A. Bradenburg
	Name: Patricia A. Bradenburg Title: Banking Officer
U.S. BANK NATIONAL ASSOCIATION, not in its individual capacity, but solely as Indenture Trustee
By:	/s/ Mirtza J. Escobar
	Name: Mirtza J. Escobar Title: Vice President
ACCESS FINANCING, LLC, Servicer
By:	/s/ Brian Stone
	Name:  Brian Stone Title:  Chief Risk Officer

[Second Amendment to 2018-Three Supplement]

Consent of Series 2018-Three Noteholders:

TSO-FORTIVA NOTES HOLDCO LP,

as holder of 100% of Class A Notes

By: TowerBrook TSO GP (Alberta), L.P., its

General Partner

By: TowerBrook Investors, Ltd., its General

Partner

By: /s/ Glenn F. Miller                                 
     Name: Glenn F. Miller
     Title: Authorized Signatory

CCFC CORP.,

as holder of 100% of Class B Notes

By: /s/ Mitch Saunders                             
     Name: Mitch Saunders
     Title: Treasurer

[Second Amendment to 2018-Three Supplement]

EX-10.11I

CERTAIN INFORMATION, IDENTIFIED BY [*****], HAS BEEN EXCLUDED FROM THE EXHIBIT BECAUSE IT IS BOTH NOT MATERIAL AND WOULD LIKELY CAUSE COMPETITIVE HARM TO THE COMPANY IF PUBLICLY DISCLOSED.

Exhibit 10.11(i)

THIRD AMENDMENT TO

THE SERIES 2018-THREE INDENTURE SUPPLEMENT

This Third Amendment to the Series 2018-Three Indenture Supplement (the “Amendment”), dated as of January 23, 2020, among Perimeter Master Note Business Trust, a business trust organized and existing under the laws of the State of Nevada (herein, the “Issuer” or the “Trust”), Access Financing, LLC, a Georgia limited liability company (the “Servicer”) and U.S. Bank National Association, 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 February 8, 2017 (as amended, restated, supplemented or otherwise modified from time to time, the “Indenture”) among the Issuer, the Servicer and the Indenture Trustee.

Capitalized terms used herein shall have the meanings assigned to such terms in the Supplement (as defined below).

WITNESSETH:

WHEREAS, the Issuer, the Servicer and the Indenture Trustee executed the Series 2018-Three Indenture Supplement, dated as November 16, 2018, the First Amendment to the Series 2018-Three Indenture Supplement, dated as of October 9, 2019 and the Second Amendment to the Series 2018-Three Indenture Supplement, dated as of November 13, 2019 (as so amended, the “Supplement”); and

WHEREAS, the parties hereto have agreed to amend the Supplement on the terms and conditions hereinafter set forth in accordance with Section 9.02 of the Indenture;

NOW, THEREFORE, in consideration of the promises and of the mutual covenants and agreements hereinafter set forth, the parties hereto hereby agree as follows:

SECTION 1. Amendments of the Supplement.

1.1 The Supplement is hereby amended as follows:

(a) The definitions of “Commitment Termination Date” and “Target Proceeds Amount” are hereby deleted in their entirety and replaced with the following:

“Commitment Termination Date” shall mean the earliest to occur of (i) the Stated Maturity Date and (ii) the date on which an Early Redemption Event has occurred.

“Target Proceeds Amount” shall have the meaning specified in the Class A Purchase Agreement.

(b) Section 4.05(a) of the Supplement is amended hereby by deleting paragraph (xi) in its entirety and inserting the following in its place:

(xi) [Reserved].

(c) Section 4.05(a) of the Supplement is further amended hereby by deleting paragraph (xiv) in its entirety and inserting the following in its place:

(xiv) the balance of such Available Funds (“Excess Collections”) shall be distributed to the Issuer and applied in accordance with the Trust Agreement.

(d) Section 5.01(l) of the Supplement is amended hereby by deleting it in its entirety and inserting the following in its place:

(l) On each Distribution Date, the Paying Agent, solely in accordance with the Monthly Servicer Statement, shall distribute to each of the Servicer, Backup Servicer, Owner Trustee and Indenture Trustee such amounts held by the Paying Agent that are allocated and available on such Distribution Date to pay the Servicing Fee, the Backup Servicing Fee, the Program Fees and the Program Expenses, respectively.

(e) Section 6.01(g) of the Supplement is amended hereby by deleting paragraph (ii) in in its entirety and inserting the following in its place:

(ii) the Three-Month Delinquency Ratio exceeds [*****]%;

SECTION 2. Miscellaneous

2.1     Ratification. As amended hereby, the Supplement is in all respects ratified and confirmed and the Supplement as so supplemented by this Amendment shall be read, taken and construed as one and the same instrument.

2.2     Counterparts. This Amendment 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 shall constitute one and the same instrument.

2.3     Governing Law. THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES THEREOF (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW).

2.4     Successors and Assigns. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective permitted successors and assigns.

2.5     Effectiveness. This Amendment shall be effective as of the date first above written.

2

2.6     Limitation of Liability. It is expressly understood and agreed by the parties hereto that (a) this Amendment is executed and delivered by Wilmington Trust, National Association, 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, National Association, but is made and intended for the purpose of binding only the Issuer and (c) under no circumstances shall Wilmington Trust, National Association 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.

2.7     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).

3

IN WITNESS WHEREOF, the undersigned have caused this Amendment to be duly executed and delivered by their respective duly authorized officers on the day and year first above written.

PERIMETER MASTER NOTE BUSINESS TRUST, as Issuer
By:	Wilmington Trust, National Association, not in its individual capacity, but solely as Owner Trustee
By:	/s/ Nancy E. Hagner
	Name:  Nancy E. Hagner Title:  Assistant Vice President
U.S. BANK NATIONAL ASSOCIATION, not in its individual capacity, but solely as Indenture Trustee
By:	/s/ Mirtza J. Escobar
	Name: Mirtza J. Escobar Title: Vice President
ACCESS FINANCING, LLC, Servicer
By:	/s/ Bettie Lass
	Name: Bettie Lass Title: Treasurer

[Third Amendment to 2018-Three Supplement]

Consent of Series 2018-Three Noteholders:

TSO-FORTIVA NOTES HOLDCO LP,

as holder of 100% of Class A Notes

By: TowerBrook TSO GP (Alberta), L.P., its

General Partner

By: TowerBrook Investors, Ltd., its General

Partner

By: /s/ Glenn F. Miller                               
     Name: Glenn F. Miller
     Title: Authorized Signatory

CCFC CORP.,

as holder of 100% of Class B Notes

By: /s/ Mitch Saunders                           
     Name: Mitch Saunders
     Title: Treasurer

[Third Amendment to 2018-Three Supplement]

EX-10.11K

CERTAIN INFORMATION, IDENTIFIED BY [*****], HAS BEEN EXCLUDED FROM THE EXHIBIT BECAUSE IT IS BOTH NOT MATERIAL AND WOULD LIKELY CAUSE COMPETITIVE HARM TO THE COMPANY IF PUBLICLY DISCLOSED.

Exhibit 10.11(k)

EXECUTION COPY

FIRST AMENDMENT TO PURCHASE AGREEMENT

This FIRST AMENDMENT, dated as of June 11, 2018 (this “Amendment”), to the PURCHASE AGREEMENT, dated as of February 8, 2017 (the “Existing Agreement”, and as amended by this Amendment, the “Agreement”), among PERIMETER MASTER NOTE BUSINESS TRUST, a business trust organized and existing under the laws of the State of Nevada, as issuer (the “Issuer”), PERIMETER FUNDING CORPORATION, a Nevada corporation (“Perimeter”), as transferor (together with its successors and permitted assigns in such capacity, the “Transferor”), ACCESS FINANCING, LLC, a Georgia limited liability company, as assignee of Atlanticus Services Corporation, a Georgia corporation, as servicer (together with its successors and permitted assigns, the “Servicer”), TSO-FORTIVA NOTES HOLDCO LP, as Agent (the “Agent”), TSO-FORTIVA CERTIFICATE HOLDCO LP, as a Certificateholder and TSO-FORTIVA NOTES HOLDCO LP, as an Investor.

W I T N E S S E T H :

WHEREAS, the parties wish to amend the Existing Agreement as set forth herein;

NOW, THEREFORE, in consideration of the mutual covenants herein contained, and other good and valuable consideration, the receipt and adequacy of which are hereby expressly acknowledged, the parties hereto agree as follows:

1. Definitions. Capitalized terms used herein and not otherwise defined herein shall have the meanings specified in the Existing Agreement.

2. Amendments.

(a) Section 2.2(d) of the Existing Agreement is amended hereby by adding the following sentence at the end of such Section:

Notwithstanding any provision to the contrary herein or in any other Transaction Document, when the Class A-1 Note Principal Balance, Class A-2 Note Principal Balance or Class A-3 Note Principal Balance has been reduced to zero, the Class A-1 Maximum Principal Amount, Class A-2 Maximum Principal Amount or Class A-3 Maximum Principal Amount, as applicable, shall automatically be reduced to zero.

(b) Section 6.1 of the Existing Agreement is amended hereby by deleting the first sentence thereof in its entirety and adding the following in its place:

This Agreement shall terminate on the date on which the Offered Notes and any other amounts owed to the Agent, any Investor or any Indemnified Party under the Transaction Documents have been paid in full (other than unasserted indemnity claims) (the “Termination Date”); provided, however, that (i) the rights and remedies of the parties hereto with respect to any representations or warranties made or deemed to be made by such party in this Agreement, and (ii) the provisions of Article V and Sections 6.9, 6.10 and 6.11 of this Agreement shall survive the termination of this Agreement and the payment in full of the Note Principal Balance.

3. Consent. Each of the Transferor and TSO-Fortiva Notes Holdco LP, as Agent under the Agreement, hereby consents to the transfer of a participation interest in the Class A-1 Notes, Class A-2 Notes, Class A-3 Notes, Class A-4 Notes and Class A-5 Notes (each as defined in the Agreement) to [*****] pursuant to a master participation agreement in substantially the form attached hereto as Exhibit A.

4. Representations and Warranties. 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). As of the date hereof, each of the Transferor, the Issuer and the Servicer, as to itself only and not as to any other, represents and warrants to the Agent, the Investors and the Certificateholder, that all representations and warranties made by it in Section 4.1 of the Agreement, with respect to itself, are true and correct as of the date hereof.

5. Agreement in Full Force and Effect as Amended. Except as specifically amended hereby, all of the terms and conditions of the Existing Agreement shall remain in full force and effect. All references to the Existing Agreement in any other document or instrument among the parties hereto shall be deemed to mean such Existing Agreement as amended by this Amendment. This Amendment shall not constitute a novation of the Existing Agreement, but shall constitute an amendment thereof. The parties hereto agree to be bound by the terms and obligations of the Existing Agreement, as amended by this Amendment, as though the terms and obligations of the Existing Agreement were set forth herein.

6. Limited Recourse; No Proceedings. Sections 6.10 and 6.11 of the Agreement are incorporated herein by reference.

7. Counterparts. This Amendment may be executed in any number of counterparts and by separate parties hereto on separate counterparts, each of which when executed shall be deemed an original, but all such counterparts taken together shall constitute one and the same instrument.

8. Governing Law. 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).

2

9. Limitation of Liability. It is expressly understood and agreed by the parties hereto that (a) this Amendment is executed and delivered by Wilmington Trust, National Association, 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, National Association but is made and intended for the purpose of binding only the Issuer, (c) nothing herein contained shall be construed as creating any liability on Wilmington Trust, National Association, individually or personally, to perform any covenant either expressed or implied contained herein, all such liability, if any, being expressly waived by the parties to this Agreement and by any person claiming by, through or under the parties to this Agreement, (d) Wilmington Trust, National Association has not verified and has conducted no investigation as to the accuracy or completeness of any representation, warranty or covenant of the Issuer and (e) under no circumstances shall Wilmington Trust, National Association 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 any other document to which the Issuer is a party.

3

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed by their respective officers as of the day and year first above written.

PERIMETER FUNDING CORPORATION,

as Transferor


By: /s/ William R. McCamey                         

Name: William R. McCamey
Title: President

ACCESS FINANCING, LLC, as Servicer


By: /s/ Brian Stone                                          

Name: Brian Stone
Title: President

PERIMETER MASTER NOTE BUSINESS

TRUST, as Issuer

By: Wilmington Trust, National

Association, not in its individual capacity

but solely as Owner Trustee


By:/s/ Roseline K. Maney                             
Name: Roseline K. Maney
Title: Administrative Vice President

TSO-Fortiva Notes Holdco LP, as Agent

By: TowerBrook TSO GP (Alberta), L.P., its

General Partner

By: TowerBrook Investors, Ltd., its General

Partner

By: /s/ Glenn F. Miller                                  
Name: Glenn F. Miller
Title: Attorney-in-Fact

By: /s/ Jennifer Glassman                            
Name: Jennifer Glassman
Title: Attorney-in-Fact

[SIGNATURE PAGE TO FIRST AMENDMENT TO PURCHASE AGREEMENT]

TSO-Fortiva Notes Holdco LP, as Investor

By: TowerBrook TSO GP (Alberta), L.P., its

General Partner

By: TowerBrook Investors, Ltd., its General

Partner

By: /s/ Glenn F. Miller                                  
Name: Glenn F. Miller
Title: Attorney-in-Fact

By: /s/ Jennifer Glassman                             
Name: Jennifer Glassman
Title: Attorney-in-Fact

TSO-Fortiva Certificate Holdco LP, as

Certificateholder

By: TowerBrook TSO GP (Alberta), L.P., its

General Partner

By: TowerBrook Investors, Ltd., its General

Partner

By: /s/ Glenn F. Miller                                  
Name: Glenn F. Miller
Title: Attorney-in-Fact

By: /s/ Jennifer Glassman                           
Name: Jennifer Glassman
Title: Attorney-in-Fact

[SIGNATURE PAGE TO FIRST AMENDMENT TO PURCHASE AGREEMENT]

EXHIBIT A

MASTER PARTICIPATION AGREEMENT

EX-10.11L

CERTAIN INFORMATION, IDENTIFIED BY [*****], HAS BEEN EXCLUDED FROM THE EXHIBIT BECAUSE IT IS BOTH NOT MATERIAL AND WOULD LIKELY CAUSE COMPETITIVE HARM TO THE COMPANY IF PUBLICLY DISCLOSED.

Exhibit 10.11(l)

EXECUTION COPY

SECOND AMENDMENT TO PURCHASE AGREEMENT

This SECOND AMENDMENT, dated as of November 16, 2018 (this “Amendment”), to the PURCHASE AGREEMENT, dated as of February 8, 2017 (the “Existing Agreement”, as amended by the First Amendment to the Purchase Agreement, dated as of June 11, 2018, and as amended by this Amendment, the “Agreement”), among PERIMETER MASTER NOTE BUSINESS TRUST, a business trust organized and existing under the laws of the State of Nevada, as issuer (the “Issuer”), PERIMETER FUNDING CORPORATION, a Nevada corporation (“Perimeter”), as transferor (together with its successors and permitted assigns in such capacity, the “Transferor”), ACCESS FINANCING, LLC, a Georgia limited liability company, as assignee of Atlanticus Services Corporation, a Georgia corporation, as servicer (together with its successors and permitted assigns, the “Servicer”), TSO-FORTIVA NOTES HOLDCO LP, as Agent (the “Agent”), TSO-FORTIVA CERTIFICATE HOLDCO LP, as a Certificateholder and TSO-FORTIVA NOTES HOLDCO LP, as an Investor.

W I T N E S S E T H :

WHEREAS, the parties wish to amend the Existing Agreement as set forth herein;

NOW, THEREFORE, in consideration of the mutual covenants herein contained, and other good and valuable consideration, the receipt and adequacy of which are hereby expressly acknowledged, the parties hereto agree as follows:

1. Definitions. Capitalized terms used herein and not otherwise defined herein shall have the meanings specified in the Existing Agreement.

2. Amendments.

(a) Section 1.1 of the Existing Agreement is amended hereby by deleting the definitions of Class A-1 Maximum Principal Amount, Class A-2 Maximum Principal Amount, Class A-3 Maximum Principal Amount, Class A-4 Maximum Principal Amount, Class A-5 Maximum Principal Amount and Receivable Sales Agreement and adding the following definitions in appropriate alphabetical order:

“Aggregate Maximum Principal Amount” means Ninety Million Dollars ($90,000,000.00), as such amount may be reduced from time to time in accordance with the terms hereof or the Series 2018-Three Purchase Agreement.

“Class A-1 Maximum Principal Amount” means $0.00.

“Class A-2 Maximum Principal Amount” means, on any date, an amount not to exceed the product of (i) (a) if the Senior Advance Rate is less than 60%, the percentage equivalent of a fraction (A) the numerator of which is equal to 60% minus the Senior Advance Rate and (B) the denominator of which is equal to 90% minus the Senior Advance Rate or (b) if the Senior Advance Rate is greater than or equal to 60%, 0 times (ii) an amount equal to the Maximum Principal Amount on such date, as such amount may be reduced from time to time in accordance with Section 2.2(d).

“Class A-3 Maximum Principal Amount” means, on any date, an amount not to exceed the product of (i) (a) if the Senior Advance Rate is less than 70%, the percentage equivalent of a fraction (A) the numerator of which is equal to 70% minus the Senior Advance Rate and (B) the denominator of which is equal to 90% minus the Senior Advance Rate or (b) if the Senior Advance Rate is greater than or equal to 70%, 0 times (ii) an amount equal to (a) the Maximum Principal Amount on such date minus (b) the Class A-2 Maximum Principal Amount on such date, as such amount may be reduced from time to time in accordance with Section 2.2(d).

“Class A-4 Maximum Principal Amount” means, on any date, an amount not to exceed the product of (i) 50% times (ii) an amount equal to (a) the Maximum Principal Amount on such date minus (b) the sum of the Class A-2 Maximum Principal Amount and the Class A-3 Maximum Principal Amount, in each case on such date.

“Class A-5 Maximum Principal Amount” means, on any date, an amount not to exceed (a) the Maximum Principal Amount on such date minus (b) the sum of the Class A-2 Maximum Principal Amount, the Class A-3 Maximum Principal Amount and the Class A-4 Maximum Principal Amount, in each case on such date.

“Maximum Principal Amount” means, on any date, an amount equal to (i) the Aggregate Maximum Principal Amount on such date (after giving effect to any decreases on such date) minus (ii) the Class A Note Principal Balance (as such term is defined in the Series 2018-Three Supplement), as of such date (after giving effect to any increases or decreases on such date).

2

“Program Management Agreement” means the Program Management Agreement dated as of April 1, 2017 between The Bank of Missouri (as successor in interest to Mid America Bank and Trust Company) and Atlanticus Services Corporation, as the same may be amended, supplemented or otherwise modified from time to time in accordance with its terms.

“Receivable Sales Agreement” means the Amended and Restated Receivable Sales Agreement dated as of April 1, 2017 between The Bank of Missouri (as successor in interest to Mid America Bank and Trust Company) and the Seller, as the same may be amended, supplemented or otherwise modified from time to time in accordance with its terms.

“Senior Advance Rate” means the greater of (i) [*****]% and (ii) the stated advance rate for the Series 2018-One Notes under the Series 2018-One Purchase Agreement as of the date of any amendment thereto effecting an increase in the stated advance rate.

“Series 2018-One Purchase Agreement” means the Class A Note Purchase Agreement dated as of June 11, 2018 by and among the purchasers parties thereto, Credit Suisse AG, New York Branch, as administrative agent, the Transferor, the Servicer, the Issuer and the Seller, as amended, restated or otherwise modified from time to time in accordance with its terms.

“Series 2018-Three Purchase Agreement” means the Purchase Agreement dated as of November 16, 2018, by and among TSO-Fortiva Notes Holdco LP, the Transferor, the Servicer and the Issuer, as amended, restated or otherwise modified from time to time in accordance with its terms.

“Series 2018-Three Supplement” means the Series 2018-Three Supplement, dated as of November 16, 2018, to the Master Indenture, by and among the Issuer, the Servicer and the Indenture Trustee, as the same may from time to time be amended, supplemented or otherwise modified in accordance with its terms and in effect.

(b) The Existing Agreement is amended hereby by adding the following sentence at the end of Section 2.2(d):

In the event that the Senior Advance Rate increases, (i) each of the Class A-2 Maximum Principal Amount and the Class A-3 Maximum Principal Amount shall automatically be reduced in accordance with the definitions thereof and (ii) each of the Class A-2 Note Principal Balance and the Class A-3 Note Principal Balance shall be reduced and each of the Class A-4 Note Principal Balance and the Class A-5 Note Principal Balance shall be increased automatically to reflect a pro rata distribution of the Class A Note Principal Balance in accordance with the relative amounts of the Class A-2 Maximum Principal Amount, the Class A-3 Maximum Principal Amount, the Class A-4 Maximum Principal Amount and the Class A-5 Maximum Principal Amount.

3

(c) Section 3.2(b)(x) of the Existing Agreement is amended hereby by deleting it in its entirety and adding the following in its place:

Both before and immediately following such purchase, (a) the Class B Note Principal Balance shall be no less than 5% of the sum of (i) the Note Principal Balance and (ii) the outstanding principal balance of the Series 2018-One Notes; and (b) the Series Adjusted Subordinated Transferor Amount shall be no less than Series Required Transferor Amount;

(d) Section 3.2(b) of the Existing Agreement is amended hereby by deleting the word “and” at the end of clause (xi), renumbering clause (xii) as clause (xiii) and inserting the following clause (xii) thereto:

All conditions precedent to a “Note Principal Balance Increase” under Series 2018-Three set forth in the Series 2018-Three Purchase Agreement have been satisfied or waived; and

(e) Section 4.1(r) of the Existing Agreement is amended hereby by deleting it in its entirety and adding the following in its place:

No Early Redemption Event or Event of Default. After giving effect to issuance of the Notes, and the purchase on each Increase Date of each Note Principal Balance Increase, no Early Redemption Event (with respect to the Issuer under Series 2017-One or Series 2018-Three), Event of Default (with respect to Series 2017-One or Series 2018-Three) or Servicer Default (with respect to the Servicer) has occurred and is continuing, and no event, act or omission has occurred and is continuing which, with the lapse of time, the giving of notice or both, would constitute such an Early Redemption Event (with respect to the Issuer under Series 2017-One or Series 2018-Three), Event of Default (with respect to Series 2017-One or Series 2018-Three) or Servicer Default (with respect to the Servicer).

(h) The Existing Agreement is amended hereby by deleting the references to “Loan Servicing Agreement” in Sections 3.2(viii), 4.3(b)(iii), 4.3(b)(v), 4.3(b)(xiii), and 5.1, and replacing them with “Program Management Agreement”.

4

3. Representations and Warranties. 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). As of the date hereof, each of the Transferor, the Issuer and the Servicer, as to itself only and not as to any other, represents and warrants to the Agent, the Investors and the Certificateholder, that all representations and warranties made by it in Section 4.1 of the Agreement, with respect to itself, are true and correct as of the date hereof.

4. Agreement in Full Force and Effect as Amended. Except as specifically amended hereby, all of the terms and conditions of the Existing Agreement shall remain in full force and effect. All references to the Existing Agreement in any other document or instrument among the parties hereto shall be deemed to mean such Existing Agreement as amended by this Amendment. This Amendment shall not constitute a novation of the Existing Agreement, but shall constitute an amendment thereof. The parties hereto agree to be bound by the terms and obligations of the Existing Agreement, as amended by this Amendment, as though the terms and obligations of the Existing Agreement were set forth herein.

5. Limited Recourse; No Proceedings. Sections 6.10 and 6.11 of the Agreement are incorporated herein by reference.

6. Counterparts. This Amendment may be executed in any number of counterparts and by separate parties hereto on separate counterparts, each of which when executed shall be deemed an original, but all such counterparts taken together shall constitute one and the same instrument.

7. Governing Law. 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).

8. Limitation of Liability. It is expressly understood and agreed by the parties hereto that (a) this Amendment is executed and delivered by Wilmington Trust, National Association, 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, National Association but is made and intended for the purpose of binding only the Issuer, (c) nothing herein contained shall be construed as creating any liability on Wilmington Trust, National Association, individually or personally, to perform any covenant either expressed or implied contained herein, all such liability, if any, being expressly waived by the parties to this Agreement and by any person claiming by, through or under the parties to this Agreement, (d) Wilmington Trust, National Association has not verified and has conducted no investigation as to the accuracy or completeness of any representation, warranty or covenant of the Issuer and (e) under no circumstances shall Wilmington Trust, National Association 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 any other document to which the Issuer is a party.

5

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed by their respective officers as of the day and year first above written.

PERIMETER FUNDING CORPORATION,

as Transferor


By: /s/ Joshua C. Miller                                 

Name: Joshua C. Miller
Title: Assistant Secretary

ACCESS FINANCING, LLC, as Servicer


By: /s/ Brian Stone                                        

Name: Brian Stone
Title: President

PERIMETER MASTER NOTE BUSINESS

TRUST, as Issuer

By: Wilmington Trust, National 

Association, not in its individual capacity

but solely as Owner Trustee


By:/s/ Robert P. Hines Jr.                                
Name: Robert P. Hines Jr.
Title: Vice President

[SIGNATURE PAGE TO SECOND AMENDMENT TO PURCHASE AGREEMENT]

TSO-Fortiva Notes Holdco LP, as Agent

By: TowerBrook TSO GP (Alberta), L.P., its

General Partner

By: TowerBrook Investors, Ltd., its General

Partner

By: /s/ Glenn F. Miller                                  
Name: Glenn F. Miller
Title: Attorney-in-Fact

TSO-Fortiva Notes Holdco LP, as Investor

By: TowerBrook TSO GP (Alberta), L.P., its

General Partner

By: TowerBrook Investors, Ltd., its

General Partner

By: /s/ Glenn F. Miller                                    
Name: Glenn F. Miller
Title: Attorney-in-Fact

TSO-Fortiva Certificate Holdco LP, as

Certificateholder

By: TowerBrook TSO GP (Alberta), L.P., its

General Partner

By: TowerBrook Investors, Ltd., its General

Partner

By: /s/ Glenn F. Miller                                   
Name: Glenn F. Miller
Title: Attorney-in-Fact

[SIGNATURE PAGE TO SECOND AMENDMENT TO PURCHASE AGREEMENT]

EX-10.11M

Exhibit 10.11(m)

THIRD AMENDMENT TO PURCHASE AGREEMENT

This THIRD AMENDMENT, dated as of November 13, 2019 (this “Amendment”), to the PURCHASE AGREEMENT, dated as of February 8, 2017 (the “Existing Agreement”, as amended by the First Amendment to the Purchase Agreement, dated as of June 11, 2018, the Second Amendment to the Purchase Agreement, dated as of November 16, 2018, and as amended by this Amendment, the “Agreement”), among PERIMETER MASTER NOTE BUSINESS TRUST, a business trust organized and existing under the laws of the State of Nevada, as issuer (the “Issuer”), PERIMETER FUNDING CORPORATION, a Nevada corporation (“Perimeter”), as transferor (together with its successors and permitted assigns in such capacity, the “Transferor”), ACCESS FINANCING, LLC, a Georgia limited liability company, as assignee of Atlanticus Services Corporation, a Georgia corporation, as servicer (together with its successors and permitted assigns, the “Servicer”), TSO-FORTIVA NOTES HOLDCO LP, as Agent (the “Agent”), TSO-FORTIVA CERTIFICATE HOLDCO LP, as a Certificateholder and TSO-FORTIVA NOTES HOLDCO LP, as an Investor.

W I T N E S S E T H :

WHEREAS, the parties wish to amend the Existing Agreement as set forth herein;

NOW, THEREFORE, in consideration of the mutual covenants herein contained, and other good and valuable consideration, the receipt and adequacy of which are hereby expressly acknowledged, the parties hereto agree as follows:

1. Definitions. Capitalized terms used herein and not otherwise defined herein shall have the meanings specified in the Existing Agreement.

2. Amendment.

Section 1.1 of the Existing Agreement is amended hereby by deleting the definition of “Aggregate Maximum Principal Amount” and adding the following definition in its place:

“Aggregate Maximum Principal Amount” means Seventy Million Dollars ($70,000,000.00), as such amount may be reduced from time to time in accordance with the terms hereof or the Series 2018-Three Purchase Agreement.

3. Representations and Warranties. 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). As of the date hereof, each of the Transferor, the Issuer and the Servicer, as to itself only and not as to any other, represents and warrants to the Agent, the Investors and the Certificateholder, that all representations and warranties made by it in Section 4.1 of the Agreement, with respect to itself, are true and correct as of the date hereof.

4. Agreement in Full Force and Effect as Amended. Except as specifically amended hereby, all of the terms and conditions of the Existing Agreement shall remain in full force and effect. All references to the Existing Agreement in any other document or instrument among the parties hereto shall be deemed to mean such Existing Agreement as amended by this Amendment. This Amendment shall not constitute a novation of the Existing Agreement, but shall constitute an amendment thereof. The parties hereto agree to be bound by the terms and obligations of the Existing Agreement, as amended by this Amendment, as though the terms and obligations of the Existing Agreement were set forth herein.

5. Limited Recourse; No Proceedings. Sections 6.10 and 6.11 of the Agreement are incorporated herein by reference.

6. Counterparts. This Amendment may be executed in any number of counterparts and by separate parties hereto on separate counterparts, each of which when executed shall be deemed an original, but all such counterparts taken together shall constitute one and the same instrument.

7. Governing Law. 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).

8. Limitation of Liability. It is expressly understood and agreed by the parties hereto that (a) this Amendment is executed and delivered by Wilmington Trust, National Association, 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, National Association but is made and intended for the purpose of binding only the Issuer, (c) nothing herein contained shall be construed as creating any liability on Wilmington Trust, National Association, individually or personally, to perform any covenant either expressed or implied contained herein, all such liability, if any, being expressly waived by the parties to this Agreement and by any person claiming by, through or under the parties to this Agreement, (d) Wilmington Trust, National Association has not verified and has conducted no investigation as to the accuracy or completeness of any representation, warranty or covenant of the Issuer and (e) under no circumstances shall Wilmington Trust, National Association 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 any other document to which the Issuer is a party.

2

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed by their respective officers as of the day and year first above written.

PERIMETER FUNDING CORPORATION,

as Transferor


By: /s/ Rosalind T. Drakeford                        

Name: Rosalind T. Drakeford
Title: Secretary

ACCESS FINANCING, LLC, as Servicer


By: /s/ Mitch Saunders                                  

Name: Mitch Saunders
Title: Vice President

PERIMETER MASTER NOTE BUSINESS

TRUST, as Issuer

By: Wilmington Trust, National

Association, not in its individual capacity

but solely as Owner Trustee


By:/s/ Patricia A. Bradenburg                       
Name: Patricia A. Bradenburg
Title: Banking Officer

[SIGNATURE PAGE TO THIRD AMENDMENT TO PURCHASE AGREEMENT]

TSO-Fortiva Notes Holdco LP, as Agent

By: TowerBrook TSO GP (Alberta), L.P., its

General Partner

By: TowerBrook Investors, Ltd., its General

Partner

By: /s/ Glenn F. Miller                                  
Name: Glenn F. Miller
Title: Authorized Signatory

TSO-Fortiva Notes Holdco LP, as Investor

By: TowerBrook TSO GP (Alberta), L.P., its

General Partner

By: TowerBrook Investors, Ltd., its General

Partner

By: /s/ Glenn F. Miller                                  
Name: Glenn F. Miller
Title: Authorized Signatory

TSO-Fortiva Certificate Holdco LP, as

Certificateholder

By: TowerBrook TSO GP (Alberta), L.P., its

General Partner

By: TowerBrook Investors, Ltd., its General

Partner

By: /s/ Glenn F. Miller                                    
Name: Glenn F. Miller
Title: Authorized Signatory

[SIGNATURE PAGE TO THIRD AMENDMENT TO PURCHASE AGREEMENT]

EX-10.11N

CERTAIN INFORMATION, IDENTIFIED BY [*****], HAS BEEN EXCLUDED FROM THE EXHIBIT BECAUSE IT IS BOTH NOT MATERIAL AND WOULD LIKELY CAUSE COMPETITIVE HARM TO THE COMPANY IF PUBLICLY DISCLOSED.

Exhibit 10.11(n)

FOURTH AMENDMENT TO PURCHASE AGREEMENT

This FOURTH AMENDMENT, dated as of January 23, 2020 (this “Amendment”), to the PURCHASE AGREEMENT, dated as of February 8, 2017 (the “Existing Agreement”, as amended by the First Amendment to the Purchase Agreement, dated as of June 11, 2018, the Second Amendment to the Purchase Agreement, dated as of November 16, 2018, the Third Amendment to the Purchase Agreement, dated as of November 13, 2019, and as amended by this Amendment, the “Agreement”), among PERIMETER MASTER NOTE BUSINESS TRUST, a business trust organized and existing under the laws of the State of Nevada, as issuer (the “Issuer”), PERIMETER FUNDING CORPORATION, a Nevada corporation (“Perimeter”), as transferor (together with its successors and permitted assigns in such capacity, the “Transferor”), ACCESS FINANCING, LLC, a Georgia limited liability company, as assignee of Atlanticus Services Corporation, a Georgia corporation, as servicer (together with its successors and permitted assigns, the “Servicer”), TSO-FORTIVA NOTES HOLDCO LP, as Agent (the “Agent”), TSO-FORTIVA CERTIFICATE HOLDCO LP, as a Certificateholder and TSO-FORTIVA NOTES HOLDCO LP, as an Investor.

W I T N E S S E T H :

WHEREAS, the parties wish to amend the Existing Agreement as set forth herein;

NOW, THEREFORE, in consideration of the mutual covenants herein contained, and other good and valuable consideration, the receipt and adequacy of which are hereby expressly acknowledged, the parties hereto agree as follows:

1. Definitions. Capitalized terms used herein and not otherwise defined herein shall have the meanings specified in the Existing Agreement.

2. Amendments.

(a) Section 1.1 of the Existing Agreement is hereby amended by deleting the definition of “Target Proceeds Amount” and adding the following two definitions:

“Daily Target Proceeds Amount” means, for any date of determination occurring on or after December 1, 2019, an amount equal to [*****], in each case as of the day prior to such date of determination.

“Target Proceeds Amount” means, for each Monthly Period commencing on or after December 1, 2019 and occurring before December 1, 2020, an amount equal to the sum of the Daily Target Proceeds Amount for each day in such Monthly Period.

(b) Schedule A of the Existing Agreement is amended hereby by deleting the definition of “Target Proceeds Amount.”

(c) Section 2.2 of the Existing Agreement is amended hereby by deleting the fourth sentence of paragraph (b) and inserting the following in its place:

The Issuer shall deliver no more than two such notices to the Agent in any calendar month, and each amount specified in any such notice must be (i) in an aggregate amount of not less than $1,000,000 and (ii) if the related Increase Date shall occur after February 8, 2021, in an aggregate amount, when combined with any Note Principal Balance Increase (as defined in the Series 2018-Three Supplement) occurring on the same day, of not less than $5,000,000.

(d) Section 2.2 of the Existing Agreement is amended hereby by deleting paragraph (e) and inserting the following in its place:  

(e) Notwithstanding anything contained herein or in the other Transaction Documents, in the event the Issuer prepays all or a portion of the Class A Note Principal Balance during the Revolving Period, the Maximum Principal Amount shall not be reduced and the Issuer shall continue to have the right to request Note Principal Balance Increases on the terms and subject to the conditions hereof.

(e) Section 2.3 of the Existing Agreement is amended hereby by deleting paragraph (b) and inserting the following in its place:  

(b) The Issuer hereby covenants that the aggregate of the Class A Note Principal Balance and the Class A Note Principal Balance (as defined in the Series 2018-Three Supplement) shall equal or exceed $[*****] at all times commencing on December 1, 2019 and prior to December 1, 2020. Notwithstanding the foregoing, if the Issuer repays all or any portion of the Class A Note Principal Balance, at any time and from time to time during any Monthly Period commencing on December 1, 2019 and prior to December 1, 2020, in an amount that causes the aggregate of the Class A Note Principal Balance and the Class A Note Principal Balance (as defined in the Series 2018-Three Supplement) to be less than $[*****], the Issuer shall pay to the Agent on behalf of the Investors an amount equal to the Target Proceeds Amount in accordance with the Indenture Supplement. At any time on or after December 1, 2020, the Transferor or its designee shall have the option to purchase the Class A Notes from the Investors at an amount equal to the outstanding Class A Note Principal plus accrued and unpaid interest thereon and all other amounts due in respect of the Class A Notes under the Transaction Documents.

2

(f) Section 4.2 of the Existing Agreement is amended hereby by deleting paragraph (m) and inserting the following in its place:

(m) Additional Series. Notwithstanding anything contained herein or in the other Transaction Documents, the Issuer may issue additional Series of notes under the Indenture or any Indenture Supplement without obtaining the Agent’s prior written consent.

(g) Section 4.2 of the Existing Agreement is amended hereby by deleting paragraph (jj) and inserting the following in its place:

(jj) [Reserved].

(h) Section 4.2 of the Existing Agreement is amended hereby by deleting paragraph (ll) and inserting the following in its place:

(ll) Transfer of Class B Notes; Class B Note Purchase Agreement. The Class B Notes shall not be transferred in whole or in part without the prior written consent of the Agent, which consent shall not be unreasonably delayed or withheld; provided, however, the Class B Notes may be transferred to an Affiliate of the Holder of the Class B Notes without the consent of the Agent. The Class B Note Purchase Agreement shall not be amended, restated or otherwise modified without the prior written consent of the Agent which consent shall not be unreasonably delayed or withheld.

(i) The following new Section is hereby added to the Existing Agreement as Section 4.6:

Notwithstanding anything contained herein or in the Intercreditor Agreement, the Agent hereby agrees, for itself and on behalf of the Investors, to consent to or waive any requested amendment or waiver to the Series 2018-One Indenture Supplement or the Class A Purchase Agreement (as defined in the Series 2018-One Indenture Supplement) requested by the Transferor or required pursuant to the Intercreditor Agreement to the following definitions of “Advance Rate,” “Borrowing Base,” “Class A Costs,” “Class A Note Rate,” “Excess Concentration Amounts,” “Monthly Interest,” “Net Eligible Receivables Balance” or any term used directly or indirectly in such defined term.

3

(j) Exhibit D of the Existing Agreement is amended hereby by deleting paragraph 7 and inserting the following in its place:

7. No draws under the Senior Supplement may occur unless before and immediately following such draw, the sum of the Class B Note Principal Balance and the Series Required Transferor Amount shall be no less than 10% of the sum of (i) the Note Principal Balance and (ii) the outstanding principal balance of the Senior Facility.

3. Representations and Warranties. 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). As of the date hereof, each of the Transferor, the Issuer and the Servicer, as to itself only and not as to any other, represents and warrants to the Agent, the Investors and the Certificateholder, that all representations and warranties made by it in Section 4.1 of the Agreement, with respect to itself, are true and correct as of the date hereof.

4. Agreement in Full Force and Effect as Amended. Except as specifically amended hereby, all of the terms and conditions of the Existing Agreement shall remain in full force and effect. All references to the Existing Agreement in any other document or instrument among the parties hereto shall be deemed to mean such Existing Agreement as amended by this Amendment. This Amendment shall not constitute a novation of the Existing Agreement, but shall constitute an amendment thereof. The parties hereto agree to be bound by the terms and obligations of the Existing Agreement, as amended by this Amendment, as though the terms and obligations of the Existing Agreement were set forth herein.

5. Limited Recourse; No Proceedings. Sections 6.10 and 6.11 of the Agreement are incorporated herein by reference.

6. Counterparts. This Amendment may be executed in any number of counterparts and by separate parties hereto on separate counterparts, each of which when executed shall be deemed an original, but all such counterparts taken together shall constitute one and the same instrument.

7. Governing Law. 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).

4

8. Limitation of Liability. It is expressly understood and agreed by the parties hereto that (a) this Amendment is executed and delivered by Wilmington Trust, National Association, 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, National Association but is made and intended for the purpose of binding only the Issuer, (c) nothing herein contained shall be construed as creating any liability on Wilmington Trust, National Association, individually or personally, to perform any covenant either expressed or implied contained herein, all such liability, if any, being expressly waived by the parties to this Agreement and by any person claiming by, through or under the parties to this Agreement, (d) Wilmington Trust, National Association has not verified and has conducted no investigation as to the accuracy or completeness of any representation, warranty or covenant of the Issuer and (e) under no circumstances shall Wilmington Trust, National Association 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 any other document to which the Issuer is a party.

5

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed by their respective officers as of the day and year first above written.

PERIMETER FUNDING CORPORATION,

as Transferor


By: /s/ Bettie Lass                                            

Name: Bettie Lass
Title: Treasurer

ACCESS FINANCING, LLC, as Servicer


By: /s/ Brian Stone                                            

Name: Brian Stone
Title: President

PERIMETER MASTER NOTE BUSINESS

TRUST, as Issuer

By: Wilmington Trust, National

Association, not in its individual capacity

but solely as Owner Trustee


By:/s/ Nancy E. Hagner                                       
Name: Nancy E. Hagner
Title: Assistant Vice President

[SIGNATURE PAGE TO FOURTH AMENDMENT TO PURCHASE AGREEMENT]

TSO-Fortiva Notes Holdco LP, as Agent

By: TowerBrook TSO GP (Alberta), L.P., its

General Partner

By: TowerBrook Investors, Ltd., its General

Partner

By: /s/ Glenn F. Miller                                     
Name: Glenn F. Miller
Title: Authorized Signatory

TSO-Fortiva Notes Holdco LP, as Investor

By: TowerBrook TSO GP (Alberta), L.P., its

General Partner

By: TowerBrook Investors, Ltd., its General

Partner

By: /s/ Glenn F. Miller                                     
Name: Glenn F. Miller
Title: Authorized Signatory

TSO-Fortiva Certificate Holdco LP, as

Certificateholder

By: TowerBrook TSO GP (Alberta), L.P., its

General Partner

By: TowerBrook Investors, Ltd., its General

Partner

By: /s/ Glenn F. Miller                                      
Name: Glenn F. Miller
Title: Authorized Signatory

[SIGNATURE PAGE TO FOURTH AMENDMENT TO PURCHASE AGREEMENT]

EX-10.11O

CERTAIN INFORMATION, IDENTIFIED BY [*****], HAS BEEN EXCLUDED FROM THE EXHIBIT BECAUSE IT IS BOTH NOT MATERIAL AND WOULD LIKELY CAUSE COMPETITIVE HARM TO THE COMPANY IF PUBLICLY DISCLOSED.

Exhibit 10.11(o)

EXECUTION COPY

PURCHASE AGREEMENT


by and among


TSO-Fortiva Notes Holdco LP,

as an Investor,

TSO-Fortiva Notes Holdco LP,

as Agent,


PERIMETER FUNDING CORPORATION,
as Transferor,


ACCESS FINANCING, LLC,
as Servicer,

PERIMETER MASTER NOTE BUSINESS TRUST,

as Issuer


(Variable Funding Notes, Series 2018-Three, Class A-3, Class A-4 and Class A-5)

Dated as of November 16, 2018

Table of Contents

Page

ARTICLE I DEFINITIONS		1
SECTION 1.1	Defined Terms.	1
SECTION 1.2	Other Terms	8
SECTION 1.3	Computation of Time Periods	8
ARTICLE II PURCHASE AND SALE		9
SECTION 2.1	Purchase and Sale of the Offered Notes	9
SECTION 2.2	Purchases of Note Principal Balance Increases	9
SECTION 2.3	Note Interest, Additional Interest, Fees and Other Costs and Expenses	10
SECTION 2.4	Payments and Computations, Etc	11
ARTICLE III CONDITIONS PRECEDENT		11
SECTION 3.1	Conditions Precedent on the Closing Date	11
SECTION 3.2	Conditions Precedent on each Increase Date	13
ARTICLE IV REPRESENTATIONS AND WARRANTIES		15
SECTION 4.1	Representations and Warranties of the Issuer, the Transferor and the Servicer	15
SECTION 4.2	Covenants of the Issuer, the Transferor and the Servicer	24
SECTION 4.3	Periodic Notices and Reports	34
SECTION 4.4	Tax Treatment	38
SECTION 4.5	Board of Directors of Transferor.	38
ARTICLE V INDEMNIFICATION; EXPENSES; RELATED MATTERS		40
SECTION 5.1	Indemnities by the Transferor	40
SECTION 5.2	Taxes	41
SECTION 5.3	Indemnities by the Servicer	43
ARTICLE VI MISCELLANEOUS		45
SECTION 6.1	Term of Agreement; Survival	45
SECTION 6.2	Waivers; Amendments	45
SECTION 6.3	Notices; Payments	46
SECTION 6.4	Governing Law; Submission to Jurisdiction; Appointment of Service Agent	48
SECTION 6.5	Integration	48
SECTION 6.6	Severability of Provisions	49
SECTION 6.7	Counterparts; Facsimile Delivery	49
SECTION 6.8	Successors and Assigns; Binding Effect; Stapled Transfers of Offered Notes	49
SECTION 6.9	Confidentiality	49
SECTION 6.10	No Bankruptcy Petition Against the Issuer or the Transferor	50
SECTION 6.11	No Recourse Against Issuer	50
SECTION 6.12	Limitation of Liability	50
SECTION 6.13	Amounts Limited to Available Collections	51

i

ARTICLE VII THE AGENT		51
SECTION 7.1	Authorization and Action	51
SECTION 7.2	Delegation of Duties	52
SECTION 7.3	Exculpatory Provisions	52
SECTION 7.4	Reliance	53
SECTION 7.5	Non-Reliance on Agent and Other Investors	53
SECTION 7.6	Reimbursement and Indemnification	53
SECTION 7.7	Agent in its Individual Capacity.	54
SECTION 7.8	Successor Agent	54

SCHEDULES AND EXHIBITS

EXHIBIT A	Increase Notice
EXHIBIT B	Tradenames of Transferor
EXHIBIT C	Permitted Transferee
EXHIBIT D	Senior Facility Requirements

SCHEDULE A	Definitions
SCHEDULE 4.1(x)	List of Beneficial Owners of Issuer
SCHEDULE 4.1(ee)	List of Affiliated Agreements
SCHEDULE 4.1(ff)	List of Deposit Accounts
SCHEDULE 4.2(y)	List of Investment Property

ii

This PURCHASE AGREEMENT, dated as of November 16, 2018 (as amended, supplemented or otherwise modified and in effect from time to time, this “Agreement”), is by and among TSO-FORTIVA NOTES HOLDCO LP, a Delaware limited partnership, as an investor (together with its successors and permitted assigns, the “Investors”), TSO-FORTIVA NOTES HOLDCO LP, as agent (together with its successors and permitted assigns, the “Agent”), PERIMETER FUNDING CORPORATION, a Nevada corporation, as transferor (together with its successors and permitted assigns in such capacity, the “Transferor”), ACCESS FINANCING, LLC, a Georgia corporation, as servicer (together with its successors and permitted assigns, the “Servicer”) and PERIMETER MASTER NOTE BUSINESS TRUST, a Nevada business trust, as issuer (the “Issuer”).

W I T N E S S E T H

WHEREAS, the Issuer intends to issue Class A-3 Notes, Class A-4 Notes, Class A-5 Notes and Class B Notes (the “Notes”); and

WHEREAS, on the terms and subject to the conditions specified in this Agreement, the Transfer and Servicing Agreement, the Indenture and the Indenture Supplement, the Transferor will cause the Issuer to issue the Class A-3 Notes, Class A-4 Notes and Class A-5 Notes (the “Offered Notes”) to the Investors on the Closing Date;

NOW THEREFORE, in consideration of the premises and the mutual covenants herein contained, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

ARTICLE I 

DEFINITIONS

SECTION 1.1     Defined Terms. Capitalized terms used herein (including in the preamble and recitals hereof) and not defined herein are defined in, or incorporated by reference into, the Indenture, the Indenture Supplement or the Transfer and Servicing Agreement, as applicable. Additionally, the following terms shall have the following meanings for all purposes of this Agreement:

“Agent” is defined in the preamble.

“Agent Designee” is defined in Section 4.5(a).

“Aggregate Maximum Principal Amount” means Ninety Million Dollars ($90,000,000.00), as such amount may be reduced from time to time in accordance with the terms hereof or the Series 2017-One Purchase Agreement.

“Agreement” is defined in the preamble.

“Bankruptcy Code” means the United States Bankruptcy Code, 11 U.S.C. §§ 101 et seq., as amended.

“Board” is defined in Section 4.5(a).

“Class A-3 Maximum Principal Amount” means, on any date, an amount not to exceed the product of (i) (a) if the Senior Advance Rate is less than 70%, the percentage equivalent of a fraction (A) the numerator of which is equal to 70% minus the Senior Advance Rate and (B) the denominator of which is equal to 90% minus the Senior Advance Rate or (b) if the Senior Advance Rate is greater than or equal to 70%, 0 times (ii) the Maximum Principal Amount on such date, as such amount may be reduced from time to time in accordance with Section 2.2(d).

“Class A-3 Note Rate” is defined in Schedule A attached hereto and made a part hereof.

“Class A-3 Notes” means the Variable Funding Notes, Series 2018-Three, Class A-3, issued by the Issuer on the Closing Date.

“Class A-4 Maximum Principal Amount” means, on any date, an amount not to exceed the product of (i) 50% times (ii) an amount equal to (a) the Maximum Principal Amount on such date minus (b) the Class A-3 Maximum Principal Amount on such date.

“Class A-4 Note Rate” is defined in Schedule A attached hereto and made a part hereof.

“Class A-4 Notes” means the Variable Funding Notes, Series 2018-Three, Class A-4, issued by the Issuer on the Closing Date.

“Class A-5 Maximum Principal Amount” means, on any date, an amount not to exceed (a) the Maximum Principal Amount on such date minus (b) the sum of the Class A-3 Maximum Principal Amount and the Class A-4 Maximum Principal Amount, in each case on such date.

“Class A-5 Note Rate” is defined in Schedule A attached hereto and made a part hereof.

“Class A-5 Notes” means the Variable Funding Notes, Series 2018-Three, Class A-5, issued by the Issuer on the Closing Date.

“Closing Date” means November 16, 2018.

“Code” means the Internal Revenue Code of 1986, as amended.

“Commitment Percentage” means, for each Investor and for each Class, the percentage set forth immediately below such Investor’s name on the signature pages of this Agreement or in any assignment to an Investor in accordance with the provisions set forth herein; provided, however, that the aggregate Commitment Percentage with respect to all of the Investors shall at all times equal 100%.

“Debtor Relief Laws” means (i) the 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.

2

“ERISA” means The Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and the rulings issued thereunder.

“Excepted Persons” is defined in Section 6.9.

“Excluded Liabilities” is defined in Section 5.1.

“Excluded Taxes” means, with respect to any Indemnified Party, (i) any tax (including any franchise tax) imposed on or measured by the gross or net income (however denominated), branch profits, gross or net receipts, capital, net worth or similar items (including any interests, penalties or additions with respect thereto) of such Indemnified Party by the United States or by the jurisdiction or political subdivision or taxing authority thereof in which such Indemnified Party’s principal office or lending offices are located or are resident, managed or controlled, in which such Indemnified Party or lending office is incorporated or organized or otherwise doing business, or for which there is a present or former connection between such jurisdiction, political subdivision or taxing authority thereof and such Indemnified Party (excluding any connection arising solely out of the execution, delivery or enforcement of the Transaction Documents), (ii) in the case of the United States or any state thereof (including the District of Columbia), any taxes imposed by the United States or such state by means of withholding at the source unless such withholding results from a change in applicable law after the date such Indemnified Party becomes entitled to the benefits of any of the Transaction Documents with respect to the Class A-3 Note Principal Balance, Class A-4 Note Principal Balance or Class A-5 Note Principal Balance, as applicable, or portion thereof affected by such change (provided that taxes withheld pursuant to Section 1446 of the Code shall be Excluded Taxes in any event), (iii) any taxes to which an Indemnified Party is subject (to the extent of the tax rate then in effect) on the date this Agreement is executed or to which an Indemnified Party would be subject on such date if a payment hereunder had been received by such Person on such date, and with respect to any Indemnified Party that becomes a party hereto after the date hereof, any taxes to which such Indemnified Party is subject on the date it becomes a party hereto (other than in each case taxes for which each of the other Indemnified Parties is entitled to reimbursement pursuant to the terms of this Agreement), (iv) taxes to which the Indemnified Party becomes subject subsequent to the date referred to in clause (iii) above as a result of a change in residence, place of incorporation, or principal place of business of such Indemnified Party, a change in the branch or lending office of such Indemnified Party participating in the transactions specified herein or other similar circumstances or as a result of the recognition by an Indemnified Party of gain on the sale, assignment or participation by such Indemnified Party of any interest to which it is entitled hereunder or under the other Transaction Documents, (v) taxes attributable to such Indemnified Party’s failure to comply with Section 5.2(b) of this Agreement and (vi) any U.S. federal withholding taxes imposed under FATCA.

“FATCA” means Sections 1471 through 1474 of the Code, as in effect on the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations thereunder or official governmental interpretations thereof and any agreements entered into pursuant to Section 1471(b)(1) of the Code.

3

“FICO Score” shall mean, for each Obligor, the credit bureau-based industry standard score created by Fair Isaac Co. of such Obligor obtained from Equifax, Inc., Experian Information Solutions, Inc., TransUnion, LLC or Fair Isaac Corporation at the time of origination of the related Account.

“GAAP” means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such accounting profession, in effect from time to time.

“Holdings” means Atlanticus Holdings Corporation, a Georgia corporation.

“Increase Date” means a date upon which a Note Principal Balance Increase occurs.

“Increase Notice” is defined in Section 2.2(b).

“Indemnified Amounts” is defined in Section 5.1.

“Indemnified Parties” is defined in Section 5.1.

“Indenture” means the Master Indenture, dated as of February 8, 2017, by and among the Issuer, the Servicer and the Indenture Trustee, as the same may from time to time be amended, supplemented or otherwise modified in accordance with its terms and in effect.

“Indenture Supplement” means the Series 2018-Three Indenture Supplement, dated as of November 16, 2018, to the Master Indenture, by and among the Issuer, the Servicer and the Indenture Trustee, as the same may from time to time be amended, supplemented or otherwise modified in accordance with its terms and in effect.

“Indenture Trustee” means U.S. Bank National Association, as indenture trustee, and its successors and permitted assigns in such capacity.

“Insolvency Event” means, with respect to a specified Person, (a) the commencement of an involuntary proceeding in a court having jurisdiction in the premises in respect of such Person or any substantial part of its property under any applicable Debtor Relief Law now or hereafter in effect, or the commencement of a proceeding for the appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator, conservator or similar official for such Person or for any substantial part of its property, or for the winding-up or liquidation of such Person’s affairs, and any such proceeding shall remain undismissed for a period of sixty (60) consecutive days; or (b) the commencement by such Person of a voluntary case under any applicable Debtor Relief Law now or hereafter in effect, or the consent by such Person to the entry of an order for relief in an involuntary case under any such law, or the consent by such Person to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator, conservator or similar official for such Person or for any substantial part of its property, or the making by such Person of any general assignment for the benefit of creditors, or the failure by such Person generally to pay its debts as such debts become due, or such Person shall otherwise be dissolved or liquidated, or the taking of action by such Person in furtherance of any of the foregoing.

4

“Institutional Parties” is defined in Section 4.5(d).

“Investors” is defined in the preamble.

“Issuer” is defined in the preamble.

“Law” means any law (including common law), constitution, statute, treaty, regulation, rule, ordinance, order, injunction, writ, decree or award of any Governmental Authority.

“Maximum Principal Amount” means, on any date, an amount equal to (i) the Aggregate Maximum Principal Amount on such date (after giving effect to any decreases on such date) minus (ii) the Class A Note Principal Balance (as such term is defined in the Series 2017-One Supplement), as of such date (after giving effect to any increases or decreases on such date).

“1940 Act” means The Investment Company Act of 1940, as amended.

“Note Principal Balance” is defined in the Indenture Supplement.

“Note Principal Balance Increase” is defined in the Indenture Supplement.

“Notes” is defined in the recitals.

“NYC Debt Collector’s Law” means Title 20, subchapter 30, of the New York City Administrative Code (N.Y. ADC. LAW §§20-488 to -494), as may be amended or otherwise modified from time to time.

“Offered Notes” is defined in the recitals.

“Owner Trustee” means Wilmington Trust, National Association, as owner trustee of the Issuer, and its successors and permitted assigns in such capacity.

“Patriot Act” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, P.L. 107-56 (signed into law October 26, 2001), as amended.

“payor” is defined in Section 5.2(a).

“Permitted Transferee” means (a) any investment fund managed by TowerBrook Capital Partners L.P. identified on Exhibit C attached hereto and any entity directly or indirectly controlled by any one or more of such investment funds, and (b) each other Person who has been consented to as a potential transferee by the Transferor (which consent shall not be unreasonably withheld or delayed), in each case under (a) or (b) other than (i) a member of an expanded group (as defined in Treasury Regulation section 1.385-1(c)(4) or any successor regulation then in effect) that includes the Transferor or the Issuer (or an entity which for U.S. federal income tax purposes is considered the same Person as the Transferor or the Issuer) other than a member of a consolidated group (as defined in Treasury Regulation section 1.1502-1(h)) that includes the Transferor or the Issuer (or an entity which for U.S. federal income tax purposes is considered the same Person as the Transferor or the Issuer), (ii) a “controlled partnership” (as defined in Treasury Regulation section 1.385-1(c)(1) or any successor regulation then in effect) of such expanded group or (iii) a disregarded entity owned directly or indirectly by a Person described in preceding clause (i) or (ii).

5

“Plan” means an “employee benefit plan” as defined in Section 3(3) of ERISA.

“Program Management Agreement” means the Program Management Agreement dated as of April 1, 2017 between The Bank of Missouri (as successor in interest to Mid America Bank and Trust Company) and Atlanticus Services Corporation, as the same may be amended, supplemented or otherwise modified from time to time in accordance with its terms.

“Proprietary Information” means (a) confidential or proprietary information relating to pricing or compensation paid by the Servicer to any third parties with whom the Servicer has a contractual relationship that directly relates to the Receivables and the performance by the Servicer or such third parties of their obligations under such agreements; (b) data on an account-by-account basis, modeling results or projections, account management strategies; and (c) other similar information that the Servicer reasonably regards as proprietary to its business; provided, however, that Proprietary Information shall not include (i) monthly reports containing complete and accurate data classified according to the data fields and other categories as set forth in Exhibit C to the Indenture Supplement and (ii) the tax treatment and tax structure of the transactions contemplated herein.

“Receivable Sales Agreement” means the Amended and Restated Receivable Sales Agreement dated as of April 1, 2017 between The Bank of Missouri (as successor in interest to Mid America Bank and Trust Company) and the Seller, as the same may be amended, supplemented or otherwise modified from time to time in accordance with its terms.

“recipient” is defined in Section 5.2(a).

“Reportable Event” is defined in Title IV of ERISA.

“Requirements of Law” means, with respect to any Person, the certificate of incorporation or articles of association and by-laws or other organizational or governing documents of such Person, and any Law applicable to or binding upon such Person or to which such Person is subject.

“Seller” means Fortiva Funding, LLC, a Georgia limited liability company, and its successors and permitted assigns.

“Senior Advance Rate” means as of any date of determination, the greater of (i) the effective advance rate as of the initial Increase Date (as defined in the Series 2018-Two Purchase Agreement) and (ii) the effective advance rate for the Series 2018-Two Notes as of such date. .

“Series 2017-One Closing Date” shall mean February 8, 2017.

“Series 2017-One Purchase Agreement” means the Purchase Agreement dated as of February 8, 2017 by and among TSO-Fortiva Notes Holdco LP, TSO-Fortiva Certificate Holdco LP, the Transferor, the Servicer and the Issuer, as amended, restated or otherwise modified from time to time in accordance with its terms.

6

“Series 2017-One Supplement” means the Amended and Restated Series 2017-One Supplement, dated as of June 11, 2018, to the Master Indenture, by and among the Issuer, the Servicer and the Indenture Trustee, as the same may from time to time be amended, supplemented or otherwise modified in accordance with its terms and in effect.

“Series 2018-One Purchase Agreement” means the Class A Note Purchase Agreement dated as of June 11, 2018 by and among the purchasers parties thereto, Credit Suisse AG, New York Branch, as administrative agent, the Transferor, the Servicer, the Issuer and the Seller, as amended, restated or otherwise modified from time to time in accordance with its terms.

“Series 2018-Two Purchase Agreement” means the Class A Note Purchase Agreement dated as of November 16, 2018 by and among the purchasers parties thereto, JPMorgan Chase Bank, National Association, as administrative agent, the Transferor, the Servicer and the Issuer, as amended, restated or otherwise modified from time to time in accordance with its terms.

“Servicer” is defined in the preamble.

“Solvent” means, as to any Person at any time, having a state of affairs such that all of the following conditions are met: (a) the fair value of the property of such Person is greater than the amount of such Person’s liabilities as such value is established and liabilities evaluated for purposes of Section 101(32) of the Bankruptcy Code, (b) the present fair salable value of the property of such Person in an orderly liquidation of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured, (c) such Person believes it is able to realize upon its property and pay its debts and other liabilities as they mature in the normal course of business, (d) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay as such debts and liabilities mature, and (e) such Person is not engaged in business or a transaction, and is not about to engage in a business or a transaction, for which such Person’s property would constitute unreasonably small capital.

“Stapled Transfer” is defined in Section 6.8.

“Support Letter” means the Support Letter, dated as of November 16, 2018, executed by Holdings in favor of the Agent, as the same may from time to time be amended, supplemented or otherwise modified in accordance with its terms and in effect.

“Target Proceeds Amount” is defined in Schedule A attached hereto and incorporated herein.

“Taxes” is defined in Section 5.2(a).

“TCP” is defined in Section 4.5(c).

“Termination Date” is defined in Section 6.1.

7

“Transaction Documents” means, collectively, this Agreement, the Offered Notes, the Indenture, the Indenture Supplement, the Transfer and Servicing Agreement, the Trust Agreement, the Administration Agreement, the Class B Note Purchase Agreement, the Support Letter, the Receivables Purchase Agreement and all other agreements heretofore or hereafter executed or delivered to the Agent and/or the Investors in connection with any of the foregoing or the Offered Notes, in each case, as the same may be amended, restated, supplemented or otherwise modified from time to time in accordance with its terms.

“Transfer and Servicing Agreement” means the Transfer and Servicing Agreement, dated as of February 8, 2017, by and among the Transferor, the Issuer, the Servicer and the Indenture Trustee, as the same may from time to time be amended, supplemented or otherwise modified in accordance with its terms and in effect.

“Transferor” is defined in the preamble.

“Trust Account” means any bank, trust or other depository account of the Issuer, in each case together with all sub-accounts thereof and all separate accounts ledgered as sub-accounts thereof.

“UCC” means the applicable Uniform Commercial Code.

SECTION 1.2     Other Terms. All terms defined directly or by incorporation herein shall have the defined meanings when used in any certificate or other document delivered pursuant thereto unless otherwise defined therein. For purposes of this Agreement and all such certificates and other documents, unless the context otherwise requires: (a) accounting terms not otherwise defined herein, and accounting terms partly defined herein to the extent not defined, shall have the respective meanings given to them under, and shall be construed in accordance with, GAAP; (b) terms used in Article 9 of the UCC in the State of New York, and not specifically defined herein, are used herein as defined in such Article 9; (c) references to any amount as on deposit or outstanding on any particular date means such amount at the close of business on such day; (d) the words “hereof,” “herein” and “hereunder” and words of similar import refer to this Agreement (or the certificate or other document in which they are used) as a whole and not to any particular provision of this Agreement (or such certificate or document); (e) references to any Section, Schedule or Exhibit are references to Sections, Schedules and Exhibits in or to this Agreement (or the certificate or other document in which the reference is made) and references to any paragraph, Section, clause or other subdivision within any Section or definition refer to such paragraph, Section, clause or other subdivision of such Section or definition; (f) the term “including” means “including without limitation”; (g) references to any Law refer to that Law as amended from time to time and include any successor Law; (h) references to any agreement refer to that agreement as from time to time amended or supplemented or as the terms of such agreement are waived or modified in accordance with its terms; (i) references to any Person include that Person’s successors and permitted assigns; and (j) headings are for purposes of reference only and shall not otherwise affect the meaning or interpretation of any provision hereof.

SECTION 1.3     Computation of Time Periods. Unless otherwise stated in this Agreement, in the computation of a period of time from a specified date to a later specified date, the word “from” means “from and including”, the words “to” and “until” each means “to but excluding”, and the word “within” means “from and excluding a specified date and to and including a later specified date”.

8

ARTICLE II

PURCHASE AND SALE

SECTION 2.1     Purchase and Sale of the Offered Notes . (a) The closing of the purchase and sale of the Offered Notes shall take place on the Closing Date.

(a)     On the Closing Date, the Transferor agrees to cause the Issuer to issue to the Investors, in the name of the Agent, the Offered Notes.

(b)     On the Closing Date, the Transferor will cause the Class A-3 Notes, Class A-4 Notes and Class A-5 Notes, each dated the Closing Date, to be delivered to the Agent, registered in the name of the applicable Investors, on behalf of the Investors, having a maximum principal amount up to the Class A-3 Maximum Principal Amount, Class A-4 Maximum Principal Amount and Class A-5 Maximum Principal Amount, respectively, duly authenticated in accordance with the provisions of the Indenture.

(c)     On the terms and subject to the conditions specified in this Agreement and the Indenture Supplement, the Investors, from time to time during the period from the Closing Date to the last day of the Revolving Period, shall acquire Note Principal Balance Increases by providing funds to the Transferor, on behalf of the Issuer.

SECTION 2.2     Purchases of Note Principal Balance Increases. (a) On the terms and subject to the conditions hereof, including Article III, in consideration for the sale of the Offered Notes by the Transferor to the Investors hereunder from time to time during the Revolving Period, on request of the Transferor on behalf of the Issuer in accordance with Section 2.2(b), the Investors shall pay to the Issuer an amount equal in each instance to the lesser of (i) the amount requested by the Issuer, (ii) the largest amount that will not cause the Class A Note Principal Balance to exceed the Maximum Principal Amount and (iii) the largest amount for each Class of Offered Notes that will not cause the Class A-3 Note Principal Balance, the Class A-4 Note Principal Balance or the Class A-5 Note Principal Balance to exceed the Class A-3 Maximum Principal Amount, Class A-4 Maximum Principal Amount or Class A-5 Maximum Principal Amount, respectively, at such time.

(a)     The purchase of each Note Principal Balance Increase shall be made pursuant to the terms of an increase notice (the “Increase Notice”) in a form substantially similar to that attached hereto as Exhibit A, delivered by the Transferor, on behalf of the Issuer, to the Agent not later than 2:00 p.m. (New York City time) on a Business Day which is not later than ten (10) Business Days prior to the proposed Increase Date. Each such notice shall specify (i) the aggregate amount of the Note Principal Balance Increase with regard to the Class A-3 Notes, Class A-4 Notes and/or Class A-5 Notes, as applicable, which amount must (A) satisfy the applicable minimum requirement set forth below and (B) be allocated on a pro rata basis among the Notes which are available to be increased as of such date, and (ii) the proposed Increase Date. Any such notice, once given, shall be irrevocable. The Issuer shall deliver no more than two such notices to the Agent in any calendar month, and each amount specified in any such notice must be in an aggregate amount of not less than $1,000,000. On the date of purchase of the Note Principal Balance Increase, each Investor shall, upon satisfaction of the applicable conditions set forth in Article III, make available to the Transferor, on behalf of the Issuer, in same day funds, at such bank or other location reasonably designated by the Transferor, on behalf of the Issuer, in its Increase Notice given pursuant to this Section 2.2(b), an amount equal to its Commitment Percentage of the Note Principal Balance Increase.

9

(b)     The Issuer may prepay all or any portion of the Note Principal Balance at any time upon three (3) Business Days notice to the Agent. Any such repayment amount shall be applied as follows:

(i)     first, to the extent available, an amount equal to the Class A-3 Note Principal shall be applied to repay the Class A-3 Note Principal Balance;

(ii)     second, once the Class A-3 Note Principal Balance has been reduced to zero, to the extent available, an amount equal to the Class A-4 Note Principal shall be applied to repay the Class A-4 Note Principal Balance; and

(iii)     third, once the Class A-4 Note Principal Balance has been reduced to zero, to the extent available, an amount equal to the Class A-5 Note Principal shall be applied to repay the Class A-5 Note Principal Balance.

(c)      When any portion of the Note Principal Balance has been repaid on the Class A-3 Notes, the Class A-3 Maximum Principal Amount shall automatically be reduced by such amount. Notwithstanding any provision to the contrary herein or in any other Transaction Document, when the Class A-3 Note Principal Balance has been reduced to zero, the Class A-3 Maximum Principal Amount shall automatically be reduced to zero. In the event that the Senior Advance Rate increases, (i) the Class A-3 Maximum Principal Amount shall automatically be reduced in accordance with the definition thereof and (ii) the Class A-3 Note Principal Balance shall be reduced and each of the Class A-4 Note Principal Balance and the Class A-5 Note Principal Balance shall be increased automatically to reflect a pro rata distribution of the Class A Note Principal Balance in accordance with the relative amounts of the Class A-3 Maximum Principal Amount, the Class A-4 Maximum Principal Amount and the Class A-5 Maximum Principal Amount.

(d)     In the event the Issuer prepays all or a portion of the Class A Note Principal Balance other than (i) with proceeds of a Senior Facility, or (ii) in accordance with Sections 4.01(b), 4.05(a)(xiv) or 4.05(b)(ii) of the Indenture Supplement, the Maximum Principal Amount shall automatically be reduced in part or in whole by the amount of such prepayment. Each such reduction shall be irrevocable.

(e)     To the extent that there is a Net Eligible Receivables Balance Deficiency (subject to Transferor’s ability to transfer additional Eligible Receivables to the Issuer to cure such deficiency) as evidenced by any report delivered to Agent pursuant to Section 4.3(a)(iii) hereof or any information requested by Agent pursuant to Section 4.3(a)(vi) hereof, or as otherwise known to Issuer or Transferor at any time, the Issuer shall repay the amount of such Net Eligible Receivables Balance Deficiency on the next Distribution Date.

10

SECTION 2.3     Note Interest, Additional Interest, Fees and Other Costs and Expenses. (a) The Issuer shall pay, as and when due in accordance with the Indenture Supplement and this Agreement, the Class A-3 Monthly Interest, the Class A-4 Monthly Interest, the Class A-5 Monthly Interest, the Class A-3 Additional Interest, the Class A-4 Additional Interest, the Class A-5 Additional Interest and all amounts payable by it pursuant to Section 2.3(c) below and Article V, if any.

(a)     In the event that the Issuer repays all or any portion of the Note Principal Balance on or before February 8, 2020, other than (i) with proceeds of a Senior Facility or (ii) pursuant to Sections 4.01(b), 4.05(a)(xiv) or 4.05(b)(ii) of the Indenture Supplement, the Issuer shall pay to the Agent on behalf of the Investors an amount equal to the Target Proceeds Amount in accordance with the Indenture Supplement.

(b)     Transferor shall reimburse the Agent for all out-of-pocket costs and expenses incurred by the Agent and its Affiliates on behalf of the Investors in connection with the routine administration of this Agreement and the other Transaction Documents, including, without limitation, legal expenses and reasonable attorneys’ fees; provided, that Transferor’s reimbursement obligation for such costs and expenses shall not exceed Twenty-Five Thousand and No/100 Dollar ($25,000.00) per annum in the aggregate when combined with the amounts due and payable by the Issuer or the Transferor, as applicable, pursuant to Section 4.2(d) and pursuant to the Series 2017-One Purchase Agreement.

(c)     The Class A Notes shall be due and payable in full on the Commitment Termination Date.

SECTION 2.4     Payments and Computations, Etc. All amounts to be paid or deposited by the Transferor or the Servicer hereunder shall be paid or deposited in accordance with the terms hereof no later than 3:00 p.m. (New York City time) on the day when due in same day funds; if such amounts are payable to the Investors they shall be paid or deposited in the account indicated under the heading “Payment Information” in Section 6.3, until otherwise notified by the Agent. All computations of per annum fees hereunder shall be made on the basis of a year of 360 days for the actual number of days (including the first but excluding the last day) elapsed. Any computations by the Investors of amounts payable under Article V shall be supported by a certificate prepared in good faith setting forth the basis and the calculation of the amount (in reasonable detail) of each request by the Investors, shall be binding upon the Issuer and the Transferor absent manifest error, and the Investors shall deliver a copy thereof to the Transferor and the Servicer. Nothing in this Section 2.4 shall be deemed to require the Issuer or the Transferor to pay any amount to the Investors to the extent the Investors have been compensated therefor under another provision of this Agreement or to the extent such amount is already reflected in the computations of Class A-3 Additional Interest, Class A-4 Additional Interest, Class A-5 Additional Interest or any other fees hereunder.

ARTICLE III 
CONDITIONS PRECEDENT

SECTION 3.1     Conditions Precedent on the Closing Date. This Agreement shall become effective on the Closing Date upon the satisfaction of the following conditions:

(a)     the Agent shall have received the items listed below:

(i)     A copy of this Agreement duly executed by the Transferor, the Issuer and the Servicer;

11

(ii)     Officer’s Certificates of each of the Seller, the Transferor, the Issuer, Holdings and the Servicer, each dated the date of this Agreement, certifying (1) the names and true signatures of the incumbent officers of such Person authorized to sign this Agreement (if such Person is a party hereto) and the other documents to be delivered by it hereunder (on which certificate the Agent and the Investors may conclusively rely until such time as the Agent and the Investors shall receive from the Seller, the Transferor, the Issuer, Holdings or the Servicer, as the case may be, a revised certificate meeting the requirements of this paragraph (b)(ii)), (2) that the copy of the certificate of incorporation or formation, as applicable, and limited liability company agreement or by-laws, as applicable, of each of the Seller, the Transferor, Holdings and the Servicer and the Nevada certificate of trust and the Trust Agreement, in the case of the Issuer, attached thereto is a complete and correct copy and such document has not been amended, modified or supplemented and is in full force and effect, and (iii) to the extent applicable, the resolutions of such Person’s board of directors approving and authorizing the execution, delivery and performance by such Person of the Transaction Documents to which such Person is a party and the documents related thereto;

(iii)     A good standing certificate for the Seller issued by the Secretary of State of Georgia, a good standing certificate for the Transferor issued by the Secretary of State of Nevada, a good standing certificate for the Issuer issued by the Secretary of State of Nevada, a good standing certificate for the Servicer issued by the Secretary of State of Georgia, and a good standing certificate for Holdings issued by the Secretary of State of Georgia;

(iv)     Acknowledgment copies of proper financing statements (Form UCC-1) naming (i) the Account Owner as the debtor with respect to the Receivables and such other related property, and the Seller as secured party, (ii) the Seller as the debtor with respect to the Receivables and such other related property, and the Transferor as secured party, (iii) the Transferor as the debtor with respect to the Receivables and such other related property, and the Issuer as the secured party and (iv) the Issuer as the debtor with respect to the Receivables and such other related property, and the Indenture Trustee, as the secured party, or other similar instruments or documents as may be necessary or in the reasonable opinion of the Agent desirable under the UCC of all appropriate jurisdictions or any comparable law to evidence the perfection of the Indenture Trustee’s interest in the Receivables and such other related property;

(v)     Acknowledgment copies of proper financing statements, if any, necessary to release and terminate all security interests and other rights of any Person in the property transferred to the Issuer;

(vi)     Certified copies of request for information or copies (Form UCC-11) (or a similar search report certified by parties reasonably acceptable to the Agent) dated a date reasonably prior to the Closing Date listing all effective financing statements which name the Issuer, the Account Owner, the Seller and the Transferor (under its present name and any previous names) as debtor and which are filed with respect to the Issuer, the Account Owner, the Seller and the Transferor, together with copies of such financing statements, and such search report shall show no Liens on the Trust Estate (other than Permitted Liens);

12

(vii)     An executed copy of the Indenture, the Indenture Supplement, the Support Letter and an executed or a certified copy of each of the other Transaction Documents executed by the Seller, the Issuer, the Transferor and the Servicer;

(viii)     The Offered Notes duly executed by the Issuer and duly authenticated by the Indenture Trustee and issued in the name of the Agent on behalf of the Investors pursuant to the Indenture Supplement; and

(ix)     (A) Opinion of Rosalind Drakeford, Assistant General Counsel for Atlanticus, Seller and Holdings, relating to certain corporate matters;

(B)     Opinion of Fennemore Craig P.C., special Nevada Counsel to the Transferor and the Issuer, relating to due authorization and the conveyance of Receivables;

(C)     Opinion of Orrick, Herrington & Sutcliffe LLP (“Orrick”), special New York counsel to the Servicer, the Transferor and the Issuer, with respect to the enforceability of certain agreements;

(D)     Opinion of Chapman and Cutler, counsel to the Indenture Trustee, regarding organization, authority, due execution, enforceability, certain other corporate matters with respect to the Indenture Trustee;

(E)     Opinion of Richards Layton and Finger, counsel to the Owner Trustee, regarding certain corporate matters;

(F)     Opinion of Orrick with respect to creation of security interest granted by the Issuer to the Indenture Trustee for the benefit of the Noteholders under the Indenture;

(G)     Opinion of Burr & Forman LLP, regarding perfection of security interest granted by the Seller to the Transferor;

(H)     Opinion of Orrick regarding true sale of receivables by the Seller to the Transferor under the Receivables Purchase Agreement;

(I)     Opinion of Orrick regarding substantive consolidation;

(J)     Opinion of Orrick to the effect that, for U.S. federal income tax purposes, the Issuer will not be treated as an association or publicly traded partnership taxable as a corporation; and

13

(K)     Opinion of Orrick regarding certain receivership matters in connection with the transfer of Receivables to the Seller from The Bank of Missouri.

SECTION 3.2     Conditions Precedent on each Increase Date. On any Increase Date, each Investor shall purchase and pay for the initial Note Principal Balance Increase, in the case of the Initial Funding Date, or any Note Principal Balance Increases, in the case of any Increase Date, provided that each of the following conditions have been satisfied or waived.

(a)     Not less than ten (10) Business Days prior to the proposed Increase Date, the Agent shall have received a duly completed Increase Notice.

(b)     On the Increase Date, the following statements shall be true and the Transferor, the Issuer and the Servicer shall be deemed to have certified, each as to itself only and not as to any other, that:

(i)     Its representations and warranties contained in Section 4.1 and each other Transaction Document are true and correct on and as of such day as though made on and as of such date;

(ii)     With respect to the Issuer, no event has occurred and is continuing, or would result from such Transaction which constitutes an Early Redemption Event;

(iii)     On and as of such day, after giving effect to such purchase of the Note Principal Balance Increase, the Class A-3 Note Principal Balance, Class A-4 Note Principal Balance and Class A-5 Note Principal Balance will not exceed the Class A-3 Maximum Principal Amount, Class A-4 Maximum Principal Amount and Class A-5 Maximum Principal Amount, respectively;

(iv)     On and as of such day, it has performed all of the agreements contained in this Agreement and each other Transaction Document to which it is a party to be performed by such person at or prior to such day and to the extent each is a party thereto;

(v)     No Law shall prohibit, and no order, judgment or decree of any federal, state or local court or governmental body, agency or instrumentality shall prohibit or enjoin, the paying of such Note Principal Balance Increase by the Investors in accordance with the provisions hereof;

(vi)     With respect to the Issuer, no Class A-3 Monthly Interest, Class A-4 Monthly Interest, Class A-5 Monthly Interest, Class A-3 Additional Interest, Class A-4 Additional Interest, Class A-5 Additional Interest, other fees and costs due and payable to the Investors pursuant to this Agreement and the other Transaction Documents or any unreimbursed Reduction Amounts shall be outstanding as of such Increase Date;

(vii)     The Revolving Period is in effect;

(viii)     No suit, action or other proceeding, investigation or injunction, or final judgment relating thereto, shall be pending or, to its knowledge, threatened before any court or governmental agency, seeking to restrain or prohibit or to obtain damages or other relief in connection with any of the Transaction Documents, the Receivable Sales Agreement, the Program Management Agreement or the consummation of the transactions contemplated thereby;

14

(ix)     The Credit Card Guidelines shall not have been amended or otherwise modified in a manner that could reasonably be expected to have a Material Adverse Effect on the Issuer or the Receivables;

(x)     Both before and immediately following such purchase, (a) the Class B Note Principal Balance shall be no less than 5% of the sum of (i) the Note Principal Balance and (ii) the outstanding principal balance of the Series 2018-Two Notes; and (b) the Series Adjusted Subordinated Transferor Amount shall be no less than Series Required Transferor Amount;

(xi)     Both before and immediately following such purchase, the aggregate unpaid principal balance of all Series of Notes issued under the Indenture or any Indenture Supplement shall not exceed the Net Eligible Receivables Balance as of such date;

(xii)     All conditions precedent to a “Note Principal Balance Increase” under Series 2017-One set forth in the Series 2017-One Purchase Agreement have been satisfied or waived; and

(xiii)     With respect to the Initial Funding Date, certificates of the chief financial officer (or, in the absence of a chief financial officer, the chief executive officer) of the Transferor, in his or her capacity as such and not in his or her individual capacity, in form and substance satisfactory to the Agent in its sole discretion (each, a “Solvency Certificate”) certifying that the Transferor and the Issuer will be Solvent following the consummation on the Initial Funding Date of the transactions contemplated by this Agreement, the Indenture, the Indenture Supplement and the other Transaction Documents to which it is a party, including the transfer by the Transferor to the Issuer of the Transferred Assets.

ARTICLE IV 

REPRESENTATIONS AND WARRANTIES

SECTION 4.1     Representations and Warranties of the Issuer, the Transferor and the Servicer. As of the Closing Date and as of any Increase Date, each of the Transferor, the Issuer and the Servicer, as to itself only and not as to any other, represents and warrants to the Agent, the Investors, that all representations and warranties made by it in this Section 4.1, with respect to itself, are true and correct as of such day as though made on and as of such day:

(a)     Organization and Good Standing. The Transferor is a corporation duly organized and validly existing in good standing under the laws of the State of Nevada. The Servicer is a corporation duly organized and validly existing in good standing under the laws of the State of Georgia. Each of the Transferor and the Servicer has full corporate power, authority and legal right to execute, deliver and perform its obligations under this Agreement and any other Transaction Documents to which it is a party. The Issuer is a business trust duly organized and validly existing in good standing under the laws of the State of Nevada and has full power, authority and legal right to (i) execute, deliver and perform its obligations under this Agreement and any other Transaction Documents to which it is a party, (ii) own its properties and assets (including, without limitation, the Trust Estate) and carry on its business as now being conducted and as contemplated in the Transaction Documents, (iii) consummate the transactions contemplated under the Transaction Documents to which it is a party and (iv) grant the Liens with regard to the Trust Estate pursuant to the Transaction Documents to which it is a party.

15

(b)     Due Qualification. Each of the Issuer, the Transferor and the Servicer, as applicable, is duly qualified to do business and is in good standing as a business trust or a corporation, as applicable, and has obtained all necessary licenses and approvals with respect thereto, in each jurisdiction in which failure to so qualify or to obtain such licenses and approvals would have a Material Adverse Effect on the Issuer, the Transferor or the Servicer, as applicable.

(c)     Due Authorization. The execution and delivery by the Issuer, the Transferor and the Servicer, as applicable, of this Agreement and the other Transaction Documents to which it is a party, and the consummation by the Issuer, the Transferor and the Servicer, as applicable, of the transactions provided for in this Agreement and the other Transaction Documents to which it is a party have been duly authorized by the Issuer, the Transferor and the Servicer, as applicable, by all necessary action on the part of the Issuer, the Transferor and the Servicer, as the case may be.

(d)     No Violation. The execution and delivery by it of this Agreement and the other Transaction Documents to which it is a party, the performance by it of the transactions contemplated hereby and thereby and the fulfillment of the terms hereof and thereof applicable to the Issuer, the Transferor or the Servicer, as the case may be, will not 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, or an event, fact, condition or circumstance which, with notice or passage of time, or both, would constitute or result in a conflict, breach or default under, any Requirements of Law applicable to the Issuer, the Transferor or the Servicer, as applicable, the Nevada certificate of trust or the Trust Agreement of the Issuer or any indenture, contract, agreement, mortgage, deed of trust, or other instrument to which the Issuer, the Transferor or the Servicer, as applicable, is a party or by which it or any of its respective property is bound.

(e)     Binding Obligation. This Agreement and the other Transaction Documents to which it is a party constitute legal, valid and binding obligations of the Issuer, the Transferor and the Servicer, as applicable, enforceable against such party in accordance with their respective terms, except as enforceability may be limited by applicable Debtor Relief Laws or other similar laws now or hereafter in effect, affecting the enforcement of the rights of creditors generally and except as such enforceability may be limited by general principles of equity (whether considered in a proceeding at law or in equity).

16

(f)     No Proceedings. There are no proceedings or investigations pending or, to the knowledge of the Issuer, the Transferor or the Servicer, as applicable, threatened, against the Issuer, the Transferor or the Servicer, as applicable, nor, to the knowledge of the Issuer, the Transferor or the Servicer, are there any proceedings or investigations pending or threatened against the Account Owner, before any court, regulatory body, administrative agency, or other tribunal or governmental instrumentality (i) asserting the invalidity of this Agreement or the other Transaction Documents to which it is a party, (ii) seeking to prevent the consummation of any of the transactions contemplated by this Agreement or the other Transaction Documents to which it is a party, (iii) seeking any determination or ruling that, in the reasonable judgment of the Issuer, the Transferor or the Servicer, as applicable, would materially and adversely affect the performance by the Issuer, the Transferor or the Servicer, as applicable, of its obligations under this Agreement or the other Transaction Documents 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 or the other Transaction Documents to which it is a party, (v) seeking any determination or ruling that, if adversely determined, would materially and adversely affect the condition (financial or otherwise), business, properties or operations of the Issuer, the Transferor or the Servicer, as applicable. None of the Issuer, the Transferor or the Servicer or, to the knowledge of the Issuer, the Transferor or the Servicer, the Account Owner, is party or subject to any order, writ, injunction, judgment or decree of any Governmental Authority, nor is there any action, suit, proceeding, inquiry or investigation by any Governmental Authority, in either case, that could reasonably be expected to prevent or materially delay the consummation by the Issuer, the Transferor, the Servicer or the Account Owner of the transactions contemplated herein and in the Transaction Documents. None of the Issuer, the Transferor or the Servicer or, to the knowledge of the Issuer, the Transferor or the Servicer, the Account Owner, has any existing accrued and/or unpaid penalties, fines or sanctions imposed by and owing to any Governmental Authority or any other governmental payee, and in the case of the Servicer only, which is not currently being contested in good faith by appropriate proceedings and against which adequate reserves have been established in accordance with GAAP consistently applied.

(g)     All Consents Required. All approvals, authorizations, consents, orders or other actions of any Person or of any Governmental Authority required to be obtained by the Transferor, the Issuer and the Servicer, as applicable, on or prior to the date hereof in connection with the execution and delivery by the Transferor, the Issuer and the Servicer, as applicable, of this Agreement and the other Transaction Documents to which it is a party, the performance by the Transferor, the Issuer and the Servicer, as applicable, of the transactions contemplated by this Agreement and the other Transaction Documents to which it is a party and the fulfillment by the Transferor, the Issuer and the Servicer of the terms hereof and thereof applicable to the Transferor, the Issuer or the Servicer, as applicable, have been obtained and are in full force and effect.

(h)     Solvency: Transferor. Each of the Transferor and the Issuer will be Solvent following the consummation on each Increase Date of the transactions contemplated by this Agreement, the Indenture, the Indenture Supplement and the other Transaction Documents to which it is a party, including the transfer by the Transferor to the Issuer of the Transferred Assets. The transfers of the Receivables to the Issuer for the benefit of the Noteholders are not being made by the Transferor with actual intent to hinder, delay or defraud itself or its creditors.

17

(i)     Taxes. The Transferor and the Issuer have filed or caused to be filed all Tax returns (federal, state and local) required to be filed. The Transferor and the Issuer have paid or caused to be paid all present Taxes, assessments and other governmental charges made against it or any of its property (other than any amount of Tax the validity of which is currently being contested in good faith by appropriate proceedings and with respect to which reserves in accordance with generally accepted accounting principles have been provided on the books of the Transferor), and, to the best of the Transferor’s and the Issuer’s knowledge, no Tax lien has been filed and no claim is being asserted, with respect to any such Tax, fee or other charge.

(j)     ERISA. The Transferor, the Issuer and their respective ERISA benefit plans are in compliance with ERISA in all material respects.

(k)     Use of Proceeds. Neither the Transferor nor the Issuer is engaged in the business of extending credit for the purposes of purchasing or carrying margin stock, and no proceeds of any acquisition of an interest in the Notes, directly or indirectly, will be used for a purpose that violates, or would be inconsistent with, Regulations T, U and X promulgated by the Federal Reserve Board from time to time.

(l)     Reports Accurate. No information, exhibit, financial statement, document, book, record or report furnished by the Transferor, the Issuer or the Servicer, as applicable, to the Agent in connection with this Agreement, any other Transaction Documents to which it is a party or any transaction contemplated hereby is inaccurate in any material respect as of the date it is dated or as of the date so furnished, and no such document contains any untrue statement of a material fact or omits to state a material fact or any fact necessary to make the statements contained therein, in light of the circumstances under which they were made, not misleading.

(m)     Place of Business. As of the Closing Date, the principal place of business and chief executive office of the Transferor is located at 101 Convention Drive, Suite 850-20A, Las Vegas, Nevada 89109, the principal place of business and chief executive office of the Issuer is located at 3993 Howard Hughes Parkway, Suite 250, Las Vegas, Nevada 89169, and the principal place of business and chief executive office of the Servicer is located at Five Concourse Parkway, Suite 300, Atlanta, Georgia 30346, and the office where the Servicer keeps all of the instruments, documents, agreements, books and records relating to the Accounts and the Receivables is located in DeKalb County, Georgia.

(n)     Tradenames. As of the Closing Date, the Transferor has, within the last five (5) years, operated only under the tradenames identified in Exhibit B hereto, and, within the last five (5) years, has not changed its name, merged with or into or consolidated with any other corporation or been the subject of any bankruptcy, insolvency or similar proceeding applicable to the Transferor.

(o)     Value. The Transferor has received or will receive reasonably equivalent value in return for the transfer of its interest in the Receivables and the other property transferred pursuant to the Transfer and Servicing Agreement.

(p)     Security Interest. The Transferor has granted a security interest (as defined in the UCC) to the Issuer in the Receivables, which is enforceable in accordance with applicable law. The Issuer has granted a security interest (as defined in the UCC) to the Indenture Trustee, in the Receivables, which is enforceable in accordance with applicable law. The Indenture Trustee has a first priority perfected security interest in the Receivables. All filings (including, without limitation, such UCC filings) as are necessary in any jurisdiction to perfect the interest of the Indenture Trustee in the Receivables have been made. As of the Closing Date, no financing statement naming the Issuer as “Debtor” and relating to any of the Trust Estate is on file in any public office except those on behalf of the Indenture Trustee and those related to the Permitted Liens. As of the Closing Date, the Issuer is not party to any agreement, document or instrument that conflicts with this Section 4.1(p).

18

(q)     Investment Company Act. Neither the Transferor nor the Issuer is or is controlled by, an “investment company” within the meaning of the 1940 Act.

(r)     No Early Redemption Event or Event of Default. After giving effect to issuance of the Notes, and the purchase on each Increase Date of each Note Principal Balance Increase, no Early Redemption Event (with respect to the Issuer under Series 2017-One or Series 2018-Three), Event of Default (with respect to Series 2017-One or Series 2018-Three) or Servicer Default (with respect to the Servicer) has occurred and is continuing, and no event, act or omission has occurred and is continuing which, with the lapse of time, the giving of notice or both, would constitute such an Early Redemption Event (with respect to the Issuer under Series 2017-One or Series 2018-Three), Event of Default (with respect to Series 2017-One or Series 2018-Three) or Servicer Default (with respect to the Servicer).

(s)     No Registration under the Securities Act, Trust Indenture Act. With respect to the Issuer, it is not necessary in connection with the offer, sale and delivery of the Offered Notes to the Investors to register the Offered Notes under the Securities Act. With respect to the Issuer, the Indenture and the Indenture Supplement are not required to be qualified under the Trust Indenture Act of 1939.

(t)     Additional Representations and Warranties. The representations and warranties of the Transferor in the Transfer and Servicing Agreement, with regard to itself as Transferor and with respect to the Receivables (individually and in the aggregate), are true and correct as of the applicable date set forth in the Transfer and Servicing Agreement. The representations and warranties of the Servicer in the Indenture, the Indenture Supplement and the Transfer and Servicing Agreement, with regard to itself as Servicer, are true and correct as of the applicable date set forth in the Indenture, the Indenture Supplement or the Transfer and Servicing Agreement. The representations and warranties of the Issuer in the Indenture, the Indenture Supplement and the Transfer and Servicing Agreement with regard to itself as Issuer, are true and correct as of the applicable date set forth in the Indenture, the Indenture Supplement or the Transfer and Servicing Agreement.

(u)     Credit Card Guidelines. Since December 16, 2016, there have been no material changes in the Credit Card Guidelines other than as permitted hereunder.

(v)     Liens. Except as set forth herein or in the other Transaction Documents, the execution and delivery by it of this Agreement and the other Transaction Documents to which it is a party, the performance by it of the transactions contemplated hereby and thereby and the fulfillment of the terms hereof and thereof applicable to the Issuer will not result in the creation or imposition of any Lien of any nature upon any of the properties or assets of the Issuer.

19

(w)     Transfer and Servicing Agreement. The Transfer and Servicing Agreement is the only agreement pursuant to which the Issuer purchases the Receivables and the related Transferred Assets. The Issuer has furnished to the Agent a true, correct and complete copy of the Transfer and Servicing Agreement. The purchase by the Issuer under the Transfer and Servicing Agreement constitutes a sale or the grant of a security interest enforceable against creditors of the Transferor. There is no provision in the Transfer and Servicing Agreement that would restrict the ability of the Issuer to collaterally assign its rights thereunder to the Indenture Trustee.

(x)     Subsidiaries, Capitalization and Ownership Interests. The Issuer has no subsidiaries as of the Closing Date. The outstanding equity interests in the Issuer are directly owned (both beneficially and of record) by the Transferor. The outstanding ownership or voting interests of the Issuer have been duly authorized and validly issued. Schedule 4.1(x) attached hereto, lists all beneficiaries, administrators, managers or managing members or directors of the Issuer as of the Closing Date. Except as disclosed pursuant to Section 4.1(ff), the Issuer does not (i) own any Investment Property or (ii) own any interest or participate or engage in any joint venture, partnership or similar arrangements with any Person.

(y)     Title to Receivables. Upon the sale of the Receivables to the Issuer pursuant to the Transfer and Servicing Agreement, the Issuer will be the lawful owner of, and have good title to, or have security interest in, each Receivable, free and clear of any Liens (other than Permitted Liens).

(z)     Other Agreements. None of the Issuer, the Transferor or the Servicer is in default in the performance, observance or fulfillment of any obligation, covenant or condition contained in any agreement, document or instrument to which it is a party or to which any of its properties or assets are subject, nor is there any event, fact, condition or circumstance which, with notice or passage of time or both, would constitute or result in a conflict, breach, default or event of default under, any of the foregoing. As of the Series 2017-One Closing Date, each of the Issuer and the Transferor was newly formed. As of the Closing Date, each of the Issuer and the Transferor is not a party to any material agreements other than the Transaction Documents, the “Transaction Documents” (as defined in the Series 2017-One Purchase Agreement), the “Transaction Documents” (as defined in the Series 2018-One Purchase Agreement) and the “Transaction Documents” (as defined in the Series 2018-Two Purchase Agreement).

(aa)     Financial Statements and Reports. Any financial statements and financial information relating to the Transferor or Holdings delivered to Agent by the Transferor (a) are consistent with the books of account and records of the Transferor or Holdings, as applicable, (b) have been prepared in accordance with GAAP (except to the extent consented to in writing by the Agent after disclosure in writing by the Transferor to the Agent), on a consistent basis throughout the indicated periods, except that the unaudited financial statements contain no footnotes or year-end adjustments, and (c) present fairly in all material respects the financial condition, assets and liabilities and results of operations of the Transferor or Holdings, as applicable, at the dates and for the relevant periods indicated in accordance with GAAP (except to the extent consented to in writing by the Agent after disclosure in writing by the Transferor to the Agent) on a basis consistently applied. Neither the Transferor nor Holdings has any material obligations or liabilities of any kind required to be disclosed therein that are not disclosed in such financial statements, and since the date of the most recent financial statements submitted to Agent pursuant to Section 4.4, there has not occurred any Material Adverse Effect with respect to the Transferor, the Servicer, the Seller, the Issuer or Holdings or, to the knowledge of the Transferor, the Servicer or the Issuer, the Account Owner.

20

(bb)     Compliance with Law. The Issuer, the Transferor and the Servicer and, to the knowledge of the Issuer, the Transferor and the Servicer, the Account Owner (in the case of the Account Owner, solely with respect to the Receivables, the sale of the Receivables and the origination of the Receivables) (a) are in compliance with all Requirements of Law, and (b) are not in violation of any order of any Governmental Authority or other board or tribunal, except, in the case of both (a) and (b), where noncompliance or violation could not reasonably be expected to be, have or result in a Material Adverse Effect on such Person. None of the Issuer, the Transferor or the Servicer nor, to the knowledge of the Issuer, the Transferor and the Servicer, the Account Owner (in the case of the Account Owner, solely with respect to the Receivables, the sale of the Receivables and the origination of the Receivables) have received any notice that the Issuer, the Transferor, the Servicer or the Account Owner is not in material compliance in any respect with any of the requirements of any of the foregoing. The Issuer has not established and does not maintain or contribute to any “benefit plan” that is covered by Title IV of ERISA. The Issuer, the Transferor and the Servicer and, to the knowledge of the Issuer, the Transferor and the Servicer, the Account Owner, have maintained in all material respects all records required to be maintained by any applicable Governmental Authority. Since its formation, the Issuer has not engaged, directly or indirectly, in any business other than the activities set forth herein and in the other Transaction Documents and in the documents relating to other Series issued pursuant to the Indenture.

(cc)     Licenses and Permits. Each of the Issuer, the Transferor and the Servicer and, to the knowledge of the Issuer, the Transferor and the Servicer, the Account Owner (in the case of the Account Owner solely with respect to the Receivables, the sale of the Receivables and the origination of the Receivables) are in compliance with and have all Permits necessary or required by Requirements of Law or any Governmental Authority for the operation of their respective businesses as presently conducted and as proposed to be conducted except where noncompliance, violation or lack thereof is not reasonably expected to have or result in a Material Adverse Effect on the Issuer, the Transferor, the Servicer or the Account Owner. All Permits necessary or required by Requirements of Law or Governmental Authority for the operation of the Issuer’s, the Transferor’s, the Servicer’s and, to the knowledge of the Issuer, the Transferor and the Servicer, the Account Owner’s (in the case of the Account Owner, solely with respect to the Receivables, the sale of the Receivables and the origination of the Receivables) businesses are not in known conflict with the rights of others, except where such conflict or lack of being in full force and effect is not reasonably expected to have or result in a Material Adverse Effect on the Issuer, the Transferor, the Servicer or the Account Owner.

(dd)     Existing Indebtedness, Investments, Guarantees and Certain Contracts. The Issuer does not (a) have any outstanding Indebtedness, except Indebtedness incurred under the Transaction Documents or documents related to other Series issued pursuant to the Indenture, or (b) own or hold any equity investments in, or have any outstanding guarantees for, the obligations of any other Person.

21

(ee)     Affiliated Agreements. Except as set forth in Schedule 4.1(ee) attached hereto, there are no existing or proposed agreements or transactions between the Issuer, on the one hand, and the Issuer’s members, managers, administrators, trustees, managing members, investors, officers, directors, stockholders, other equity holders, employees, or Affiliates or any members of their respective families, on the other hand.

(ff)     Deposit Accounts, Securities Accounts and other Investment Property. Schedule 4.1(ff) attached hereto, lists all of the Issuer’s Deposit Accounts, Securities Accounts and other Investment Property as of the Closing Date.

(gg)     Non-Subordination. The Secured Obligations are not subordinated in any way to any other obligations of the Issuer or to the rights of any other Person.

(hh)     Servicing. The Issuer has entered into the Transfer and Servicing Agreement with the Servicer pursuant to which the Issuer has engaged the Servicer, as servicer to monitor, manage, enforce and collect the applicable Receivables and disburse any collections in respect thereof as provided by the Transfer and Servicing Agreement.

(ii)     Broker’s or Finder’s Commissions. No broker’s, finder’s or placement fee or commission will be payable to any broker or agent engaged by the Issuer, the Transferor or the Servicer or any of their respective officers, directors or agents with respect to the transactions contemplated by this Agreement and the other Transaction Documents. The Transferor agrees to indemnify the Agent and the Investors and hold each harmless from and against any claim, demand or liability for broker’s, finder’s or placement fees or similar commissions, whether or not payable by the Transferor, incurred or alleged to have been incurred in connection with such transactions, other than any broker’s or finder’s fees payable to Persons engaged by the Agent and/or the Investors without the knowledge of the Transferor.

(jj)     Anti-Terrorism; OFAC; AML

(i)     For purposes of this Section: “Transaction Person” includes the Issuer, the Transferor, the Servicer, any Person controlling or controlled by the Issuer, the Transferor or the Servicer, any Person having a beneficial interest in the Issuer, the Transferor or the Servicer, and any Person for whom the Issuer, the Transferor or the Servicer is acting as agent or nominee in connection with this transaction; “Sanctions” means any economic sanctions law, regulation, Executive Order, program or list administered or enforced by the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”), including without limitation Section 1 of EO 13224 and OFAC’s Specially Designated Nationals and Blocked Persons List; “EO 13224” means Executive Order 13224 of September 23, 2001 Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001); “Sanctioned Person” means any person whose property or interest in property is blocked or subject to blocking, or with whom dealing is otherwise prohibited or restricted, pursuant to any Sanctions; and “Sanctioned Country” means country or territory that is, or whose government is, the subject of comprehensive Sanctions (currently including, without limitation, Cuba, Iran, North Korea, Sudan, Syria and the Crimea region of Ukraine).

22

(ii)     No Transaction Person (1) is a Sanctioned Person; (2) engages in any dealings or transactions prohibited by Section 2 of EO 13224 or, to the knowledge of the Issuer, the Transferor or the Servicer, is otherwise a known associate based on publicly available information with any such Sanctioned Person in any manner that violates Section 2 of such executive order; or (3) to the knowledge of the Issuer, the Transferor or the Servicer, is located, organized or resident in a Sanctioned Country. To the knowledge of the Issuer, the Transferor and the Servicer, no part of the proceeds of the Notes will be used by the Issuer or the Transferor or lent, contributed or otherwise made available to any other Person, directly or indirectly (1) to fund any activities or business of or with any Sanctioned Person or in any Sanctioned Country or (2) in any other manner that would result in a violation of any Sanctions by the Agent, the Investors or any other Person.

(iii)     To the knowledge of the Issuer, the Transferor and the Servicer, no part of the proceeds of the Notes will be used, directly or indirectly, for any payments (i) to fund or facilitate any money laundering or terrorist financing activities or business; or (ii) in any other manner that would cause or result in violation of Patriot Act laws, rules or regulations.

(iv)     To the knowledge of the Issuer, the Transferor and the Servicer, no part of the proceeds of the Notes will be used, directly or indirectly, for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended, or any other applicable law, rule or regulation prohibiting bribery or corruption.

(v)     The Issuer, the Transferor and the Servicer acknowledge by executing this Agreement that the Agent has notified the Issuer, the Transferor and the Servicer that, pursuant to the requirements of the Patriot Act, the Agent and each Investor is required to obtain, verify and record such information as may be necessary to identify the Issuer, the Transferor, the Servicer, or any Person owning twenty-five percent (25.00%) or more of the equity interests of the Transferor (including, without limitation, the name and address of such Person) in accordance with the Patriot Act.

(kk)     Other Business Activity. The Issuer has no other business activity except as contemplated in this Agreement, the other Transaction Documents and the documents relating to other Series issued pursuant to the Indenture and is not party to any other debt, financing or other material transaction or agreement other than the Transaction Documents or documents related to any other Series issued pursuant to the Indenture.

(ll)     Ordinary Course of Business. Each payment of interest and principal on the Offered Notes will have been (i) in payment of a debt incurred in the ordinary course of business or financial affairs on the part of the Issuer and (ii) made in the ordinary course of business or financial affairs of the Issuer.

(mm)     NYC Debt Collector’s Law. The execution, delivery and performance by the Issuer of this Agreement and the other Transaction Documents to which the Issuer is a party do not and will not result in the Issuer being deemed a “debt collection agency” or require licensing under, or violate any provision of the NYC Debt Collector’s Law and the Issuer is in compliance in all respects with any applicable provisions of the NYC Debt Collector’s Law.

23

(nn)     Schedule. The information contained in the schedule of Receivables attached to the report delivered pursuant to Section 4.4(a)(iii) as supplemented from time to time, and in each data tape or data file provided to the Agent pursuant to Section 4.4 is true, correct and complete in all material respects.

The representations and warranties set forth in this section shall survive the purchase of any portion of the Offered Notes by an Investor. Upon discovery by the Transferor, the Servicer, the Issuer, the Agent or any Investor of a breach of any of the foregoing representations and warranties, the party discovering such breach shall give prompt written notice to the others.

SECTION 4.2     Covenants of the Issuer, the Transferor and the Servicer. Each of the Transferor, the Issuer and the Servicer covenants, with respect to itself only and not as to any other, as follows:

(a)     Compliance with Laws and Other Obligations, Preservation of Corporate or Trust Existence. Each of the Issuer, the Transferor and the Servicer, as applicable, will comply in all material respects with all applicable laws, rules, regulations and orders and preserve and maintain its corporate or trust existence, rights, franchises, qualifications and privileges, except to the extent that failure to do so could not reasonably be expected (i) to have a Material Adverse Effect on the Issuer, the Transferor or the Servicer, as applicable, or on the transaction documented under this Agreement, or (ii) have an Adverse Effect. The Transferor and the Issuer will comply, in all material respects, with all acts, rules, regulations, orders, decrees and directions of any Governmental Authority applicable to the Accounts or any part thereof, provided, however, that the Issuer and the Transferor may contest any act, rule, regulation, order, decree or direction in any reasonable manner which will not materially and adversely affect the rights of the Indenture Trustee in the Receivables or the collectability of the Receivables. Each of the Issuer, the Transferor and the Servicer shall (A) pay all Taxes, assessments, fees, governmental charges, claims for labor, supplies, rent and all other obligations or liabilities of any kind for which it is liable when due and payable, except liabilities being contested in good faith and against which adequate reserves have been established in accordance with GAAP consistently applied and (B) properly file all reports required to be filed by it with any Governmental Authority, except under clause (B) where the failure to file could not reasonably be expected to be, have or result in a Material Adverse Effect on such Person.

(b)     Organization. Each of the Issuer, the Transferor and the Servicer, as applicable, will preserve and maintain its existence as a trust or as a corporation, as applicable, duly organized and existing under the laws of the State of Nevada, in the case of the Transferor and the Issuer, and the State of Georgia, in the case of the Servicer; provided, however, that the Issuer, the Transferor and the Servicer, as applicable, may consolidate or merge to the extent permitted by the Transaction Documents.

(c)     Books and Records. The Servicer, will, at its own cost and expense, maintain Records with respect to the Accounts and the Receivables and copies of all documents relating to each Account as custodian for the Indenture Trustee, and prior to the Closing Date or the Increase Date, indicate clearly and unambiguously in its computer files that the Receivables have been transferred and assigned to the Indenture Trustee for the benefit of the Noteholders pursuant to the Transaction Documents or documents related to any other Series issued under the Indenture.

24

(d)     Access to Information. From the Closing Date until six (6) months after the termination of this Agreement in accordance with Section 6.1, each of the Issuer, the Transferor and the Servicer, as applicable, will, at any time and from time to time during regular business hours, on at least five (5) Business Days (or if an Early Redemption Event has occurred, one Business Day) notice to the Issuer, the Transferor or the Servicer, as the case may be, permit the Agent on behalf of the Investors, or their agents or representatives (i) to examine all books, records and documents (including computer tapes and disks) in the possession or under the control of the Issuer, the Transferor or the Servicer, as the case may be, relating to the Receivables (other than names of account holders and Proprietary Information, including strategic plans for the Servicer’s credit card business), including the forms of Credit Card Agreements under which such Receivables arise, (ii) to engage a third-party to perform a loan to file review of the Receivables and (iii) to visit the offices and properties of the Issuer, the Transferor or the Servicer, as applicable, for the purpose of examining such materials described in clause (i) above and observing and discussing collection practices and business and financial prospects generally. Unless an Early Redemption Event has occurred, the Agent and the Investors shall be limited to one visit per year, which visit shall be at the Issuer’s, the Transferor’s or the Servicer’s, as applicable, reasonable cost and expense (and otherwise at the expense of the Investors), in no event to exceed Twenty-Five Thousand and No/100 Dollar ($25,000.00) per annum in the aggregate when combined with any reimbursement amounts due and payable by the Transferor pursuant to Section 2.3(c), unless a first examination indicates material deficiencies and an additional visit is required, in the sole discretion of the Agent; provided, however, any visits following the termination of this Agreement shall be at the expense of the Agent. In addition, each of the Issuer, the Transferor and the Servicer, as applicable, will, instruct its independent accountants and financial advisors to cooperate with the Agent and its agents and representatives in their investigation pursuant to this Section 4.2(d). Any information obtained by the Agent and the Investors pursuant to this Section 4.2(d) shall be held in confidence by the Agent and the Investors in accordance with the provisions of Section 6.9 hereof.

(e)     Credit Card Agreements. Each of the Transferor and the Issuer shall comply with and perform its obligations, if any, under the applicable Credit Card Agreements relating to the Accounts, except to the extent that failure to do so could not reasonably be expected (i) to have a Material Adverse Effect on the Transferor or the Issuer, as applicable, or on the transaction documented under this Agreement, or (ii) have an Adverse Effect.

(f)     Notice of Liens. The Transferor and the Issuer shall advise the Agent promptly, in reasonable detail, of any Lien asserted or claim made against any of the Receivables (other than any Lien permitted hereunder or under the Indenture). The Transferor and the Issuer shall take all actions, and execute and deliver all documents and instruments, necessary to promptly release and terminate any such Liens.

25

(g)     Change of Location. Each of the Transferor and the Issuer, as applicable, (i) will not without providing thirty (30) days prior written notice to the Agent and without filing any new financing statements and such amendments to any previously filed financing statements as the Agent may reasonably require, change its name, type of organization or jurisdiction of organization, (ii) will not delete or otherwise impair the marking of its Records referred to in the Transfer and Servicing Agreement and (iii) will promptly take all actions required of each relevant jurisdiction in order to continue the first priority perfected security interest of the Indenture Trustee in the Trust Estate.

(h)     Other Actions. Following prior request from the Agent, each of the Issuer, the Transferor and the Servicer (but only to the extent of its obligations as Servicer under the Transaction Documents) shall make available to the Agent copies of any and all documents, instruments, materials and other items that relate to, secure, evidence, give rise to or generate or otherwise involve the Trust Estate, including, without limitation, the Receivables, in each case to the extent such Person has access to such documents, instruments, materials and other items without incurring any significant cost, time or expense. Each of the Transferor, the Issuer and the Servicer (but only to the extent of its obligations as Servicer under the Transaction Documents), as applicable, shall execute and deliver to the Agent on behalf of the Investors all such documents and instruments and do all such other acts and things as may be necessary or reasonably required by the Agent, acting on behalf of the Investors, or the Indenture Trustee to enable the Indenture Trustee or the Agent on behalf of the Investors to exercise and enforce their respective rights under this Agreement or the Transaction Documents and to realize thereon, and the Transferor, the Servicer (but only to the extent of its obligations as Servicer under the Transaction Documents) and the Issuer shall record and file and re-record and refile all such documents and instruments, at such time or times, in such manner and at such place or places, as may be necessary or reasonably required by the Indenture Trustee or the Agent to validate, preserve, perfect and protect the position of the Indenture Trustee, including, without limitation, the Indenture Trustee’s first priority (other than with respect to property or assets covered by Permitted Liens) perfected Lien on the Trust Estate, or the Agent under this Agreement, the Indenture, the Indenture Supplement and the Receivables Purchase Agreement (to the extent the Transferor, the Issuer or the Servicer is a party thereto), and the Transferor, the Issuer and the Servicer shall maintain this Agreement as part of its official records; provided, however, that none of the Transferor, the Issuer or the Servicer will have any obligation to prepare or file financing statements in the names of the Investors. Each of the Issuer, the Transferor and the Servicer (but only to the extent of its obligations as Servicer under the Transaction Documents other than this Agreement) shall defend the Trust Estate and the Indenture Trustee’s first priority (other than with respect to property or assets covered by Permitted Liens) perfected Lien thereon against all claims and demands of all Persons at any time claiming the same or any interest therein adverse to the Indenture Trustee, and pay all out-of-pocket costs and expenses (including, without limitation, reasonable attorneys’ fees and expenses) in connection with such defense.

(i)     Transfer of Receivables. The Transferor shall cause the Seller to comply with its agreements and obligations pursuant to the Receivables Purchase Agreement, including the obligation set forth in Section 5.01(l) thereof. The Issuer shall enforce its rights with respect to all obligations of the Transferor and the Servicer under the Transfer and Servicing Agreement.

26

(j)     Resignation or Removal of the Indenture Trustee or Administrator. The Transferor, the Issuer or the Servicer, as applicable, promptly shall notify the Agent on behalf of the Investors of any resignation or removal of the Indenture Trustee under the Indenture or the Administrator under the Administration Agreement. The Issuer shall not remove the Indenture Trustee or Administrator or appoint any successor thereto without the prior written consent of the Agent, which consent shall not be unreasonably withheld or delayed.

(k)     No Change in Business or Credit Card Guidelines. None of the Transferor, the Issuer or the Servicer will make any change in the character of its business or, except pursuant to any Requirements of Law, in the Credit Card Guidelines, which change would have a Material Adverse Effect on the Transferor, the Issuer or the Servicer, as applicable.

(l)     Amendments to the Transaction Documents. Each of the Transferor, the Issuer and the Servicer, as applicable, shall not terminate (except in accordance with the terms thereof and only if at the time of such termination none of the Class A Note Principal Balance or other amounts payable to the Agent or the Investors hereunder are unpaid), amend, waive any right or obligation of any party under or any condition precedent under, or otherwise modify any Transaction Document to which it is a party without the prior written consent of the Agent on behalf of the Investors, which consent shall not be unreasonably withheld or delayed unless such amendment or waiver is of the Indenture Supplement in which case the Agent’s consent shall be in its sole discretion to any change other than an administrative change which does not have an economic impact on the Investors. The Transferor shall not enter into any receivables purchase agreement, including an agreement matching the description in clause (ii) of the definition of Receivables Purchase Agreement, without the prior written consent of the Agent on behalf of the Investors, which consent shall not be unreasonably withheld or delayed.

(m)     No Additional Series Without Consent. Other than a Series of notes satisfying the requirements of a Senior Facility set forth on Exhibit D, Issuer will not issue any additional Series of notes under the Indenture or any Indenture Supplement without obtaining the Agent’s prior written consent.

(n)     No Paired Series Without Consent. Series 2018-Three shall not become a Paired Series without the Agent’s prior written consent.

(o)     Conduct of Business and Maintenance of Existence and Assets. Each of the Issuer, the Transferor and the Servicer shall (a) collect (or, in the case of the Issuer and the Transferor, shall cause the Servicer to collect) all Receivables in the ordinary course of business, (b) maintain and keep in full force and effect its existence and all material Permits and qualifications to do business and remain in good standing in its jurisdiction of formation and each other jurisdiction in which the ownership or lease of property or the nature of its business makes such Permits or qualification necessary and in which failure to maintain such Permits or qualification is reasonably expected to have or result in a Material Adverse Effect on such Person and (c) remain in good standing and maintain operations in all jurisdictions in which currently located, except where the failure to remain in good standing or maintain operations could not reasonably be expected to be, have or result in a Material Adverse Effect on such Person.

27

(p)     True Books. Each of the Issuer, the Transferor and the Servicer shall (a) keep true, complete and accurate in all material respects (in accordance with GAAP (except to the extent consented to in writing by the Agent after disclosure in writing to the Agent), except for the omission of footnotes and year-end adjustments in interim financial statements) books of record and account in accordance with commercially reasonable business practices in which true and correct entries are made of all of its dealings and transactions in all material respects; (b) set up and maintain on its books such reserves as may be required by GAAP (except to the extent consented to in writing by the Agent after disclosure in writing to the Agent) with respect to doubtful accounts and all Taxes, assessments, charges, levies and claims and with respect to its business and (c) maintain a revenue recognition method in accordance with GAAP (except to the extent consented to in writing by the Agent after disclosure in writing to the Agent).

(q)     Other Liens. If Liens other than Permitted Liens exist on the Trust Estate, the Issuer or the Transferor shall take all actions, and execute and deliver all documents and instruments, necessary to promptly release and terminate such Liens. Upon discovery of any Lien other than a Permitted Lien, the Issuer or the Transferor shall notify the Agent.

(r)     Special Purpose Entity. Each of the Issuer and the Transferor, at all times:

(i)     shall do all things necessary to observe corporate formalities, and preserve its existence as a single-purpose, bankruptcy-remote entity;

(ii)     shall allocate fairly and reasonably and pay from its own funds the cost of (i) any overhead expenses (including paying for any office space) shared with any of its Affiliates and (ii) any services (such as asset management, legal and accounting) that are provided jointly to it and one or more of its Affiliates;

(iii)     shall maintain and utilize separate invoices and checks bearing its own name;

(iv)     shall be, and at all times hold itself out to the public as, a legal entity separate and distinct (other than for tax purposes) from any other Person;

(v)     shall comply with any other customary rating agency requirements for a single purpose entity as the Agent may require from time to time by notice to the Issuer and the Transferor;

(vi)     shall conduct its business and activities in all respects in compliance with the assumptions contained in the legal opinion delivered pursuant to Section 3.1(a)(viii)(I) of this Agreement;

(vii)     shall not engage in any business or activity other than the ownership, operation and maintenance of the Receivables, the issuance of notes pursuant to the Indenture and activities incidental thereto;

(viii)     shall not acquire or own any material assets other than the Receivables, and such incidental personal property as may be necessary for the operation of the Receivables;

28

(ix)     shall not merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets or change its legal structure, without in each case the Agent’s consent;

(x)     shall not fail to preserve its existence as an entity duly organized, validly existing and in good standing (if applicable) under the laws of the jurisdiction of its organization or formation, and qualifications to do business, or without the prior written consent of the Agent, amend, modify, terminate or fail to comply with the provisions of its partnership agreement, certificate of limited partnership, bylaws, articles of incorporation, operating agreement, articles of organization, certificate of trust, trust agreement or other similar organizational documents, as the case may be;

(xi)     shall not own any Subsidiary (except for the Issuer) or make any equity investment in any Person without the consent of the Agent;

(xii)     except in connection with the servicing of the Receivables, shall not commingle its assets with the assets of any of its members, general partners, shareholders, Affiliates, principals or of any other Person;

(xiii)     shall not incur any Indebtedness for borrowed money, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than the Secured Obligations;

(xiv)     shall not fail to maintain its records, books of accounts and bank accounts separate and apart from those of its members, partners, shareholders, principals and Affiliates or any other Person;

(xv)     shall not, other than its formation documents or any Transaction Documents or documents relating to other Series issued pursuant to the Indenture or as otherwise provided in the Transaction Documents or documents relating to other Series issued pursuant to the Indenture, enter into any contract or agreement with any of its members, general partners, shareholders, principals or Affiliates, or any member, general partner, shareholder, principal or Affiliate of any of the foregoing, except upon terms and conditions that are intrinsically fair and substantially similar to those that would be available on an arms-length basis with third parties other than any of its members, general partners, shareholders, principals or Affiliates, or any member, general partner, shareholder or Affiliate of any of the foregoing;

(xvi)     shall not seek its dissolution or winding up in whole, or in part;

(xvii)     shall not fail to correct any known misunderstandings regarding its separate identity;

(xviii)     other than as provided in the Transaction Documents or documents relating to other Series issued pursuant to the Indenture, shall not hold itself out to be responsible for the Indebtedness or liabilities of another Person;

29

(xix)     shall not, other than owning the Receivables purchased from the Seller pursuant to the Receivables Purchase Agreement, solely in the case of the Transferor, and owning the Receivables purchased from the Transferor pursuant to the Transfer and Servicing Agreement, solely in the case of the Issuer, make any loans or advances to any third party, including any member, general partner, shareholder, principal or Affiliate of the Issuer, the Seller, the Servicer, the Transferor or any member, general partner, shareholder, principal or Affiliate of any of the foregoing;

(xx)     shall not fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations (provided that this clause shall not require any owner of the Transferor or the Issuer to make any contribution of capital to the Transferor or the Issuer); and

(xxi)     shall not, except for invoicing for collections and servicing of Receivables, share any common logo with (i) any of its general partners, shareholders, principals, members or Affiliates, (ii) any Affiliate of any of its general partners, shareholders, principals or members, or (iii) any other Person.

(s)     Collections. Each of the Issuer, the Transferor and the Servicer covenants that it shall:

(i)     At all times comply, and in the case of the Issuer and the Transferor, require the Servicer to comply, with the terms of Section 3.01 of the Transfer and Servicing Agreement.

(ii)     Prevent the deposit into the Collection Account of any funds other than collections from Receivables or other funds to be deposited into the Collection Account under this Agreement or the other Transaction Documents or documents relating to other Series issued pursuant to the Indenture; provided that, this covenant shall not be breached to the extent that funds are inadvertently deposited into the Collection Account and upon discovery are promptly segregated and removed from the Collection Account.

(t)     [Reserved].

(u)     Actions with respect to Bankruptcy Petitions. To the extent permitted by law, each of the Issuer and the Transferor will timely object to all proceedings of the type described in the definition of Insolvency Event instituted against it.

(v)     NYC Debt Collector’s Law. Each of the Issuer, the Transferor and the Servicer shall comply in all respects with any applicable provisions of the NYC Debt Collector’s Law.

(w)     Indebtedness. The Issuer shall not create, incur, assume or suffer to exist any Indebtedness, except (i) Indebtedness under the Transaction Documents and documents related to any other Series issued pursuant to the Indenture and in accordance with this Agreement and (ii) fees, trade payables to third party service providers and other general unsecured liabilities incurred in the ordinary course of the Issuer’s business not to exceed $10,000 in the aggregate outstanding at any time.

30

(x)     Liens. Neither of the Issuer or the Transferor shall create, incur, assume or suffer to exist any Lien upon, in or against, or pledge of, any of the Trust Estate, whether now owned or hereafter acquired, except the following (collectively, “Permitted Liens”): (a) Liens under the Transaction Documents or documents relating to other outstanding Series issued pursuant to the Indenture or otherwise arising in favor of the Indenture Trustee, for the benefit of the Noteholders, (b) any right of setoff granted in favor of any financial institution in respect of Trust Accounts opened and maintained in the ordinary course of business or pursuant to the requirements of this Agreement; provided, that with respect to any such Trust Account, the Indenture Trustee has a perfected Lien thereon and control thereof, in form, scope and substance satisfactory to the Indenture Trustee in its sole discretion and (c) Liens imposed by law for Taxes that are not yet due or are being contested in good faith and against which adequate reserves have been established in accordance with GAAP consistently applied.

(y)     Investments; Investment Property; Collateral; Subsidiaries. Other than as contemplated in the Transaction Documents or documents relating to other outstanding Series issued pursuant to the Indenture, neither the Issuer nor the Transferor shall, directly or indirectly, (a) merge with, purchase, own, hold, invest in or otherwise acquire any equity interests of, or any other interest in, all or substantially all of the assets of, any Person or any joint venture, (b) purchase, own, hold, invest in or otherwise acquire any Investment Property (except (i) those set forth in Schedule 4.2(y) attached hereto as of the Closing Date, (ii) Trust Accounts with financial institutions and investments in the ordinary course of business; provided, that with respect to any such Trust Accounts, the Indenture Trustee has a perfected Lien thereon and control thereof, in form, scope and substance satisfactory to the Indenture Trustee in its sole discretion and (iii) the endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business) or (c) make or permit to exist any loan, advances or guarantees to or for the benefit of any Person or assume, guarantee, endorse, contingently agree to purchase or otherwise become liable for or upon or incur any obligation of any Person except as provided in clause (b) above. The Issuer shall not purchase, lease, own, operate, hold, invest in or otherwise acquire any property or asset that is located outside of the United States except as provided in clause (b) above. The Issuer shall not have any Subsidiaries.

(z)     Transactions with Affiliates. Neither the Issuer nor the Transferor shall enter into or consummate any transaction of any kind with any of its Affiliates other than (a) the transactions contemplated hereby and by the other Transaction Documents and by documents relating to other outstanding Series issued pursuant to the Indenture, and (b) to the extent not otherwise prohibited under this Agreement, other transactions upon fair and reasonable terms materially no less favorable to such Person than would be obtained in a comparable arms-length transaction with a Person that is not an Affiliate.

(aa)     Charter Documents; Fiscal Year; Dissolution; Use of Proceeds; Insurance Policies; Taxes; Trade Names. Neither the Transferor nor the Issuer shall (i) amend, modify, restate or change its certificate of trust, trust agreement, certificate of formation, operating agreement, articles of incorporation, bylaws or similar charter or governance documents, (ii) change its fiscal year, (iii) amend, alter, suspend, terminate or make provisional in any material way, any Permit, the suspension, amendment, alteration or termination of which could reasonably be expected to be, have or result in a Material Adverse Effect on the Issuer or the Transferor without the prior written consent of the Agent, which consent shall not be unreasonably withheld or delayed, (iv) wind up, liquidate or dissolve (voluntarily or involuntarily) or commence or suffer any proceedings seeking or that would result in any of the foregoing, (v) use any proceeds of any Note for “purchasing” or “carrying” “margin stock” as defined in Regulations T, U or X of the Board of Governors of the Federal Reserve System, (vi) amend, modify, restate or change any insurance policy in a manner adverse to the Agent or any other Investor in any material respect, (vii) engage, directly or indirectly, in any business other than as set forth herein, (viii) establish new or additional trade names without providing not less than thirty (30) days advance written notice to the Agent or (ix) certificate, or cause to have certificated, any equity ownership interest in the Issuer that is not evidenced by a certificate as of the Closing Date, without the Agent’s prior written consent, which consent shall not be unreasonably withheld or delayed.

31

(bb)     Transfer of Trust Estate; Amendment of Receivables.

(i)     Except as provided in the Transaction Documents and the documents relating to other outstanding Series issued pursuant to the Indenture, the Issuer shall not sell, lease, transfer, pledge, encumber, assign or otherwise dispose of all or any portion of the Trust Estate without the prior consent of Agent.

(ii)     None of the Issuer, the Transferor or the Servicer shall extend, amend, waive or otherwise modify the terms of any Receivable or permit the rescission or cancellation of any Receivable, whether for any reason relating to a negative change in the related Obligor’s creditworthiness or inability to make any payment under the Receivable or otherwise, except as permitted by the Credit Card Guidelines.

(cc)     Contingent Obligations and Risks. Except as otherwise expressly permitted by the Transaction Documents and the documents relating to other Series issued pursuant to the Indenture, neither the Issuer nor the Transferor shall enter into any Contingent Obligations or assume, guarantee, endorse, contingently agree to purchase or otherwise become liable for or upon or incur any obligation of any Person (other than indemnities to officers and directors of such Person to the extent permitted by Requirements of Law); provided, however, that nothing contained in this Section 4.2(cc) shall prohibit the Issuer or the Transferor from indorsing checks in the ordinary course of its business.

(dd)     Truth of Statements. None of the Issuer, the Transferor or the Servicer shall furnish to the Agent any information, exhibit, financial statement, document, book, record or report that contains any untrue statement of a material fact or that omits to state a material fact or any fact necessary to make it not misleading in light of the circumstances under which it was furnished.

(ee)     Anti-Terrorism; OFAC; AML.

(i)     No Transaction Person (as defined in Section 4.1(jj)) shall (a) be or become a Sanctioned Person (as defined in Section 4.1(jj)) whose property or interests in property are blocked or subject to blocking pursuant to Section 1 of Executive Order 13224 of September 23, 2001 Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit or Support Terrorism (66 Fed. Reg. 49079 (2001)), (b) engage in any dealings or transactions prohibited by Section 2 of such executive order, or to the knowledge of the Issuer, the Transferor or the Servicer, otherwise be associated with any such Sanctioned Person in any manner that violates Section 2 of such executive order, or (c) otherwise become a Sanctioned Person on the list of Specially Designated Nationals and Blocked Persons in violation of the limitations or prohibitions under any other OFAC regulation or executive order.

32

(ii)     To the knowledge of the Issuer, the Transferor and the Servicer, the proceeds of any Note shall not be used, directly or indirectly, for any payments (i) to fund or facilitate any money laundering or terrorist financing activities or business; or (ii) in any other manner that would cause or result in violation of Patriot Act laws, rules or regulations.

(iii)     To the knowledge of the Issuer, the Transferor and the Servicer, the proceeds of any Note shall not be used, directly or indirectly, for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended, or any other applicable law, rule or regulation prohibiting bribery or corruption.

(ff)     Deposit Accounts and Payment Instructions.

(i)     Aside from Series Accounts opened with the Indenture Trustee in connection with other Series, the Issuer shall not open a deposit account or securities account (other than those listed in Schedule 4.2(ff) attached hereto as of the Closing Date), or move a deposit account or securities account to a different bank or securities intermediary, as applicable, without the prior written consent of the Agent, which consent shall not be unreasonably withheld, conditioned or delayed, but may be conditioned upon the delivery of an account control agreement with such successor bank or securities intermediary in form and substance reasonably acceptable to the Agent. In the event that any bank or securities intermediary at which a Trust Account is maintained ceases to be an Eligible Institution, then the Issuer shall, within 30 days of such occurrence, move such Trust Accounts to an Eligible Institution that is approved by the Agent in writing, such approval not to be unreasonably withheld, conditioned or delayed, but may be conditioned upon the delivery of an account control agreement with such successor bank or securities intermediary in form and substance reasonably acceptable to the Agent.

(ii)     Neither the Issuer nor the Transferor shall make any change in the instructions to the Servicer with respect to the deposits of collections regarding Receivables to the Collection Account in accordance with the Transfer and Servicing Agreement.

(gg)     No Adverse Selection. Each of the Transferor and the Issuer covenants and agrees that all Receivables selected to be purchased by the Issuer pursuant to the Transfer and Servicing from all other similar receivables that are included in the Seller’s pipeline of loans for acquisition from the Account Owner shall, at all times, (i) be selected at random and with no intention to select receivables that would be more adverse to the Issuer than any other Person and (ii) when compared to all credit card receivables originated through the Seller’s platform be allocated among the Issuer and all other entities directly or indirectly managed or controlled by the Seller or any of its Affiliates, selected at random and not selected in a manner that would be more adverse to the Issuer or the Noteholders than to any such other entity and its creditors.

33

(hh)     Account Owner. Prior to the addition of any Account Owner, the Transferor shall (i) consult with the Agent, (ii) provide the Agent with at least 60 days’ prior written notice of such proposed Account Owner, (iii) use commercially reasonable efforts to furnish to the Agent such information requested by the Agent as is reasonably necessary to allow the Agent to perform substantially the same diligence review of the Account Owner and the proposed arrangement as it performed with respect to existing Account Owner as of the Closing Date; and (iv) provide the Agent with drafts of the proposed agreements and form documents to be executed and used in connection with such Account Owner at least five Business Days’ prior to such addition and consider in good faith the Agent’s comments to such agreements and documents.

(ii)     Repurchase. The Transferor covenants to purchase Ineligible Receivables pursuant to Section 2.05(a) of the Transfer and Servicing Agreement and, to the extent that the terms of the Receivables Purchase Agreement require the Seller to repurchase such Receivables resell such Ineligible Receivables to Seller, in the event that a Net Eligible Receivables Balance Deficiency occurs and remains uncured as a result of any unrepurchased Ineligible Receivables’ principal balance being reduced to zero.

(jj)     Senior Facility. The Transferor and the Issuer covenants and agrees not to enter into any financing other than one or more Series of notes satisfying the requirements of a Senior Facility set forth on Exhibit D without obtaining the Agent’s prior written consent.

(kk)     Backup Servicer. In the event of the termination or resignation of the Backup Servicer, the Transferor and the Issuer shall use commercially reasonable efforts to engage a backup servicer acceptable to the Agent in its reasonable discretion within one hundred and eighty (180) days of the date of such resignation or termination.

(ll)     Transfer of Class B Notes; Class B Note Purchase Agreement. The Class B Notes shall not be transferred in whole or in part without the prior written consent of the Agent. The Class B Note Purchase Agreement shall not be amended, restated or otherwise modified without the prior written consent of the Agent.

(mm)     [Reserved].

(nn)     Sale of the Receivables. Each of the Transferor and the Issuer shall in good faith request that the Noteholders under the Senior Facility agree to provide the Class A Noteholders a right of first refusal to purchase the Receivables in the event of a sale of Receivables after an “Event of Default” under the Senior Facility.

(oo)     Enforcement of Rights. The Issuer shall enforce its rights with respect to all obligations of the Transferor and the Servicer under the Transfer and Servicing Agreement and all other Transaction Documents to which the Issuer and the Transferor or the Servicer is a party. The Transferor shall enforce its rights with respect to all obligations of the Seller under the Receivables Purchase Agreement.

34

(pp)     Deposit of Collections. In the event that the Servicer fails to deposit any Collections into the Collection Account within two (2) Business Days following the Date of Processing, the Servicer shall pay to the Issuer, in immediately available funds, the amount of such Collections.

(qq)     Release of Collections. In the event that the Servicer releases any Collections from the Collection Account in contravention of the Indenture Supplement or any other Transaction Document to which the Servicer is a party, the Servicer shall pay to the Issuer, in immediately available funds, the amount of such improperly released Collections.

SECTION 4.3     Periodic Notices and Reports.

(a)     Financial Reporting. From the Closing Date until the Termination Date, the Transferor, the Issuer or the Servicer, as applicable, shall furnish to the Agent:

(i)     Annual Reporting. Within ninety (90) days following the end of each fiscal year of each of the Transferor and Holdings, beginning with the fiscal year ending December 31, 2018, the audited consolidated balance sheet of each of the Transferor and Holdings as of the end of such fiscal year, and the related audited consolidated statements of income and cash flows of the Transferor and Holdings for such fiscal year, which financial statements shall be prepared and certified without any material qualification and accompanied by any management letter of the Transferor’s or Holdings’, as applicable, independent certified public accounting firm and an Officer’s Certificate of the Transferor;

(ii)     Quarterly Reporting. Within forty-five (45) days following the end of each of the first three fiscal quarters of each fiscal year of the Transferor and Holdings, beginning with the fiscal quarter ending March 31, 2018, the unaudited consolidated balance sheet of each of the Transferor and Holdings as of the end of such fiscal quarter, and the related unaudited consolidated statements of income and cash flows of the Transferor and Holdings for such fiscal quarter;

(iii)     Monthly Reporting. The Servicer shall furnish to the Investors (or cause to be furnished to the Investors), on a monthly basis on or before each Determination Date, (A) such information relating to the status of the Receivables, accounts relating to the Indenture or the Indenture Supplement for the preceding Monthly Period and such other information with respect to the Issuer’s property in a certificate substantially in the form of Exhibit C to the Indenture Supplement and (B) copies of any monthly reports delivered to Holders of the Series 2018-Two Notes;

(iv)     Compliance Certificate. Together with the financial statements required under this Section, a compliance certificate signed by the Transferor’s president, chief financial officer, treasurer or other executive officer stating that, to the best of such Person’s knowledge after reasonable investigation, the financial statements delivered to the Investors have been prepared in accordance with GAAP and accurately reflect the financial condition of the Transferor and a certificate of the Transferor that no Early Redemption Event exists, or if any Early Redemption Event exists, stating the nature and status thereof and the steps taken or proposed to be taken with respect thereto;

35

(v)     Filings with Governmental Authorities. Promptly after the same are sent, copies of all financial statements and reports that the Transferor or the Issuer may make to, or file with, the Securities and Exchange Commission or any successor or analogous governmental authority;

(vi)     Other Information. Such other information, documents, records or reports respecting the Accounts, the Receivables or the servicing thereof or the Issuer as the Agent on behalf of the Investors may from time to time reasonably request (as can be reasonably obtained or provided by the Transferor or the Servicer); and such publicly available information, documents, records or reports respecting the Servicer, the Transferor, the Issuer or the condition or operations, financial or otherwise, of the Servicer, the Issuer or the Transferor as the Agent may from time to time reasonably request; provided, that neither the Servicer nor the Transferor shall be required to disclose any information reasonably determined by it to be Proprietary Information;

provided, however, for so long as Holdings is subject to, and in compliance with, the requirements of the Securities Exchange Act of 1934, as amended, and such requirements require public disclosure of the items specified in the above clauses (i), (ii), (iv) and (v), Holdings shall be required to furnish such items only upon the request of the Agent.

(b)     Notices. The Transferor, the Issuer and the Servicer, as applicable, shall notify the Agent in writing of any of the following with respect to itself only promptly and in any event within five (5) days upon learning of the occurrence thereof, describing the same and, if applicable, the steps being taken with respect thereto:

(i)     Notice of Early Redemption Events. As soon as possible and in any event, within five (5) days after learning of the occurrence of any Early Redemption Event or Event of Default, accompanied by a statement of the chief financial officer or chief accounting officer of the Transferor or the Issuer or an Officer’s Certificate of a Servicing Officer, as applicable, specifying the nature and status thereof, the period of existence thereof and what action is proposed to be taken with respect thereto;

(ii)     Judgment and Proceedings. The entry of any judgment or decree against the Transferor, the Issuer or the Servicer, as applicable, in excess of $5,000,000, or the institution of any material lawsuit or other proceeding against such Person;

(iii)     Litigation. The institution of any litigation, arbitration proceeding or governmental proceeding against the Issuer, the Transferor or the Servicer (i) asserting the invalidity of this Agreement or the other Transaction Documents to which it is a party or the Receivable Sales Agreement or the Program Management Agreement, (ii) seeking to prevent the consummation of any of the transactions contemplated by this Agreement or the other Transaction Documents to which it is a party or the Receivable Sales Agreement or the Program Management Agreement, (iii) seeking any determination or ruling that, in the reasonable judgment of the Issuer, the Transferor or the Servicer, as applicable, would materially and adversely affect the performance by the Issuer, the Transferor or the Servicer, as applicable, of its obligations under this Agreement or the other Transaction Documents 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 or the other Transaction Documents to which it is a party or the Receivable Sales Agreement or the Program Management Agreement, (v) seeking any determination or ruling that, if adversely determined, would materially and adversely affect the condition (financial or otherwise), business, properties or operations of the Issuer, the Transferor or the Servicer, as applicable, (vi) that makes a claim or claims against or affecting the Issuer or the Transferor, or that makes a claim or claims in an aggregate amount greater than $5,000,000, in the case of the Servicer or the Account Owner, or (vii) that is commenced by or against the Issuer, the Transferor or the Servicer as debtor under any applicable Debtor Relief Law;

36

(iv)     ERISA. The occurrence of any Reportable Event under Section 4043(c) (5), (6) or (9) of ERISA with respect to any Plan of the Transferor, the Issuer or the Servicer, as applicable, any decision to terminate or withdraw from a Plan of the Transferor, the Issuer or the Servicer, as applicable, any finding made with respect to a Plan of the Transferor, the Issuer or the Servicer, as applicable, under Section 4041(c) or (e) of ERISA, the commencement of any proceeding with respect to a Plan of the Transferor, the Issuer or the Servicer, as applicable under Section 4042 of ERISA, the failure to make any required installment or other required payment under Section 412 of the Code or Section 302 of ERISA on or before the date for such installment or payment, or any material increase in the actuarial present value of unfunded vested benefits under all Plans of the Transferor, the Issuer or the Servicer, as applicable, over the preceding year;

(v)     Defaults Under Transaction Documents. The occurrence of (A) a breach of any obligation, (B) any event giving rise to a right of termination or (C) any notice of termination delivered under any Transaction Document or the Receivable Sales Agreement or the Program Management Agreement;

(vi)     Defaults Under Other Agreements. The occurrence of a default or an event of default under any other financing arrangement pursuant to which the Transferor, the Issuer or the Servicer is a debtor or an obligor;

(vii)     Events of Default or Early Redemption Events Under Senior Facility. The occurrence of any “Event of Default” or “Early Redemption Event” under the Senior Series (as defined in Exhibit D); provided that giving notice pursuant to this clause (vii) shall be solely the obligation of the Servicer;

(viii)     Modifications to the Senior Supplement. Any waiver, amendment, restatement, supplement or modification to the Senior Supplement (as defined in Exhibit D) and will provide a copy thereof at the same time as such notice; provided that giving notice pursuant to this clause (viii) shall be solely the obligation of the Transferor;

(ix)     Material Adverse Effect. Any other development, event, fact, circumstance or condition that is reasonably expected to have or result in a Material Adverse Effect on any of the Issuer, the Transferor, or the Servicer, in each case describing the nature and status thereof and the action proposed to be taken with respect thereto;

37

(x)     Trust Estate. Any matter(s) in existence affecting in any material respect the value, enforceability or collectability of the Trust Estate taken as a whole;

(xi)     Regulatory Scrutiny. (A) The Issuer, the Transferor, the Servicer or, to the Issuer’s, the Transferor’s, or the Servicer’s knowledge, the Account Owner is being placed under regulatory supervision, has received any subpoena or material request for information from a Governmental Authority, has had a legal action, litigation, suit or arbitration proceeding brought or threatened against it by any Governmental Authority or has received a material notice or request from any Governmental Authority regarding any liability of the Issuer, the Transferor, the Servicer or the Account Owner, (B) any license, permit, charter, registration or approval necessary for the conduct of the Issuer’s, the Transferor’s, the Servicer’s or, to the Issuer’s, the Transferor’s, or the Servicer’s knowledge, the Account Owner’s business is to be, or has been suspended or revoked, or (C) the Issuer, the Transferor, the Servicer or the Account Owner has received any notice or order by any Government Authority to cease and desist any practice, procedure or policy employed by the Issuer, the Transferor, the Servicer or, to the Issuer’s, the Transferor’s, or the Servicer’s knowledge, the Account Owner in the conduct of its respective business, and such cessation may reasonably be expected to result in a Material Adverse Effect with respect to the Issuer, the Transferor, the Servicer or, to the Issuer’s, the Transferor’s, or the Servicer’s knowledge, the Account Owner;

(xii)     Tax Lien. The filing, recording or assessment of any federal, state, local or foreign tax lien against the Trust Estate or the Issuer;

(xiii)     Transaction Documents. Any termination, waiver, amendment or modification of, as the case may be, the terms of (including the applicable fee schedule to) the Transfer and Servicing Agreement, any other Transaction Document, the Receivable Sales Agreement or the Program Management Agreement and will provide a copy thereof at the same time as such notice;

(xiv)     Indebtedness. Any failure to pay when due any Indebtedness of the Issuer, the Transferor or the Servicer;

(xv)     Change of Name or Location. Any change in the legal name, jurisdiction of organization or type of organization of the Issuer or the Transferor;

(xvi)     Contract Termination. The loss, termination or expiration of any contract to which the Issuer, the Transferor or the Servicer is a party or by which its properties or assets are subject or bound that is reasonably expected to have or result in a Material Adverse Effect on the Issuer, the Transferor or the Servicer;

(xvii)     Eligible Receivable. Any event or circumstance that could reasonably be expected to cause a Receivable owned by the Issuer to fail to satisfy clause (e) of the definition of “Eligible Receivable”; and

(xviii)     Other Information. Such other information, documents, records or reports respecting the Trust Estate or the condition or operations, financial or otherwise of the Issuer, the Transferor or the Servicer as the Agent may from time to time reasonably request in order to protect the Investors’ interests under or as contemplated by this Agreement; provided (A) that the Issuer, the Transferor or the Servicer, as applicable, shall provide such requested information, documents, records or reports within (30) days of receipt of such request from the Agent and (y) that the Issuer, the Transferor or the Servicer, as applicable, has possession or access to such information, documents, records or reports without incurring any significant costs, time or expenses.

38

(c)     Copies of Notices. The Transferor, the Issuer and the Servicer, as applicable, shall promptly furnish to the Agent a copy of each certificate, report, statement, notice or other communication furnished by or on behalf of itself under the Transaction Documents to the holders of the Offered Notes, to the Indenture Trustee concurrently therewith and furnish to the Agent promptly after receipt thereof a copy of each notice, demand or other communication received by or on behalf of it pursuant to this Agreement, the Transfer and Servicing Agreement, the Indenture, the Indenture Supplement or the Receivables Purchase Agreement. Each such communication provided hereunder shall be furnished to the Agent in writing.

SECTION 4.4     Tax Treatment.

Each Investor hereby agrees to treat the Offered Notes for purposes of federal and state income or franchise taxes and any other tax imposed on or measured by income as indebtedness unless otherwise required by the Internal Revenue Service.

SECTION 4.5     Board of Directors of Transferor.

(a) For so long as the Offered Notes remain Outstanding, the Transferor shall cause its Board of Directors (the “Board”) to be comprised of five members including one member designated by the Agent or an Affiliate of the Agent (the “Agent Designee”). None of the Transferor, the Board or any committee of the Board shall undertake or approve any of the following actions without the unanimous consent of all Board members:

(i)     dissolution, liquidation or termination of the Transferor or the Issuer;

(ii)     institution of a case or other proceeding under any Debtor Relief Law involving the Transferor or the Issuer;

(iii)     material amendment of any Transaction Document to which the Transferor or the Issuer is a party; or

(iv)     change in the business of the Transferor or the Issuer.

(b) For so long as the Offered Notes remain Outstanding, (i) the Agent Designee may be removed or replaced, with or without cause, only with the written consent of the Agent and (ii) if the Agent requests the removal and/or replacement of the Agent Designee, the Transferor shall take all actions necessary to effect such request.

(c) The assumption by the Agent Designee of his or her duties under the Articles of Incorporation of the Transferor will be without prejudice to the rights of the Agent Designee, TowerBrook Capital Partners L.P. (“TCP”) or the rights of their respective affiliates to pursue or participate in other interests and activities including, without limitation, investments in and devotion of time to other businesses which compete with the Transferor, and to receive and enjoy profits or compensation therefrom.

39

(d)   The Agent Designee, TCP and their respective affiliates (the “Institutional Parties”) may engage in any capacity (as owner, employee, manager, consultant or otherwise) in any activity, whether or not such activity competes with or is benefited by the business of the Transferor, without being liable to the Transferor or the other members of the Board for any income or profit derived from such activity, and none of the Institutional Parties shall be obligated to make available to the Transferor or any other member of the Board any business opportunity of which an Institutional Party is or becomes aware.

(e) To the fullest extent permitted by applicable law, the doctrine of corporate opportunity, or any analogous doctrine, shall not apply to the Institutional Parties.  The Transferor renounces any interest or expectancy of the Transferor in, or in being offered an opportunity to participate in, business opportunities that are from time to time presented to any Institutional Party.  No Institutional Party shall have any duty to communicate knowledge of or offer any potential transaction, agreement, arrangement or other matter that may be an opportunity for the Transferor to the Transferor, and no Institutional Party shall be liable to the Transferor or to the members for breach of any fiduciary or other duty by reason of the fact that such person pursues or acquires for, or directs such opportunity to, another person or does not communicate such opportunity or information to the Transferor. No amendment or repeal of this paragraph (e) shall apply to or have any effect on the liability or alleged liability of any Institutional Party for or with respect to any opportunities of which such Institutional Party becomes aware prior to such amendment or repeal.

ARTICLE V

INDEMNIFICATION; EXPENSES; RELATED MATTERS

SECTION 5.1     Indemnities by the Transferor. Without limiting any other rights which the Indemnified Parties may have hereunder or under applicable Law and notwithstanding any provision to the contrary herein or in any other Transaction Document, including Section 5.03 of the Transfer and Servicing Agreement, the Transferor hereby agrees to indemnify, defend and hold harmless (on an after tax basis) the Agent, each Investor and their respective successors and permitted assigns and their respective officers, directors, employees, partners, representatives, members, managers, advisors, shareholders, attorneys, Affiliates and agents (collectively, “Indemnified Parties”) from and against any and all damages, losses, claims, liabilities, deficiencies, obligations, fines, penalties, actions (whether threatened or existing), judgments, suits (whether threatened or existing), costs and expenses, including reasonable attorneys’ fees and disbursements (all of the foregoing being collectively referred to as “Indemnified Amounts”) awarded against or incurred by any of them arising out of or relating to this Agreement, the other Transaction Documents, the Receivable Sales Agreement, the Program Management Agreement, the ownership or maintenance, either directly or indirectly, by such Investor of the Offered Notes or any of the other transactions contemplated hereby or thereby or in respect of the Trust Estate, except, (i) Indemnified Amounts to the extent determined in a final and non-appealable judgment by a court of competent jurisdiction to have directly resulted from such Indemnified Party’s gross negligence, fraud or willful misconduct, (ii) to the extent that any Indemnified Amount relates to Excluded Taxes or amounts payable by the Issuer under Sections 5.2 or 5.3, (iii) for recourse for the payment of principal of or interest on, or other amounts due in respect of, the Offered Notes as a result of nonpayment by Obligors on the Accounts or the related Receivables (collectively, the “Excluded Liabilities”). Without limiting the generality of the foregoing, the Transferor shall indemnify each Indemnified Party for Indemnified Amounts relating to or resulting from:

40

(a)     any representation or warranty made by the Transferor or the Issuer or any officers of the Transferor or the Issuer under or in connection with this Agreement, any of the other Transaction Documents, or any other information or report delivered by the Transferor or the Issuer pursuant hereto, or pursuant to any of the other Transaction Documents having been incomplete, false or incorrect when made or deemed made;

(b)     the failure by the Transferor or the Issuer to comply with any applicable Law with respect to any Receivable or the related Credit Card Agreement, or the nonconformity of any Receivable or the related Credit Card Agreement with any such applicable Law;

(c)     any dispute, claim, offset or defense (other than bankruptcy) of the Obligor to the payment of any Receivable (including a defense based on such Receivable or the related Credit Card Agreement not being the legal, valid and binding obligation of such Obligor enforceable against it in accordance with its terms);

(d)     the failure by the Transferor or the Issuer to comply with any term, provision or covenant contained in this Agreement or any of the other Transaction Documents to which it is a party or to perform any of its respective duties or obligations under the Receivables or related Contracts; or

(e)     any action taken by the Transferor or the Issuer in the enforcement or collection of any Receivable.

Promptly after receipt by an Indemnified Party of notice of the commencement of any action, such Indemnified Party will, if a claim in respect thereof is to be made under this Section 5.1, notify the Transferor, provided, however, the omission to so notify the Transferor will not relieve the Transferor from any liability which it may have to any such Indemnified Party under this Section 5.1, except to the extent the Transferor was actually prejudiced by the failure to give such notices promptly.

41

Thereafter, the Indemnified Party and the Transferor shall consult, to the extent appropriate, with a view to minimizing the cost to the Transferor of its obligations hereunder; provided, however, that nothing contained herein shall obligate any Indemnified Party to take any action that imposes on such Person any additional costs or legal or regulatory burdens which in such Person’s reasonable opinion, would have an adverse effect on its business, operations or financial condition. In case any Indemnified Party receives written notice of any damage, loss or expense in respect of which indemnity may be sought hereunder by it and it notifies the Transferor thereof, the Transferor will be entitled to participate therein, and to the extent that it may elect by written notice delivered to the Indemnified Party promptly after receiving the aforesaid notice from such Indemnified Party, to assume the defense thereof, with counsel reasonably satisfactory at all times to such Indemnified Party; provided, however, that if the parties against which any damage, loss or expense arises include both the Indemnified Party and the Transferor, and the Indemnified Party shall have reasonably concluded that there may be legal defenses available to it which are different from or additional to those available to the Transferor, the Indemnified Party shall have the right to select one separate counsel for such Indemnified Party to assume such legal defenses and otherwise to participate in the defense of such damage, loss or expenses on behalf of such Indemnified Party. Upon receipt of notice from the Transferor to such Indemnified Party of its election to assume the defense of such action and approval by the Indemnified Party of such counsel, the Transferor shall not be liable to such Indemnified Party under this Section 5.1 for any legal or other expenses subsequently incurred by such Indemnified Party in connection with the defense thereof unless (i) the Indemnified Party shall have employed such counsel in connection with assumption of legal defenses in accordance with the proviso to the next preceding sentence, (ii) the Transferor shall not have employed and continued to employ counsel reasonably satisfactory to the Indemnified Party to represent the Indemnified Party within a reasonable time after notice of commencement of the action or (iii) the Transferor shall have authorized the employment of counsel for the Indemnified Party at the expense of the Transferor.

SECTION 5.2     Taxes. (a) All payments and distributions made hereunder by the Issuer, Transferor or the Servicer (each, a “payor”) to each Investor (a “recipient”) shall be made, to the extent permitted by applicable law, free and clear of and without deduction for any present or future income, excise, stamp or franchise taxes and any other taxes, fees, duties, withholdings or other charges of any nature whatsoever imposed by any taxing authority on any recipient (or any assignee of such parties), but excluding Excluded Taxes (such non-excluded items being called “Taxes”). In the event that any withholding or deduction from any payment made by the payor hereunder is required in respect of any Taxes, then the payor (or if such payor is the Servicer, the Issuer):

(i)     shall pay directly to the relevant authority the full amount required to be so withheld or deducted;

(ii)     shall promptly forward to such Investor an official receipt or other documentation satisfactory to such Investor evidencing such payment to such authority; and

(iii)     shall pay to the recipient such additional amount or amounts as is necessary to ensure that the net amount actually received by the recipient will equal the full amount such recipient would have received had no such withholding or deduction been required.

Moreover, if any Taxes are directly asserted against any recipient with respect to any payment received by such payment recipient hereunder, the recipient may pay such Taxes and the payor (or if such payor is the Servicer, the Issuer) will promptly pay such additional amounts (including any penalties, interest or expenses), as shall be necessary in order that the net amount received by the payment recipient after the payment of such Taxes (including any Taxes on such additional amount) shall equal the amount such payment recipient would have received had such Taxes not been asserted.

42

If the payor fails to pay any Taxes when due to the appropriate taxing authority or fails to remit to the recipient the required receipts or other required documentary evidence, the payor (or if such payor is the Servicer, the Issuer) shall indemnify the recipient for any incremental Taxes, interest, or penalties that may become payable by any recipient as a result of any such failure.

(b)     Each Investor shall, prior to becoming a party to any Transaction Document, deliver to each payor two duly completed copies of an Internal Revenue Service Form W-9 or applicable successor form.

(i)     Each Investor shall deliver to each payor two (2) further copies of any such form or certification previously delivered on or before the date that any such form or certification expires or becomes obsolete and after the occurrence of any event requiring a change in the most recent form previously delivered by it to the payor;

(ii)     Each Investor shall obtain such extensions of time for filing and complete such forms or certifications as may reasonably be requested by the payor; unless, in any such case, an event (including, without limitation, any change in treaty, law or regulation) has occurred after the Closing Date and prior to the date on which any such delivery would otherwise be required which renders all such forms inapplicable or which would prevent such Investor from duly completing and delivering any such form with respect to it, and such Investor so advises the payor. In such event, the Investor shall make reasonable efforts to cooperate with the payor in availing itself of any other then reasonably available exemption for Taxes. Each such Investor shall certify that it is entitled to an exemption from United States backup withholding tax;

(iii)     If a payment made to a recipient would be subject to United States federal withholding tax imposed by FATCA if such recipient were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such recipient shall deliver to the Transferor at the time or times prescribed by law and at such time or times reasonably requested by the payor such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the payor as may be necessary for the payor to comply with its obligations under FATCA and to determine that such recipient has complied with such recipient’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (iii), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

(c)     If any party determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section 5.2 (including by the payment of additional amounts pursuant to this Section 5.2), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Section with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of such indemnified party and without interest (other than any interest paid by the relevant government or taxing authority with respect to such refund). Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid over pursuant to this subsection 5.2(c) (plus any penalties, interest or other charges imposed by the relevant government or taxing authority) in the event that such indemnified party is required to repay such refund to such government or taxing authority. Notwithstanding anything to the contrary in this subsection 5.2(c), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this subsection 5.2(c) the payment of which would place the indemnified party in a less favorable net after-Tax position than the indemnified party would have been in if the indemnification payments or additional amounts giving rise to such refund had never been paid. This paragraph shall not be construed to require any indemnified party to make available its tax returns (or any other information relating to its Taxes that it deems confidential) to the indemnifying party or any other Person.

43

(d)     Each Investor agrees that it will use reasonable efforts to reduce or eliminate any claim for compensation pursuant to this Section 5.2, including but not limited to designating a different office in which any funding hereunder is made, accounted for or booked if such designation will avoid the need for, or reduce the amount of, any additional amount or amounts otherwise owing pursuant to this Section 5.2 and will not, in the good faith opinion of such Investor, be unlawful or otherwise materially disadvantageous to such Investor.

SECTION 5.3     Indemnities by the Servicer. (a) Notwithstanding any provision to the contrary herein or in any other Transaction Document, including Section 6.03 of the Transfer and Servicing Agreement, the Servicer shall indemnify, defend and hold harmless (on an after tax basis) each Indemnified Party from and against any Indemnified Amount suffered or sustained by reason of willful misfeasance, bad faith, or negligence in the performance of the duties of the Servicer, by reason of reckless disregard or breach of covenants, obligations and duties of the Servicer hereunder or under any other Transaction Document to which the Servicer is a party or by reason of the failure of any representation or warranty made or deemed made by the Servicer (or any of its officers) under or in connection with this Agreement or any other Transaction Document to which the Servicer is a party have been true and correct in all material respects as of the date made or deemed made; provided, however, that the Servicer shall not indemnify any such Indemnified Party for any such Indemnified Amount suffered or sustained by reason of any action taken or omitted at the written request of any such Indemnified Party; and provided, further, that the Servicer shall not indemnify any such Indemnified Party for any such Indemnified Amount to the extent determined in a final and non-appealable judgment by a court of competent jurisdiction to have directly resulted from such Indemnified Party’s gross negligence, fraud or willful misconduct, with respect to the uncollectibility of the Receivables on account of the insolvency, bankruptcy or lack of creditworthiness of the related Obligor or with respect to any Excluded Taxes required to be paid by any such Indemnified Party in connection herewith to any taxing authority. The Servicer shall not be liable for acts or omissions of any Successor Servicer. The provisions of this indemnity shall run directly to and be enforceable by an injured party subject to the limitations hereof.

(a)     Each Indemnified Party shall use its good faith efforts to mitigate, reduce or eliminate any losses, expenses or claims for indemnification pursuant to this Section 5.3; provided, however, that nothing contained herein shall obligate any Indemnified Party to take any action that imposes on such Person any additional costs or legal or regulatory burdens which in such Person’s reasonable opinion, would have an adverse effect on its business, operations or financial condition.

44

(b)     Promptly after the receipt by an Indemnified Party of written notice of any damage, loss or expense in respect of which indemnity may be sought under this Section 5.3 by it, such Indemnified Party will, if a claim is to be made against the Servicer, notify the Servicer thereof in writing; but the omission so to notify the Servicer will not relieve the Servicer from any liability which it may have to any Indemnified Party except as may be required or provided otherwise than under this Section 5.3. Thereafter, the Indemnified Party and the Servicer shall consult, to the extent appropriate, with a view to minimizing the cost to the Servicer of its obligations hereunder; provided, however, that nothing contained herein shall obligate any Indemnified Party to take any action that imposes on such Person any additional costs or legal or regulatory burdens which in such Person’s reasonable opinion, would have an adverse effect on its business, operations or financial condition. In case any Indemnified Party receives written notice of any damage, loss or expense in respect of which indemnity may be sought hereunder by it and it notifies the Servicer thereof, the Servicer will be entitled to participate therein, and to the extent that it may elect by written notice delivered to the Indemnified Party promptly after receiving the aforesaid notice from such Indemnified Party, to assume the defense thereof, with counsel reasonably satisfactory at all times to such Indemnified Party; provided, however, that if the parties against which any damage, loss or expense arises include both the Indemnified Party and the Servicer, and the Indemnified Party shall have reasonably concluded that there may be legal defenses available to it which are different from or additional to those available to the Servicer, the Indemnified Party shall have the right to select one separate counsel for such Indemnified Party to assume such legal defenses and otherwise to participate in the defense of such damage, loss or expenses on behalf of such Indemnified Party. Upon receipt of notice from the Servicer to such Indemnified Party of its election to assume the defense of such action and approval by the Indemnified Party of such counsel, the Servicer shall not be liable to such Indemnified Party under this Section 5.3 for any legal or other expenses subsequently incurred by such Indemnified Party in connection with the defense thereof unless (i) the Indemnified Party shall have employed such counsel in connection with assumption of legal defenses in accordance with the proviso to the next preceding sentence, (ii) the Servicer shall not have employed and continued to employ counsel reasonably satisfactory to the Indemnified Party to represent the Indemnified Party within a reasonable time after notice of commencement of the action or (iii) the Servicer shall have authorized the employment of counsel for the Indemnified Party at the expense of the Servicer.

(c)     Notwithstanding any other provisions contained in this Section 5.3, (i) the Servicer shall not be liable for any settlement, compromise or consent to the entry of any order adjudicating or otherwise disposing of any damage, loss or expense effected without its consent and (ii) after the Servicer has assumed the defense of any damage, loss or expense under this Section 5.3 with respect to any Indemnified Party, it will not settle, compromise or consent to entry of any order adjudicating or otherwise disposing thereof (1) if such settlement, compromise or order involved the payment of money damages, unless the Servicer agrees with such Indemnified Party to pay such money damages and, if not simultaneously paid, to furnish such Indemnified Party with satisfactory evidence of its ability to pay such money damages, (2) if such settlement, compromise or order involved any relief against such Indemnified Party, other than the payment of money damages, without the prior written consent of such Indemnified Party and (3) if such settlement, compromise or order does not provide a full release of the Indemnified Party, without the prior written consent of such Indemnified Party.

45

ARTICLE VI

MISCELLANEOUS

SECTION 6.1     Term of Agreement; Survival. This Agreement shall terminate on the date on which the Offered Notes and any other amounts owed to the Agent, any Investor or any Indemnified Party under the Transaction Documents have been paid in full (other than unasserted indemnity claims) (the “Termination Date”); provided, however, that (i) the rights and remedies of the parties hereto with respect to any representations or warranties made or deemed to be made by such party in this Agreement, and (ii) the provisions of Article V and Sections 6.9, 6.10 and 6.11 of this Agreement shall survive the termination of this Agreement and the payment in full of the Note Principal Balance. Furthermore, all representations, warranties, covenants, guaranties and indemnifications contained in this Agreement and the Transaction Documents and in any document, certificate or statement delivered pursuant hereto or in connection herewith shall survive the sale and transfer of the Offered Notes.

SECTION 6.2     Waivers; Amendments. (a) No failure or delay on the part of any party hereto in exercising any power, right or remedy under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or remedy preclude any other further exercise thereof or the exercise of any other power, right or remedy. The rights and remedies herein provided shall be cumulative and nonexclusive of any rights or remedies provided by law.

(a)     This Agreement may be amended from time to time only with the written consent of the Transferor, the Servicer, the Issuer, the Agent and Investors in Offered Notes representing more than 66 2/3% of the Class A Note Principal Balance.

(b)     Notwithstanding anything to the contrary contained herein or in any other Transaction Document, any provision of this Agreement that requires consent of the Investors or of each Investor shall be satisfied by the consent of Investors in Offered Notes representing more than 66 2/3% of the Class A Note Principal Balance.

SECTION 6.3     Notices; Payments. All notices and other communications provided for hereunder shall, unless otherwise stated herein, be in writing (including facsimile) and mailed, facsimiled, emailed or delivered, as to each party hereto, at its address specified below or at such other address as shall be designated by such party in a written notice to the other party hereto. All such notices and communications shall, when mailed, be effective three (3) days after deposit in the mails, when facsimiled or emailed, be effective when confirmed by telephone or email, and when hand delivered, upon delivery.

46

If to the Agent:

TSO-Fortiva Notes Holdco LP

c/o TowerBrook Capital Partners L.P.

Park Avenue Tower

65 East 55th Street, 19th Floor

New York, NY 10022

Attention: Glenn Miller and Walter Weil

If to the Investors:

TSO-Fortiva Notes Holdco LP

c/o TowerBrook Capital Partners L.P.

Park Avenue Tower

65 East 55th Street, 19th Floor

New York, NY 10022

Attention: Glenn Miller and Walter Weil

If to the Transferor:

Perimeter Funding Corporation
101 Convention Center Drive

Suite 850, Room 20-A

Las Vegas, Nevada 89109

Attn: Joshua Miller

With a copy to (which copy shall not constitute notice)

Colleen Dolan

Fennemore Craig, P.C.

300 East Second Street, 15th Floor

Reno, Nevada 89501

If to the Servicer:

Access Financing, LLC
Five Concourse Parkway, Suite 300
Atlanta, Georgia 30346
Attention: General Counsel

47

With a copy to (which copy shall not constitute notice)

Law Office of Reagan Beck

P.O. Box 202

Wayland, Massachusetts 01778

If to the Issuer:

Perimeter Master Note Business Trust
c/o Wilmington Trust, National Association
3993 Howard Hughes Parkway

Suite 250

Las Vegas, Nevada 89169
Attention:     Corporate Trust Administration

With a copy to (which copy shall not constitute notice)

Colleen Dolan

Fennemore Craig, P.C.

300 East Second Street, 15th Floor

Reno, Nevada 89501

SECTION 6.4     Governing Law; Submission to Jurisdiction; Appointment of Service Agent(a)     THIS AGREEMENT 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). EACH OF THE PARTIES HERETO HEREBY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE COURT SITTING IN THE CITY OF NEW YORK FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. NOTHING IN THIS SECTION 6.4 SHALL AFFECT THE RIGHT OF ANY PARTY TO BRING ANY ACTION OR PROCEEDING AGAINST ANY OF THE PARTIES HERETO OR ANY OF THEIR RESPECTIVE PROPERTY IN THE COURTS OF OTHER JURISDICTIONS.

(b)     EACH OF THE PARTIES HERETO HEREBY WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, AMONG ANY OF THEM ARISING OUT OF, CONNECTED WITH, RELATING TO OR INCIDENTAL TO THE RELATIONSHIP BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT OR THE OTHER TRANSACTION DOCUMENTS.

48

(c)     Each of the parties hereto hereby irrevocably and unconditionally consents to service of process in the manner provided for notices in Section 6.3 of this Agreement; provided, that nothing in this Agreement shall affect the right of any such party to serve process in any other manner permitted by law.

(d)     In the event of a dispute or litigation under any Transaction Document, the prevailing party shall be entitled to receive all expenses incurred therewith, including reasonable attorneys’ fees and expenses.

(e)     Each of the parties hereto acknowledges and agrees that any breach or threatened breach of Section 4.2(jj) of this Agreement is likely to cause irreparable harm for which money damages may not be an appropriate or sufficient remedy. Each party hereto therefore agrees that the party alleging such breach or threat to commit such breach is entitled to seek injunctive or other equitable relief to remedy or prevent any breach or threatened breach of Section 4.2(jj) of this Agreement. Such remedy is not the exclusive remedy for any breach or threatened breach of Section 4.2(jj) of this Agreement, but is in addition to all other rights and remedies available at law or in equity and pursuant to this Agreement.

SECTION 6.5     Integration. This Agreement contains the final and complete integration of all prior expressions by the parties hereto with respect to the subject matter hereof and shall constitute the entire Agreement among the parties hereto with respect to the subject matter hereof superseding all prior oral or written understandings.

SECTION 6.6     Severability of Provisions. If any one or more of the provisions 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 such other provisions.

SECTION 6.7     Counterparts; Facsimile Delivery. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same Agreement. Electronic delivery of an executed signature page of this Agreement shall be effective as delivery of an executed counterpart hereof.

SECTION 6.8     Successors and Assigns; Binding Effect; Stapled Transfers of Offered Notes. This Agreement shall be binding upon each of and inure to the benefit of the Transferor, the Issuer, the Servicer, and the Investors and their respective successors and permitted assigns (including any subsequent holders of the Offered Notes). Notwithstanding anything to the contrary contained herein, except as provided in Section 5.02 or 6.02 of the Transfer and Servicing Agreement, this Agreement may not be assigned by the Transferor, the Issuer or the Servicer without the prior written consent of the Agent on behalf of the Investors. Each Investor with the consent of the Agent (such consent not to be unreasonably withheld) may Transfer its rights hereunder in whole or in part to any Permitted Transferee without the consent of the Transferor and to any other Person with the prior written consent of the Transferor, in each case in compliance with the Indenture Supplement; provided that if an Early Redemption Event or Event of Default has occurred and is continuing, each Investor may Transfer its rights hereunder in whole or in part to any Person without the consent of the Transferor. Notwithstanding the foregoing, no Offered Note may be transferred other than pursuant to a transfer of a pro rata portion of Class A-3 Notes, Class A-4 Notes, and Class A-5 Notes (a “Stapled Transfer”). Each of the Transferor and the Agent hereby consents to the transfer of a participation interest in the Class A-3 Notes, Class A-4 Notes and Class A-5 Notes to Alan Fishman pursuant to a master participation agreement in substantially the form attached hereto as Exhibit E.

49

SECTION 6.9     Confidentiality. Each of the parties hereto hereby agrees that it will not disclose the contents of this Agreement, any information disclosed pursuant to this Agreement including confidential information of or with respect to the Investors, the Agent, the Transferor, the Servicer or the Issuer to any other Person; except that each such party, its Affiliates and such party’s and it’s Affiliates’ respective officers, managers, members, partners, advisors, consultants and employees may disclose this Agreement and such information (i) to its external accountants and attorneys, financing sources, potential financing sources, investors, potential investors, and the agents of such Persons (“Excepted Persons”), and as required by an applicable law or order of any judicial or administrative proceeding or regulatory examination, (ii) to any Permitted Transferee or potential Permitted Transferee; provided that to the extent that such Permitted Transferee or potential Permitted Transferee actually receives the confidential information described below, it will enter into a confidentiality agreement for the benefit of the Transferor and its Affiliates in a mutually agreeable form and (iii) in any suit, action, proceeding or investigation (whether in law or in equity or pursuant to arbitration) involving this Agreement for the purpose of defending itself, reducing its liability, or protecting or exercising any of its claims, rights, remedies or interests under or in connection with this Agreement; provided, however, that the disclosing party shall, as a condition to any such disclosure, direct and require any Excepted Person receiving such information to maintain the confidentiality of such information and the disclosing party shall be liable for any failure of such Excepted Person to maintain the confidentiality of such information. It is understood that the financial terms that may not be disclosed except in compliance with this Section 6.9 are: all fees and other pricing terms, and all provisions relating to Early Redemption Events. Each of the parties hereto acknowledges and agrees that any breach or threatened breach of this Section is likely to cause the disclosing party irreparable harm for which money damages may not be an appropriate or sufficient remedy. The party receiving confidential information therefore agrees that the disclosing party is entitled to seek injunctive or other equitable relief to remedy or prevent any breach or threatened breach of this Section. Such remedy is not the exclusive remedy for any breach or threatened breach of this Section, but is in addition to all other rights and remedies available at law or in equity and pursuant to this Agreement.

Notwithstanding anything herein to the contrary, each party (and each employee, representative or other agent of each party) hereto may disclose to any and all persons, without limitation of any kind, any information with respect to the United States federal income “tax treatment” and “tax structure” of the transactions contemplated hereby (including opinions or other tax analyses) that are provided to such parties (or their representatives) relating to such tax treatment and tax structure; provided that with respect to any document or similar item that in either case contains information concerning the tax treatment or tax structure of the transaction as well as other information, this sentence shall only apply to such portions of the document or similar item that relate to the tax treatment or tax structure of the transactions contemplated hereby.

50

SECTION 6.10     No Bankruptcy Petition Against the Issuer or the Transferor. Each of the parties hereto, by entering into this Agreement, covenants and agrees that it will not at any time institute against, or join any other Person in instituting against, the Issuer or the Transferor any proceeding of a type referred to in the definition of Insolvency Event.

SECTION 6.11     No Recourse Against Issuer. Notwithstanding anything to the contrary contained herein, the obligations of the Issuer under this Agreement, the Indenture and the Indenture Supplement shall be payable at such time as funds are received by or are available to the Issuer in excess of funds necessary to pay in full all outstanding Notes and, to the extent funds are not available to pay such obligations, the claims relating thereto shall not constitute a claim against the Issuer but shall continue to accrue. Each party hereto agrees that the payment by the Issuer of any “claim” (as defined in Section 101 of Title 11 of the Bankruptcy Code) of any such party hereunder shall be subordinated to the payment in full of all Notes.

SECTION 6.12     Limitation of Liability. It is expressly understood and agreed by the parties hereto that (a) this Agreement is executed and delivered by Wilmington Trust, National Association, 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, National Association but is made and intended for the purpose of binding only the Issuer and (c) under no circumstances shall Wilmington Trust, National Association 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 6.13     Amounts Limited to Available Collections. Notwithstanding anything else in this Agreement to the contrary, the obligations of the Issuer and Transferor hereunder shall be payable hereunder solely to the extent funds are available therefor and, to the extent such funds are insufficient or unavailable to pay any amounts owing by the Issuer or the Transferor, as applicable, hereunder, it shall not constitute a claim against the Issuer or the Transferor, as applicable.

51

ARTICLE VII

THE AGENT

SECTION 7.1     Authorization and Action.

(a)     Each Investor hereby irrevocably designates and appoints TSO-Fortiva Notes Holdco LP, as Agent hereunder, and authorizes the Agent to take such actions as agent on its behalf, including execution of the other Transaction Documents, and to exercise such powers as are delegated to the Agent by the terms of this Agreement together with such actions and powers as are reasonably incidental thereto. The Agent shall not have any duties or responsibilities, except those expressly set forth herein, or any fiduciary relationship with the Investor, and no implied covenants, functions, responsibilities, duties, obligations or liabilities on the part of the Agent shall be read into this Agreement or otherwise exist for the Agent, regardless of whether an Event of Default or Early Redemption Event has occurred and is continuing. In performing its functions and duties hereunder, the Agent shall act solely as agent for the Investors and does not assume nor shall be deemed to have assumed any obligation or relationship of trust or agency with or for the Issuer, the Transferor or the Servicer or any of their successors or assigns. The provisions of this Article are solely for the benefit of the Agent and the Investors, and none of the Issuer, the Transferor or the Servicer shall have any rights as a third party beneficiary of any such provisions. The Agent shall not be required to take any action which exposes the Agent to personal liability or which is contrary to this Agreement or applicable law. Without limiting the generality of the foregoing, (i) the Agent shall not have any duty to take any discretionary action or exercise any discretionary powers; provided that, the Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Agent to liability or that is contrary to any Transaction Document or applicable law, including for the avoidance of doubt any action that may be in violation of the automatic stay under any applicable law, and (ii) except as expressly set forth in the Transaction Documents, the Agent shall not have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Issuer, the Transferor, the Servicer or any of their respective Affiliates that is communicated to or obtained by the Agent or any of its Affiliates in any capacity. The Agent shall be deemed not to have knowledge of any Event of Default or Early Redemption Event unless and until written notice thereof is given to Agent by the Issuer, the Transferor, the Servicer or an Investor, and the Agent shall not be responsible for or have any duty to ascertain or inquire into (A) any statement, warranty or representation made in or in connection with any Transaction Document, (B) the contents of any certificate, report or other document delivered hereunder or in connection with any Transaction Document, (C) the performance or observance of any of the covenants, agreements or other terms or conditions set forth in any Transaction Document, (D) the validity, enforceability, effectiveness or genuineness of any Transaction Document or any other agreement, instrument or document, (E) the creation, perfection or priority of Liens on the Trust Estate or the existence of the Trust Estate or (F) the satisfaction of any condition set forth in Article III or elsewhere in any Transaction Document, other than to confirm receipt of items expressly required to be delivered to the Agent. The Agent shall not be liable or responsible for any act or omission of the Account Bank.

(b)     Each Investor and each subsequent Investor hereby consents to the registration of the Class A Notes in the name of Agent as the “Class A Noteholder” (as defined in the Indenture Supplement) solely for the purposes of administration and convenience, and that as such Class A Noteholder, the Agent shall have no beneficial ownership interest in the Class A Notes. Without limiting the authorization of and delegation to the Agent set forth in the foregoing Section 7.1(a), it is hereby acknowledged and agreed that all payments in respect of the Class A Notes and in respect of fees and other amounts owing to the Investors under this Agreement shall, except as otherwise expressly provided herein, be remitted by the applicable payor to the Agent as the Class A Noteholder, and the Agent in such capacity shall distribute all such amounts, promptly following receipt thereof, to the applicable parties in interest according to their respective interests therein, determined by reference to the terms of the Indenture, the Indenture Supplement, this Agreement and the Agent’s books and records relating to the Class A Notes, the Indenture, the Indenture Supplement and this Agreement (it being agreed that the entries made in such books and records of the Agent shall be conclusive and binding for all purposes absent manifest error).

52

SECTION 7.2     Delegation of Duties.

The Agent may execute any of its duties under this Agreement by or through agents or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. The Agent shall not be responsible for the negligence or misconduct of any agents or attorneys-in-fact selected by it with reasonable care. The exculpatory provisions set forth in Section 7.3 shall apply to any such agents or attorneys-in-fact.

SECTION 7.3     Exculpatory Provisions.

Neither the Agent nor any of its Affiliates or any of its or their respective directors, members, managers, shareholders, partners, officers, agents, representatives or employees shall be (i) liable for any action lawfully taken or omitted to be taken by it or them under or in connection with this Agreement (except for its, their or such Person’s own gross negligence or willful misconduct), or (ii) responsible in any manner to any Investor for any recitals, statements, representations or warranties made by the Transferor, the Issuer or the Servicer contained in this Agreement or in any certificate, report, statement or other document referred to or provided for in, or received under or in connection with, this Agreement or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other document furnished in connection herewith, or for any failure of the Transferor, the Issuer or the Servicer to perform its obligations hereunder, or for the satisfaction of any condition specified herein. The Agent shall not be under any obligation to any Investor to ascertain or to inquire as to the observance or performance of any of the agreements or covenants contained in, or conditions of, this Agreement, or to inspect the properties, books or records of the Transferor, the Issuer or the Servicer. The Agent shall not be deemed to have knowledge of any Early Redemption Event unless the Agent has received notice from the Transferor, the Issuer or the Investor.

SECTION 7.4     Reliance.

The Agent (including in its capacity as “Class A Noteholder”) shall in all cases be entitled to rely, and shall be fully protected in relying, upon any document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons and upon advice and statements of legal counsel (including, without limitation, counsel to the Servicer, the Transferor or the Issuer), independent accountants and other experts selected by the Agent. The Agent shall in all cases be fully justified in failing or refusing to take any action under this Agreement or any other document furnished in connection herewith unless it shall first receive such advice or concurrence of the Investors as it deems appropriate or it shall first be indemnified to its satisfaction by the Investors, provided that unless and until the Agent shall have received such advice, the Agent may take or refrain from taking any action, as the Agent shall deem advisable and in the best interests of the Investors. The Agent shall in all cases be fully protected in acting, or in refraining from acting, in accordance with a request of an Investor, and such request and any action taken or failure to act pursuant thereto shall be binding upon each Investor.

53

SECTION 7.5     Non-Reliance on Agent and Other Investors .

The Investors expressly acknowledge that neither the Agent nor any of its Affiliates or any of its or their respective directors, members, managers, shareholders, partners, officers, agents, representatives or employees has made any representations or warranties to it and that no act by the Agent hereafter taken, including, without limitation, any review of the affairs of the Servicer, the Issuer, the Account Owner, the Seller or the Transferor, shall be deemed to constitute any representation or warranty by the Agent. Each Investor represents and warrants to the Agent that it has and will, independently and without reliance upon the Agent or any Investor and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, operations, property, financial and other conditions and creditworthiness of the Transferor, the Seller, the Issuer, the Account Owner and the Servicer and made its own decision to enter into this Agreement.

The Investors are not partners or co-venturers, and no Investor shall be liable for the acts or omissions of, or (except as otherwise set forth herein in case of the Agent) authorized to act for, any other Investor. The Agent shall have the exclusive right on behalf of the Investors to enforce the payment of the principal of and interest on any Offered Note after the date such principal or interest has become due and payable pursuant to the terms of this Agreement.

SECTION 7.6     Reimbursement and Indemnification.

The Investors agree to reimburse and indemnify the Agent (including in its capacity as “Class A Noteholder”) and each of its of its Affiliates or any of its or their respective directors, members, managers, shareholders, partners, officers, agents, representatives or employees ratably according to their pro rata shares, to the extent not paid or reimbursed by the Transferor, the Servicer or the Issuer (a) for any amounts for which the Agent, acting in its capacity as Agent, is entitled to reimbursement by the Transferor, the Servicer or the Issuer hereunder and (b) for any other expenses incurred by the Agent, acting in its capacity as Agent, in connection with the administration and enforcement of this Agreement.

SECTION 7.7     Agent in its Individual Capacity.

The Agent and each of its Affiliates may make loans to, accept deposits from and generally engage in any kind of business with the Servicer, the Seller, the Issuer or the Transferor as though the Agent was not the Agent hereunder. With respect to purchasing the Offered Notes or Note Principal Balance Increases pursuant to this Agreement, the Agent and each of its Affiliates shall have the same rights and powers under this Agreement as any Investor and may exercise the same as though it were not the Agent, and the terms “Investor” and “Investors” shall include the Agent, in its individual capacity.

54

SECTION 7.8     Successor Agent.

The Agent may, upon 5 days’ notice to the Transferor, the Issuer and the Investors resign as Agent. If the Agent shall resign, then Investors holding a majority of the outstanding principal balance of the Class A Notes during such 5-day period shall appoint a successor agent. If for any reason no successor Agent is appointed by the Investors and accepted such appointment during such 5-day period, then the retiring Agent may, on behalf of the Investors, appoint a successor Agent. Any successor agent shall be an Investor or an Affiliate of an Investor who shall agree to comply with Section 6.9 hereof; provided that any successor agent that is not an Investor shall comply with Section 9.04 of the Indenture Supplement as if it were a Class A Noteholder. Upon the acceptance of any appointment as Agent hereunder by a successor Agent, such successor Agent shall thereupon succeed to and become vested with all of the rights, powers, privileges and duties of the retiring Agent, and the retiring Agent shall be discharged from its duties and obligations hereunder. Such successor Agent shall be designated as the “Class A Noteholder” as described in Section 7.1(b) hereof. After any retiring Agent’s resignation hereunder as Agent, the provisions of this Article VII shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Agent under this Agreement.

[Signatures Follow]

55

IN WITNESS WHEREOF, the parties have caused this Purchase Agreement to be executed by their respective officers thereunto duly authorized, as of the date and year first above written.

PERIMETER FUNDING CORPORATION,

as Transferor


By: /s/ Joshua C. Miller                                

Name: Joshua C. Miller
Title: Assistant Secretary

ACCESS FINANCING, LLC, as Servicer


By: /s/ Brian Stone                                       

Name: Brian Stone

Title: Chief Risk Officer

PERIMETER MASTER NOTE BUSINESS

TRUST, as Issuer

By: Wilmington Trust, National

Association, not in its individual capacity

but solely as Owner Trustee


By:/s/ Robert P. Hines Jr.                              
Name: Robert P. Hines Jr.
Title: Vice President

TSO-Fortiva Notes Holdco LP, as Agent

By: TowerBrook TSO GP (Alberta), L.P., its

General Partner

By: TowerBrook Investors, Ltd., its

General Partner

By: /s/ Glenn F. Miller                                  
Name: Glenn F. Miller
Title: Attorney-in-Fact

S-1

TSO-Fortiva Notes Holdco LP, as Investor

By: TowerBrook TSO GP (Alberta), L.P., its

General Partner

By: TowerBrook Investors, Ltd., its General

Partner

By: /s/ Glenn F. Miller                                 
Name: Glenn F. Miller
Title: Attorney-in-Fact

Class A-3 Commitment Percentage: 100%

Class A-4 Commitment Percentage: 100%

Class A-5 Commitment Percentage: 100%

2

SCHEDULE A

DEFINITIONS

“Class A-3 Note Rate” means [*****]% per annum.

“Class A-4 Note Rate” means [*****]% per annum.

“Class A-5 Note Rate” means [*****]% per annum.

“Target Proceeds Amount” means the following:

[*****].

EX-10.11P

Exhibit 10.11(p)

FIRST AMENDMENT TO PURCHASE AGREEMENT

This FIRST AMENDMENT, dated as of November 13, 2019 (this “Amendment”), to the PURCHASE AGREEMENT, dated as of November 16, 2018 (the “Existing Agreement” and as amended by this Amendment, the “Agreement”), among PERIMETER MASTER NOTE BUSINESS TRUST, a business trust organized and existing under the laws of the State of Nevada, as issuer (the “Issuer”), PERIMETER FUNDING CORPORATION, a Nevada corporation (“Perimeter”), as transferor (together with its successors and permitted assigns in such capacity, the “Transferor”), ACCESS FINANCING, LLC, a Georgia limited liability company, as servicer (together with its successors and permitted assigns, the “Servicer”), TSO-FORTIVA NOTES HOLDCO LP, as Agent (the “Agent”) and TSO-FORTIVA NOTES HOLDCO LP, as an Investor.

W I T N E S S E T H :

WHEREAS, the parties wish to amend the Existing Agreement as set forth herein;

NOW, THEREFORE, in consideration of the mutual covenants herein contained, and other good and valuable consideration, the receipt and adequacy of which are hereby expressly acknowledged, the parties hereto agree as follows:

1. Definitions. Capitalized terms used herein and not otherwise defined herein shall have the meanings specified in the Existing Agreement.

2. Amendment.

Section 1.1 of the Existing Agreement is amended hereby by deleting the definition of “Aggregate Maximum Principal Amount” and adding the following definition in its place:

“Aggregate Maximum Principal Amount” means Seventy Million Dollars ($70,000,000.00), as such amount may be reduced from time to time in accordance with the terms hereof or the Series 2017-One Purchase Agreement.

3. Representations and Warranties. 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). As of the date hereof, each of the Transferor, the Issuer and the Servicer, as to itself only and not as to any other, represents and warrants to the Agent, the Investors and the Certificateholder, that all representations and warranties made by it in Section 4.1 of the Agreement, with respect to itself, are true and correct as of the date hereof.

4. Agreement in Full Force and Effect as Amended. Except as specifically amended hereby, all of the terms and conditions of the Existing Agreement shall remain in full force and effect. All references to the Existing Agreement in any other document or instrument among the parties hereto shall be deemed to mean such Existing Agreement as amended by this Amendment. This Amendment shall not constitute a novation of the Existing Agreement, but shall constitute an amendment thereof. The parties hereto agree to be bound by the terms and obligations of the Existing Agreement, as amended by this Amendment, as though the terms and obligations of the Existing Agreement were set forth herein.

5. Limited Recourse; No Proceedings. Sections 6.10 and 6.11 of the Agreement are incorporated herein by reference.

6. Counterparts. This Amendment may be executed in any number of counterparts and by separate parties hereto on separate counterparts, each of which when executed shall be deemed an original, but all such counterparts taken together shall constitute one and the same instrument.

7. Governing Law. 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).

8. Limitation of Liability. It is expressly understood and agreed by the parties hereto that (a) this Amendment is executed and delivered by Wilmington Trust, National Association, 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, National Association but is made and intended for the purpose of binding only the Issuer, (c) nothing herein contained shall be construed as creating any liability on Wilmington Trust, National Association, individually or personally, to perform any covenant either expressed or implied contained herein, all such liability, if any, being expressly waived by the parties to this Agreement and by any person claiming by, through or under the parties to this Agreement, (d) Wilmington Trust, National Association has not verified and has conducted no investigation as to the accuracy or completeness of any representation, warranty or covenant of the Issuer and (e) under no circumstances shall Wilmington Trust, National Association 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 any other document to which the Issuer is a party.

2

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed by their respective officers as of the day and year first above written.

PERIMETER FUNDING CORPORATION,

as Transferor


By: /s/ Rosalind T. Drakeford                          

Name: Rosalind T. Drakeford
Title: Secretary

ACCESS FINANCING, LLC, as Servicer


By: /s/ Mitch Saunders               

Name: Mitch Saunders
Title: Vice President

PERIMETER MASTER NOTE BUSINESS

TRUST, as Issuer

By: Wilmington Trust, National

Association, not in its individual capacity

but solely as Owner Trustee


By:/s/ Patricia A. Bradenburg                         
Name: Patricia A. Bradenburg
Title: Banking Officer

[SIGNATURE PAGE TO FIRST AMENDMENT TO PURCHASE AGREEMENT]

TSO-Fortiva Notes Holdco LP, as Agent

By: TowerBrook TSO GP (Alberta), L.P., its

General Partner

By: TowerBrook Investors, Ltd., its General

Partner

By: /s/ Glenn F. Miller                                  
Name: Glenn F. Miller
Title: Authorized Signatory

TSO-Fortiva Notes Holdco LP, as Investor

By: TowerBrook TSO GP (Alberta), L.P., its

General Partner

By: TowerBrook Investors, Ltd., its General

Partner

By: /s/ Glenn F. Miller                                
Name: Glenn F. Miller
Title: Authorized Signatory

[SIGNATURE PAGE TO FIRST AMENDMENT TO PURCHASE AGREEMENT]

EX-10.11Q

CERTAIN INFORMATION, IDENTIFIED BY [*****], HAS BEEN EXCLUDED FROM THE EXHIBIT BECAUSE IT IS BOTH NOT MATERIAL AND WOULD LIKELY CAUSE COMPETITIVE HARM TO THE COMPANY IF PUBLICLY DISCLOSED.

Exhibit 10.11(q)

SECOND AMENDMENT TO PURCHASE AGREEMENT

This SECOND AMENDMENT, dated as of January 23, 2020 (this “Amendment”), to the PURCHASE AGREEMENT, dated as of November 16, 2018 (the “Existing Agreement” and as amended by this Amendment and the First Amendment to the Purchase Agreement dated as of November 13, 2019, the “Agreement”), among PERIMETER MASTER NOTE BUSINESS TRUST, a business trust organized and existing under the laws of the State of Nevada, as issuer (the “Issuer”), PERIMETER FUNDING CORPORATION, a Nevada corporation (“Perimeter”), as transferor (together with its successors and permitted assigns in such capacity, the “Transferor”), ACCESS FINANCING, LLC, a Georgia limited liability company, as servicer (together with its successors and permitted assigns, the “Servicer”), TSO-FORTIVA NOTES HOLDCO LP, as Agent (the “Agent”) and TSO-FORTIVA NOTES HOLDCO LP, as an Investor.

W I T N E S S E T H :

WHEREAS, the parties wish to amend the Existing Agreement as set forth herein;

NOW, THEREFORE, in consideration of the mutual covenants herein contained, and other good and valuable consideration, the receipt and adequacy of which are hereby expressly acknowledged, the parties hereto agree as follows:

1. Definitions. Capitalized terms used herein and not otherwise defined herein shall have the meanings specified in the Existing Agreement.

2. Amendments.

(a) Section 1.1 of the Existing Agreement is hereby amended by deleting the definition of “Target Proceeds Amount” and adding the following two definitions:

“Daily Target Proceeds Amount” means, for any date of determination occurring on or after December 1, 2019, an amount equal to [*****], in each case as of the day prior to such date of determination.

“Target Proceeds Amount” means, for each Monthly Period commencing on or after December 1, 2019 and occurring before December 1, 2020, an amount equal to the sum of the Daily Target Proceeds Amount for each day in such Monthly Period.

(b) Schedule A of the Existing Agreement is amended hereby by deleting the definition of “Target Proceeds Amount.”

(c) Section 2.2 of the Existing Agreement is amended hereby by deleting the fourth sentence of paragraph (b) and inserting the following in its place:

The Issuer shall deliver no more than two such notices to the Agent in any calendar month, and each amount specified in any such notice must be (i) in an aggregate amount of not less than $1,000,000 and (ii) if the related Increase Date shall occur after February 8, 2021, in an aggregate amount, when combined with any Note Principal Balance Increase (as defined in the Series 2017-One Supplement) occurring on the same day, of not less than $5,000,000.

(d) Section 2.2 of the Existing Agreement is amended hereby by deleting paragraph (e) and inserting the following in its place:

(e) Notwithstanding anything contained herein or in the other Transaction Documents, in the event the Issuer prepays all or a portion of the Class A Note Principal Balance during the Revolving Period, the Maximum Principal Amount shall not be reduced and the Issuer shall continue to have the right to request Note Principal Balance Increases on the terms and subject to the conditions hereof.

(e) Section 2.3 of the Existing Agreement is amended hereby by deleting paragraph (b) and inserting the following in its place:  

(b) The Issuer hereby covenants that the aggregate of the Class A Note Principal Balance and the Class A Note Principal Balance (as defined in the Series 2017-One Supplement) shall equal or exceed $[*****] at all times commencing on December 1, 2019 and prior to December 1, 2020. Notwithstanding the foregoing, if the Issuer repays all or any portion of the Class A Note Principal Balance, at any time and from time to time during any Monthly Period commencing on December 1, 2019 and prior to December 1, 2020, in an amount that causes the aggregate of the Class A Note Principal Balance and the Class A Note Principal Balance (as defined in the Series 2017-One Supplement) to be less than $[*****], the Issuer shall pay to the Agent on behalf of the Investors an amount equal to the Target Proceeds Amount in accordance with the Indenture Supplement. At any time on or after December 1, 2020, the Transferor or its designee shall have the option to purchase the Class A Notes from the Investors at an amount equal to the outstanding Class A Note Principal plus accrued and unpaid interest thereon and all other amounts due in respect of the Class A Notes under the Transaction Documents.

2

(f) Section 4.2 of the Existing Agreement is amended hereby by deleting paragraph (m) and inserting the following in its place:

(m) Additional Series. Notwithstanding anything contained herein or in the other Transaction Documents, the Issuer may issue additional Series of notes under the Indenture or any Indenture Supplement without obtaining the Agent’s prior written consent.

(g) Section 4.2 of the Existing Agreement is amended hereby by deleting paragraph (jj) and inserting the following in its place:

(jj) [Reserved].

(h) Section 4.2 of the Existing Agreement is amended hereby by deleting paragraph (ll) and inserting the following in its place:

(ll) Transfer of Class B Notes; Class B Note Purchase Agreement. The Class B Notes shall not be transferred in whole or in part without the prior written consent of the Agent, which consent shall not be unreasonably delayed or withheld; provided, however, the Class B Notes may be transferred to an Affiliate of the Holder of the Class B Notes without the consent of the Agent. The Class B Note Purchase Agreement shall not be amended, restated or otherwise modified without the prior written consent of the Agent which consent shall not be unreasonably delayed or withheld.

(i) The following new Section is hereby added to the Existing Agreement as Section 4.6:

Notwithstanding anything contained herein, the Agent hereby agrees, for itself and on behalf of the Investors, to consent to or waive any requested amendment or waiver to the Series 2018-Two Indenture Supplement or the Class A Purchase Agreement (as defined in the Series 2018-Two Indenture Supplement) requested by the Transferor or required pursuant to the Series 2018-Two Supplement to the definitions of “Advance Rate,” “Borrowing Base,” “Class A Costs,” “Class A-1 Note Rate,” “Class A-2 Note Rate,” “Excess Concentration Amounts,” “Monthly Interest,” “Net Eligible Receivables Balance” or any term used directly or indirectly in such defined term.

3

(j) Exhibit D of the Existing Agreement is amended hereby by deleting paragraph 7 and inserting the following in its place:

7. No draws under the Senior Supplement may occur unless before and immediately following such draw, the sum of the Class B Note Principal Balance and the Series Required Transferor Amount shall be no less than 10% of the sum of (i) the Note Principal Balance and (ii) the outstanding principal balance of the Senior Facility.

3. Representations and Warranties. 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). As of the date hereof, each of the Transferor, the Issuer and the Servicer, as to itself only and not as to any other, represents and warrants to the Agent, the Investors and the Certificateholder, that all representations and warranties made by it in Section 4.1 of the Agreement, with respect to itself, are true and correct as of the date hereof.

4. Agreement in Full Force and Effect as Amended. Except as specifically amended hereby, all of the terms and conditions of the Existing Agreement shall remain in full force and effect. All references to the Existing Agreement in any other document or instrument among the parties hereto shall be deemed to mean such Existing Agreement as amended by this Amendment. This Amendment shall not constitute a novation of the Existing Agreement, but shall constitute an amendment thereof. The parties hereto agree to be bound by the terms and obligations of the Existing Agreement, as amended by this Amendment, as though the terms and obligations of the Existing Agreement were set forth herein.

5. Limited Recourse; No Proceedings. Sections 6.10 and 6.11 of the Agreement are incorporated herein by reference.

6. Counterparts. This Amendment may be executed in any number of counterparts and by separate parties hereto on separate counterparts, each of which when executed shall be deemed an original, but all such counterparts taken together shall constitute one and the same instrument.

7. Governing Law. 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).

4

8. Limitation of Liability. It is expressly understood and agreed by the parties hereto that (a) this Amendment is executed and delivered by Wilmington Trust, National Association, 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, National Association but is made and intended for the purpose of binding only the Issuer, (c) nothing herein contained shall be construed as creating any liability on Wilmington Trust, National Association, individually or personally, to perform any covenant either expressed or implied contained herein, all such liability, if any, being expressly waived by the parties to this Agreement and by any person claiming by, through or under the parties to this Agreement, (d) Wilmington Trust, National Association has not verified and has conducted no investigation as to the accuracy or completeness of any representation, warranty or covenant of the Issuer and (e) under no circumstances shall Wilmington Trust, National Association 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 any other document to which the Issuer is a party.

5

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed by their respective officers as of the day and year first above written.

PERIMETER FUNDING CORPORATION,

as Transferor


By: /s/ Bettie Lass                                          

Name: Bettie Lass
Title: Treasurer

ACCESS FINANCING, LLC, as Servicer


By: /s/ Brian Stone                                         

Name: Brian Stone
Title: President

PERIMETER MASTER NOTE BUSINESS

TRUST, as Issuer

By: Wilmington Trust, National

Association, not in its individual capacity

but solely as Owner Trustee


By:/s/ Nancy E. Hagner                                
Name: Nancy E. Hagner
Title: Assistant Vice President

[SIGNATURE PAGE TO SECOND AMENDMENT TO PURCHASE AGREEMENT]

TSO-Fortiva Notes Holdco LP, as Agent

By: TowerBrook TSO GP (Alberta), L.P., its

General Partner

By: TowerBrook Investors, Ltd., its General

Partner

By: /s/ Glenn F. Miller                                  
Name: Glenn F. Miller
Title: Authorized Signatory

TSO-Fortiva Notes Holdco LP, as Investor

By: TowerBrook TSO GP (Alberta), L.P., its

General Partner

By: TowerBrook Investors, Ltd., its General

Partner

By: /s/ Glenn F. Miller                               
Name: Glenn F. Miller
Title: Authorized Signatory

[SIGNATURE PAGE TO SECOND AMENDMENT TO PURCHASE AGREEMENT]

EX-10.11R

CERTAIN INFORMATION, IDENTIFIED BY [*****], HAS BEEN EXCLUDED FROM THE EXHIBIT BECAUSE IT IS BOTH NOT MATERIAL AND WOULD LIKELY CAUSE COMPETITIVE HARM TO THE COMPANY IF PUBLICLY DISCLOSED.

Exhibit 10.11(r)

EXECUTION COPY

SERIES 2019-ONE INDENTURE SUPPLEMENT

Dated as of June 12, 2019

to

MASTER INDENTURE

Dated as of February 8, 2017

Series 2019-One Asset Backed Notes

$115,789,000 Class A Asset Backed Notes

$63,158,000 Class B Asset Backed Notes

$10,527,000 Class C Asset Backed Notes     

$10,526,000 Class D Asset Backed Notes

PERIMETER MASTER NOTE BUSINESS TRUST

SERIES 2019-ONE

among

PERIMETER MASTER NOTE BUSINESS TRUST

Issuer

ACCESS FINANCING, LLC

Servicer

and

U.S. BANK NATIONAL ASSOCIATION

Indenture Trustee

on behalf of the Series 2019-One Noteholders

EXHIBITS

Exhibit A     Form of Class A Rule 144 A Global Note

Exhibit B     Form of Class B Rule 144 A Global Note

Exhibit C     Form of Class C Rule 144 A Global Note

Exhibit D     Form of Class D Rule 144 A Global Note

Exhibit E     Form of Monthly Servicer Statement

SERIES 2019-ONE INDENTURE SUPPLEMENT, dated as of June 12, 2019 (this “Supplement”), among PERIMETER MASTER NOTE BUSINESS TRUST, a business trust organized and existing under the laws of the State of Nevada (the “Issuer”), ACCESS FINANCING, LLC, a Georgia limited liability company, as servicer (together with its successors and permitted assigns, the “Servicer”), and U.S. BANK NATIONAL ASSOCIATION, a national banking association, not in its individual capacity, but solely as Indenture Trustee (together with its successors in the trusts thereunder as provided in the Indenture, the “Indenture Trustee”) under the Master Indenture dated as of February 8, 2017 (the “Indenture”) among the Issuer, the Servicer and the Indenture Trustee.

Section 2.10 of the Indenture provides that the Issuer may, pursuant to one or more Indenture Supplements, direct the Indenture Trustee, on behalf of the Issuer, to issue one or more Series of Notes and to set forth the Principal Terms of such Series.

Pursuant to the Indenture and this Supplement, the Issuer and the Indenture Trustee shall create a new Series of Notes and specify the Principal Terms thereof.

ARTICLE I     

Creation of the Series 2019-One Notes.

Section 1.01.     Designation.

(a)     There is hereby created and designated a Series of Notes to be issued pursuant to the Indenture and this Supplement to be known as the “Perimeter Master Note Business Trust, Series 2019-One Notes” or the “Series 2019-One Notes.” The Series 2019-One Notes shall be issued in four Classes, the first of which shall be known as the “Class A Series 2019-One Asset Backed Notes,” the second of which shall be known as the “Class B Series 2019-One Asset Backed Notes,” the third of which shall be known as the “Class C Series 2019-One Asset Backed Notes” and the fourth of which shall be known as the “Class D Series 2019-One Asset Backed Notes.” The Series 2019-One Notes shall be due and payable on the Stated Maturity Date.

(b)     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, the terms and provisions of this Supplement shall be controlling.

(c)     The Indenture Trustee, the Paying Agent, the Note Registrar, the Transferor, the Issuer and any agent of any of them shall prior to due presentation of a Registered Note for registration of transfer, treat the Person in whose name any Registered Note is registered as the owner of such Registered Note for the purpose of receiving distributions pursuant to the terms of the applicable Indenture Supplement and for all other purposes whatsoever and, none of the Indenture Trustee, the Paying Agent, the Note Registrar, the Transferor, the Issuer or any agent of any of them shall be affected by any notice to the contrary.

ARTICLE II

Definitions

Section 2.01.     Definitions.

(a)     All capitalized terms used but not otherwise defined herein are defined in the Indenture, the Transfer and Servicing Agreement or the Trust Agreement (including by way of reference to other documents). Each capitalized term defined herein shall relate only to the Series 2019-One Notes and no other Series of Notes issued by the Issuer. Whenever used in this 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.

“Administrative Redemption” shall mean a redemption of the Series 2019-One Notes as specified in subsection 7.01(a).

“Allocation Amount” shall mean, as of any date, an amount equal to (a) the Initial Note Principal Balance, minus (b) the total amount of principal payments made on the Series 2019-One Notes prior to such date minus (c) the excess, if any, of (i) the total amount of Reduction Amounts for all Distribution Dates prior to such date and Reallocated Principal Collections that under subsections 4.06(b) through (d) were used prior to such date to fund the Class A Required Amount, the Class B Required Amount or the Class C Required Amount over (ii) such Reduction Amounts and Reallocated Principal Collections reimbursed pursuant to subsection 4.04(a)(vii)(A) prior to such date, provided that the Allocation Amount shall not be less than zero.

“Available Finance Charge Collections” shall mean an amount equal to, with respect to any Monthly Period, the product of (i) the Floating Allocation Percentage for such Monthly Period and (ii) the Series 2019-One Allocable Finance Charge Collections for such Monthly Period.

“Available Principal Collections” shall mean an amount equal to, with respect to any Monthly Period, (i) the product of (a) the Fixed/Floating Allocation Percentage for such Monthly Period and (b) Series 2019-One Allocable Principal Collections minus (ii) the Transferor Available Principal Collections and Reallocated Principal Collections with respect to such Monthly Period that pursuant to Section 4.06 are required to fund the Class A Required Amount, the Class B Required Amount, the Class C Required Amount or the Class D Required Amount for such Monthly Period plus (iii) any other amounts which pursuant to subsection 4.04(a) are to be treated as Available Principal Collections for such Monthly Period.

“Average Principal Receivables” shall mean, for any period, the sum of the Principal Receivables for each day in such period divided by the number of days in such period.

2

“Backup Servicer” shall mean the entity designated by the Servicer to be a backup servicer under a backup servicing agreement pursuant to a notice provided to the Indenture Trustee.

“Backup Servicing Fee” shall mean the fee payable pursuant to a backup servicing agreement entered into by the Servicer, the Issuer, the Backup Servicer and the Indenture Trustee.

“Capped Program Expenses” shall mean, for any Distribution Date, the sum of (i) an amount not to exceed $50,000 per year beginning on the Closing Date and ending on each anniversary thereof, equal to the Program Expenses owed to the Owner Trustee and (ii) an amount not to exceed $50,000 per year beginning on the Closing Date and ending on each anniversary thereof, equal to the Program Expenses owed to the Indenture Trustee.

“Charge-Off Rate” shall mean, with respect to any Monthly Period, the annualized percentage equivalent of a fraction (a) the numerator of which is the aggregate outstanding principal balance of all Receivables that became Defaulted Receivables during such Monthly Period net of Recoveries and (b)  the denominator of which is the aggregate amount of Principal Receivables as of the last day of the prior Monthly Period.

“Class A Additional Interest” shall have the meaning specified in subsection 4.02(a).

“Class A Initial Note Principal Balance” shall mean $115,789,000.

“Class A Interest Shortfall” shall have the meaning specified in subsection 4.02(a).

“Class A Monthly Interest” shall have the meaning specified in subsection 4.02(a).

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

“Class A Note Interest Rate” shall mean, for any Interest Period for the Class A Notes, a per annum rate of [*****]%.

“Class A Note Principal Balance” shall mean, on any date, the Class A Initial Note Principal Balance, minus the total amount of principal payments made on the Class A Notes on or prior to such date.

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

“Class A Required Amount” shall have the meaning specified in subsection 4.03(a).

3

“Class B Additional Interest” shall have the meaning specified in subsection 4.02(b).

“Class B Initial Note Principal Balance” shall mean $63,158,000.

“Class B Interest Shortfall” shall have the meaning specified in subsection 4.02(b).

“Class B Monthly Interest” shall have the meaning specified in subsection 4.02(b).

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

“Class B Note Interest Rate” shall mean, for any Interest Period for the Class B Notes, a per annum rate of [*****]%.

“Class B Note Principal Balance” shall mean, on any date, the Class B Initial Note Principal Balance, minus the total amount of principal payments made on the Class B Notes on or prior to such date.

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

“Class B Required Amount” shall have the meaning specified in subsection 4.03(b).

“Class C Additional Interest” shall have the meaning specified in subsection 4.02(c).

“Class C Initial Note Principal Balance” shall mean $10,527,000.

“Class C Interest Shortfall” shall have the meaning specified in subsection 4.02(c).

“Class C Monthly Interest” shall have the meaning specified in subsection 4.02(c).

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

“Class C Note Interest Rate” shall mean, for any Interest Period for the Class C Notes, a per annum rate of [*****]%.

“Class C Note Principal Balance” shall mean, on any date, the Class C Initial Note Principal Balance, minus the total amount of principal payments made on the Class C Notes on or prior to such date.

4

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

“Class C Required Amount” shall have the meaning specified in subsection 4.03(c).

“Class D Additional Interest” shall have the meaning specified in subsection 4.02(d).

“Class D Initial Note Principal Balance” shall mean $10,526,000.

“Class D Interest Shortfall” shall have the meaning specified in subsection 4.02(d).

“Class D Monthly Interest” shall have the meaning specified in subsection 4.02(d).

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

“Class D Note Interest Rate” shall mean, for any Interest Period for the Class D Notes, a per annum rate of [*****]%.

“Class D Note Principal Balance” shall mean, on any date, the Class D Initial Note Principal Balance, minus the total amount of principal payments made on the Class D Notes on or prior to such date.

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

“Class D Required Amount” shall have the meaning specified in subsection 4.03(d).

“Closing Date” shall mean June 12, 2019.

“Collection Release Conditions” shall mean, on any day, that each of the following is true before and after giving effect to a release of Collections to the Issuer under Section 4.01:

(a) the aggregate unpaid principal balance of all Series of Notes issued under the Indenture or any Indenture Supplement shall not exceed the sum of the Net Eligible Receivables Balance plus the aggregate pre-funding amounts of other Series of Notes issued and outstanding on such date; provided, however, for purposes of this calculation, clause (b) of the definition of Net Eligible Receivables Balance shall be determined as of the last day of the immediately preceding Monthly Period; and

(b) the Transferor Amount on such day is greater than the Required Transferor Amount (after giving effect to all Principal Receivables transferred to the Issuer on such day).

5

“Controlled Redemption Commencement Date” shall mean July 15, 2021.

“Controlled Redemption Payment Amount” shall mean, for any Distribution Date during the Controlled Redemption Period, an amount equal to the Controlled Redemption Target Amount for such Distribution Date plus any Controlled Redemption Target Amount previously owed but not distributed on a prior Distribution Date.

“Controlled Redemption Period” shall mean the period commencing at the close of business on May 31, 20121 and ending on the earlier of (a) the commencement of the Early Redemption Period and (b) December 15, 2022.

“Controlled Redemption Target Amount” shall mean, for any Distribution Date during the Controlled Redemption Period, an amount equal to one-eighteenth of the sum of the Class A Initial Note Principal Balance, the Class B Initial Note Principal Balance, the Class C Initial Note Principal Balance and the Class D Initial Note Principal Balance.

“Determination Date” shall mean the third (3^rd) Business Day preceding each Distribution Date.

“Distribution Date” shall mean the fifteenth (15th) day of each calendar month, or if such fifteenth day is not a Business Day, the next succeeding Business Day; provided, that the first Distribution Date for Series 2019-One shall be July 15, 2019.

“Early Redemption Event” shall mean any Early Redemption Event specified in Section 5.01 of the Indenture and any Early Redemption Event specified in Section 6.01 hereof.

“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 with respect to Series 2019-One is deemed to have occurred, and ending on the first to occur of (a) the payment in full of the Note Principal Balance or (b) the Stated Maturity Date.

“Excess Concentration Amount” shall have the meaning specified in subsection 10.06(a).

“Excess Spread Percentage” shall mean, with respect to any Monthly Period, the annualized percentage equivalent of a fraction, (a) the numerator of which is equal to Collections of Finance Charge Receivables minus the Defaulted Amount, in each case for such Monthly Period and (b) the denominator of which is the Average Principal Receivables for such Monthly Period.

“FATCA” shall mean Sections 1471 through 1474 of the Code, as in effect on the date hereof (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations thereunder or official governmental interpretations thereof and any agreements entered into pursuant to Section 1471(b)(1) of the Code.

6

“Fixed/Floating Allocation Percentage” shall mean, with respect to any day during a Monthly Period, the percentage equivalent (which percentage shall never exceed 100%) of a fraction, the numerator of which is (a) during the Revolving Period, the Series Adjusted Allocation Amount for Series 2019-One (or, in the case of the first Monthly Period, the Initial Note Principal Balance) plus the Series Adjusted Subordinated Transferor Amount, in each case as of the last day of the immediately preceding Monthly Period and (b) during the Redemption Period, the Series Adjusted Allocation Amount for Series 2019-One plus the Series Adjusted Subordinated Transferor Amount in each case as of the close of business on the date on which the Revolving Period shall have terminated or been suspended, as the case may be, and the denominator of which is the product of (x) the greater of (A) the sum of (i) the total amount of Principal Receivables as of the last day of the immediately preceding Monthly Period (or with respect to the first Monthly Period, the total amount of Principal Receivables as of the Closing Date), (ii) the Special Funding Amount as of such last day (or with respect to the first Monthly Period, the Closing Date), and (iii) the amount of Collections of Principal Receivables on deposit in the Collection Account as of such last day (or with respect to the first Monthly Period, as of the Closing Date) and (B) the sum of the numerators used to determine the series allocation percentages with respect to Collections of Principal Receivables for all Series of Notes Outstanding on the date of determination, and (y) the Series 2019-One Allocation Percentage as of the last day of the immediately preceding Monthly Period; provided, however, that with respect to any Monthly Period in which one or more Reset Dates occurs, the Fixed/Floating Allocation Percentage shall be recalculated as provided above but as of such Reset Date for the period from and including such Reset Date to but excluding the earlier of the next such Reset Date, if any, and the last day of such Monthly Period; provided further, that the numerator in clause (b) above shall continue to be the Series Adjusted Allocation Amount for Series 2019-One plus the Series Adjusted Subordinated Transferor Amount in each case as of the close of business on the date on which the Revolving Period shall have terminated unless the Series 2019-One Notes are paid in full on such date; provided further, however, that if Series 2019-One is paired with a Paired Series as provided in Section 9.06 and if an Early Redemption Event (as such term is defined in the Indenture) occurs with respect to the Paired Series, the Issuer may, by written notice to the Indenture Trustee and the Servicer, designate that the numerator in clause (b) above shall be the Series Adjusted Allocation Amount for Series 2019-One plus the Series Adjusted Subordinated Transferor Amount as of the close of business of the last day of the revolving period for such Paired Series.

“Floating Allocation Percentage” shall mean, with respect to any day during a Monthly Period, the percentage equivalent (which percentage shall never exceed 100%) of a fraction, the numerator of which is the Allocation Amount (or in the case of the first Monthly Period, the Initial Note Principal Balance) plus, with respect to the allocation of Collections of Finance Charge Receivables only, the Series Adjusted Subordinated Transferor Amount, in each case as of the last day of the immediately preceding Monthly Period and the denominator of which is the product of (x) the Series 2019-One Allocation Percentage with respect to such Monthly Period and (y) the greater of (A) the sum of (i) the total amount of Principal Receivables as of such day (or with respect to the first Monthly Period, the total amount of Principal Receivables on the Closing Date), (ii) the Special Funding Amount as of such last day (or with respect to the first Monthly Period, the Closing Date) and (iii) the amount of Collections of Principal Receivables on deposit in the Collection Account as of such last day (or with respect to the first Monthly Period, as of the Closing Date) and (B) the sum of the numerators used to determine the series allocation percentages with respect to Collections of Finance Charge Receivables for all Series of Notes Outstanding on the date of determination; provided, however, that with respect to any Monthly Period in which one or more Reset Dates occurs, the Floating Allocation Percentage shall be recalculated as provided above but as of such Reset Date, for the period from and after the date on which any such Reset Date occurs to but excluding the date, if any, that another such Reset Date occurs or, if no other Reset Date occurs during such Monthly Period, to and including the last day of such Monthly Period, as applicable.

7

“Indenture Trustee Fee” shall mean an annual fee payable to the Indenture Trustee in the amount of $15,000.

“Initial Note Principal Balance” shall mean $200,000,000.

“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.

“Measurement Date” shall mean, for each Monthly Period, the Determination Date for such Monthly Period.

“Monthly Backup Servicing Fee” shall have the meaning specified in subsection 3.01(b).

“Monthly Interest” shall mean, with respect to any Distribution Date, the sum of the Class A Monthly Interest, the Class B Monthly Interest, the Class C Monthly Interest and the Class D Monthly Interest for such Distribution Date.

“Monthly Servicer Statement” shall have the meaning specified in subsection 5.02(a)(i).

“Monthly Servicing Fee” shall have the meaning specified in subsection 3.01(a).

“Net Eligible Receivables Balance” shall mean, as of any date of determination, (a) an amount equal to the aggregate amount of Principal Receivables that constitute Eligible Receivables as of such date, minus (b) the aggregate amount of any Excess Concentration Amounts as of such date, plus (c) the aggregate amount of funds on deposit in the Special Funding Account as of such date, plus (d) the aggregate amount of Collections of Principal Receivables on deposit in the Collection Account as of such date.

“Note Principal Balance” shall mean, for any date of determination, the sum of the Class A Note Principal Balance, the Class B Note Principal Balance, the Class C Note Principal Balance and the Class D Note Principal Balance.

“Noteholder FATCA Information” shall have the meaning specified in Section 9.05.

“Noteholder Tax Identification Information” shall have the meaning specified in Section 9.05.

8

“Optional Redemption” shall have the meaning specified in subsection 4.08(a).

“Optional Redemption Date” shall have the meaning specified in subsection 4.08(a).

“Optional Redemption Notice” shall have the meaning specified in subsection 4.08(a).

“Owner Trustee Fee” shall mean an annual fee payable to the Owner Trustee in the amount of $5,500.

“Paired Series” shall have the meaning specified in Section 9.06.

“Payment Date” shall mean, with respect to Series 2019-One, a Distribution Date.

“Principal Payment Rate” shall mean, with respect to any Monthly Period, the percentage equivalent of a fraction the numerator of which is the Collections of Principal Receivables for such Monthly Period and the denominator of which is the aggregate amount of Principal Receivables as of the last day of the prior Monthly Period.

“Program Expenses” shall mean an amount equal to one-twelfth the product of (i) the Floating Allocation Percentage, (ii) the Series 2019-One Allocation Percentage and (iii) indemnification amounts owed to the Indenture Trustee and the Owner Trustee pursuant to the Transaction Documents.

“Program Fees” shall mean, with respect to each Distribution Date occurring in July commencing with the July 2020 Distribution Date, an amount equal to the Indenture Trustee Fee and the Owner Trustee Fee.

“QIBs” shall mean qualified institutional buyers as defined in Rule 144A.

“Reallocated Principal Collections” shall mean, with respect to any Distribution Date, an amount equal to the lesser of (I) the product of (a) the Series 2019-One Allocable Principal Collections deposited in the Collection Account for the related Monthly Period, (b) the Fixed/Floating Allocation Percentage for the related Monthly Period and (c) 42%, and (II) the greater of (x) the sum of the Class B Note Principal Balance, the Class C Note Principal Balance and the Class D Note Principal Balance (prior to any distributions on such Distribution Date), minus the excess, if any, of the total amount of Reduction Amounts for all prior Distribution Dates and the Reallocated Principal Collections that under subsections 4.06(b) through (d) were used to fund the Class A Required Amount, the Class B Required Amount or the Class C Required Amount on all prior Distribution Dates over such Reduction Amounts and Reallocated Principal Collections reimbursed pursuant to subsection 4.04(a)(vii)(A) prior to such date and (y) zero.

“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 Note Principal Balance plus the Class B Note Principal Balance plus the Class C Note Principal Balance plus the Class D Note Principal Balance plus (ii) the Monthly Interest for such Distribution Date plus any Monthly Interest previously due but not paid plus (iii) Series 2019-One Monthly Fees for such Distribution Date.

9

“Redemption Period” shall mean, with respect to Series 2019-One, the Controlled Redemption Period or an Early Redemption Period.

“Reduction Amount” shall have the meaning specified in subsection 4.05(b).

“Regulation RR” shall mean Part 244 – Credit Risk Retention (Regulation RR), 12 C.F.R. §§244.1-244.22, as the same may be amended from time to time.

“Reset Date” shall mean each of (a) an Addition Cut-Off Date, (b) the date of any increase or decrease (other than regularly scheduled redemptions or early redemptions but including any optional redemption or limited redemption in the principal balance of the Notes of any Series) in the note principal balance or allocation amount for another variable funding Series and (c) any date on which a new Series is issued.

“Revolving Period” shall mean the period beginning at the close of business on the Closing Date and ending on the earlier of (a) the close of business on the day immediately preceding the day the Controlled Redemption Period commences and (b) the close of business on the day immediately preceding the day the Early Redemption Period commences.

“Rule 144A” shall mean Rule 144A promulgated under the Securities Act.

“Scheduled Final Payment Date” shall mean (a) with respect to the Class A Notes, May 16, 2022, (b) with respect to the Class B Notes, November 15, 2022 and(c) with respect to the Class C Notes and the Class D Notes, December 15, 2022.

“Series 2019-One” shall mean the Series of Notes the terms of which are specified in this Supplement.

“Series 2019-One Allocable Defaulted Amount” shall mean the Series Allocable Defaulted Amount with respect to Series 2019-One.

“Series 2019-One Allocable Finance Charge Collections” shall mean the Series Allocable Finance Charge Collections with respect to Series 2019-One.

“Series 2019-One Allocable Principal Collections” shall mean the Series Allocable Principal Collections with respect to Series 2019-One.

“Series 2019-One Allocation Percentage” shall mean the Series Allocation Percentage with respect to Series 2019-One.

“Series 2019-One Distribution Account” shall have the meaning set forth in subsection 4.07(a).

“Series 2019-One Monthly Fees” shall mean, with respect to any Distribution Date, the amounts determined pursuant to subsection 4.04(a)(i) and subsection 4.04(a)(ix).

10

“Series 2019-One Monthly Interest” shall mean the amounts determined pursuant to subsections 4.02(a) through (d).

“Series 2019-One Note” shall mean a Class A Note, a Class B Note, a Class C Note or a Class D Note.

“Series 2019-One Noteholder” shall mean a Class A Noteholder, a Class B Noteholder, a Class C Noteholder or a Class D Noteholder.

“Series Adjusted Allocation Amount” shall have the meaning specified in the Transfer and Servicing Agreement.

“Series Adjusted Subordinated Transferor Amount” shall mean, as of any date, an amount equal to the Series Required Transferor Amount minus (y) the excess, if any, of the total amount of Transferor Reduction Amounts for all prior Distribution Dates and the amounts that under subsection 4.06(a) were used to fund the Class A Required Amount, the Class B Required Amount, the Class C Required Amount and the Class D Required Amount on all prior Distribution Dates over amounts reimbursed pursuant to subsection 4.04(a)(vii)(B) prior to such date.

“Series Allocation Amount” shall mean, for Series 2019-One, the Initial Note Principal Balance minus the total amount of any payments of principal paid on the Series 2019-One Notes at any time other than during an Early Redemption Period; provided, however, that if Series 2019-One is paired with a Paired Series as provided in Section 9.06, then Series Allocation Amount shall mean the Initial Note Principal Balance minus (but only for purposes of the definition of the Series Adjusted Allocation Amount and the Trust Adjusted Allocation Amount used in the definition of Series 2019-One Allocable Finance Charge Collections, Series 2019-One Allocable Defaulted Amount and Floating Allocation Percentage (but only to the extent the definition of Floating Allocation Percentage is used in the definitions of Series Finance Charge Collections and Series Default Amount)) the total amount of principal payments made on the Class A Notes, the Class B Notes, the Class C Notes and the Class D Notes; provided further, however, that if Series 2019-One is paired with a Paired Series as provided in Section 9.06 and if an Early Redemption Event (as such term is defined in the Indenture) occurs with respect to the Paired Series, the Issuer may, by written notice to the Indenture Trustee and the Servicer, reduce the Series Allocation Amount (for all purposes of this Supplement, the Indenture and the Transfer and Servicing Agreement) to a lower amount provided that such amount is not less than the greater of (I) the Initial Note Principal Balance minus the total amount of principal payments made on the Class A Notes, the Class B Notes, the Class C Notes or the Class D Notes, and (II) the Series Allocation Amount (as such term is defined in the Indenture) for such Paired Series.

“Series Allocation Percentage” shall have the meaning specified in the Transfer and Servicing Agreement.

“Series Default Amount” shall mean, with respect to any Monthly Period, an amount equal to the product of (a) the Series 2019-One Allocable Defaulted Amount for the related Monthly Period and (b) the Floating Allocation Percentage for such Monthly Period.

11

“Series Required Transferor Amount” shall mean, with respect to any date of determination, an amount equal to (a)(i) the sum of the Class A Note Principal Balance plus the Class B Note Principal Balance plus the Class C Note Principal Note Balance plus the Class D Note Principal Note Balance divided by (ii) 95.0% minus (b) the sum of the Class A Note Principal Balance plus the Class B Note Principal Balance plus the Class C Note Principal Note Balance plus the Class D Note Principal Note Balance.

“Servicing Fee Rate” shall mean [*****]% per annum.

“Special Payment Date” shall mean each Distribution Date with respect to any Redemption Period.

“Stated Maturity Date” shall mean December 15, 2022.

“Subordinated Transferor Percentage” shall mean, with respect to any Monthly Period, the percentage equivalent of a fraction, the numerator of which is the Series Adjusted Subordinated Transferor Amount as of the last day of the preceding Monthly Period (or in the case of the first Monthly Period, the Series Adjusted Subordinated Transferor Amount as of the Closing Date) and the denominator of which is the product of (x) the Series 2019-One Allocation Percentage with respect to such Monthly Period and (y) the product of (I) the greater of (A) the sum of (i) the total amount of Principal Receivables as of such day (or with respect to the first Monthly Period, the total amount of Principal Receivables on the Closing Date), (ii) the Special Funding Amount as of such last day (or with respect to the first Monthly Period, the Closing Date) and (iii) the amount of Collections of Principal Receivables on deposit in the Collection Account as of such last day (or with respect to the first Monthly Period, as of the Closing Date) and (B) the sum of the numerators used to determine the series allocation percentages with respect to Collections of Principal Receivables for all Series of Notes Outstanding and (II) the Series 2019-One Allocation Percentage as of the last day of the immediately preceding Monthly Period (or with respect to the first Monthly Period, as of the Closing Date); provided, however, that with respect to any Monthly Period in which one or more Reset Dates occurs, the Subordinated Transferor Percentage shall be recalculated as provided above but as of such Reset Date, for the period from and after the date on which any such Reset Date occurs to but excluding the date, if any, that another such Reset Date occurs or, if no other Reset Date occurs during such Monthly Period, to and including the last day of such Monthly Period, as applicable.

“Three-Month Charge-Off Rate” shall mean, for any Monthly Period, the average of the Charge-Off Rate for such Monthly Period and the two immediately preceding Monthly Periods.

“Three-Month Excess Spread Percentage” shall mean, for any Monthly Period, the average of the Excess Spread Percentages for such Monthly Period and the two immediately preceding Monthly Periods.

“Three-Month Principal Payment Rate” shall mean, for any Monthly Period, the average of the Principal Payment Rate for such Monthly Period and the two immediately preceding Monthly Periods.

12

“Transferor Available Principal Collections” shall mean, with respect to any Distribution Date, an amount equal to the lesser of (i) the product of (A) the Series 2019-One Allocable Principal Collections deposited in the Collection Account for the related Monthly Period, and (B) the Subordinated Transferor Percentage for such Monthly Period, and (ii) the greater of (A) the Series Adjusted Subordinated Transferor Amount and (B) zero.

“Transferor Percentage” shall mean 100% minus (a) the Floating Allocation Percentage, when used as of any date with respect to Defaulted Receivables or with respect to Collections of Finance Charge Receivables or (b) the Fixed/Floating Allocation Percentage, when used as of any date with respect to Collections of Principal Receivables.

“Transferor Reduction Amounts” shall have the meaning specified in subsection 4.05(a).

“Transferor’s Interest” shall have the meaning specified in Section 10.05.

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

13

ARTICLE III

Fees

Section 3.01.     Servicing Compensation; Backup Servicing Fee.

(a)     Servicing Fee. The share of the Servicing Fee allocable to the Series 2019-One Noteholders with respect to any Distribution Date (the “Monthly Servicing Fee”) shall mean an amount equal to one-twelfth of the product of (1) the Floating Allocation Percentage, (2) the Series 2019-One Allocation Percentage, (3) the Servicing Fee Rate and (4) the Average Principal Receivables for the related Monthly Period. The remainder of the Servicing Fee, if any, shall be paid by the Issuer or the holders of the Transferor Certificate and the Noteholders of other Series (as provided in the Transfer and Servicing Agreement and the Indenture Supplements relating to such other Series) and in no event shall the Indenture Trustee or the Series 2019-One Noteholders be liable for the share of the Servicing Fee to be paid by the Issuer or the holders of the Transferor Certificate or the Noteholders of any other Series.

(b)     Backup Servicing Fee. The share of the Backup Servicing Fee allocable to the Series 2019-One Noteholders with respect to any Distribution Date (the “Monthly Backup Servicing Fee”) shall equal the product of (1) the Floating Allocation Percentage, (2) the Series 2019-One Allocation Percentage and (3) the Backup Servicing Fee for the most recent Monthly Period preceding such Distribution Date. The remainder of the Backup Servicing Fee, if any, shall be paid by the Issuer or the holders of the Transferor Certificate and the Noteholders of other Series (as provided in the Transfer and Servicing Agreement and the Indenture Supplements relating to such other Series) and in no event shall the Indenture Trustee or the Series 2019-One Noteholders be liable for the share of the Backup Servicing Fee to be paid by the Issuer or the holders of the Transferor Certificate or the Noteholders of any other Series.

14

ARTICLE IV

Rights of Series 2019-One Noteholders and
Allocation and Application of Collections

Section 4.01.     Collections and Allocations.

(a)     Allocations. Collections of Finance Charge Receivables and Principal Receivables allocated to Series 2019-One pursuant to Section 4.01 of the Transfer and Servicing Agreement shall be allocated and distributed as set forth in this Article.

(b)     Allocations of Collections to the Issuer. The Servicer shall on any Business Day requested by the Issuer, withdraw from the Collection Account and pay to the Issuer for application as provided in the Trust Agreement the following amounts:

(i)     an amount equal to the Transferor Percentage for the related Monthly Period of Series 2019-One Allocable Finance Charge Collections deposited in the Collection Account but only if the Collection Release Conditions are satisfied (after giving effect to all Principal Receivables transferred to the Issuer on such day) and otherwise shall be deposited in the Special Funding Account and subject to subsection 8.02(e) of the Indenture; and

(ii)     an amount equal to the Transferor Percentage for the related Monthly Period of Series 2019-One Allocable Principal Collections deposited in the Collection Account but only if the Collection Release Conditions are satisfied (after giving effect to all Principal Receivables transferred to the Issuer on such day) and otherwise shall be deposited in the Special Funding Account and subject to subsection 8.02(e) of the Indenture.

The withdrawals to be made from the Collection Account pursuant to this subsection 4.01(b) do not apply to deposits into the Collection Account that do not represent Collections, including payment for the reassignment of the Receivables pursuant to Section 2.04(c) or Section 2.05 of the Transfer and Servicing Agreement, payment of the purchase price for the Series 2019-One Notes pursuant to Section 8.01 of the Transfer and Servicing Agreement, payment of the Redemption Amount for the Series 2019-One Notes pursuant to Section 7.01 or Section 8.01 of this Supplement and proceeds from the sale, disposition or liquidation of Receivables pursuant to Section 5.05 of the Indenture.

(c)     Allocations of Collections to the Series 2019-One Noteholders.

(i) Allocations of Finance Charge Receivables. The Servicer shall, prior to the close of business on any Deposit Date, allocate to Series 2019-One and retain in the Collection Account for application as provided herein an amount equal to the product of (A) the Floating Allocation Percentage, (B) the Series 2019-One Allocation Percentage, and (C) 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.

15

(ii) Allocations of Principal Receivables. The Servicer shall allocate to Series 2019-One the following amounts as set forth below:

(x)     Allocations During the Revolving Period. With respect to any Deposit Date during the Revolving Period, an amount equal to the product of (I) the Fixed/Floating Allocation Percentage, (II) the Series 2019-One Allocation Percentage and (III) the aggregate amount of Collections of Principal Receivables deposited in the Collection Account with respect to such Deposit Date shall be allocated to the Series 2019-One Noteholders and retained in the Collection Account until applied as provided herein; provided, however, that any such amounts may be withdrawn from the Collections Account and paid to the Issuer for application pursuant to the Trust Agreement, but only if the Collection Release Conditions are satisfied (after giving effect to all Principal Receivables transferred to the Issuer on such day) and otherwise shall be deposited in the Special Funding Account and subject to subsection 8.02(e) of the Indenture.

(y)     Allocations During the Controlled Redemption Period. With respect to any Deposit Date during the Controlled Redemption Period, an amount equal to the product of (I) the Fixed/Floating Allocation Percentage and (II) the Series 2019-One Allocation Percentage and (III) the aggregate amount of Collections of Principal Receivables deposited in the Collection Account on such Deposit Date (such product for any such date, a “Percentage Allocation”) shall be allocated to the Series 2019-One Noteholders and retained in the Collection Account until applied as provided herein; provided, however, that if the sum of such Percentage Allocation and all preceding Percentage Allocations for the same Monthly Period exceeds the Controlled Redemption Payment Amount for the related Distribution Date, then such excess shall not be treated as a Percentage Allocation and shall be paid to the Issuer for application pursuant to the Trust Agreement but only if the Collection Release Conditions are satisfied (after giving effect to all Principal Receivables transferred to the Issuer on such day) and otherwise shall be deposited in the Special Funding Account and subject to subsection 8.02(e) of the Indenture.

(z)     Allocations During the Early Redemption Period. With respect to any Deposit Date during the Early Redemption Period, an amount equal to the product of (I) the Fixed/Floating Allocation Percentage and (II) the Series 2019-One Allocation Percentage and (III) the aggregate amount of Collections of Principal Receivables deposited to the Collection Account with respect to such Deposit Date shall be allocated to the Series 2019-One Noteholders and retained in the Collection Account until applied as provided herein; provided, however, that after the date on which an amount of such Collections equal to the Note Principal Balance has been deposited into the Collection Account and allocated to the Series 2019-One Noteholders, any amounts in excess of such amounts shall be paid to the Issuer for application pursuant to the Trust Agreement, but only if the Collection Release Conditions are satisfied (after giving effect to all Principal Receivables transferred to the Issuer on such day) and otherwise shall be deposited in the Special Funding Account and subject to subsection 8.02(e) of the Indenture.

16

Section 4.02.     Determination of Monthly Interest.

(a)     The amount of monthly interest (“Class A Monthly Interest”) distributable from the Collection Account with respect to the Class A Notes on any Distribution Date shall be an amount equal to the product of (i) (A) 30/360, times (B) the Class A Note Interest Rate with respect to the immediately preceding Interest Period and (ii) the Class A Note Principal Balance as of the close of business on the last day of the immediately preceding Monthly Period; provided, however, with respect to the July 2019 Distribution Date, the Class A Monthly Interest shall be $[*****].

On the Determination Date preceding each Distribution Date, the Servicer shall determine the excess, if any (the “Class A Interest Shortfall”), of (x) the Class A Monthly Interest for such Distribution Date over (y) the aggregate amount of funds allocated and available to pay such Class A Monthly Interest on such Distribution Date. If the Class A Interest Shortfall with respect to any Distribution Date is greater than zero, on each subsequent Distribution Date until such Class A Interest Shortfall is fully paid, an additional amount (“Class A Additional Interest”) equal to the product of (i) (A) 30/360, times (B) the Class A Note Interest Rate and (ii) such Class A Interest Shortfall (or the portion thereof which has not been paid on the Class A Notes) shall be payable as provided herein with respect to the Class A Notes. Notwithstanding anything to the contrary herein, Class A Additional Interest shall be payable or distributed on the Class A Notes only to the extent permitted by applicable law.

(b)     The amount of monthly interest (“Class B Monthly Interest”) distributable from the Collection Account with respect to the Class B Notes on any Distribution Date shall be an amountbequal to the product of (i) (A) 30/360, times (B) the Class B Note Interest Rate with respect to the immediately preceding Interest Period and (ii) the Class B Note Principal Balance as of the close of business on the last day of the immediately preceding Monthly Period; provided, however, with respect to the July 2019 Distribution Date, the Class B Monthly Interest shall be $[*****].

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) 30/360, times (B) the Class B Note Interest 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.

(c)     The amount of monthly interest (“Class C Monthly Interest”) distributable from the Collection Account with respect to the Class C Notes on any Distribution Date shall be an amount equal to the product of (i) (A) 30/360, times (B) the Class C Note Interest Rate with respect to the immediately preceding Interest Period and (ii) the Class C Note Principal Balance as of the close of business on the last day of the immediately preceding Monthly Period; provided, however, with respect to the July 2019 Distribution Date, the Class C Monthly Interest shall be $[*****].

17

On the Determination Date preceding each Distribution Date, the Servicer shall determine the excess, if any (the “Class C Interest Shortfall”), of (x) the Class C Monthly Interest for such Distribution Date over (y) the aggregate amount of funds allocated and available to pay such Class C Monthly Interest on such Distribution Date. If the Class C Interest Shortfall with respect to any Distribution Date is greater than zero, on each subsequent Distribution Date until such Class C Interest Shortfall is fully paid, an additional amount (“Class C Additional Interest”) equal to the product of (i) (A) 30/360, times (B) the Class C Note Interest Rate and (ii) such Class C Interest Shortfall (or the portion thereof which has not been paid on the Class C Notes) shall be payable as provided herein with respect to the Class C Notes. Notwithstanding anything to the contrary herein, Class C Additional Interest shall be payable or distributed on the Class C Notes only to the extent permitted by applicable law.

(d)     The amount of monthly interest (“Class D Monthly Interest”) distributable from the Collection Account with respect to the Class D Notes on any Distribution Date shall be an amount equal to the product of (i) (A) 30/360, times (B) the Class D Note Interest Rate with respect to the immediately preceding Interest Period and (ii) the Class D Note Principal Balance as of the close of business on the last day of the immediately preceding Monthly Period; provided, however, with respect to the July 2019 Distribution Date, the Class D Monthly Interest shall be $[*****].

On the Determination Date preceding each Distribution Date, the Servicer shall determine the excess, if any (the “Class D Interest Shortfall”), of (x) the Class D Monthly Interest for such Distribution Date over (y) the aggregate amount of funds allocated and available to pay such Class D Monthly Interest on such Distribution Date. If the Class D Interest Shortfall with respect to any Distribution Date is greater than zero, on each subsequent Distribution Date until such Class D Interest Shortfall is fully paid, an additional amount (“Class D Additional Interest”) equal to the product of (i) (A) 30/360, times (B) the Class D Note Interest Rate and (ii) such Class D Interest Shortfall (or the portion thereof which has not been paid on the Class D Notes) shall be payable as provided herein with respect to the Class D Notes. Notwithstanding anything to the contrary herein, Class D Additional Interest shall be payable or distributed on the Class D Notes only to the extent permitted by applicable law.

Section 4.03.     Required Amounts.

(a)     With respect to each Distribution Date, on the related Determination Date, the Servicer shall determine the amount (the “Class A Required Amount”), if any, by which (x) the amount required pursuant to subsections 4.04(a)(i) and 4.04(a)(ii) for such Distribution Date exceeds (y) the Available Finance Charge Collections for such Distribution Date available to fund such amount. In the event that the Class A Required Amount for such Distribution Date is greater than zero, the Servicer shall give written notice to the Indenture Trustee of such Class A Required Amount on the date of computation.

18

(b)     With respect to each Distribution Date, on the related Determination Date, the Servicer shall determine the amount (the “Class B Required Amount”), if any, by which (x) the amount required pursuant to subsection 4.04(a)(iii) for such Distribution Date exceeds (y) the balance of Available Finance Charge Collections in each case for such Distribution Date available to fund such amount after application of the amounts required pursuant to subsections 4.04(a)(i) and 4.04(a)(ii). In the event that the Class B Required Amount for such Distribution Date is greater than zero, the Servicer shall give written notice to the Indenture Trustee of such Class B Required Amount on the date of computation.

(c)     With respect to each Distribution Date, on the related Determination Date, the Servicer shall determine the amount (the “Class C Required Amount”), if any, by which (x) the amount required pursuant to subsection 4.04(a)(iv) for such Distribution Date exceeds (y) the balance of Available Finance Charge Collections in each case for such Distribution Date available to fund such amount after application of the amounts required pursuant to subsections 4.04(a)(i) through 4.04(a)(iii). In the event that the Class C Required Amount for such Distribution Date is greater than zero, the Servicer shall give written notice to the Indenture Trustee of such Class C Required Amount on the date of computation.

(d)     With respect to each Distribution Date, on the related Determination Date, the Servicer shall determine the amount (the “Class D Required Amount”), if any, by which (x) the amount required pursuant to subsection 4.04(a)(v) for such Distribution Date exceeds (y) the balance of Available Finance Charge Collections in each case for such Distribution Date available to fund such amount after application of the amounts required pursuant to subsections 4.04(a)(i) through 4.04(a)(iv). In the event that the Class D Required Amount for such Distribution Date is greater than zero, the Servicer shall give written notice to the Indenture Trustee of such Class D Required Amount on the date of computation.

Section 4.04.     Application of Available Finance Charge Collections and Available Principal Collections. The Servicer shall apply, or shall cause the Paying Agent to apply by written instruction to the Paying Agent pursuant to the Monthly Servicer Statement, on each Distribution Date, Available Finance Charge Collections and Available Principal Collections on deposit in the Collection Account with respect to such Distribution Date to make the following distributions:

(a)     On each Distribution Date, an amount equal to the Available Finance Charge Collections with respect to such Distribution Date will be distributed in the following priority:

(i)     an amount equal to the sum of the Monthly Servicing Fee, the Program Fees, the Capped Program Expenses and the Monthly Backup Servicing Fee, if any, for the related Distribution Date plus the sum of the amount of any Monthly Servicing Fee, the Program Fees, the Capped Program Expenses and any Monthly Backup Servicing Fee previously due but not distributed to the Servicer, the Owner Trustee, the Indenture Trustee or the Backup Servicer, if any respectively, on a prior Distribution Date, shall be distributed, pro rata, as applicable, to the Servicer, the Owner Trustee, the Indenture Trustee and the Backup Servicer, if any;

19

(ii)     an amount equal to Class A Monthly Interest for the related Distribution Date plus an amount equal to any Class A Interest Shortfall not distributed on a prior Distribution Date plus the amount of any Class A Additional Interest for such Distribution Date plus any Class A Additional Interest previously due but not distributed to Class A Noteholders on a prior Distribution Date, shall be distributed to the Class A Noteholders;

(iii)     an amount equal to Class B Monthly Interest for the related Distribution Date plus an amount equal to 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;

(iv)     an amount equal to Class C Monthly Interest for the related Distribution Date plus an amount equal to any Class C Interest Shortfall not distributed on a prior Distribution Date plus the amount of any Class C Additional Interest for such Distribution Date plus any Class C Additional Interest previously due but not distributed to Class C Noteholders on a prior Distribution Date, shall be distributed to the Class C Noteholders;

(v)     an amount equal to Class D Monthly Interest for the related Distribution Date plus an amount equal to any Class D Interest Shortfall not distributed on a prior Distribution Date plus the amount of any Class D Additional Interest for such Distribution Date plus any Class D Additional Interest previously due but not distributed to Class D Noteholders on a prior Distribution Date, shall be distributed to the Class D Noteholders;

(vi)     an amount equal to the Series Default Amount for such Distribution Date shall be treated as a portion of Available Principal Collections for such Distribution Date;

(vii)     (A) an amount equal to the aggregate amount of Reduction Amounts plus Reallocated Principal Collections that under subsections 4.06(b) through (d) were used to fund the Class A Required Amount, the Class B Required Amount or the Class C Required Amount which have not been previously reimbursed shall be treated as a portion of Available Principal Collections for such Distribution Date;

(B) an amount equal to the aggregate amount of Transferor Reduction Amounts plus Transferor Available Principal Collections that under subsection 4.06(a) were used to fund the Class A Required Amount, the Class B Required Amount, the Class C Required Amount or the Class D Required Amount which have not been previously reimbursed shall be treated as a portion of Available Principal Collections for such Distribution Date;

20

(viii)     if an Early Redemption Event has occurred on or prior to such Distribution Date, an amount up to the Class A Note Principal Balance plus the Class B Note Principal Balance plus the Class C Note Principal Balance plus the Class D Note Principal Balance on such Distribution Date shall be treated as a portion of Available Principal Collections for such Distribution Date;

(ix)     an amount equal to the Program Expenses for such Distribution Date not paid in clause (i) above, plus the amount of any Program Expenses previously due but not distributed to the Owner Trustee or Indenture Trustee on a prior Distribution Date, shall be distributed, pro rata, as applicable, to the Owner Trustee and the Indenture Trustee;

(x)     the balance of such Available Finance Charge Collections shall be distributed to the Issuer and applied in accordance with the Trust Agreement.

(b)     On each Distribution Date with respect to the Revolving Period, an amount equal to the Available Principal Collections deposited in the Collection Account for the related Monthly Period shall be distributed to the Issuer and applied in accordance with the Trust Agreement but only if the Collection Release Conditions are satisfied (after giving effect to all Principal Receivables transferred to the Issuer on such day) and otherwise shall be deposited in the Special Funding Account and subject to subsection 8.02(e) of the Indenture.

(c)     On each Distribution Date with respect to a Controlled Redemption Period commencing on the Controlled Redemption Commencement Date, an amount equal to the Controlled Redemption Payment Amount deposited in the Collection Account for the related Monthly Period shall be distributed in the following order of priority:

(i)     an amount, to the extent available, equal to the Class A Note Principal Balance shall be distributed to the Class A Noteholders;

(ii)     for each Distribution Date beginning on the Distribution Date on which the Class A Notes have been paid in full, an amount, to the extent available, equal to the Class B Note Principal Balance shall be distributed to the Class B Noteholders;

(iii)     for each Distribution Date beginning on the Distribution Date on which the Class B Notes have been paid in full, an amount, to the extent available, equal to the Class C Note Principal Balance shall be distributed to the Class C Noteholders;

(iv)     for each Distribution Date beginning on the Distribution Date on which the Class C Notes have been paid in full, an amount, to the extent available, equal to the Class D Note Principal Balance shall be distributed to the Class D Noteholders; and

(v)     for each Distribution Date beginning on the Distribution Date on which the Class D Notes are paid in full, an amount equal to the balance, if any, of such Available Principal Collections shall be distributed to the Issuer and applied in accordance with the Trust Agreement.

21

(d)     On each Distribution Date with respect to an Early Redemption Period, an amount equal to the Available Principal Collections deposited in the Collection Account for the related Monthly Period shall be distributed in the following order of priority:

(i)     an amount, to the extent available, equal to the Class A Note Principal Balance shall be distributed to the Class A Noteholders;

(ii)     for each Distribution Date beginning on the Distribution Date on which the Class A Notes have been paid in full, an amount, to the extent available, equal to the Class B Note Principal Balance shall be distributed to the Class B Noteholders;

(iii)     for each Distribution Date beginning on the Distribution Date on which the Class B Notes have been paid in full, an amount, to the extent available, equal to the Class C Note Principal Balance shall be distributed to the Class C Noteholders;

(iv)     for each Distribution Date beginning on the Distribution Date on which the Class C Notes have been paid in full, an amount, to the extent available, equal to the Class D Note Principal Balance shall be distributed to the Class D Noteholders; and

(v)     for each Distribution Date beginning on the Distribution Date on which the Class D Notes are paid in full, an amount equal to the balance, if any, of such Available Principal Collections shall be distributed to the Issuer and applied in accordance with the Trust Agreement.

Section 4.05.     Defaulted Amounts; Reduction Amounts.

On each Determination Date, the Servicer shall calculate the Series Default Amount for the related Distribution Date. If, on any Distribution Date, the Series Default Amount for the related Monthly Period exceeds the Available Finance Charge Collections allocated and available to be applied for that purpose pursuant to subsection 4.04(a)(vi) for such Distribution Date,

(a) first, the Series Adjusted Subordinated Transferor Amount (after giving effect to any reductions for Transferor Available Principal Collections that under subsection 4.06(a) were used to fund the Class A Required Amount, the Class B Required Amount, the Class C Required Amount or the Class D Required Amount, on such Distribution Date), will be reduced, subject to the succeeding sentence, by the amount of such excess, but not by more than the Series Default Amount for such Distribution Date (a “Transferor Reduction Amount”). In the event that such reduction would cause the Series Adjusted Subordinated Transferor Amount to be a negative number, the Series Adjusted Subordinated Transferor Amount shall be reduced to zero. Transferor Reduction Amounts shall thereafter be reimbursed and the Series Adjusted Subordinated Transferor Amount increased (but not by an amount in excess of the aggregate unreimbursed Transferor Reduction Amounts) on any Distribution Date by the amount of Available Finance Charge Collections allocated and available for that purpose pursuant to subsection 4.04(a)(vii)(B),

22

(b) second, in the event, the Series Adjusted Subordinated Transferor Amount has been reduced to zero in accordance with clause (a) above, the Allocation Amount (after giving effect to any reductions for Reallocated Principal Collections that under subsections 4.06(b) through (d) were used to fund the Class A Required Amount, the Class B Required Amount or the Class C Required Amount on such Distribution Date), will be reduced, subject to the succeeding sentence, by the amount of such excess, but not by more than the Series Default Amount for such Distribution Date (a “Reduction Amount”). In the event that such reduction would cause the Allocation Amount to be a negative number, the Allocation Amount shall be reduced to zero. Reduction Amounts shall thereafter be reimbursed and the Allocation Amount increased (but not by an amount in excess of the aggregate unreimbursed Reduction Amounts) on any Distribution Date by the amount of Available Finance Charge Collections allocated and available for that purpose pursuant to subsection 4.04(a)(vii)(A).

Section 4.06.     Reallocated Principal Collections.

(a)     On each Distribution Date, prior to the application of Reallocated Principal Collections in accordance with subsections (b), (c) and (d) below, the Servicer shall direct the Paying Agent, by written instruction to the Paying Agent, to apply pursuant to the related Monthly Servicer Statement, Transferor Available Principal Collections with respect to such Distribution Date, to fund, in the following order of priority, the Class A Required Amount, the Class B Required Amount or the Class C Required Amount. On each Distribution Date, the Series Adjusted Subordinated Transferor Amount shall be reduced by the amount of Transferor Available Principal Collections used to fund the Class A Required Amount, the Class B Required Amount or the Class C Required Amount for such Distribution Date, but in any event the Series Adjusted Subordinated Transferor Amount shall not be reduced by operation of this subsection 4.06(a) to an amount less than zero.

(b)     On each Distribution Date, the Servicer shall direct the Paying Agent, by written instruction to the Paying Agent, to apply pursuant to the related Monthly Servicer Statement, Reallocated Principal Collections with respect to such Distribution Date to fund the excess, if any, of the Class A Required Amount over the amount funded in accordance with subsection 4.06(a). On each Distribution Date, the Allocation Amount shall be reduced by the amount of Reallocated Principal Collections used to fund the Class A Required Amount for such Distribution Date, but in any event the Allocation Amount shall not be reduced by operation of this subsection 4.06(b) to an amount less than the Class A Note Principal Balance.

(c)     On each Distribution Date, the Servicer shall direct the Paying Agent, by written instruction to the Paying Agent, to apply pursuant to the Monthly Servicer Statement, Reallocated Principal Collections with respect to such Distribution Date remaining after application in accordance with subsection 4.06(b), to fund the excess, if any, of the Class B Required Amount over the amount funded in accordance with subsection 4.06(a). On each Distribution Date, the Allocation Amount shall be reduced by the amount of Reallocated Principal Collections used to fund the Class B Required Amount for such Distribution Date, but in any event the Allocation Amount shall not be reduced by operation of this subsection 4.06(c) to an amount less than the sum of the Class A Note Principal Balance and the Class B Note Principal Balance.

23

(d)     On each Distribution Date, the Servicer shall direct the Paying Agent, by written instruction to the Paying Agent, to apply pursuant to the Monthly Servicer Statement, Reallocated Principal Collections with respect to such Distribution Date remaining after application in accordance with subsection 4.06(b), to fund the excess, if any, of the Class C Required Amount over the amount funded in accordance with subsection 4.06(a). On each Distribution Date, the Allocation Amount shall be reduced by the amount of Reallocated Principal Collections used to fund the Class C Required Amount for such Distribution Date, but in any event the Allocation Amount shall not be reduced by operation of this subsection 4.06(d) to an amount less than the sum of the Class A Note Principal Balance, the Class B Note Principal Balance and the Class C Note Principal Balance.

Section 4.07.     Series 2019-One Distribution Account.

(a)     The Servicer shall establish and maintain, with the Paying Agent in the name of the Indenture Trustee, for the benefit of the Series 2019-One Noteholders, a Series Account (the “Series 2019-One Distribution Account”) bearing a designation clearly indicating that the funds deposited therein are held for the benefit of the Series 2019-One Noteholders. The Series 2019-One Distribution Account shall be established and maintained with the Paying Agent on behalf of and in the name of the Indenture Trustee. The Indenture Trustee shall possess all right, title and interest in all funds on deposit from time to time in the Series 2019-One Distribution Account and in all proceeds thereof. The Series 2019-One Distribution Account shall be under the sole dominion and control of the Indenture Trustee for the benefit of the Series 2019-One Noteholders. Funds on deposit in the Series 2019-One Distribution Account shall not be subject to investment. If at any time the Series 2019-One Distribution 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 the Series 2019-One Noteholders shall consent) establish a new Series 2019-One Distribution Account meeting the conditions specified above as an Eligible Deposit Account, and shall transfer any cash or any investments to such new Series 2019-One Distribution Account.

(b)     On each Distribution Date, the Paying Agent, solely in accordance with the Monthly Servicer Statement, shall withdraw from the Collection Account and deposit into the Series 2019-One Distribution Account Collections of Finance Charge Receivables and Principal Receivables allocated to Series 2019-One on such Distribution Date for application pursuant to Section 4.04.

24

Section 4.08.     Optional Redemption.

(a)     On any Business Day after the termination of the Revolving Period, the Issuer may cause the Servicer to provide written notice to the Indenture Trustee and the Series 2019-One Noteholders (an “Optional Redemption Notice”) at least ten (10) Business Days prior to any Business Day (the “Optional Redemption Date”) stating its intention to cause a full redemption of the Series 2019-One Notes (an “Optional Redemption”). The Redemption Amount shall be paid from any Available Principal Collections or from the proceeds of the issuance of one or more new Series of Notes issued substantially contemporaneously with such full redemption (or any combination of the above).

(b)     The Issuer shall deposit the Redemption Amount into the Collection Account in same day funds on the Business Day prior to the Optional Redemption Date. Following the deposit of the Redemption Amount into the Collection Amount in accordance with the foregoing, the Allocation Amount for Series 2019-One shall be reduced to zero and following the payment in full of such Redemption Amount to the Series 2019-One Noteholders and other parties entitled to any of such amount, the Series 2019-One Noteholders shall have no further interest in the Trust Estate. The Redemption Amount shall be distributed as set forth in subsection 8.01(b).

ARTICLE V

Distributions and Reports to
Series 2019-One Noteholders

Section 5.01.     Distributions.

(a)     On each Distribution Date, the Paying Agent, solely in accordance with the Monthly Servicer Statement, shall distribute to each Class A Noteholder (other than as provided in Section 10.02 of the Indenture) such amounts held by the Paying Agent that are allocated and available on such Distribution Date to pay interest on the Class A Notes.

(b)     On each Special Payment Date, the Paying Agent, solely in accordance with the Monthly Servicer Statement, shall distribute to each Class A Noteholder of record on the related Record Date (other than as provided in Section 10.02 of the Indenture) such amounts held by the Paying Agent that are allocated and available on such date to pay principal of the Class A Notes pursuant to this Supplement up to a maximum amount on any such date equal to the Class A Note Principal Balance on such date.

(c)     On each Distribution Date, the Paying Agent, solely in accordance with the Monthly Servicer Statement, shall distribute to each Class B Noteholder (other than as provided in Section 10.02 of the Indenture) such amounts held by the Paying Agent that are allocated and available on such Distribution Date to pay interest on the Class B Notes.

(d)     On each Special Payment Date, the Paying Agent, solely in accordance with the Monthly Servicer Statement, shall distribute to each Class B Noteholder of record on the related Record Date (other than as provided in Section 10.02 of the Indenture) such amounts held by the Paying Agent that are allocated and available on such date to pay principal of the Class B Notes pursuant to this Supplement up to a maximum amount on any such date equal to the Class B Note Principal Balance on such date.

25

(e)     On each Distribution Date, the Paying Agent, solely in accordance with the Monthly Servicer Statement, shall distribute to each Class C Noteholder (other than as provided in Section 10.02 of the Indenture) such amounts held by the Paying Agent that are allocated and available on such Distribution Date to pay interest on the Class C Notes.

(f)     On each Special Payment Date, the Paying Agent, solely in accordance with the Monthly Servicer Statement, shall distribute to each Class C Noteholder of record on the related Record Date (other than as provided in Section 10.02 of the Indenture) such amounts held by the Paying Agent that are allocated and available on such date to pay principal of the Class C Notes pursuant to this Supplement up to a maximum amount on any such date equal to the Class C Note Principal Balance on such date.

(g)     On each Distribution Date, the Paying Agent, solely in accordance with the Monthly Servicer Statement, shall distribute to each Class D Noteholder (other than as provided in Section 10.02 of the Indenture) such amounts held by the Paying Agent that are allocated and available on such Distribution Date to pay interest on the Class D Notes.

(h)     On each Special Payment Date, the Paying Agent, solely in accordance with the Monthly Servicer Statement, shall distribute to each Class D Noteholder of record on the related Record Date (other than as provided in Section 10.02 of the Indenture) such amounts held by the Paying Agent that are allocated and available on such date to pay principal of the Class D Notes pursuant to this Supplement up to a maximum amount on any such date equal to the Class D Note Principal Balance on such date.

(i)     On each Distribution Date, the Paying Agent, solely in accordance with the Monthly Servicer Statement, shall distribute to each of the Servicer, Backup Servicer, Owner Trustee and the Indenture Trustee such amounts held by the Paying Agent that are allocated and available on such Distribution Date to pay the Servicing Fee, the Backup Servicing Fee, the Program Fees and the Program Expenses, respectively.

(j)     The distributions to be made pursuant to this Section 5.01 are subject to the provisions of Section 8.01 of the Transfer and Servicing Agreement, Section 5.05 of the Indenture and Section 8.01 of this Supplement.

(k)     Except as provided in Section 10.02 of the Indenture with respect to a final distribution, distributions to Series 2019-One Noteholders hereunder shall be made by wire transfer of same day funds to the account that has been designated by the applicable Noteholders not less than ten Business Days prior to such Distribution Date.

Section 5.02.     Reports and Statements to Series 2019-One Noteholders.

(a)     Not later than each Determination Date, the Servicer shall deliver to the Indenture Trustee and the Paying Agent (i) a statement substantially in the form of Exhibit E prepared by the Servicer (the “Monthly Servicer Statement”) and (ii) a certificate of a Servicing Officer substantially in the form attached thereto.

26

(b)     A copy of each statement or certificate provided pursuant to subsection 5.02(a) may be obtained by any Series 2019-One Noteholder or any beneficial owner thereof by a request in writing to the Servicer.

(c)     On or before January 31 of each calendar year, commencing in January 2020, the Paying Agent, on behalf of the Indenture Trustee, shall post to its website a statement prepared by the Servicer containing the information which is required to be contained in the statement to Series 2019-One Noteholders, as set forth in paragraph (a) above aggregated for such calendar year or the applicable portion thereof during which such Person was a Series 2019-One Noteholder, together with other information as is required to be provided by an issuer of indebtedness under the Code. Such obligation of the Servicer 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.

27

ARTICLE VI

Early Redemption Events; Events of Default

Section 6.01.     Early Redemption Events. If any one of the following events shall occur with respect to the Series 2019-One Notes:

(a)     (i) failure on the part of the Seller, the Transferor or the Issuer to make any payment or deposit required by the terms of any Transaction Document on or before the date occurring five (5) Business Days after the date such payment or deposit is required to be made therein or herein or (ii) failure on the part of the Seller, the Transferor or the Issuer duly to observe or perform any other covenants or agreements in any Transaction Document which continues unremedied for a period of thirty (30) days after the date on which the Seller, the Issuer or the Transferor, as applicable, obtains actual knowledge of such failure or on which written notice of such failure requiring the same to be remedied, shall have been given to the Seller, the Transferor or the Issuer by the Indenture Trustee, or to, the Seller, the Transferor, or to the Issuer and the Indenture Trustee by the Holders of not less than 50% of the aggregate outstanding principal balance of the Series 2019-One Notes;

(b)     any representation or warranty made by the Seller, the Transferor or the Issuer under any Transaction Document which continues to be incorrect for a period of thirty (30) days after the date on which the Seller, the Issuer or the Transferor, as applicable, obtains actual knowledge of such failure or on which written notice of such failure requiring the same to be remedied, shall have been given to the Seller, the Transferor or the Issuer by the Indenture Trustee, or to the Seller, the Transferor or the Issuer and the Indenture Trustee by the Holders of not less than 50% of the aggregate outstanding principal balance of the Series 2019-One Notes; 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 replaced or 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;

(c)     the occurrence of a Servicer Default;

(d)     the Transferor shall fail to cause the amount of the Transferor’s Interest, when measured in a manner consistent with the requirements of Regulation RR, to satisfy the requirements of Regulation RR as required by Section 10.05 of this Supplement;

(e)     any of the following occurs for any Monthly Period:

(i) the Three-Month Charge-Off Rate exceeds [*****]%;

(ii) the Three-Month Monthly Principal Payment Rate is less than [*****]%;

(iii) the Three-Month Excess Spread Percentage is less than [*****]%; or

(f)     the occurrence and continuation of any Event of Default (as such term is defined in the Indenture);

28

(h)      the Class A Note Principal Balance, the Class B Note Principal Balance, the Class C Note Principal Balance and the Class D Note Principal Balance shall not be paid in full on the Scheduled Final Payment Date for such Class of Notes;

(i)     an Insolvency Event with respect to Atlanticus Holdings Corporation occurs;

(j)     no Account Owner is originating Receivables that are sold and transferred from the Seller to the Transferor and subsequently sold and transferred from the Transferor to the Issuer; or

(k)     the Issuer becomes taxable as an association or a publicly traded partnership taxable as a corporation under the Code;

then, in the case of any event described above other than in subparagraph (f) after the applicable grace period, if any, set forth in such subparagraphs, either the Indenture Trustee at the direction of the Holders of not less than 50% of the aggregate outstanding principal balance of the Series 2019-One Notes or such Holders, by notice then given in writing to the Issuer, the Servicer and the Indenture Trustee may declare that an Early Redemption Event has occurred with respect to Series 2019-One as of the date of such notice, and, in the case of any event described in subparagraph (f), an Early Redemption Event shall occur with respect to Series 2019-One without any notice or other action on the part of the Indenture Trustee or the Series 2019-One Noteholders immediately upon the occurrence of such event, unless such Early Redemption Event is waived by the Holders of not less than 50% of the aggregate outstanding principal balance of the Series 2019-One Notes, by notice given in writing to the Indenture Trustee, the Issuer and the Servicer. The Indenture Trustee shall provide prompt written notice to each Rating Agency upon the occurrence and continuation of an Early Redemption Event of which a Responsible Officer of the Indenture Trustee has actual knowledge.

Section 6.02     Series 2019-One Event of Default. An “Event of Default” with respect to any Series 2019-One Note means the occurrence of the following event (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): [*****].

The Issuer shall deliver to the Indenture Trustee, within five (5) days after the occurrence of any Event of Default with respect to Series 2019-One, written notice in the form of an Officer’s Certificate of the Issuer of such Event of Default, its status and what action the Issuer is taking or proposes to take with respect thereto.

Sections 5.03(a) and (c) of the Indenture shall be applicable to the Event of Default described in the first paragraph of this Section 6.02 above.

29

ARTICLE VII

Administrative Redemption; Series Termination

Section 7.01.     Administrative Redemption.

(a)     On any day occurring on or after the date on which the Note Principal Balance is reduced to 10% or less of the Initial Note Principal Balance at any time on or after the Closing Date, the Servicer shall have the option to redeem the Series 2019-One Notes, at a redemption 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 Servicer shall give the Issuer and the Indenture Trustee at least thirty (30) days prior written notice of the date on which the Servicer intends to exercise such redemption option. The Servicer shall deposit the Redemption Amount into the Collection Account in same day funds on the Business Day prior to such scheduled redemption. Such redemption option is subject to payment in full of the Redemption Amount. Following the deposit of the Redemption Amount into the Collection Amount in accordance with the foregoing, the Allocation Amount for Series 2019-One shall be reduced to zero and following the payment in full of such Redemption Amount to the Series 2019-One Noteholders and other parties entitled to any of such amount, the Series 2019-One Noteholders shall have no further interest in the Trust Estate. The Redemption Amount shall be distributed as set forth in subsection 8.01(b).

Section 7.02.     Repayment.

The Series 2019-One Notes shall be due and payable in full on the Stated Maturity Date.

ARTICLE VIII     

Redemption of Series 2019-One Notes; Final Distributions

Section 8.01.     Sale of Receivables or Redemption of the Notes pursuant to Section 2.04(c) or 8.01 of the Transfer and Servicing Agreement and Sections 5.05 and 5.17 of the Indenture and Section 7.01 of this Supplement.

(a)    (i)    The amount to be paid by the Transferor with respect to Series 2019-One in connection with a reassignment of Receivables to the Transferor pursuant to Section 2.04(c) 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.

(ii)     The amount to be paid by the Transferor with respect to Series 2019-One in connection with any purchase of the Notes, pursuant to the Transferor’s exercise of its right of first refusal contained in Section 8.01 of the Transfer and Servicing Agreement shall be an amount equal to the Redemption Amount for the Distribution Date of any such purchase.

30

(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 2019-One Notes 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 2:30 p.m., New York City 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 solely in accordance with the Monthly Servicer Statement:

i. the Class A Note Principal Balance on such Distribution Date plus an amount equal to the sum of (A) the Class A Monthly Interest for such Distribution Date, (B) any Class A Monthly Interest previously due but not distributed to the Class A Noteholders on a prior Distribution Date, (C) any Class A Additional Interest for such Distribution Date and any Class A Additional Interest previously due but not distributed to the Class A Noteholders on a prior Distribution Date shall be distributed to the Paying Agent for payment to the Class A Noteholders;

ii. the Class B Note Principal Balance on such Distribution Date plus an amount equal to the sum of (A) the Class B Monthly Interest for such Distribution Date, (B) any Class B Monthly Interest previously due but not distributed to the Class B Noteholders on a prior Distribution Date, (C) any Class B Additional Interest for such Distribution Date and any Class B Additional Interest previously due but not distributed to the Class B Noteholders on a prior Distribution Date shall be distributed to the Paying Agent for payment to the Class B Noteholders;

iii. the Class C Note Principal Balance on such Distribution Date plus an amount equal to the sum of (A) the Class C Monthly Interest for such Distribution Date, (B) any Class C Monthly Interest previously due but not distributed to the Class C Noteholders on a prior Distribution Date, (C) any Class C Additional Interest for such Distribution Date and any Class C Additional Interest previously due but not distributed to the Class C Noteholders on a prior Distribution Date shall be distributed to the Paying Agent for payment to the Class C Noteholders;

iv. the Class D Note Principal Balance on such Distribution Date plus an amount equal to the sum of (A) the Class D Monthly Interest for such Distribution Date, (B) any Class D Monthly Interest previously due but not distributed to the Class D Noteholders on a prior Distribution Date, (C) any Class D Additional Interest for such Distribution Date and any Class D Additional Interest previously due but not distributed to the Class D Noteholders on a prior Distribution Date shall be distributed to the Paying Agent for payment to the Class D Noteholders;

31

v. the Series 2019-One Monthly Fees previously due but not distributed shall be distributed to the Paying Agent for payment to the Servicer, the Backup Servicer, the Indenture Trustee and the Owner Trustee.

(c)     Notwithstanding anything to the contrary in this Supplement or the Indenture, all amounts distributed to the Paying Agent pursuant to subsection 8.01(b) for payment to the Series 2019-One Noteholders shall be deemed distributed in full to the Series 2019-One Noteholders on the date on which such funds are distributed to the Paying Agent pursuant to this Section and the Series 2019-One Notes shall be deemed to be no longer Outstanding as such term is defined in Section 1.01 of the Indenture.

ARTICLE IX

The Series 2019-One Notes; Private Placement; Representations and Warranties; Transfer Restrictions; Withholding

Section 9.01.     Form of Delivery of Series 2019-One Notes; Denominations.

(a)     The Series 2019-One Notes shall be substantially in the form attached hereto as Exhibits A, B , C and D, respectively and shall be delivered as Book-Entry Notes. The Class A Notes shall be in minimum denominations of $100,000 and integral multiples of $1,000 in excess thereof. The Class B Notes, the Class C Notes and the Class D Notes shall be delivered in minimum denominations of $500,000 and integral multiples of $1,000 in excess thereof. The Indenture Trustee shall authenticate the Series 2019-One Notes upon the written order of the Issuer as provided in Section 2.03 of the Indenture.

(b)     The Depositary for the Series 2019-One Notes shall be The Depository Trust Company and the Series 2019-One Notes shall be initially registered in the name of Cede & Co., its nominee, and will initially be held by the Indenture Trustee as custodian for The Depository Trust Company.

Section 9.02.     Private Placement of Securities.

The Series 2019-One Notes have not been registered under the Securities Act or any state securities law. No transfer of any Series 2019-One Note shall be made except in accordance with Sections 9.03 and 9.04 of this Supplement. The Series 2019-One Notes shall bear a legend to the effect set forth in Exhibits A, B, C and D. Neither the Issuer nor the Indenture Trustee is obligated to register the Series 2019-One Notes under the Securities Act or to take any other action not otherwise required under this Supplement or the Indenture to permit the transfer of the Series 2019-One Notes without registration.

Section 9.03.     Representations, Warranties and Agreements of Noteholders.

Each purchaser of a Class A Note, Class B Note Class C Note or Class D Note will be deemed to have acknowledged, represented, warranted and agreed by its purchase of a Class A Note, Class B Note, Class C Note or Class D Note, as follows:

32

(a)     that (i) is a QIB, (ii) is aware that the sale of the Series 2019-One Notes to it is being made in reliance on the exemption from registration provided by Rule 144A, and (iii) is acquiring the Series 2019-One Notes for its own account or for one or more accounts, each of which is a QIB, and as to each of which it exercises sole investment discretion, and in a principal amount of not less than the minimum denomination of such Series 2019-One Note for it and for each such account. Any purported transfer of the Series 2019-One Notes to a purchaser that does not comply with the requirements of this paragraph shall be null and void ab initio. The Issuer may sell any Series 2019-One Notes acquired in violation of the foregoing at the cost and risk of the purported owner;

(b)     it understands that each Class A Note, Class B Note, Class C Note or Class D Note will bear a legend set forth on the forms included as Exhibits A, B, C or D respectively;

(c)     it understands that the Series 2019-One Notes are being offered only in a transaction not involving any public offering in the United States within the meaning of the Securities Act, none of the Series 2019-One Notes have been or will be registered under the Securities Act, and, if in the future the transferee decides to offer, resell, pledge or otherwise transfer the Series 2019-One Notes, such Series 2019-One Notes may only be offered, resold, pledged or otherwise transferred in accordance with the Indenture and the applicable legend on such Series 2019-One Notes set forth above. The transferee acknowledges that the Issuer makes no representation as to the availability of any exemption under the Securities Act or any applicable state securities laws for resale of the Notes;

(d)     it understands that an investment in the Series 2019-One Notes involves certain risks, including the risk of loss of all or a substantial part of its investment under certain circumstances. The transferee has had access to this offering memorandum and all other documents and information concerning the Indenture Trustee, the Note Registrar, the Paying Agent, the Seller, the Servicer, the Issuer, the Receivables and the Series 2019-A Notes as it deemed necessary and appropriate in order to make an informed investment decision with respect to its purchase of the Series 2019-One Notes, including an opportunity to ask questions of and request information from the Issuer and the Servicer. The transferee has such knowledge and experience in financial and business matters and expertise in assessing financial risk, that it is capable of evaluating the merits, risks and suitability of its investment in the Series 2019-One Notes and understands that the Issuer has not requested any credit rating from a rating agency for any Series 2019-A Notes, and the transferee and any accounts for which it is acting are each able to bear the economic risk of the holder’s or of its investment;

(e)      (i) it understands that none of the Issuer, the Servicer, the Note Registrar, the Paying Agent, nor the Indenture Trustee is acting as a fiduciary or financial or investment adviser for the transferee, (ii) it is not relying (for purposes of making any investment decision or otherwise) upon any advice, counsel or representations (whether written or oral) of the Issuer, the Servicer, the Note Registrar, the Paying Agent or the Indenture Trustee other than in the most current offering memorandum for such Series 2019-One Notes, (iii) it understand that none of the Issuer, the Servicer, the Note Registrar, the Paying Agent nor the Indenture Trustee has given to the transferee (directly or indirectly through any other person) any assurance, guarantee, or representation whatsoever as to the expected or projected success, profitability, return, performance, result, effect, consequence, or benefit (including legal, regulatory, tax, financial, accounting, or otherwise) of its purchase or the documentation for the Series 2019-One Notes, (iv) it has consulted with its own legal, regulatory, tax, business, investment, financial, and accounting advisers to the extent it has deemed necessary, and it has made its own investment decisions (including decisions regarding the suitability of any transaction pursuant to the Indenture) based upon its own judgment and upon any advice from such advisers as it has deemed necessary and not upon any view expressed by the Issuer, the Servicer, the Note Registrar, the Paying Agent or the Indenture Trustee, (v) it has determined that the rates, prices or amounts and other terms of the purchase and sale of the Series 2019-One Notes reflect those in the relevant market for similar transactions, (vi) it is purchasing the Series 2019-One Notes with a full understanding of all of the terms, conditions and risks thereof (economic and otherwise), and is capable of assuming and willing to assume (financially and otherwise) these risks, and (vii) it is a sophisticated investor familiar with transactions similar to its investment in the Series 2019-One Notes;

33

(f)     (i) if it is acquiring (and any fiduciary acting on its behalf) of a beneficial interest in an Series 2019-One Note that is represented by a book-entry note, by its acquisition thereof, will be deemed to have represented, and each noteholder (and any fiduciary acting on behalf of a noteholder) of an Series 2019-One Note that is a definitive note will represent, to the Issuer, the Indenture Trustee, the Note Registrar, the Paying Agent and the Servicer that for so long as it holds such Series 2019-One Note (or a beneficial interest therein) either (A) it is not (and will not be) a Benefit Plan or any non-U.S. plan, governmental plan (as defined in Section 3(32) of ERISA, or a church plan (as defined in Section 3(33) of ERISA) that is subject to Similar Law, and that it is not (and will not be) acquiring or holding such Series 2019-One Note (or any interest therein) on behalf of, as a fiduciary of, as trustee of, or with, the assets of, a Benefit Plan or any non-U.S. plan, governmental plan (as defined in Section 3(32) of ERISA, or a church plan (as defined in Section 3(33) of ERISA) that is subject to Similar Law, or (B) its acquisition, holding and disposition of such Series 2019-One Note (or any interest therein) will not result in a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code (in the case of a Class A Note) or a violation of any Similar Law.

(g)     It understands that any purported transfer of the Series 2019-One Notes or any interest in an Series 2019-One Note to a transferee that does not comply with the requirements of this paragraph shall be null and void ab initio. The Issuer may sell any Series 2019-One Notes acquired in violation of the foregoing at the cost and risk of the purported owner.

(h)     it acknowledges that it is not acquiring any Class A Note, Class B Note, Class C Note or Class D Note with a view to the resale, distribution, or other disposition thereof in violation of the Securities Act;

(i)     it will provide notice to each person to whom it proposes to transfer any interest in the Series 2019-One Notes of the transfer restrictions and representations set forth in this Supplement, including the exhibits thereto.

34

(j)     it acknowledges that the Class A Notes, the Class B Notes, the Class C Notes and the Class D Notes do not represent deposits with or other liabilities of the Indenture Trustee, the Servicer, the Note Registrar, the Paying Agent or any entity related to any of them (other than the Issuer) or any other purchaser of the Class A Notes, the Class B Notes, the Class C Notes and the Class D Notes and unless otherwise expressly provided in the Indenture, each of the Indenture Trustee, the Servicer, any entity related to any of them and any other purchaser of Series 2019-One Notes will not, in any way, be responsible for or stand behind the capital value or the performance of the Series-2019-One Notes or the assets held by the Issuer; it acknowledges that acquisition of Notes involves investment risks including prepayment and interest rate risks, possible delay in repayment and loss of income and principal invested;

(k)     it acknowledges that the Indenture Trustee, the Note Registrar, the Paying Agent, the Seller, the Servicer, the Issuer and others will rely on the truth and accuracy of the foregoing acknowledgments, representations and agreements, and agrees that if any of the foregoing acknowledgments, representations and agreements made or deemed to have been made by it are no longer accurate, it will promptly notify the Issuer and the Indenture Trustee;

(l)     if it is acting as a nominee or in a similar capacity, represents and agrees that no beneficial owner for which it is acting as a nominee owns less than the minimum denomination for such Series 2019-One Note;

(m)     it will strictly comply with Section 3.16 of the Indenture as to treatment of the Series 2019-One Notes as indebtedness of the Issuer for purposes of federal, state and local income or franchise taxes and any other tax imposed on or measured by income, as provided in Section 3.16 of the Indenture; and

(n)     (i) it has not acquired and shall not sell, trade or transfer any interest in the Series 2019-One Note, nor cause any interest in the Series 2019-One Note to be marketed, readily available or readily tradeable, on or through either (A) an “established securities market” 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 Series 2019-One Note 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 Series 2019-One Note and stands ready to effect buy or sell transactions at the quoted prices for itself or on behalf of others), and (ii) either (A) it is not, and will not become, a partnership, Subchapter S corporation, grantor trust or an entity disregarded as a separate entity from any such entity for U.S. federal income tax purposes or (B) it is such an entity, but (x) none of the direct or indirect beneficial owners of any of the interests in the Series 2019-One Note have allowed or caused, or will allow or cause, 50% or more (or such other percentage as the Issuer may establish prior to the time of such proposed transfer) of the value of such interests to be attributable to the transferee’s ownership of Series 2019-One Notes and any other interests in the Issuer and (y) it is not and will not be a principal purpose of the arrangement involving the beneficial interest in any Series 2019-One Notes to permit any partnership to satisfy the 100 partner limitation of Treasury Regulation Section 1.7704-1(h)(1)(ii) necessary for such partnership not to be classified as a publicly traded partnership under the Code.

35

Section 9.04.     Transfer Restrictions.

(a)      No Class A Note, Class B Note, Class C Note or Class D Note may be transferred unless it is transferred in compliance with Section 9.03 and (i) to the Issuer, or (ii) pursuant to Rule 144A under the Securities Act in each case, in compliance with any applicable state securities or “blue sky” laws.

(b)     Any transfer, resale, pledge or other transfer of the Class A Notes, the Class B Notes, the Class C Notes or the Class D Notes contrary to the restrictions set forth in Section 9.03 and in this Supplement and the Indenture shall be deemed void ab initio by the Indenture Trustee, notwithstanding any instructions to the contrary to the Issuer, the Indenture Trustee, the Note Registrar or any intermediary. If at any time the Issuer determines or is notified that holder of a Series 2019-One Note or a beneficial owner of a Series 2019-One Note, as the case may be, was in breach, at the time given, of any of the representations set forth herein, the Issuer may consider the acquisition of such Series 2019-One Note or such beneficial interest in such Series 2019-One Note void ab initio and require that such Series 2019-One Note or such beneficial interest therein be transferred to a person designated by the Issuer. If the transferee fails to transfer such Series 2019-One Note or such beneficial interests in such Series 2019-One Note within thirty (30) days after notice of the voided transfer, then the Issuer shall cause such holder’s interest or beneficial owner’s interest in such Series 2019-One Note to be transferred in a commercially reasonable sale arranged by the Issuer (conducted by the Issuer or an agent of the Issuer in accordance with Section 9-610(b) of the UCC as applied to securities that are sold on a recognized market or that may decline speedily in value) to a person that certifies to the Indenture Trustee, the Note Registrar and the Issuer, in connection with such transfer, that such person is a QIB.

Section 9.05.     Withholding.

Prior to the first Distribution Date, and at any subsequent time as required by applicable Requirements of Law, (i) each holder of a Series 2019-One Note shall deliver to the Paying Agent and the Issuer a correct, complete and properly executed U.S. IRS Form W-9, W-8BEN, W-8BEN-E, W-8ECI, W-8IMY (with applicable supporting documentation) or W-8EXP, or any successor form, as applicable (“Noteholder Tax Identification Information”) and (ii) each holder of a Series 2019-One Note shall deliver to the Paying Agent and the Issuer any documentation that is required under FATCA or is otherwise necessary (in the sole determination of the Issuer, the Paying Agent and the Indenture Trustee or other agent of the Issuer, as applicable) to enable the Issuer, the Paying Agent and any other agent of the Issuer to comply with their obligations under FATCA and to determine that such holder of a Series 2019-One Note (or holder of any beneficial interest in a Series 2019-One Note) has complied with its obligations under FATCA, or to determine the amount to deduct and withhold from a payment (“Noteholder FATCA Information”).

Each holder of a Series 2019-One Note or an interest therein, by acceptance of such Series 2019-One Note or such interest in such Series 2019-One Note, will be deemed to have agreed to provide the Issuer, the Paying Agent and the Indenture Trustee with the Noteholder Tax Identification Information and, to the extent applicable, the Noteholder FATCA Information.  In addition, each holder of a Series 2019-One Note or an interest therein will be deemed to understand that the Indenture Trustee, the Paying Agent and any other agent of the Issuer may withhold interest and principal payable with respect to a Series 2019-One Note (without any corresponding gross-up) on any holder of a Series 2019-One Note or beneficial owner of an interest in a Series 2019-One Note that fails to comply with the foregoing requirements.

36

Section 9.06.     Paired Series. With prior written notice to the Indenture Trustee, prior to the start of the Early Redemption Period, the Series 2019-One Notes may be paired with one or more other Series such that the allocation amount of the paired Series will increase proportionately to the decrease in the Adjusted Allocation Amount for Series 2019-One (each, a “Paired Series”); provided that no Series shall be deemed to be a Paired Series with Series 2019-One unless the related Indenture Supplement shall explicitly state that it is a Paired Series with Series 2019-One.

ARTICLE X     

Miscellaneous Provisions

Section 10.01.     Ratification of Agreement. As supplemented by this Supplement, the Indenture is in all respects ratified and confirmed and the Indenture as so supplemented by this Supplement shall be read, taken and construed as one and the same instrument.

Section 10.02.     Counterparts. This Supplement 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 shall constitute one and the same instrument.

Section 10.03.     Governing Law; Submission to Jurisdiction; Waiver of Jury Trial. THIS SUPPLEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN WITHOUT REFERENCE TO ITS CONFLICT OF LAWS PROVISIONS (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW). EACH OF THE PARTIES HERETO HEREBY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE COURT SITTING IN THE CITY OF NEW YORK FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. NOTHING IN THIS SECTION 10.03 SHALL AFFECT THE RIGHT OF ANY PARTY TO BRING ANY ACTION OR PROCEEDING AGAINST ANY OF THE PARTIES HERETO OR ANY OF THEIR RESPECTIVE PROPERTY IN THE COURTS OF OTHER JURISDICTIONS.

37

EACH OF THE PARTIES HERETO HEREBY WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, AMONG ANY OF THEM ARISING OUT OF, CONNECTED WITH, RELATING TO OR INCIDENTAL TO THE RELATIONSHIP BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT OR THE OTHER TRANSACTION DOCUMENTS.

Section 10.04.     Limitation of Liability. It is expressly understood and agreed by the parties hereto that (a) this Supplement is executed and delivered by Wilmington Trust, National Association, 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, National Association but is made and intended for the purpose of binding only the Issuer, (c) nothing herein contained shall be construed as creating any liability on Wilmington Trust, National Association, individually or personally, to perform any covenant either expressed or implied contained herein, all such liability, if any, being expressly waived by the parties to this Agreement and by any person claiming by, through or under the parties to this Agreement, (d) Wilmington Trust, National Association has not verified and has conducted no investigation as to the accuracy or completeness of any representation, warranty or covenant of the Issuer and (e) under no circumstances shall Wilmington Trust, National Association 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 Supplement or any other document to which the Issuer is a party.

Section 10.05.     Measuring the Transferor’s Interest for Purposes of Regulation RR. In order to facilitate compliance with Regulation RR, the Servicer shall, on each Measurement Date and on the issuance date of any Notes under the Indenture, measure the interest of the Transferor in the Transferred Assets represented by the Transferor Certificate (the “Transferor’s Interest”) in a manner consistent with the requirements of Regulation RR. If on any Measurement Date the amount of the Transferor’s Interest, when measured in a manner consistent with the requirements of Regulation RR, does not satisfy the requirements of Regulation RR, the Transferor shall cause the amount of the Transferor’s Interest, when measured in a manner consistent with the requirements of Regulation RR, to satisfy the requirements of Regulation RR as soon as practicable thereafter but, in any event, no later than the immediately subsequent Measurement Date. For purposes of this Section 10.05, the Transferor’s Interest shall constitute a “seller’s interest” for purposes of Regulation RR.

The Servicer shall indicate in each Monthly Servicer Statement whether the amount of the Transferor’s Interest, when measured in a manner consistent with the requirements of Regulation RR, satisfies the requirements of Regulation RR.

In no event shall the Indenture Trustee have any responsibility to monitor compliance with or enforce compliance with Regulation RR. The Indenture Trustee shall not be charged with knowledge of such rules, nor shall it be liable to any Noteholder or other party for violation of such rules now or hereinafter in effect.

38

Section 10.06.     Excess Concentration Amount.

(a) As of the first day of any Monthly Period, an amount of Principal Receivables equal to the sum, without duplication, of the following amounts shall constitute the “Excess Concentration Amount” for such Monthly Period:

(i)     [*****]; and

(ii)     [*****].

(b) At the option of the Transferor, any Receivables which constitute Excess Concentration Amounts shall be treated as Ineligible Receivables in accordance with Section 2.05 of the Transfer and Servicing Agreement.

Section 10.07.        The Indenture Trustee. The Indenture Trustee shall be entitled to the same rights, protections and indemnities under this Supplement that it is provided under the Indenture.

Section 10.08.        Additional Covenant.    The Issuer and Servicer agree that funds on deposit in the Special Funding Account shall only be invested in Eligible Investments described in clauses (a) through (g) of the definition thereof.

39

IN WITNESS WHEREOF, the Issuer, the Servicer and the Indenture Trustee have caused this Indenture Supplement to be duly executed by their respective officers thereunto duly authorized, all as of the date first above written.

PERIMETER MASTER NOTE BUSINESS TRUST, Issuer
By: Wilmington Trust, National association
	not in its individual capacity, but solely as Owner Trustee
By:	/s/ Nancy E. Hagner
	Name: Nancy E. Hagner Title: Assistant Vice President
U.S. BANK NATIONAL ASSOCIATION, not in its individual capacity, but solely as Indenture Trustee
By:	/s/ Mirtza J. Escobar
	Name: Mirtza J. Escobar Title: Vice President
ACCESS FINANCING, LLC, Servicer
By:	/s/ Brian Stone
	Name:   Brian Stone Title:     President

[Signature Page to Series 2019-One Indenture Supplement]

TABLE OF CONTENTS

Page

ARTICLE I

Creation of the Series 2019-One Notes

Section 1.01. Designation 1

ARTICLE II

Definitions

Section 2.01. Definitions 2

ARTICLE III

Fees

Section 3.01. Servicing Compensation; Backup Servicing Fee 14

ARTICLE IV

Rights of Series 2019-One Noteholders and Allocation and Application of Collections

Section 4.01.	Collections and Allocations	15
Section 4.02.	Determination of Monthly Interest	17
Section 4.03.	Required Amounts	18
Section 4.04.	Application of Available Finance Charge Collections and Available Principal Collections	19
Section 4.05.	Defaulted Amounts; Reduction Amounts	22
Section 4.06	Reallocated Principal Collections	23
Section 4.07.	Series 2019-One Distribution Account	24
Section 4.08.	Optional Redemption	24
ARTICLE V
Distributions and Reports to Series 2019-One Noteholders
Section 5.01.	Distributions	25
Section 5.02.	Reports and Statements to Series 2019-One Noteholders	26

ARTICLE VI

Early Redemption Events; Events of Default

Section 6.01.	Early Redemption Events	27
Section 6.01.	Series 2019-One Event of Default	28

ARTICLE VII

Administrative Redemption; Series Termination

Section 7.01.	Administrative Redemption	29
Section 7.02.	Repayment	29

-i-

TABLE OF CONTENTS

(continued)

                                         Page

ARTICLE VIII Redemption of Series 2019-One Notes; Final Distributions
Section 8.01.	Sale of Receivables or Redemption of the Notes pursuant to Section 2.04(c) or 8.01 of the Transfer and Servicing Agreement and Sections 5.05 and 5.17 of the Indenture and Section 7.01 of this Supplement	29
ARTICLE IX The Series 2019-One Notes; Private Placement; Representations and Warranties; Transfer Restrictions; Withholding
Section 9.01.	Form of Delivery of the Series 2019-One Notes; Denominations	31
Section 9.02.	Private Placement of Securities	31
Section 9.03.	Representations, Warranties and Agreements of Noteholders	31
Section 9.04.	Transfer Restrictions	34
Section 9.05.	Withholding	35
Section 9.05.	Paired Series	36
ARTICLE X Miscellaneous Provisions
Section 10.01.	Ratification of Agreement	36
Section 10.02.	Counterparts	36
Section 10.03.	Governing Law; Submission to Jurisdiction; Waiver of Jury Trial	36
Section 10.04.	Limitation of Liability	37
Section 10.05.	Measuring the Transferor’s Interest for purposes of Regulation RR	37
Section 10.06.	Excess Concentration Amounts	38
Section 10.07.	The Indenture Trustee	38
Section 10.08.	Additional Covenant	38

-ii-

EX-10.11S

CERTAIN INFORMATION, IDENTIFIED BY [*****], HAS BEEN EXCLUDED FROM THE EXHIBIT BECAUSE IT IS BOTH NOT MATERIAL AND WOULD LIKELY CAUSE COMPETITIVE HARM TO THE COMPANY IF PUBLICLY DISCLOSED.

Exhibit 10.11(s)

EXECUTION COPY

SERIES 2019-TWO INDENTURE SUPPLEMENT

Dated as of November 26, 2019

to

MASTER INDENTURE

Dated as of February 8, 2017

Series 2019-Two Asset Backed Notes

$126,316,000 Class A Asset Backed Notes

$52,632,000 Class B Asset Backed Notes

$10,526,000 Class C Asset Backed Notes     

$10,526,000 Class D Asset Backed Notes

PERIMETER MASTER NOTE BUSINESS TRUST

SERIES 2019-TWO

among

PERIMETER MASTER NOTE BUSINESS TRUST

Issuer

ACCESS FINANCING, LLC

Servicer

and

U.S. BANK NATIONAL ASSOCIATION

Indenture Trustee

on behalf of the Series 2019-Two Noteholders

EXHIBITS

Exhibit A     Form of Class A Rule 144 A Global Note

Exhibit B     Form of Class B Rule 144 A Global Note

Exhibit C     Form of Class C Rule 144 A Global Note

Exhibit D     Form of Class D Rule 144 A Global Note

Exhibit E     Form of Monthly Servicer Statement

SERIES 2019-Two INDENTURE SUPPLEMENT, dated as of November 26, 2019 (this “Supplement”), among PERIMETER MASTER NOTE BUSINESS TRUST, a business trust organized and existing under the laws of the State of Nevada (the “Issuer”), ACCESS FINANCING, LLC, a Georgia limited liability company, as servicer (together with its successors and permitted assigns, the “Servicer”), and U.S. BANK NATIONAL ASSOCIATION, a national banking association, not in its individual capacity, but solely as Indenture Trustee (together with its successors in the trusts thereunder as provided in the Indenture, the “Indenture Trustee”) under the Master Indenture dated as of February 8, 2017 (the “Indenture”) among the Issuer, the Servicer and the Indenture Trustee.

Section 2.10 of the Indenture provides that the Issuer may, pursuant to one or more Indenture Supplements, direct the Indenture Trustee, on behalf of the Issuer, to issue one or more Series of Notes and to set forth the Principal Terms of such Series.

Pursuant to the Indenture and this Supplement, the Issuer and the Indenture Trustee shall create a new Series of Notes and specify the Principal Terms thereof.

ARTICLE I 

Creation of the Series 2019-Two Notes.

Section 1.01.     Designation.

(a)     There is hereby created and designated a Series of Notes to be issued pursuant to the Indenture and this Supplement to be known as the “Perimeter Master Note Business Trust, Series 2019-Two Notes” or the “Series 2019-Two Notes.” The Series 2019-Two Notes shall be issued in four Classes, the first of which shall be known as the “Class A Series 2019-Two Asset Backed Notes,” the second of which shall be known as the “Class B Series 2019-Two Asset Backed Notes,” the third of which shall be known as the “Class C Series 2019-Two Asset Backed Notes” and the fourth of which shall be known as the “Class D Series 2019-Two Asset Backed Notes.” The Series 2019-Two Notes shall be due and payable on the Stated Maturity Date.

(b)     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, the terms and provisions of this Supplement shall be controlling.

(c)     The Indenture Trustee, the Paying Agent, the Note Registrar, the Transferor, the Issuer and any agent of any of them shall prior to due presentation of a Registered Note for registration of transfer, treat the Person in whose name any Registered Note is registered as the owner of such Registered Note for the purpose of receiving distributions pursuant to the terms of the applicable Indenture Supplement and for all other purposes whatsoever and, none of the Indenture Trustee, the Paying Agent, the Note Registrar, the Transferor, the Issuer or any agent of any of them shall be affected by any notice to the contrary.

ARTICLE II 

Definitions

Section 2.01.     Definitions.

(a)     All capitalized terms used but not otherwise defined herein are defined in the Indenture, the Transfer and Servicing Agreement or the Trust Agreement (including by way of reference to other documents). Each capitalized term defined herein shall relate only to the Series 2019-Two Notes and no other Series of Notes issued by the Issuer. Whenever used in this 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.

“Administrative Redemption” shall mean a redemption of the Series 2019-Two Notes as specified in subsection 7.01(a).

“Allocation Amount” shall mean, as of any date, an amount equal to (a) the Initial Note Principal Balance, minus (b) the Pre-Funding Amount, minus (c) the total amount of principal payments made on the Series 2019-Two Notes prior to such date minus (d) the excess, if any, of (i) the total amount of Reduction Amounts for all Distribution Dates prior to such date and Reallocated Principal Collections that under subsections 4.06(b) through (d) were used prior to such date to fund the Class A Required Amount, the Class B Required Amount or the Class C Required Amount over (ii) such Reduction Amounts and Reallocated Principal Collections reimbursed pursuant to subsection 4.04(a)(vii)(A) prior to such date, provided that the Allocation Amount shall not be less than zero.

“Available Finance Charge Collections” shall mean an amount equal to, with respect to any Monthly Period, (a) the product of (i) the Floating Allocation Percentage for such Monthly Period and (ii) the Series 2019-Two Allocable Finance Charge Collections for such Monthly Period plus (b) any Pre-Funding Investment Proceeds.

“Available Principal Collections” shall mean an amount equal to, with respect to any Monthly Period, (i) the product of (a) the Fixed/Floating Allocation Percentage for such Monthly Period and (b) Series 2019-Two Allocable Principal Collections minus (ii) the Transferor Available Principal Collections and Reallocated Principal Collections with respect to such Monthly Period that pursuant to Section 4.06 are required to fund the Class A Required Amount, the Class B Required Amount, the Class C Required Amount or the Class D Required Amount for such Monthly Period plus (iii) any other amounts which pursuant to subsection 4.04(a) are to be treated as Available Principal Collections for such Monthly Period.

“Average Principal Receivables” shall mean, for any period, the sum of the Principal Receivables for each day in such period divided by the number of days in such period.

2

“Backup Servicer” shall mean the entity designated by the Servicer to be a backup servicer under a backup servicing agreement pursuant to a notice provided to the Indenture Trustee.

“Backup Servicing Fee” shall mean the fee payable pursuant to a backup servicing agreement entered into by the Servicer, the Issuer, the Backup Servicer and the Indenture Trustee.

“Capped Program Expenses” shall mean, for any Distribution Date, the sum of (i) an amount not to exceed $50,000 per year beginning on the Closing Date and ending on each anniversary thereof, equal to the Program Expenses owed to the Owner Trustee and (ii) an amount not to exceed $50,000 per year beginning on the Closing Date and ending on each anniversary thereof, equal to the Program Expenses owed to the Indenture Trustee.

“Charge-Off Rate” shall mean, with respect to any Monthly Period, the annualized percentage equivalent of a fraction (a) the numerator of which is the aggregate outstanding principal balance of all Receivables that became Defaulted Receivables during such Monthly Period net of Recoveries and (b)  the denominator of which is the aggregate amount of Principal Receivables as of the last day of the prior Monthly Period.

“Class A Additional Interest” shall have the meaning specified in subsection 4.02(a).

“Class A Initial Note Principal Balance” shall mean $126,316,000.00.

“Class A Interest Shortfall” shall have the meaning specified in subsection 4.02(a).

“Class A Monthly Interest” shall have the meaning specified in subsection 4.02(a).

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

“Class A Note Interest Rate” shall mean, for any Interest Period for the Class A Notes, a per annum rate of [*****]%.

“Class A Note Principal Balance” shall mean, on any date, the Class A Initial Note Principal Balance, minus the total amount of principal payments made on the Class A Notes on or prior to such date.

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

“Class A Required Amount” shall have the meaning specified in subsection 4.03(a).

3

“Class B Additional Interest” shall have the meaning specified in subsection 4.02(b).

“Class B Initial Note Principal Balance” shall mean $52,632,000.00.

“Class B Interest Shortfall” shall have the meaning specified in subsection 4.02(b).

“Class B Monthly Interest” shall have the meaning specified in subsection 4.02(b).

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

“Class B Note Interest Rate” shall mean, for any Interest Period for the Class B Notes, a per annum rate of [*****]%.

“Class B Note Principal Balance” shall mean, on any date, the Class B Initial Note Principal Balance, minus the total amount of principal payments made on the Class B Notes on or prior to such date.

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

“Class B Required Amount” shall have the meaning specified in subsection 4.03(b).

“Class C Additional Interest” shall have the meaning specified in subsection 4.02(c).

“Class C Initial Note Principal Balance” shall mean $10,526,000.00.

“Class C Interest Shortfall” shall have the meaning specified in subsection 4.02(c).

“Class C Monthly Interest” shall have the meaning specified in subsection 4.02(c).

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

“Class C Note Interest Rate” shall mean, for any Interest Period for the Class C Notes, a per annum rate of [*****]%.

“Class C Note Principal Balance” shall mean, on any date, the Class C Initial Note Principal Balance, minus the total amount of principal payments made on the Class C Notes on or prior to such date.

4

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

“Class C Required Amount” shall have the meaning specified in subsection 4.03(c).

“Class D Additional Interest” shall have the meaning specified in subsection 4.02(d).

“Class D Initial Note Principal Balance” shall mean $10,526,000.00.

“Class D Interest Shortfall” shall have the meaning specified in subsection 4.02(d).

“Class D Monthly Interest” shall have the meaning specified in subsection 4.02(d).

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

“Class D Note Interest Rate” shall mean, for any Interest Period for the Class D Notes, a per annum rate of [*****]%.

“Class D Note Principal Balance” shall mean, on any date, the Class D Initial Note Principal Balance, minus the total amount of principal payments made on the Class D Notes on or prior to such date.

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

“Class D Required Amount” shall have the meaning specified in subsection 4.03(d).

“Closing Date” shall mean November 26, 2019.

“Collection Release Conditions” shall mean, on any day, that each of the following is true before and after giving effect to a release of Collections to the Issuer under Section 4.01:

(a) the aggregate unpaid principal balance of all Series of Notes issued under the Indenture or any Indenture Supplement shall not exceed the sum of the Net Eligible Receivables Balance plus the Pre-Funding Amount as of such date plus the aggregate pre-funding amounts of other Series of Notes issued and outstanding on such date; provided, however, for purposes of this calculation, clause (b) of the definition of Net Eligible Receivables Balance shall be determined as of the last day of the immediately preceding Monthly Period; and

(b) the Transferor Amount on such day is greater than the Required Transferor Amount (after giving effect to all Principal Receivables transferred to the Issuer on such day).

5

“Controlled Redemption Commencement Date” shall mean December 15, 2022.

“Controlled Redemption Payment Amount” shall mean, for any Distribution Date during the Controlled Redemption Period, an amount equal to the Controlled Redemption Target Amount for such Distribution Date plus any Controlled Redemption Target Amount previously owed but not distributed on a prior Distribution Date.

“Controlled Redemption Period” shall mean the period commencing at the close of business on October 31, 2022 and ending on the earlier of (a) the commencement of the Early Redemption Period and (b) the Stated Maturity Date.

“Controlled Redemption Target Amount” shall mean, for any Distribution Date during the Controlled Redemption Period, an amount equal to one-eighteenth of the sum of the Class A Initial Note Principal Balance, the Class B Initial Note Principal Balance, the Class C Initial Note Principal Balance and the Class D Initial Note Principal Balance.

“Determination Date” shall mean the third (3^rd) Business Day preceding each Distribution Date.

“Distribution Date” shall mean the fifteenth (15th) day of each calendar month, or if such fifteenth day is not a Business Day, the next succeeding Business Day; provided, that the first Distribution Date for Series 2019-Two shall be January 15, 2020.

“Early Redemption Event” shall mean any Early Redemption Event specified in Section 5.01 of the Indenture and any Early Redemption Event specified in Section 6.01 hereof.

“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 with respect to Series 2019-Two is deemed to have occurred, and ending on the first to occur of (a) the payment in full of the Note Principal Balance or (b) the Stated Maturity Date.

“Excess Concentration Amount” shall have the meaning specified in subsection 10.06(a).

“Excess Spread Percentage” shall mean, with respect to any Monthly Period, the annualized percentage equivalent of a fraction, (a) the numerator of which is equal to Collections of Finance Charge Receivables minus the Defaulted Amount, in each case for such Monthly Period and (b) the denominator of which is the Average Principal Receivables for such Monthly Period.

“FATCA” shall mean Sections 1471 through 1474 of the Code, as in effect on the date hereof (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations thereunder or official governmental interpretations thereof and any agreements entered into pursuant to Section 1471(b)(1) of the Code.

6

“Fixed/Floating Allocation Percentage” shall mean, with respect to any day during a Monthly Period, the percentage equivalent (which percentage shall never exceed 100%) of a fraction, the numerator of which is (a) during the Revolving Period, the Series Adjusted Allocation Amount for Series 2019-Two (or, in the case of the first Monthly Period, the Initial Note Principal Balance) plus the Series Adjusted Subordinated Transferor Amount, in each case as of the last day of the immediately preceding Monthly Period and (b) during the Redemption Period, the Series Adjusted Allocation Amount for Series 2019-Two plus the Series Adjusted Subordinated Transferor Amount in each case as of the close of business on the date on which the Revolving Period shall have terminated or been suspended, as the case may be, and the denominator of which is the product of (x) the greater of (A) the sum of (i) the total amount of Principal Receivables as of the last day of the immediately preceding Monthly Period (or with respect to the first Monthly Period, the total amount of Principal Receivables as of the Closing Date), (ii) the Special Funding Amount as of such last day (or with respect to the first Monthly Period, the Closing Date), and (iii) the amount of Collections of Principal Receivables on deposit in the Collection Account as of such last day (or with respect to the first Monthly Period, as of the Closing Date) and (B) the sum of the numerators used to determine the series allocation percentages with respect to Collections of Principal Receivables for all Series of Notes Outstanding on the date of determination, and (y) the Series 2019-Two Allocation Percentage as of the last day of the immediately preceding Monthly Period; provided, however, that with respect to any Monthly Period in which one or more Reset Dates occurs, the Fixed/Floating Allocation Percentage shall be recalculated as provided above but as of such Reset Date for the period from and including such Reset Date to but excluding the earlier of the next such Reset Date, if any, and the last day of such Monthly Period; provided further, that the numerator in clause (b) above shall continue to be the Series Adjusted Allocation Amount for Series 2019-Two plus the Series Adjusted Subordinated Transferor Amount in each case as of the close of business on the date on which the Revolving Period shall have terminated unless the Series 2019-Two Notes are paid in full on such date; provided further, however, that if Series 2019-Two is paired with a Paired Series as provided in Section 9.06 and if an Early Redemption Event (as such term is defined in the Indenture) occurs with respect to the Paired Series, the Issuer may, by written notice to the Indenture Trustee and the Servicer, designate that the numerator in clause (b) above shall be the Series Adjusted Allocation Amount for Series 2019-Two plus the Series Adjusted Subordinated Transferor Amount as of the close of business of the last day of the revolving period for such Paired Series.

“Floating Allocation Percentage” shall mean, with respect to any day during a Monthly Period, the percentage equivalent (which percentage shall never exceed 100%) of a fraction, the numerator of which is the Allocation Amount (or in the case of the first Monthly Period, the Initial Note Principal Balance) plus, with respect to the allocation of Collections of Finance Charge Receivables only, the Series Adjusted Subordinated Transferor Amount, in each case as of the last day of the immediately preceding Monthly Period and the denominator of which is the product of (x) the Series 2019-Two Allocation Percentage with respect to such Monthly Period and (y) the greater of (A) the sum of (i) the total amount of Principal Receivables as of such day (or with respect to the first Monthly Period, the total amount of Principal Receivables on the Closing Date), (ii) the Special Funding Amount as of such last day (or with respect to the first Monthly Period, the Closing Date) and (iii) the amount of Collections of Principal Receivables on deposit in the Collection Account as of such last day (or with respect to the first Monthly Period, as of the Closing Date) and (B) the sum of the numerators used to determine the series allocation percentages with respect to Collections of Finance Charge Receivables for all Series of Notes Outstanding on the date of determination; provided, however, that with respect to any Monthly Period in which one or more Reset Dates occurs, the Floating Allocation Percentage shall be recalculated as provided above but as of such Reset Date, for the period from and after the date on which any such Reset Date occurs to but excluding the date, if any, that another such Reset Date occurs or, if no other Reset Date occurs during such Monthly Period, to and including the last day of such Monthly Period, as applicable.

7

“Indenture Trustee Fee” shall mean an annual fee payable to the Indenture Trustee in the amount of $15,000.

“Initial Note Principal Balance” shall mean $200,000,000.00.

“Initial Pre-Funding Amount” shall mean an amount equal to the difference between (i) the sum of (a) the Series 2019-Two Note Principal Balance plus the aggregate unpaid principal balance of all Series of Notes issued under the Indenture or any Indenture Supplement plus (b) the Required Transferor Amount, and (ii) the sum of the Net Eligible Receivables Balance plus the aggregate pre-funding amounts of other Series of Notes issued and outstanding on such date.

“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.

“Measurement Date” shall mean, for each Monthly Period, the Determination Date for such Monthly Period.

“Monthly Backup Servicing Fee” shall have the meaning specified in subsection 3.01(b).

“Monthly Interest” shall mean, with respect to any Distribution Date, the sum of the Class A Monthly Interest, the Class B Monthly Interest, the Class C Monthly Interest and the Class D Monthly Interest for such Distribution Date.

“Monthly Servicer Statement” shall have the meaning specified in subsection 5.02(a)(i).

“Monthly Servicing Fee” shall have the meaning specified in subsection 3.01(a).

“Net Eligible Receivables Balance” shall mean, as of any date of determination, (a) an amount equal to the aggregate amount of Principal Receivables that constitute Eligible Receivables as of such date, minus (b) the aggregate amount of any Excess Concentration Amounts as of such date, plus (c) the aggregate amount of funds on deposit in the Special Funding Account as of such date, plus (d) the aggregate amount of Collections of Principal Receivables on deposit in the Collection Account as of such date.

“Note Principal Balance” shall mean, for any date of determination, the sum of the Class A Note Principal Balance, the Class B Note Principal Balance, the Class C Note Principal Balance and the Class D Note Principal Balance.

8

“Noteholder FATCA Information” shall have the meaning specified in Section 9.05.

“Noteholder Tax Identification Information” shall have the meaning specified in Section 9.05.

“Optional Redemption” shall have the meaning specified in subsection 4.08(a).

“Optional Redemption Date” shall have the meaning specified in subsection 4.08(a).

“Optional Redemption Notice” shall have the meaning specified in subsection 4.08(a).

“Owner Trustee Fee” shall mean an annual fee payable to the Owner Trustee in the amount of $5,500.

“Paired Series” shall have the meaning specified in Section 9.06.

“Payment Date” shall mean, with respect to Series 2019-Two, a Distribution Date.

“Pre-Funding Account” shall have the meaning specified in subsection 4.09(a).

“Pre-Funding Amount” shall mean, for any date of determination, the amount on deposit in the Pre-Funding Account.

“Pre-Funding Investment Proceeds” shall have the meaning set forth in subsection 4.09(b).

“Pre-Funding Period” shall mean the period commencing on the Closing Date and ending on the Pre-Funding Termination Date.

“Pre-Funding Termination Date” shall mean the earlier of the (i) the Business Day preceding the March 2020 Distribution Date or (ii) the day on which the Early Redemption Period commences.

“Principal Payment Rate” shall mean, with respect to any Monthly Period, the percentage equivalent of a fraction the numerator of which is the Collections of Principal Receivables for such Monthly Period and the denominator of which is the aggregate amount of Principal Receivables as of the last day of the prior Monthly Period.

“Program Expenses” shall mean an amount equal to one-twelfth the product of (i) the Floating Allocation Percentage, (ii) the Series 2019-Two Allocation Percentage and (iii) indemnification amounts owed to the Indenture Trustee and the Owner Trustee pursuant to the Transaction Documents.

“Program Fees” shall mean, with respect to each Distribution Date occurring in January commencing with the January 2020 Distribution Date, an amount equal to the Indenture Trustee Fee and the Owner Trustee Fee.

9

“QIBs” shall mean qualified institutional buyers as defined in Rule 144A.

“Reallocated Principal Collections” shall mean, with respect to any Distribution Date, an amount equal to the lesser of (I) the product of (a) the Series 2019-Two Allocable Principal Collections deposited in the Collection Account for the related Monthly Period, (b) the Fixed/Floating Allocation Percentage for the related Monthly Period and (c) 37%, and (II) the greater of (x) the sum of the Class B Note Principal Balance, the Class C Note Principal Balance and the Class D Note Principal Balance (prior to any distributions on such Distribution Date), minus the excess, if any, of the total amount of Reduction Amounts for all prior Distribution Dates and the Reallocated Principal Collections that under subsections 4.06(b) through (d) were used to fund the Class A Required Amount, the Class B Required Amount or the Class C Required Amount on all prior Distribution Dates over such Reduction Amounts and Reallocated Principal Collections reimbursed pursuant to subsection 4.04(a)(vii)(A) prior to such date and (y) zero.

“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 Note Principal Balance plus the Class B Note Principal Balance plus the Class C Note Principal Balance plus the Class D Note Principal Balance plus (ii) the Monthly Interest for such Distribution Date plus any Monthly Interest previously due but not paid plus (iii) Series 2019-Two Monthly Fees for such Distribution Date.

“Redemption Period” shall mean, with respect to Series 2019-Two, the Controlled Redemption Period or an Early Redemption Period.

“Reduction Amount” shall have the meaning specified in subsection 4.05(b).

“Regulation RR” shall mean Part 244 – Credit Risk Retention (Regulation RR), 12 C.F.R. §§244.1-244.22, as the same may be amended from time to time.

“Reset Date” shall mean each of (a) an Addition Cut-Off Date, (b) the date of any increase or decrease (other than regularly scheduled redemptions or early redemptions but including any optional redemption or limited redemption in the principal balance of the Notes of any Series) in the note principal balance or allocation amount for another variable funding Series, (c) any date on which a new Series is issued and (d) any date on which any funds are withdrawn from the Pre-Funding Account.

“Revolving Period” shall mean the period beginning at the close of business on the Closing Date and ending on the earlier of (a) the close of business on the day immediately preceding the day the Controlled Redemption Period commences and (b) the close of business on the day immediately preceding the day the Early Redemption Period commences.

“Rule 144A” shall mean Rule 144A promulgated under the Securities Act.

10

“Scheduled Final Payment Date” shall mean (a) with respect to the Class A Notes, November 15, 2023, (b) with respect to the Class B Notes, April 15, 2024, and (c) with respect to the Class C Notes and the Class D Notes, May 15, 2024.

“Series 2019-Two” shall mean the Series of Notes the terms of which are specified in this Supplement.

“Series 2019-Two Allocable Defaulted Amount” shall mean the Series Allocable Defaulted Amount with respect to Series 2019-Two.

“Series 2019-Two Allocable Finance Charge Collections” shall mean the Series Allocable Finance Charge Collections with respect to Series 2019-Two.

“Series 2019-Two Allocable Principal Collections” shall mean the Series Allocable Principal Collections with respect to Series 2019-Two.

“Series 2019-Two Allocation Percentage” shall mean the Series Allocation Percentage with respect to Series 2019-Two.

“Series 2019-Two Distribution Account” shall have the meaning set forth in subsection 4.07(a).

“Series 2019-Two Monthly Fees” shall mean, with respect to any Distribution Date, the amounts determined pursuant to subsection 4.04(a)(i) and subsection 4.04(a)(ix).

“Series 2019-Two Monthly Interest” shall mean the amounts determined pursuant to subsections 4.02(a) through (d).

“Series 2019-Two Note” shall mean a Class A Note, a Class B Note, a Class C Note or a Class D Note.

“Series 2019-Two Noteholder” shall mean a Class A Noteholder, a Class B Noteholder, a Class C Noteholder or a Class D Noteholder.

“Series Adjusted Allocation Amount” shall have the meaning specified in the Transfer and Servicing Agreement.

“Series Adjusted Subordinated Transferor Amount” shall mean, as of any date, an amount equal to the Series Required Transferor Amount minus (y) the excess, if any, of the total amount of Transferor Reduction Amounts for all prior Distribution Dates and the amounts that under subsection 4.06(a) were used to fund the Class A Required Amount, the Class B Required Amount, the Class C Required Amount and the Class D Required Amount on all prior Distribution Dates over amounts reimbursed pursuant to subsection 4.04(a)(vii)(B) prior to such date.

11

“Series Allocation Amount” shall mean, for Series 2019-Two, the Initial Note Principal Balance minus the total amount of any payments of principal paid on the Series 2019-Two Notes at any time other than during an Early Redemption Period minus the Pre-Funding Amount; provided, however, that if Series 2019-Two is paired with a Paired Series as provided in Section 9.06, then Series Allocation Amount shall mean the Initial Note Principal Balance minus (but only for purposes of the definition of the Series Adjusted Allocation Amount and the Trust Adjusted Allocation Amount used in the definition of Series 2019-Two Allocable Finance Charge Collections, Series 2019-Two Allocable Defaulted Amount and Floating Allocation Percentage (but only to the extent the definition of Floating Allocation Percentage is used in the definitions of Series Finance Charge Collections and Series Default Amount)) the total amount of principal payments made on the Class A Notes, the Class B Notes, the Class C Notes and the Class D Notes; provided further, however, that if Series 2019-Two is paired with a Paired Series as provided in Section 9.06 and if an Early Redemption Event (as such term is defined in the Indenture) occurs with respect to the Paired Series, the Issuer may, by written notice to the Indenture Trustee and the Servicer, reduce the Series Allocation Amount (for all purposes of this Supplement, the Indenture and the Transfer and Servicing Agreement) to a lower amount provided that such amount is not less than the greater of (I) the Initial Note Principal Balance minus the total amount of principal payments made on the Class A Notes, the Class B Notes, the Class C Notes or the Class D Notes, and (II) the Series Allocation Amount (as such term is defined in the Indenture) for such Paired Series.

“Series Allocation Percentage” shall have the meaning specified in the Transfer and Servicing Agreement.

“Series Default Amount” shall mean, with respect to any Monthly Period, an amount equal to the product of (a) the Series 2019-Two Allocable Defaulted Amount for the related Monthly Period and (b) the Floating Allocation Percentage for such Monthly Period.

“Series Required Transferor Amount” shall mean, with respect to any date of determination, an amount equal to (a)(i) the sum of the Class A Note Principal Balance plus the Class B Note Principal Balance plus the Class C Note Principal Note Balance plus the Class D Note Principal Note Balance divided by (ii) 95.0% minus (b) the sum of the Class A Note Principal Balance plus the Class B Note Principal Balance plus the Class C Note Principal Note Balance plus the Class D Note Principal Note Balance.

“Servicing Fee Rate” shall mean [*****]% per annum.

“Special Payment Date” shall mean each Distribution Date with respect to any Redemption Period.

“Stated Maturity Date” shall mean May 15, 2024.

“Subordinated Transferor Percentage” shall mean, with respect to any Monthly Period, the percentage equivalent of a fraction, the numerator of which is the Series Adjusted Subordinated Transferor Amount as of the last day of the preceding Monthly Period (or in the case of the first Monthly Period, the Series Adjusted Subordinated Transferor Amount as of the Closing Date) and the denominator of which is the product of (x) the Series 2019-Two Allocation Percentage with respect to such Monthly Period and (y) the product of (I) the greater of (A) the sum of (i) the total amount of Principal Receivables as of such day (or with respect to the first Monthly Period, the total amount of Principal Receivables on the Closing Date), (ii) the Special Funding Amount as of such last day (or with respect to the first Monthly Period, the Closing Date) and (iii) the amount of Collections of Principal Receivables on deposit in the Collection Account as of such last day (or with respect to the first Monthly Period, as of the Closing Date) and (B) the sum of the numerators used to determine the series allocation percentages with respect to Collections of Principal Receivables for all Series of Notes Outstanding and (II) the Series 2019-Two Allocation Percentage as of the last day of the immediately preceding Monthly Period (or with respect to the first Monthly Period, as of the Closing Date); provided, however, that with respect to any Monthly Period in which one or more Reset Dates occurs, the Subordinated Transferor Percentage shall be recalculated as provided above but as of such Reset Date, for the period from and after the date on which any such Reset Date occurs to but excluding the date, if any, that another such Reset Date occurs or, if no other Reset Date occurs during such Monthly Period, to and including the last day of such Monthly Period, as applicable.

12

“Three-Month Charge-Off Rate” shall mean, for any Monthly Period, the average of the Charge-Off Rate for such Monthly Period and the two immediately preceding Monthly Periods.

“Three-Month Excess Spread Percentage” shall mean, for any Monthly Period, the average of the Excess Spread Percentages for such Monthly Period and the two immediately preceding Monthly Periods.

“Three-Month Principal Payment Rate” shall mean, for any Monthly Period, the average of the Principal Payment Rate for such Monthly Period and the two immediately preceding Monthly Periods.

“Transferor Available Principal Collections” shall mean, with respect to any Distribution Date, an amount equal to the lesser of (i) the product of (A) the Series 2019-Two Allocable Principal Collections deposited in the Collection Account for the related Monthly Period, and (B) the Subordinated Transferor Percentage for such Monthly Period, and (ii) the greater of (A) the Series Adjusted Subordinated Transferor Amount and (B) zero.

“Transferor Percentage” shall mean 100% minus (a) the Floating Allocation Percentage, when used as of any date with respect to Defaulted Receivables or with respect to Collections of Finance Charge Receivables or (b) the Fixed/Floating Allocation Percentage, when used as of any date with respect to Collections of Principal Receivables.

“Transferor Reduction Amounts” shall have the meaning specified in subsection 4.05(a).

“Transferor’s Interest” shall have the meaning specified in Section 10.05.

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

13

ARTICLE III

Fees

Section 3.01.     Servicing Compensation; Backup Servicing Fee.

(a)     Servicing Fee. The share of the Servicing Fee allocable to the Series 2019-Two Noteholders with respect to any Distribution Date (the “Monthly Servicing Fee”) shall mean an amount equal to one-twelfth of the product of (1) the Floating Allocation Percentage, (2) the Series 2019-Two Allocation Percentage, (3) the Servicing Fee Rate and (4) the Average Principal Receivables for the related Monthly Period. The remainder of the Servicing Fee, if any, shall be paid by the Issuer or the holders of the Transferor Certificate and the Noteholders of other Series (as provided in the Transfer and Servicing Agreement and the Indenture Supplements relating to such other Series) and in no event shall the Indenture Trustee or the Series 2019-Two Noteholders be liable for the share of the Servicing Fee to be paid by the Issuer or the holders of the Transferor Certificate or the Noteholders of any other Series.

(b)     Backup Servicing Fee. The share of the Backup Servicing Fee allocable to the Series 2019-Two Noteholders with respect to any Distribution Date (the “Monthly Backup Servicing Fee”) shall equal the product of (1) the Floating Allocation Percentage, (2) the Series 2019-Two Allocation Percentage and (3) the Backup Servicing Fee for the most recent Monthly Period preceding such Distribution Date. The remainder of the Backup Servicing Fee, if any, shall be paid by the Issuer or the holders of the Transferor Certificate and the Noteholders of other Series (as provided in the Transfer and Servicing Agreement and the Indenture Supplements relating to such other Series) and in no event shall the Indenture Trustee or the Series 2019-Two Noteholders be liable for the share of the Backup Servicing Fee to be paid by the Issuer or the holders of the Transferor Certificate or the Noteholders of any other Series.

14

ARTICLE IV     

Rights of Series 2019-Two Noteholders and
Allocation and Application of Collections

Section 4.01.     Collections and Allocations.

(a)     Allocations. Collections of Finance Charge Receivables and Principal Receivables allocated to Series 2019-Two pursuant to Section 4.01 of the Transfer and Servicing Agreement shall be allocated and distributed as set forth in this Article.

(b)     Allocations of Collections to the Issuer. The Servicer shall on any Business Day requested by the Issuer, withdraw from the Collection Account and pay to the Issuer for application as provided in the Trust Agreement the following amounts:

(i)     an amount equal to the Transferor Percentage for the related Monthly Period of Series 2019-Two Allocable Finance Charge Collections deposited in the Collection Account but only if the Collection Release Conditions are satisfied (after giving effect to all Principal Receivables transferred to the Issuer on such day) and otherwise shall be deposited in the Special Funding Account and subject to subsection 8.02(e) of the Indenture; and

(ii)     an amount equal to the Transferor Percentage for the related Monthly Period of Series 2019-Two Allocable Principal Collections deposited in the Collection Account but only if the Collection Release Conditions are satisfied (after giving effect to all Principal Receivables transferred to the Issuer on such day) and otherwise shall be deposited in the Special Funding Account and subject to subsection 8.02(e) of the Indenture.

The withdrawals to be made from the Collection Account pursuant to this subsection 4.01(b) do not apply to deposits into the Collection Account that do not represent Collections, including payment for the reassignment of the Receivables pursuant to Section 2.04(c) or Section 2.05 of the Transfer and Servicing Agreement, payment of the purchase price for the Series 2019-Two Notes pursuant to Section 8.01 of the Transfer and Servicing Agreement, payment of the Redemption Amount for the Series 2019-Two Notes pursuant to Section 7.01 or Section 8.01 of this Supplement and proceeds from the sale, disposition or liquidation of Receivables pursuant to Section 5.05 of the Indenture.

(c)     Allocations of Collections to the Series 2019-Two Noteholders.

(i) Allocations of Finance Charge Receivables. The Servicer shall, prior to the close of business on any Deposit Date, allocate to Series 2019-Two and retain in the Collection Account for application as provided herein an amount equal to the product of (A) the Floating Allocation Percentage, (B) the Series 2019-Two Allocation Percentage, and (C) 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.

15

(ii) Allocations of Principal Receivables. The Servicer shall allocate to Series 2019-Two the following amounts as set forth below:

(x)     Allocations During the Revolving Period. With respect to any Deposit Date during the Revolving Period, an amount equal to the product of (I) the Fixed/Floating Allocation Percentage, (II) the Series 2019-Two Allocation Percentage and (III) the aggregate amount of Collections of Principal Receivables deposited in the Collection Account with respect to such Deposit Date shall be allocated to the Series 2019-Two Noteholders and retained in the Collection Account until applied as provided herein; provided, however, that any such amounts may be withdrawn from the Collections Account and paid to the Issuer for application pursuant to the Trust Agreement, but only if the Collection Release Conditions are satisfied (after giving effect to all Principal Receivables transferred to the Issuer on such day) and otherwise shall be deposited in the Special Funding Account and subject to subsection 8.02(e) of the Indenture.

(y)     Allocations During the Controlled Redemption Period. With respect to any Deposit Date during the Controlled Redemption Period, an amount equal to the product of (I) the Fixed/Floating Allocation Percentage and (II) the Series 2019-Two Allocation Percentage and (III) the aggregate amount of Collections of Principal Receivables deposited in the Collection Account on such Deposit Date (such product for any such date, a “Percentage Allocation”) shall be allocated to the Series 2019-Two Noteholders and retained in the Collection Account until applied as provided herein; provided, however, that if the sum of such Percentage Allocation and all preceding Percentage Allocations for the same Monthly Period exceeds the Controlled Redemption Payment Amount for the related Distribution Date, then such excess shall not be treated as a Percentage Allocation and shall be paid to the Issuer for application pursuant to the Trust Agreement but only if the Collection Release Conditions are satisfied (after giving effect to all Principal Receivables transferred to the Issuer on such day) and otherwise shall be deposited in the Special Funding Account and subject to subsection 8.02(e) of the Indenture.

(z)     Allocations During the Early Redemption Period. With respect to any Deposit Date during the Early Redemption Period, an amount equal to the product of (I) the Fixed/Floating Allocation Percentage and (II) the Series 2019-Two Allocation Percentage and (III) the aggregate amount of Collections of Principal Receivables deposited to the Collection Account with respect to such Deposit Date shall be allocated to the Series 2019-Two Noteholders and retained in the Collection Account until applied as provided herein; provided, however, that after the date on which an amount of such Collections equal to the Note Principal Balance has been deposited into the Collection Account and allocated to the Series 2019-Two Noteholders, any amounts in excess of such amounts shall be paid to the Issuer for application pursuant to the Trust Agreement, but only if the Collection Release Conditions are satisfied (after giving effect to all Principal Receivables transferred to the Issuer on such day) and otherwise shall be deposited in the Special Funding Account and subject to subsection 8.02(e) of the Indenture.

16

Section 4.02.     Determination of Monthly Interest.

(a)     The amount of monthly interest (“Class A Monthly Interest”) distributable from the Collection Account with respect to the Class A Notes on any Distribution Date shall be an amount equal to the product of (i) (A) 30/360, times (B) the Class A Note Interest Rate with respect to the immediately preceding Interest Period and (ii) the Class A Note Principal Balance as of the close of business on the last day of the immediately preceding Monthly Period; provided, however, with respect to the January 2020 Distribution Date, the Class A Monthly Interest shall be $[*****].

On the Determination Date preceding each Distribution Date, the Servicer shall determine the excess, if any (the “Class A Interest Shortfall”), of (x) the Class A Monthly Interest for such Distribution Date over (y) the aggregate amount of funds allocated and available to pay such Class A Monthly Interest on such Distribution Date. If the Class A Interest Shortfall with respect to any Distribution Date is greater than zero, on each subsequent Distribution Date until such Class A Interest Shortfall is fully paid, an additional amount (“Class A Additional Interest”) equal to the product of (i) (A) 30/360, times (B) the Class A Note Interest Rate and (ii) such Class A Interest Shortfall (or the portion thereof which has not been paid on the Class A Notes) shall be payable as provided herein with respect to the Class A Notes. Notwithstanding anything to the contrary herein, Class A Additional Interest shall be payable or distributed on the Class A Notes only to the extent permitted by applicable law.

(b)     The amount of monthly interest (“Class B Monthly Interest”) distributable from the Collection Account with respect to the Class B Notes on any Distribution Date shall be an amount equal to the product of (i) (A) 30/360, times (B) the Class B Note Interest Rate with respect to the immediately preceding Interest Period and (ii) the Class B Note Principal Balance as of the close of business on the last day of the immediately preceding Monthly Period; provided, however, with respect to the January 2020 Distribution Date, the Class B Monthly Interest shall be $[*****].

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) 30/360, times (B) the Class B Note Interest 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.

17

(c)     The amount of monthly interest (“Class C Monthly Interest”) distributable from the Collection Account with respect to the Class C Notes on any Distribution Date shall be an amount equal to the product of (i) (A) 30/360, times (B) the Class C Note Interest Rate with respect to the immediately preceding Interest Period and (ii) the Class C Note Principal Balance as of the close of business on the last day of the immediately preceding Monthly Period; provided, however, with respect to the January 2020 Distribution Date, the Class C Monthly Interest shall be $[*****].

On the Determination Date preceding each Distribution Date, the Servicer shall determine the excess, if any (the “Class C Interest Shortfall”), of (x) the Class C Monthly Interest for such Distribution Date over (y) the aggregate amount of funds allocated and available to pay such Class C Monthly Interest on such Distribution Date. If the Class C Interest Shortfall with respect to any Distribution Date is greater than zero, on each subsequent Distribution Date until such Class C Interest Shortfall is fully paid, an additional amount (“Class C Additional Interest”) equal to the product of (i) (A) 30/360, times (B) the Class C Note Interest Rate and (ii) such Class C Interest Shortfall (or the portion thereof which has not been paid on the Class C Notes) shall be payable as provided herein with respect to the Class C Notes. Notwithstanding anything to the contrary herein, Class C Additional Interest shall be payable or distributed on the Class C Notes only to the extent permitted by applicable law.

(d)     The amount of monthly interest (“Class D Monthly Interest”) distributable from the Collection Account with respect to the Class D Notes on any Distribution Date shall be an amount equal to the product of (i) (A) 30/360, times (B) the Class D Note Interest Rate with respect to the immediately preceding Interest Period and (ii) the Class D Note Principal Balance as of the close of business on the last day of the immediately preceding Monthly Period; provided, however, with respect to the January 2020 Distribution Date, the Class D Monthly Interest shall be $[*****].

On the Determination Date preceding each Distribution Date, the Servicer shall determine the excess, if any (the “Class D Interest Shortfall”), of (x) the Class D Monthly Interest for such Distribution Date over (y) the aggregate amount of funds allocated and available to pay such Class D Monthly Interest on such Distribution Date. If the Class D Interest Shortfall with respect to any Distribution Date is greater than zero, on each subsequent Distribution Date until such Class D Interest Shortfall is fully paid, an additional amount (“Class D Additional Interest”) equal to the product of (i) (A) 30/360, times (B) the Class D Note Interest Rate and (ii) such Class D Interest Shortfall (or the portion thereof which has not been paid on the Class D Notes) shall be payable as provided herein with respect to the Class D Notes. Notwithstanding anything to the contrary herein, Class D Additional Interest shall be payable or distributed on the Class D Notes only to the extent permitted by applicable law.

Section 4.03.     Required Amounts.

(a)     With respect to each Distribution Date, on the related Determination Date, the Servicer shall determine the amount (the “Class A Required Amount”), if any, by which (x) the amount required pursuant to subsections 4.04(a)(i) and 4.04(a)(ii) for such Distribution Date exceeds (y) the Available Finance Charge Collections for such Distribution Date available to fund such amount. In the event that the Class A Required Amount for such Distribution Date is greater than zero, the Servicer shall give written notice to the Indenture Trustee of such Class A Required Amount on the date of computation.

18

(b)     With respect to each Distribution Date, on the related Determination Date, the Servicer shall determine the amount (the “Class B Required Amount”), if any, by which (x) the amount required pursuant to subsection 4.04(a)(iii) for such Distribution Date exceeds (y) the balance of Available Finance Charge Collections in each case for such Distribution Date available to fund such amount after application of the amounts required pursuant to subsections 4.04(a)(i) and 4.04(a)(ii). In the event that the Class B Required Amount for such Distribution Date is greater than zero, the Servicer shall give written notice to the Indenture Trustee of such Class B Required Amount on the date of computation.

(c)     With respect to each Distribution Date, on the related Determination Date, the Servicer shall determine the amount (the “Class C Required Amount”), if any, by which (x) the amount required pursuant to subsection 4.04(a)(iv) for such Distribution Date exceeds (y) the balance of Available Finance Charge Collections in each case for such Distribution Date available to fund such amount after application of the amounts required pursuant to subsections 4.04(a)(i) through 4.04(a)(iii). In the event that the Class C Required Amount for such Distribution Date is greater than zero, the Servicer shall give written notice to the Indenture Trustee of such Class C Required Amount on the date of computation.

(d)     With respect to each Distribution Date, on the related Determination Date, the Servicer shall determine the amount (the “Class D Required Amount”), if any, by which (x) the amount required pursuant to subsection 4.04(a)(v) for such Distribution Date exceeds (y) the balance of Available Finance Charge Collections in each case for such Distribution Date available to fund such amount after application of the amounts required pursuant to subsections 4.04(a)(i) through 4.04(a)(iv). In the event that the Class D Required Amount for such Distribution Date is greater than zero, the Servicer shall give written notice to the Indenture Trustee of such Class D Required Amount on the date of computation.

Section 4.04.     Application of Available Finance Charge Collections and Available Principal Collections. The Servicer shall apply, or shall cause the Paying Agent to apply by written instruction to the Paying Agent pursuant to the Monthly Servicer Statement, on each Distribution Date, Available Finance Charge Collections and Available Principal Collections on deposit in the Collection Account with respect to such Distribution Date to make the following distributions:

(a)     On each Distribution Date, an amount equal to the Available Finance Charge Collections with respect to such Distribution Date will be distributed in the following priority:

(i)     an amount equal to the sum of the Monthly Servicing Fee, the Program Fees, the Capped Program Expenses and the Monthly Backup Servicing Fee, if any, for the related Distribution Date plus the sum of the amount of any Monthly Servicing Fee, the Program Fees, the Capped Program Expenses and any Monthly Backup Servicing Fee previously due but not distributed to the Servicer, the Owner Trustee, the Indenture Trustee or the Backup Servicer, if any respectively, on a prior Distribution Date, shall be distributed, pro rata, as applicable, to the Servicer, the Owner Trustee, the Indenture Trustee and the Backup Servicer, if any;

19

(ii)     an amount equal to Class A Monthly Interest for the related Distribution Date plus an amount equal to any Class A Interest Shortfall not distributed on a prior Distribution Date plus the amount of any Class A Additional Interest for such Distribution Date plus any Class A Additional Interest previously due but not distributed to Class A Noteholders on a prior Distribution Date, shall be distributed to the Class A Noteholders;

(iii)     an amount equal to Class B Monthly Interest for the related Distribution Date plus an amount equal to 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;

(iv)     an amount equal to Class C Monthly Interest for the related Distribution Date plus an amount equal to any Class C Interest Shortfall not distributed on a prior Distribution Date plus the amount of any Class C Additional Interest for such Distribution Date plus any Class C Additional Interest previously due but not distributed to Class C Noteholders on a prior Distribution Date, shall be distributed to the Class C Noteholders;

(v)     an amount equal to Class D Monthly Interest for the related Distribution Date plus an amount equal to any Class D Interest Shortfall not distributed on a prior Distribution Date plus the amount of any Class D Additional Interest for such Distribution Date plus any Class D Additional Interest previously due but not distributed to Class D Noteholders on a prior Distribution Date, shall be distributed to the Class D Noteholders;

(vi)     an amount equal to the Series Default Amount for such Distribution Date shall be treated as a portion of Available Principal Collections for such Distribution Date;

(vii)     (A) an amount equal to the aggregate amount of Reduction Amounts plus Reallocated Principal Collections that under subsections 4.06(b) through (d) were used to fund the Class A Required Amount, the Class B Required Amount or the Class C Required Amount which have not been previously reimbursed shall be treated as a portion of Available Principal Collections for such Distribution Date;

(B) an amount equal to the aggregate amount of Transferor Reduction Amounts plus Transferor Available Principal Collections that under subsection 4.06(a) were used to fund the Class A Required Amount, the Class B Required Amount, the Class C Required Amount or the Class D Required Amount which have not been previously reimbursed shall be treated as a portion of Available Principal Collections for such Distribution Date;

20

(viii)     if an Early Redemption Event has occurred on or prior to such Distribution Date, an amount up to the Class A Note Principal Balance plus the Class B Note Principal Balance plus the Class C Note Principal Balance plus the Class D Note Principal Balance on such Distribution Date shall be treated as a portion of Available Principal Collections for such Distribution Date;

(ix)     an amount equal to the Program Expenses for such Distribution Date not paid in clause (i) above, plus the amount of any Program Expenses previously due but not distributed to the Owner Trustee or Indenture Trustee on a prior Distribution Date, shall be distributed, pro rata, as applicable, to the Owner Trustee and the Indenture Trustee;

(x)     the balance of such Available Finance Charge Collections shall be distributed to the Issuer and applied in accordance with the Trust Agreement.

(b)     On each Distribution Date with respect to the Revolving Period, an amount equal to the Available Principal Collections deposited in the Collection Account for the related Monthly Period shall be distributed to the Issuer and applied in accordance with the Trust Agreement but only if the Collection Release Conditions are satisfied (after giving effect to all Principal Receivables transferred to the Issuer on such day) and otherwise shall be deposited in the Special Funding Account and subject to subsection 8.02(e) of the Indenture.

(c)     On each Distribution Date with respect to a Controlled Redemption Period commencing on the Controlled Redemption Commencement Date, an amount equal to the Controlled Redemption Payment Amount deposited in the Collection Account for the related Monthly Period shall be distributed in the following order of priority:

(i)     an amount, to the extent available, equal to the Class A Note Principal Balance shall be distributed to the Class A Noteholders;

(ii)     for each Distribution Date beginning on the Distribution Date on which the Class A Notes have been paid in full, an amount, to the extent available, equal to the Class B Note Principal Balance shall be distributed to the Class B Noteholders;

(iii)     for each Distribution Date beginning on the Distribution Date on which the Class B Notes have been paid in full, an amount, to the extent available, equal to the Class C Note Principal Balance shall be distributed to the Class C Noteholders;

(iv)     for each Distribution Date beginning on the Distribution Date on which the Class C Notes have been paid in full, an amount, to the extent available, equal to the Class D Note Principal Balance shall be distributed to the Class D Noteholders; and

(v)     for each Distribution Date beginning on the Distribution Date on which the Class D Notes are paid in full, an amount equal to the balance, if any, of such Available Principal Collections shall be distributed to the Issuer and applied in accordance with the Trust Agreement.

21

(d)     On each Distribution Date with respect to an Early Redemption Period, an amount equal to the Available Principal Collections deposited in the Collection Account for the related Monthly Period shall be distributed in the following order of priority:

(i)     an amount, to the extent available, equal to the Class A Note Principal Balance shall be distributed to the Class A Noteholders;

(ii)     for each Distribution Date beginning on the Distribution Date on which the Class A Notes have been paid in full, an amount, to the extent available, equal to the Class B Note Principal Balance shall be distributed to the Class B Noteholders;

(iii)     for each Distribution Date beginning on the Distribution Date on which the Class B Notes have been paid in full, an amount, to the extent available, equal to the Class C Note Principal Balance shall be distributed to the Class C Noteholders;

(iv)     for each Distribution Date beginning on the Distribution Date on which the Class C Notes have been paid in full, an amount, to the extent available, equal to the Class D Note Principal Balance shall be distributed to the Class D Noteholders; and

(v)     for each Distribution Date beginning on the Distribution Date on which the Class D Notes are paid in full, an amount equal to the balance, if any, of such Available Principal Collections shall be distributed to the Issuer and applied in accordance with the Trust Agreement.

Section 4.05.     Defaulted Amounts; Reduction Amounts.

On each Determination Date, the Servicer shall calculate the Series Default Amount for the related Distribution Date. If, on any Distribution Date, the Series Default Amount for the related Monthly Period exceeds the Available Finance Charge Collections allocated and available to be applied for that purpose pursuant to subsection 4.04(a)(vi) for such Distribution Date,

(a) first, the Series Adjusted Subordinated Transferor Amount (after giving effect to any reductions for Transferor Available Principal Collections that under subsection 4.06(a) were used to fund the Class A Required Amount, the Class B Required Amount, the Class C Required Amount or the Class D Required Amount, on such Distribution Date), will be reduced, subject to the succeeding sentence, by the amount of such excess, but not by more than the Series Default Amount for such Distribution Date (a “Transferor Reduction Amount”). In the event that such reduction would cause the Series Adjusted Subordinated Transferor Amount to be a negative number, the Series Adjusted Subordinated Transferor Amount shall be reduced to zero. Transferor Reduction Amounts shall thereafter be reimbursed and the Series Adjusted Subordinated Transferor Amount increased (but not by an amount in excess of the aggregate unreimbursed Transferor Reduction Amounts) on any Distribution Date by the amount of Available Finance Charge Collections allocated and available for that purpose pursuant to subsection 4.04(a)(vii)(B),

22

(b) second, in the event, the Series Adjusted Subordinated Transferor Amount has been reduced to zero in accordance with clause (a) above, the Allocation Amount (after giving effect to any reductions for Reallocated Principal Collections that under subsections 4.06(b) through (d) were used to fund the Class A Required Amount, the Class B Required Amount or the Class C Required Amount on such Distribution Date), will be reduced, subject to the succeeding sentence, by the amount of such excess, but not by more than the Series Default Amount for such Distribution Date (a “Reduction Amount”). In the event that such reduction would cause the Allocation Amount to be a negative number, the Allocation Amount shall be reduced to zero. Reduction Amounts shall thereafter be reimbursed and the Allocation Amount increased (but not by an amount in excess of the aggregate unreimbursed Reduction Amounts) on any Distribution Date by the amount of Available Finance Charge Collections allocated and available for that purpose pursuant to subsection 4.04(a)(vii)(A).

Section 4.06.     Reallocated Principal Collections.

(a)     On each Distribution Date, prior to the application of Reallocated Principal Collections in accordance with subsections (b), (c) and (d) below, the Servicer shall direct the Paying Agent, by written instruction to the Paying Agent, to apply pursuant to the related Monthly Servicer Statement, Transferor Available Principal Collections with respect to such Distribution Date, to fund, in the following order of priority, the Class A Required Amount, the Class B Required Amount or the Class C Required Amount. On each Distribution Date, the Series Adjusted Subordinated Transferor Amount shall be reduced by the amount of Transferor Available Principal Collections used to fund the Class A Required Amount, the Class B Required Amount or the Class C Required Amount for such Distribution Date, but in any event the Series Adjusted Subordinated Transferor Amount shall not be reduced by operation of this subsection 4.06(a) to an amount less than zero.

(b)     On each Distribution Date, the Servicer shall direct the Paying Agent, by written instruction to the Paying Agent, to apply pursuant to the related Monthly Servicer Statement, Reallocated Principal Collections with respect to such Distribution Date to fund the excess, if any, of the Class A Required Amount over the amount funded in accordance with subsection 4.06(a). On each Distribution Date, the Allocation Amount shall be reduced by the amount of Reallocated Principal Collections used to fund the Class A Required Amount for such Distribution Date, but in any event the Allocation Amount shall not be reduced by operation of this subsection 4.06(b) to an amount less than the Class A Note Principal Balance.

(c)     On each Distribution Date, the Servicer shall direct the Paying Agent, by written instruction to the Paying Agent, to apply pursuant to the Monthly Servicer Statement, Reallocated Principal Collections with respect to such Distribution Date remaining after application in accordance with subsection 4.06(b), to fund the excess, if any, of the Class B Required Amount over the amount funded in accordance with subsection 4.06(a). On each Distribution Date, the Allocation Amount shall be reduced by the amount of Reallocated Principal Collections used to fund the Class B Required Amount for such Distribution Date, but in any event the Allocation Amount shall not be reduced by operation of this subsection 4.06(c) to an amount less than the sum of the Class A Note Principal Balance and the Class B Note Principal Balance.

23

(d)     On each Distribution Date, the Servicer shall direct the Paying Agent, by written instruction to the Paying Agent, to apply pursuant to the Monthly Servicer Statement, Reallocated Principal Collections with respect to such Distribution Date remaining after application in accordance with subsection 4.06(b), to fund the excess, if any, of the Class C Required Amount over the amount funded in accordance with subsection 4.06(a). On each Distribution Date, the Allocation Amount shall be reduced by the amount of Reallocated Principal Collections used to fund the Class C Required Amount for such Distribution Date, but in any event the Allocation Amount shall not be reduced by operation of this subsection 4.06(d) to an amount less than the sum of the Class A Note Principal Balance, the Class B Note Principal Balance and the Class C Note Principal Balance.

Section 4.07.     Series 2019-Two Distribution Account.

(a)     The Servicer shall establish and maintain, with the Paying Agent in the name of the Indenture Trustee, for the benefit of the Series 2019-Two Noteholders, a Series Account (the “Series 2019-Two Distribution Account”) bearing a designation clearly indicating that the funds deposited therein are held for the benefit of the Series 2019-Two Noteholders. The Series 2019-Two Distribution Account shall be established and maintained with the Paying Agent on behalf of and in the name of the Indenture Trustee. The Indenture Trustee shall possess all right, title and interest in all funds on deposit from time to time in the Series 2019-Two Distribution Account and in all proceeds thereof. The Series 2019-Two Distribution Account shall be under the sole dominion and control of the Indenture Trustee for the benefit of the Series 2019-Two Noteholders. Funds on deposit in the Series 2019-Two Distribution Account shall not be subject to investment. If at any time the Series 2019-Two Distribution 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 the Series 2019-Two Noteholders shall consent) establish a new Series 2019-Two Distribution Account meeting the conditions specified above as an Eligible Deposit Account, and shall transfer any cash or any investments to such new Series 2019-Two Distribution Account.

(b)     On each Distribution Date, the Paying Agent, solely in accordance with the Monthly Servicer Statement, shall withdraw from the Collection Account and deposit into the Series 2019-Two Distribution Account Collections of Finance Charge Receivables and Principal Receivables allocated to Series 2019-Two on such Distribution Date for application pursuant to Section 4.04.

24

Section 4.08.     Optional Redemption.

(a)     On any Business Day after the termination of the Revolving Period, the Issuer may cause the Servicer to provide written notice to the Indenture Trustee and the Series 2019-Two Noteholders (an “Optional Redemption Notice”) at least ten (10) Business Days prior to any Business Day (the “Optional Redemption Date”) stating its intention to cause a full redemption of the Series 2019-Two Notes (an “Optional Redemption”). The Redemption Amount shall be paid from any Available Principal Collections or from the proceeds of the issuance of one or more new Series of Notes issued substantially contemporaneously with such full redemption (or any combination of the above).

(b)     The Issuer shall deposit the Redemption Amount into the Collection Account in same day funds on the Business Day prior to the Optional Redemption Date. Following the deposit of the Redemption Amount into the Collection Amount in accordance with the foregoing, the Allocation Amount for Series 2019-Two shall be reduced to zero and following the payment in full of such Redemption Amount to the Series 2019-Two Noteholders and other parties entitled to any of such amount, the Series 2019-Two Noteholders shall have no further interest in the Trust Estate. The Redemption Amount shall be distributed as set forth in subsection 8.01(b).

Section 4.09.     Pre-Funding Account.

(a)     The Servicer shall establish and maintain with the Paying Agent, in the name of the Indenture Trustee, for the benefit of the Noteholders, an Eligible Deposit Account (the “Pre-Funding Account”) bearing a designation clearly indicating that the funds deposited therein are held for the benefit of the Class A Noteholders, the Class B Noteholders, the Class C Noteholders and the Class D Noteholders. The Pre-Funding Account shall be established and maintained with the Paying Agent on behalf of and in the name of the Indenture Trustee. The Indenture Trustee shall possess all right, title and interest in all funds on deposit from time to time in the Pre-Funding Account and in all proceeds thereof. The Pre-Funding Account shall be under the sole dominion and control of the Indenture Trustee for the benefit of the Class A Noteholders, the Class B Noteholders, the Class C Noteholders and the Class D Noteholders. If at any time the Pre-Funding Account ceases to be an Eligible Deposit Account, the Indenture Trustee (or the Servicer on its behalf) shall within 10 Business Days (or such longer period if necessary, not to exceed 30 calendar days) establish a new Pre-Funding Account meeting the conditions specified above as an Eligible Deposit Account, and shall transfer any cash or any investments to such new Pre-Funding Account. The Paying Agent on behalf of the Indenture Trustee, at the written direction of the Servicer, shall make withdrawals from the Pre-Funding Account from time to time for the purposes set forth in this Supplement. On the Closing Date, the Initial Pre-Funding Amount shall be deposited in the Pre-Funding Account.

25

(b)     Funds on deposit in the Pre-Funding Account shall be invested at the written direction of the Servicer by the Indenture Trustee in Eligible Investments. In no event shall the Paying Agent or the Indenture Trustee be liable for the selection of Eligible Investments or for investment losses incurred thereon, except with respect to investments on which the institution acting as the Indenture Trustee is an obligor. The Indenture Trustee and the Paying Agent shall have no liability in respect of 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. The Indenture Trustee and the Paying Agent shall have no obligation to invest or reinvest any amounts held hereunder in the absence of written investment direction. Funds on deposit in the Pre-Funding Account on any Transfer Date, after giving effect to any withdrawals from the Pre-Funding Account on such Transfer Date, shall be invested in such investments that will mature so that such funds will be available for withdrawal on or prior to the following Transfer Date. The Indenture Trustee shall hold such Eligible Investments as provided in Section 6.15 of the Indenture. 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. On each Distribution Date, all interest and earnings (net of losses and investment expenses) accrued since the preceding Distribution Date on funds on deposit in the Pre-Funding Account (“Pre-Funding Investments Proceeds”) shall be deposited in the Collection Account and treated as a portion of Available Finance Charge Collections for that Distribution Date. For purposes of determining the availability of funds or the balance in the Pre-Funding Account for any reason under this Supplement, except as otherwise provided in the preceding sentence, investment earnings on such funds shall be deemed not to be available or on deposit.

(c)     On any Deposit Date in a Monthly Period during the Pre-Funding Period, the Servicer may withdraw from the Pre-Funding Account an amount not to exceed the lesser of (1) the positive difference, if any, between (I) the Transferor Amount and (II) the Required Transferor Amount, and (2) the amount on deposit in the Pre-Funding Account, and pay such amount to the Transferor with respect to the Principal Receivables conveyed to the Issuer, so long as each such Receivable is an Eligible Receivable and the Transferor and Seller have complied with the representations and warranties of (a) the Transferor in the Transfer and Servicing Agreement and (b) the Seller in the Receivables Purchase Agreement, in each case as of the related transfer date with respect to such Receivable.

(d)     In the event that there are funds on deposit in the Pre-Funding Account on the Pre-Funding Termination Date, the Servicer shall cause the Paying Agent on behalf of the Indenture Trustee to apply all amounts on deposit in the Pre-Funding Account to the Paying Agent for pro rata payment of principal on the Class A Notes, the Class B Notes, the Class C Notes and the Class D Notes on the March 2020 Distribution Date. For the avoidance of doubt, the application of any funds from the Pre-Funding Account to any payment of principal of Series 2019-Two Notes shall be considered a prepayment of principal. At any time following the March 2020 Distribution Date, the Servicer may direct the Paying Agent to close the Pre-Funding Account.

26

ARTICLE V

Distributions and Reports to
Series 2019-Two Noteholders

Section 5.01.     Distributions.

(a)     On each Distribution Date, the Paying Agent, solely in accordance with the Monthly Servicer Statement, shall distribute to each Class A Noteholder (other than as provided in Section 10.02 of the Indenture) such amounts held by the Paying Agent that are allocated and available on such Distribution Date to pay interest on the Class A Notes.

(b)     On each Special Payment Date, the Paying Agent, solely in accordance with the Monthly Servicer Statement, shall distribute to each Class A Noteholder of record on the related Record Date (other than as provided in Section 10.02 of the Indenture) such amounts held by the Paying Agent that are allocated and available on such date to pay principal of the Class A Notes pursuant to this Supplement up to a maximum amount on any such date equal to the Class A Note Principal Balance on such date.

(c)     On each Distribution Date, the Paying Agent, solely in accordance with the Monthly Servicer Statement, shall distribute to each Class B Noteholder (other than as provided in Section 10.02 of the Indenture) such amounts held by the Paying Agent that are allocated and available on such Distribution Date to pay interest on the Class B Notes.

(d)     On each Special Payment Date, the Paying Agent, solely in accordance with the Monthly Servicer Statement, shall distribute to each Class B Noteholder of record on the related Record Date (other than as provided in Section 10.02 of the Indenture) such amounts held by the Paying Agent that are allocated and available on such date to pay principal of the Class B Notes pursuant to this Supplement up to a maximum amount on any such date equal to the Class B Note Principal Balance on such date.

(e)     On each Distribution Date, the Paying Agent, solely in accordance with the Monthly Servicer Statement, shall distribute to each Class C Noteholder (other than as provided in Section 10.02 of the Indenture) such amounts held by the Paying Agent that are allocated and available on such Distribution Date to pay interest on the Class C Notes.

(f)     On each Special Payment Date, the Paying Agent, solely in accordance with the Monthly Servicer Statement, shall distribute to each Class C Noteholder of record on the related Record Date (other than as provided in Section 10.02 of the Indenture) such amounts held by the Paying Agent that are allocated and available on such date to pay principal of the Class C Notes pursuant to this Supplement up to a maximum amount on any such date equal to the Class C Note Principal Balance on such date.

(g)     On each Distribution Date, the Paying Agent, solely in accordance with the Monthly Servicer Statement, shall distribute to each Class D Noteholder (other than as provided in Section 10.02 of the Indenture) such amounts held by the Paying Agent that are allocated and available on such Distribution Date to pay interest on the Class D Notes.

27

(h)     On each Special Payment Date, the Paying Agent, solely in accordance with the Monthly Servicer Statement, shall distribute to each Class D Noteholder of record on the related Record Date (other than as provided in Section 10.02 of the Indenture) such amounts held by the Paying Agent that are allocated and available on such date to pay principal of the Class D Notes pursuant to this Supplement up to a maximum amount on any such date equal to the Class D Note Principal Balance on such date.

(i)     On each Distribution Date, the Paying Agent, solely in accordance with the Monthly Servicer Statement, shall distribute to each of the Servicer, Backup Servicer, Owner Trustee and the Indenture Trustee such amounts held by the Paying Agent that are allocated and available on such Distribution Date to pay the Servicing Fee, the Backup Servicing Fee, the Program Fees and the Program Expenses, respectively.

(j)     The distributions to be made pursuant to this Section 5.01 are subject to the provisions of Section 8.01 of the Transfer and Servicing Agreement, Section 5.05 of the Indenture and Section 8.01 of this Supplement.

(k)     Except as provided in Section 10.02 of the Indenture with respect to a final distribution, distributions to Series 2019-Two Noteholders hereunder shall be made by wire transfer of same day funds to the account that has been designated by the applicable Noteholders not less than ten Business Days prior to such Distribution Date.

Section 5.02.     Reports and Statements to Series 2019-Two Noteholders.

(a)     Not later than each Determination Date, the Servicer shall deliver to the Indenture Trustee and the Paying Agent (i) a statement substantially in the form of Exhibit E prepared by the Servicer (the “Monthly Servicer Statement”) and (ii) a certificate of a Servicing Officer substantially in the form attached thereto.

(b)     A copy of each statement or certificate provided pursuant to subsection 5.02(a) may be obtained by any Series 2019-Two Noteholder or any beneficial owner thereof by a request in writing to the Servicer.

(c)     On or before January 31 of each calendar year, commencing in January 2020, the Paying Agent, on behalf of the Indenture Trustee, shall post to its website a statement prepared by the Servicer containing the information which is required to be contained in the statement to Series 2019-Two Noteholders, as set forth in paragraph (a) above aggregated for such calendar year or the applicable portion thereof during which such Person was a Series 2019-Two Noteholder, together with other information as is required to be provided by an issuer of indebtedness under the Code. Such obligation of the Servicer 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.

28

ARTICLE VI

Early Redemption Events; Events of Default

Section 6.01.     Early Redemption Events. If any one of the following events shall occur with respect to the Series 2019-Two Notes:

(a)     (i) failure on the part of the Seller, the Transferor or the Issuer to make any payment or deposit required by the terms of any Transaction Document on or before the date occurring five (5) Business Days after the date such payment or deposit is required to be made therein or herein or (ii) failure on the part of the Seller, the Transferor or the Issuer duly to observe or perform any other covenants or agreements in any Transaction Document which continues unremedied for a period of thirty (30) days after the date on which the Seller, the Issuer or the Transferor, as applicable, obtains actual knowledge of such failure or on which written notice of such failure requiring the same to be remedied, shall have been given to the Seller, the Transferor or the Issuer by the Indenture Trustee, or to, the Seller, the Transferor, or to the Issuer and the Indenture Trustee by the Holders of not less than 50% of the aggregate outstanding principal balance of the Series 2019-Two Notes;

(b)     any representation or warranty made by the Seller, the Transferor or the Issuer under any Transaction Document which continues to be incorrect for a period of thirty (30) days after the date on which the Seller, the Issuer or the Transferor, as applicable, obtains actual knowledge of such failure or on which written notice of such failure requiring the same to be remedied, shall have been given to the Seller, the Transferor or the Issuer by the Indenture Trustee, or to the Seller, the Transferor or the Issuer and the Indenture Trustee by the Holders of not less than 50% of the aggregate outstanding principal balance of the Series 2019-Two Notes; 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 replaced or 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;

(c)     the occurrence of a Servicer Default;

(d)     the Transferor shall fail to cause the amount of the Transferor’s Interest, when measured in a manner consistent with the requirements of Regulation RR, to satisfy the requirements of Regulation RR as required by Section 10.05 of this Supplement;

(e)     any of the following occurs for any Monthly Period:

(i) the Three-Month Charge-Off Rate exceeds [*****]%;

(ii) the Three-Month Monthly Principal Payment Rate is less than [*****]%;

(iii) the Three-Month Excess Spread Percentage is less than [*****]%; or

(f)     the occurrence and continuation of any Event of Default (as such term is defined in the Indenture);

29

(h)      the Class A Note Principal Balance, the Class B Note Principal Balance, the Class C Note Principal Balance and the Class D Note Principal Balance shall not be paid in full on the Scheduled Final Payment Date for such Class of Notes;

(i)     an Insolvency Event with respect to Atlanticus Holdings Corporation occurs;

(j)     no Account Owner is originating Receivables that are sold and transferred from the Seller to the Transferor and subsequently sold and transferred from the Transferor to the Issuer; or

(k)     the Issuer becomes taxable as an association or a publicly traded partnership taxable as a corporation under the Code;

then, in the case of any event described above other than in subparagraph (f) after the applicable grace period, if any, set forth in such subparagraphs, either the Indenture Trustee at the direction of the Holders of not less than 50% of the aggregate outstanding principal balance of the Series 2019-Two Notes or such Holders, by notice then given in writing to the Issuer, the Servicer and the Indenture Trustee may declare that an Early Redemption Event has occurred with respect to Series 2019-Two as of the date of such notice, and, in the case of any event described in subparagraph (f), an Early Redemption Event shall occur with respect to Series 2019-Two without any notice or other action on the part of the Indenture Trustee or the Series 2019-Two Noteholders immediately upon the occurrence of such event, unless such Early Redemption Event is waived by the Holders of not less than 50% of the aggregate outstanding principal balance of the Series 2019-Two Notes, by notice given in writing to the Indenture Trustee, the Issuer and the Servicer. The Indenture Trustee shall provide prompt written notice to each Rating Agency upon the occurrence and continuation of an Early Redemption Event of which a Responsible Officer of the Indenture Trustee has actual knowledge.

Section 6.02     Series 2019-Two Event of Default. An “Event of Default” with respect to any Series 2019-Two Note means the occurrence of the following event (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): [*****].

The Issuer shall deliver to the Indenture Trustee, within five (5) days after the occurrence of any Event of Default with respect to Series 2019-Two, written notice in the form of an Officer’s Certificate of the Issuer of such Event of Default, its status and what action the Issuer is taking or proposes to take with respect thereto.

Sections 5.03(a) and (c) of the Indenture shall be applicable to the Event of Default described in the first paragraph of this Section 6.02 above.

30

ARTICLE VII

Administrative Redemption; Series Termination

Section 7.01.     Administrative Redemption.

(a)     On any day occurring on or after the date on which the Note Principal Balance is reduced to 10% or less of the Initial Note Principal Balance at any time on or after the Closing Date, the Servicer shall have the option to redeem the Series 2019-Two Notes, at a redemption 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 Servicer shall give the Issuer and the Indenture Trustee at least thirty (30) days prior written notice of the date on which the Servicer intends to exercise such redemption option. The Servicer shall deposit the Redemption Amount into the Collection Account in same day funds on the Business Day prior to such scheduled redemption. Such redemption option is subject to payment in full of the Redemption Amount. Following the deposit of the Redemption Amount into the Collection Amount in accordance with the foregoing, the Allocation Amount for Series 2019-Two shall be reduced to zero and following the payment in full of such Redemption Amount to the Series 2019-Two Noteholders and other parties entitled to any of such amount, the Series 2019-Two Noteholders shall have no further interest in the Trust Estate. The Redemption Amount shall be distributed as set forth in subsection 8.01(b).

Section 7.02.     Repayment.

The Series 2019-Two Notes shall be due and payable in full on the Stated Maturity Date.

ARTICLE VIII

Redemption of Series 2019-Two Notes; Final Distributions

Section 8.01.     Sale of Receivables or Redemption of the Notes pursuant to Section 2.04(c) or 8.01 of the Transfer and Servicing Agreement and Sections 5.05 and 5.17 of the Indenture and Section 7.01 of this Supplement.

(a)   (i)  The amount to be paid by the Transferor with respect to Series 2019-Two in connection with a reassignment of Receivables to the Transferor pursuant to Section 2.04(c) 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.

(ii)     The amount to be paid by the Transferor with respect to Series 2019-Two in connection with any purchase of the Notes, pursuant to the Transferor’s exercise of its right of first refusal contained in Section 8.01 of the Transfer and Servicing Agreement shall be an amount equal to the Redemption Amount for the Distribution Date of any such purchase.

31

(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 2019-Two Notes 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 2:30 p.m., New York City 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 solely in accordance with the Monthly Servicer Statement:

i. the Class A Note Principal Balance on such Distribution Date plus an amount equal to the sum of (A) the Class A Monthly Interest for such Distribution Date, (B) any Class A Monthly Interest previously due but not distributed to the Class A Noteholders on a prior Distribution Date, (C) any Class A Additional Interest for such Distribution Date and any Class A Additional Interest previously due but not distributed to the Class A Noteholders on a prior Distribution Date shall be distributed to the Paying Agent for payment to the Class A Noteholders;

ii. the Class B Note Principal Balance on such Distribution Date plus an amount equal to the sum of (A) the Class B Monthly Interest for such Distribution Date, (B) any Class B Monthly Interest previously due but not distributed to the Class B Noteholders on a prior Distribution Date, (C) any Class B Additional Interest for such Distribution Date and any Class B Additional Interest previously due but not distributed to the Class B Noteholders on a prior Distribution Date shall be distributed to the Paying Agent for payment to the Class B Noteholders;

iii. the Class C Note Principal Balance on such Distribution Date plus an amount equal to the sum of (A) the Class C Monthly Interest for such Distribution Date, (B) any Class C Monthly Interest previously due but not distributed to the Class C Noteholders on a prior Distribution Date, (C) any Class C Additional Interest for such Distribution Date and any Class C Additional Interest previously due but not distributed to the Class C Noteholders on a prior Distribution Date shall be distributed to the Paying Agent for payment to the Class C Noteholders;

iv. the Class D Note Principal Balance on such Distribution Date plus an amount equal to the sum of (A) the Class D Monthly Interest for such Distribution Date, (B) any Class D Monthly Interest previously due but not distributed to the Class D Noteholders on a prior Distribution Date, (C) any Class D Additional Interest for such Distribution Date and any Class D Additional Interest previously due but not distributed to the Class D Noteholders on a prior Distribution Date shall be distributed to the Paying Agent for payment to the Class D Noteholders;

32

v. the Series 2019-Two Monthly Fees previously due but not distributed shall be distributed to the Paying Agent for payment to the Servicer, the Backup Servicer, the Indenture Trustee and the Owner Trustee.

(c)     Notwithstanding anything to the contrary in this Supplement or the Indenture, all amounts distributed to the Paying Agent pursuant to subsection 8.01(b) for payment to the Series 2019-Two Noteholders shall be deemed distributed in full to the Series 2019-Two Noteholders on the date on which such funds are distributed to the Paying Agent pursuant to this Section and the Series 2019-Two Notes shall be deemed to be no longer Outstanding as such term is defined in Section 1.01 of the Indenture.

ARTICLE IX

The Series 2019-Two Notes; Private Placement; Representations and Warranties; Transfer Restrictions; Withholding

Section 9.01.     Form of Delivery of Series 2019-Two Notes; Denominations.

(a)     The Series 2019-Two Notes shall be substantially in the form attached hereto as Exhibits A, B , C and D, respectively and shall be delivered as Book-Entry Notes. The Class A Notes shall be in minimum denominations of $100,000 and integral multiples of $1,000 in excess thereof. The Class B Notes, the Class C Notes and the Class D Notes shall be delivered in minimum denominations of $500,000 and integral multiples of $1,000 in excess thereof. The Indenture Trustee shall authenticate the Series 2019-Two Notes upon the written order of the Issuer as provided in Section 2.03 of the Indenture.

(b)     The Depositary for the Series 2019-Two Notes shall be The Depository Trust Company and the Series 2019-Two Notes shall be initially registered in the name of Cede & Co., its nominee, and will initially be held by the Indenture Trustee as custodian for The Depository Trust Company.

Section 9.02.     Private Placement of Securities.

The Series 2019-Two Notes have not been registered under the Securities Act or any state securities law. No transfer of any Series 2019-Two Note shall be made except in accordance with Sections 9.03 and 9.04 of this Supplement. The Series 2019-Two Notes shall bear a legend to the effect set forth in Exhibits A, B, C and D. Neither the Issuer nor the Indenture Trustee is obligated to register the Series 2019-Two Notes under the Securities Act or to take any other action not otherwise required under this Supplement or the Indenture to permit the transfer of the Series 2019-Two Notes without registration.

Section 9.03.     Representations, Warranties and Agreements of Noteholders.

Each purchaser of a Class A Note, Class B Note Class C Note or Class D Note will be deemed to have acknowledged, represented, warranted and agreed by its purchase of a Class A Note, Class B Note, Class C Note or Class D Note, as follows:

33

(a)     that (i) is a QIB, (ii) is aware that the sale of the Series 2019-Two Notes to it is being made in reliance on the exemption from registration provided by Rule 144A, and (iii) is acquiring the Series 2019-Two Notes for its own account or for one or more accounts, each of which is a QIB, and as to each of which it exercises sole investment discretion, and in a principal amount of not less than the minimum denomination of such Series 2019-Two Note for it and for each such account. Any purported transfer of the Series 2019-Two Notes to a purchaser that does not comply with the requirements of this paragraph shall be null and void ab initio. The Issuer may sell any Series 2019-Two Notes acquired in violation of the foregoing at the cost and risk of the purported owner;

(b)     it understands that each Class A Note, Class B Note, Class C Note or Class D Note will bear a legend set forth on the forms included as Exhibits A, B, C or D respectively;

(c)     it understands that the Series 2019-Two Notes are being offered only in a transaction not involving any public offering in the United States within the meaning of the Securities Act, none of the Series 2019-Two Notes have been or will be registered under the Securities Act, and, if in the future the transferee decides to offer, resell, pledge or otherwise transfer the Series 2019-Two Notes, such Series 2019-Two Notes may only be offered, resold, pledged or otherwise transferred in accordance with the Indenture and the applicable legend on such Series 2019-Two Notes set forth above. The transferee acknowledges that the Issuer makes no representation as to the availability of any exemption under the Securities Act or any applicable state securities laws for resale of the Notes;

(d)     it understands that an investment in the Series 2019-Two Notes involves certain risks, including the risk of loss of all or a substantial part of its investment under certain circumstances. The transferee has had access to this offering memorandum and all other documents and information concerning the Indenture Trustee, the Note Registrar, the Paying Agent, the Seller, the Servicer, the Issuer, the Receivables and the Series 2019-A Notes as it deemed necessary and appropriate in order to make an informed investment decision with respect to its purchase of the Series 2019-Two Notes, including an opportunity to ask questions of and request information from the Issuer and the Servicer. The transferee has such knowledge and experience in financial and business matters and expertise in assessing financial risk, that it is capable of evaluating the merits, risks and suitability of its investment in the Series 2019-Two Notes and understands that the Issuer has not requested any credit rating from a rating agency for any Series 2019-A Notes, and the transferee and any accounts for which it is acting are each able to bear the economic risk of the holder’s or of its investment;

(e)      (i) it understands that none of the Issuer, the Servicer, the Note Registrar, the Paying Agent, nor the Indenture Trustee is acting as a fiduciary or financial or investment adviser for the transferee, (ii) it is not relying (for purposes of making any investment decision or otherwise) upon any advice, counsel or representations (whether written or oral) of the Issuer, the Servicer, the Note Registrar, the Paying Agent or the Indenture Trustee other than in the most current offering memorandum for such Series 2019-Two Notes, (iii) it understand that none of the Issuer, the Servicer, the Note Registrar, the Paying Agent nor the Indenture Trustee has given to the transferee (directly or indirectly through any other person) any assurance, guarantee, or representation whatsoever as to the expected or projected success, profitability, return, performance, result, effect, consequence, or benefit (including legal, regulatory, tax, financial, accounting, or otherwise) of its purchase or the documentation for the Series 2019-Two Notes, (iv) it has consulted with its own legal, regulatory, tax, business, investment, financial, and accounting advisers to the extent it has deemed necessary, and it has made its own investment decisions (including decisions regarding the suitability of any transaction pursuant to the Indenture) based upon its own judgment and upon any advice from such advisers as it has deemed necessary and not upon any view expressed by the Issuer, the Servicer, the Note Registrar, the Paying Agent or the Indenture Trustee, (v) it has determined that the rates, prices or amounts and other terms of the purchase and sale of the Series 2019-Two Notes reflect those in the relevant market for similar transactions, (vi) it is purchasing the Series 2019-Two Notes with a full understanding of all of the terms, conditions and risks thereof (economic and otherwise), and is capable of assuming and willing to assume (financially and otherwise) these risks, and (vii) it is a sophisticated investor familiar with transactions similar to its investment in the Series 2019-Two Notes;

34

(f)     (i) if it is acquiring (and any fiduciary acting on its behalf) of a beneficial interest in an Series 2019-Two Note that is represented by a book-entry note, by its acquisition thereof, will be deemed to have represented, and each noteholder (and any fiduciary acting on behalf of a noteholder) of an Series 2019-Two Note that is a definitive note will represent, to the Issuer, the Indenture Trustee, the Note Registrar, the Paying Agent and the Servicer that for so long as it holds such Series 2019-Two Note (or a beneficial interest therein) either (A) it is not (and will not be) a Benefit Plan or any non-U.S. plan, governmental plan (as defined in Section 3(32) of ERISA, or a church plan (as defined in Section 3(33) of ERISA) that is subject to Similar Law, and that it is not (and will not be) acquiring or holding such Series 2019-Two Note (or any interest therein) on behalf of, as a fiduciary of, as trustee of, or with, the assets of, a Benefit Plan or any non-U.S. plan, governmental plan (as defined in Section 3(32) of ERISA, or a church plan (as defined in Section 3(33) of ERISA) that is subject to Similar Law, or (B) in the case of a Class A Note, its acquisition, holding and disposition of such Series 2019-Two Note (or any interest therein) will not result in a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code or a violation of any Similar Law.

(g)     It understands that any purported transfer of the Series 2019-Two Notes or any interest in an Series 2019-Two Note to a transferee that does not comply with the requirements of this paragraph shall be null and void ab initio. The Issuer may sell any Series 2019-Two Notes acquired in violation of the foregoing at the cost and risk of the purported owner.

(h)     it acknowledges that it is not acquiring any Class A Note, Class B Note, Class C Note or Class D Note with a view to the resale, distribution, or other disposition thereof in violation of the Securities Act;

(i)     it will provide notice to each person to whom it proposes to transfer any interest in the Series 2019-Two Notes of the transfer restrictions and representations set forth in this Supplement, including the exhibits thereto.

35

(j)     it acknowledges that the Class A Notes, the Class B Notes, the Class C Notes and the Class D Notes do not represent deposits with or other liabilities of the Indenture Trustee, the Servicer, the Note Registrar, the Paying Agent or any entity related to any of them (other than the Issuer) or any other purchaser of the Class A Notes, the Class B Notes, the Class C Notes and the Class D Notes and unless otherwise expressly provided in the Indenture, each of the Indenture Trustee, the Servicer, any entity related to any of them and any other purchaser of Series 2019-Two Notes will not, in any way, be responsible for or stand behind the capital value or the performance of the Series-2019-Two Notes or the assets held by the Issuer; it acknowledges that acquisition of Notes involves investment risks including prepayment and interest rate risks, possible delay in repayment and loss of income and principal invested;

(k)     it acknowledges that the Indenture Trustee, the Note Registrar, the Paying Agent, the Seller, the Servicer, the Issuer and others will rely on the truth and accuracy of the foregoing acknowledgments, representations and agreements, and agrees that if any of the foregoing acknowledgments, representations and agreements made or deemed to have been made by it are no longer accurate, it will promptly notify the Issuer and the Indenture Trustee;

(l)     if it is acting as a nominee or in a similar capacity, represents and agrees that no beneficial owner for which it is acting as a nominee owns less than the minimum denomination for such Series 2019-Two Note;

(m)     it will strictly comply with Section 3.16 of the Indenture as to treatment of the Series 2019-Two Notes as indebtedness of the Issuer for purposes of federal, state and local income or franchise taxes and any other tax imposed on or measured by income, as provided in Section 3.16 of the Indenture; and

(n)     (i) it has not acquired and shall not sell, trade or transfer any interest in the Series 2019-Two Note, nor cause any interest in the Series 2019-Two Note to be marketed, readily available or readily tradeable, on or through either (A) an “established securities market” 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 Series 2019-Two Note 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 Series 2019-Two Note and stands ready to effect buy or sell transactions at the quoted prices for itself or on behalf of others), and (ii) either (A) it is not, and will not become, a partnership, Subchapter S corporation, grantor trust or an entity disregarded as a separate entity from any such entity for U.S. federal income tax purposes or (B) it is such an entity, but (x) none of the direct or indirect beneficial owners of any of the interests in the Series 2019-Two Note have allowed or caused, or will allow or cause, 50% or more (or such other percentage as the Issuer may establish prior to the time of such proposed transfer) of the value of such interests to be attributable to the transferee’s ownership of Series 2019-Two Notes and any other interests in the Issuer and (y) it is not and will not be a principal purpose of the arrangement involving the beneficial interest in any Series 2019-Two Notes to permit any partnership to satisfy the 100 partner limitation of Treasury Regulation Section 1.7704-1(h)(1)(ii) necessary for such partnership not to be classified as a publicly traded partnership under the Code.

36

Section 9.04.     Transfer Restrictions.

(a)      No Class A Note, Class B Note, Class C Note or Class D Note may be transferred unless it is transferred in compliance with Section 9.03 and (i) to the Issuer, or (ii) pursuant to Rule 144A under the Securities Act in each case, in compliance with any applicable state securities or “blue sky” laws.

(b)     Any transfer, resale, pledge or other transfer of the Class A Notes, the Class B Notes, the Class C Notes or the Class D Notes contrary to the restrictions set forth in Section 9.03 and in this Supplement and the Indenture shall be deemed void ab initio by the Indenture Trustee, notwithstanding any instructions to the contrary to the Issuer, the Indenture Trustee, the Note Registrar or any intermediary. If at any time the Issuer determines or is notified that holder of a Series 2019-Two Note or a beneficial owner of a Series 2019-Two Note, as the case may be, was in breach, at the time given, of any of the representations set forth herein, the Issuer may consider the acquisition of such Series 2019-Two Note or such beneficial interest in such Series 2019-Two Note void ab initio and require that such Series 2019-Two Note or such beneficial interest therein be transferred to a person designated by the Issuer. If the transferee fails to transfer such Series 2019-Two Note or such beneficial interests in such Series 2019-Two Note within thirty (30) days after notice of the voided transfer, then the Issuer shall cause such holder’s interest or beneficial owner’s interest in such Series 2019-Two Note to be transferred in a commercially reasonable sale arranged by the Issuer (conducted by the Issuer or an agent of the Issuer in accordance with Section 9-610(b) of the UCC as applied to securities that are sold on a recognized market or that may decline speedily in value) to a person that certifies to the Indenture Trustee, the Note Registrar and the Issuer, in connection with such transfer, that such person is a QIB.

Section 9.05.     Withholding.

Prior to the first Distribution Date, and at any subsequent time as required by applicable Requirements of Law, (i) each holder of a Series 2019-Two Note shall deliver to the Paying Agent and the Issuer a correct, complete and properly executed U.S. IRS Form W-9, W-8BEN, W-8BEN-E, W-8ECI, W-8IMY (with applicable supporting documentation) or W-8EXP, or any successor form, as applicable (“Noteholder Tax Identification Information”) and (ii) each holder of a Series 2019-Two Note shall deliver to the Paying Agent and the Issuer any documentation that is required under FATCA or is otherwise necessary (in the sole determination of the Issuer, the Paying Agent and the Indenture Trustee or other agent of the Issuer, as applicable) to enable the Issuer, the Paying Agent and any other agent of the Issuer to comply with their obligations under FATCA and to determine that such holder of a Series 2019-Two Note (or holder of any beneficial interest in a Series 2019-Two Note) has complied with its obligations under FATCA, or to determine the amount to deduct and withhold from a payment (“Noteholder FATCA Information”).

Each holder of a Series 2019-Two Note or an interest therein, by acceptance of such Series 2019-Two Note or such interest in such Series 2019-Two Note, will be deemed to have agreed to provide the Issuer, the Paying Agent and the Indenture Trustee with the Noteholder Tax Identification Information and, to the extent applicable, the Noteholder FATCA Information.  In addition, each holder of a Series 2019-Two Note or an interest therein will be deemed to understand that the Indenture Trustee, the Paying Agent and any other agent of the Issuer may withhold interest and principal payable with respect to a Series 2019-Two Note (without any corresponding gross-up) on any holder of a Series 2019-Two Note or beneficial owner of an interest in a Series 2019-Two Note that fails to comply with the foregoing requirements.

37

Section 9.06.     Paired Series. With prior written notice to the Indenture Trustee, prior to the start of the Early Redemption Period, the Series 2019-Two Notes may be paired with one or more other Series such that the allocation amount of the paired Series will increase proportionately to the decrease in the Adjusted Allocation Amount for Series 2019-Two (each, a “Paired Series”); provided that no Series shall be deemed to be a Paired Series with Series 2019-Two unless the related Indenture Supplement shall explicitly state that it is a Paired Series with Series 2019-Two.

ARTICLE X 

Miscellaneous Provisions

Section 10.01.     Ratification of Agreement. As supplemented by this Supplement, the Indenture is in all respects ratified and confirmed and the Indenture as so supplemented by this Supplement shall be read, taken and construed as one and the same instrument.

Section 10.02.     Counterparts. This Supplement 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 shall constitute one and the same instrument.

Section 10.03.     Governing Law; Submission to Jurisdiction; Waiver of Jury Trial. THIS SUPPLEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN WITHOUT REFERENCE TO ITS CONFLICT OF LAWS PROVISIONS (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW). EACH OF THE PARTIES HERETO HEREBY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE COURT SITTING IN THE CITY OF NEW YORK FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. NOTHING IN THIS SECTION 10.03 SHALL AFFECT THE RIGHT OF ANY PARTY TO BRING ANY ACTION OR PROCEEDING AGAINST ANY OF THE PARTIES HERETO OR ANY OF THEIR RESPECTIVE PROPERTY IN THE COURTS OF OTHER JURISDICTIONS.

38

EACH OF THE PARTIES HERETO HEREBY WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, AMONG ANY OF THEM ARISING OUT OF, CONNECTED WITH, RELATING TO OR INCIDENTAL TO THE RELATIONSHIP BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT OR THE OTHER TRANSACTION DOCUMENTS.

Section 10.04.     Limitation of Liability. It is expressly understood and agreed by the parties hereto that (a) this Supplement is executed and delivered by Wilmington Trust, National Association, 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, National Association but is made and intended for the purpose of binding only the Issuer, (c) nothing herein contained shall be construed as creating any liability on Wilmington Trust, National Association, individually or personally, to perform any covenant either expressed or implied contained herein, all such liability, if any, being expressly waived by the parties to this Agreement and by any person claiming by, through or under the parties to this Agreement, (d) Wilmington Trust, National Association has not verified and has conducted no investigation as to the accuracy or completeness of any representation, warranty or covenant of the Issuer and (e) under no circumstances shall Wilmington Trust, National Association 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 Supplement or any other document to which the Issuer is a party.

Section 10.05.     Measuring the Transferor’s Interest for Purposes of Regulation RR. In order to facilitate compliance with Regulation RR, the Servicer shall, on each Measurement Date and on the issuance date of any Notes under the Indenture, measure the interest of the Transferor in the Transferred Assets represented by the Transferor Certificate (the “Transferor’s Interest”) in a manner consistent with the requirements of Regulation RR. If on any Measurement Date the amount of the Transferor’s Interest, when measured in a manner consistent with the requirements of Regulation RR, does not satisfy the requirements of Regulation RR, the Transferor shall cause the amount of the Transferor’s Interest, when measured in a manner consistent with the requirements of Regulation RR, to satisfy the requirements of Regulation RR as soon as practicable thereafter but, in any event, no later than the immediately subsequent Measurement Date. For purposes of this Section 10.05, the Transferor’s Interest shall constitute a “seller’s interest” for purposes of Regulation RR.

The Servicer shall indicate in each Monthly Servicer Statement whether the amount of the Transferor’s Interest, when measured in a manner consistent with the requirements of Regulation RR, satisfies the requirements of Regulation RR.

In no event shall the Indenture Trustee have any responsibility to monitor compliance with or enforce compliance with Regulation RR. The Indenture Trustee shall not be charged with knowledge of such rules, nor shall it be liable to any Noteholder or other party for violation of such rules now or hereinafter in effect.

39

Section 10.06.     Excess Concentration Amount.

(a) As of the first day of any Monthly Period, an amount of Principal Receivables equal to the sum, without duplication, of the following amounts shall constitute the “Excess Concentration Amount” for such Monthly Period:

(i)     [*****]; and

(ii)     [*****].

(b) At the option of the Transferor, any Receivables which constitute Excess Concentration Amounts shall be treated as Ineligible Receivables in accordance with Section 2.05 of the Transfer and Servicing Agreement.

Section 10.07.        The Indenture Trustee. The Indenture Trustee shall be entitled to the same rights, protections and indemnities under this Supplement that it is provided under the Indenture.

Section 10.08.        Additional Covenant.    The Issuer and Servicer agree that funds on deposit in the Special Funding Account shall only be invested in Eligible Investments described in clauses (a) through (g) of the definition thereof.

40

IN WITNESS WHEREOF, the Issuer, the Servicer and the Indenture Trustee have caused this Indenture Supplement to be duly executed by their respective officers thereunto duly authorized, all as of the date first above written.

PERIMETER MASTER NOTE BUSINESS TRUST,

Issuer

By: Wilmington Trust, National

association

not in its individual capacity, but solely

as Owner Trustee

By:     /s/ Jacqueline Solone                                           

Name: Jacqueline Solone

Title: Vice President     

U.S. BANK NATIONAL ASSOCIATION,

not in its individual capacity, but solely as

Indenture Trustee

By:     /s/ Mirtza J. Escobar                                            

Name: Mirtza J. Escobar

Title: Vice President

ACCESS FINANCING, LLC,

Servicer

By:     /s/ Brian Stone                                                       

Name:     Brian Stone

Title:     President

[Signature Page to Series 2019-Two Indenture Supplement]

TABLE OF CONTENTS

           Page

ARTICLE I Creation of the Series 2019-Two Notes
Section 1.01.	Designation	1
ARTICLE II Definitions
Section 2.01.	Definitions	2
ARTICLE III Fees
Section 3.01.	Servicing Compensation; Backup Servicing Fee	14
ARTICLE IV Rights of Series 2019-Two Noteholders and Allocation and Application of Collections
Section 4.01.	Collections and Allocations	15
Section 4.02.	Determination of Monthly Interest	17
Section 4.03.	Required Amounts	18
Section 4.04.	Application of Available Finance Charge Collections and Available Principal Collections	19
Section 4.05.	Defaulted Amounts; Reduction Amounts	22
Section 4.06	Reallocated Principal Collections	23
Section 4.07.	Series 2019-Two Distribution Account	24
Section 4.08.	Optional Redemption	24
Section 4.09.	The Pre-Funding Account	25

-i-

TABLE OF CONTENTS

(continued)

Page

ARTICLE V Distributions and Reports to Series 2019-Two Noteholders
Section 5.01.	Distributions	26
Section 5.02.	Reports and Statements to Series 2019-Two Noteholders	28
ARTICLE VI Early Redemption Events; Events of Default
Section 6.01.	Early Redemption Events	29
Section 6.02.	Series 2019-Two Event of Default	30
ARTICLE VII Administrative Redemption; Series Termination
Section 7.01.	Administrative Redemption	31
Section 7.02.	Repayment	31
ARTICLE VIII Redemption of Series 2019-Two Notes; Final Distributions
Section 8.01.	Sale of Receivables or Redemption of the Notes pursuant to Section 2.04(c) or 8.01 of the Transfer and Servicing Agreement and Sections 5.05 and 5.17 of the Indenture and Section 7.01 of this Supplement	31
ARTICLE IX The Series 2019-Two Notes; Private Placement; Representations and Warranties; Transfer Restrictions; Withholding
Section 9.01.	Form of Delivery of the Series 2019-Two Notes; Denominations	33
Section 9.02.	Private Placement of Securities	33
Section 9.03.	Representations, Warranties and Agreements of Noteholders	33
Section 9.04.	Transfer Restrictions	36
Section 9.05.	Withholding	37
Section 9.06.	Paired Series	38

-ii-

TABLE OF CONTENTS

(continued)

Page

ARTICLE X Miscellaneous Provisions
Section 10.01.	Ratification of Agreement	38
Section 10.02.	Counterparts	38
Section 10.03.	Governing Law; Submission to Jurisdiction; Waiver of Jury Trial	38
Section 10.04.	Limitation of Liability	39
Section 10.05.	Measuring the Transferor’s Interest for purposes of Regulation RR	39
Section 10.06.	Excess Concentration Amounts	40
Section 10.07.	The Indenture Trustee	40
Section 10.08.	Additional Covenant	40

-iii-

EX-10.11U

Exhibit 10.11(u)

FIRST AMENDMENT

TO THE

PERIMETER MASTER NOTE BUSINESS TRUST

TRUST AGREEMENT

THIS FIRST AMENDMENT TO THE PERIMETER MASTER NOTE BUSINESS TRUST TRUST AGREEMENT, dated as of June 11, 2018 (this “Amendment”), is between PERIMETER FUNDING CORPORATION, as Transferor (the “Transferor”), and WILMINGTON TRUST, NATONAL ASSOCIATION, a national banking association, as Owner Trustee (the “Owner Trustee”), and amends that certain Perimeter Master Note Business Trust Trust Agreement, dated as of February 8, 2017 (the “Trust Agreement”) between the Transferor and the Owner Trustee.

RECITALS

WHEREAS, the Transferor has determined that it is appropriate to amend the Trust Agreement as provided herein in accordance with Section 10.01(b) of the Trust Agreement,

NOW THEREFORE, in consideration of the premises and the agreements contained herein, the parties hereto agree as follows:

SECTION 1.     Amendments to Section 1.01. Section 1.01 of the Trust Agreement is hereby amended by deleting the definitions of “Certificates,” “Class A Certificate,” “Class A Certificateholder” and “Trust Excess Collections” and adding the following definition in the appropriate alphabetical order:

“Certificates” shall mean, unless otherwise indicated, the Trust Certificate, the Transferor Certificates and the Supplemental Certificates.

SECTION 2.     Amendment to Section 3.01. Section 3.01 of the Trust Agreement is hereby deleted in its entirety and the following paragraph inserted as new Section 3.01:

Section 3.01.     Initial Ownership. The Owner, in its capacity as owner of the Trust Certificate, and the Transferor, as the owner of a Transferor Certificate, (i) shall be the sole beneficial owners of the Trust and (ii) shall be bound by the provisions of this Agreement.

SECTION 3.     Amendments to Section 3.02. Section 3.02 of the Trust Agreement is hereby amended by deleting the third sentence in that paragraph in its entirety.

SECTION 4.     Amendments to Section 3.03. Section 3.03 of the Trust Agreement is hereby amended by deleting the first sentence in that paragraph in its entirety and inserting the following sentence in its place:

Concurrently with the initial assignment of the Receivables to the Trust pursuant to the Transfer and Servicing Agreement, the Owner Trustee shall cause (i) a single Trust Certificate to be executed on behalf of the Trust, authenticated and delivered to the Owner and (ii) a single Transferor Certificate to be executed on behalf of the Trust, authenticated and delivered to the Transferor.

SECTION 5.     Amendments to Section 3.04(a). Section 3.04(a) of the Trust Agreement is hereby amended by deleting that Section in its entirety and inserting the following Section in its place:

(a)     Taken together, the Transferor Certificate and Trust Certificate shall represent an undivided beneficial interest in the Trust Assets subject to the lien of the Notes as provided in the Indenture, including the right to receive Collections with respect to the Receivables and other amounts at the times and in the amounts specified in the Indenture and any Indenture Supplement to be paid to the Transferor on behalf of all holders of the Transferor Certificates. All amounts payable to the Trust under and pursuant to the Transfer and Servicing Agreement, the Indenture and the Indenture Supplements are to be paid to the holders of the Transferor Certificates.

SECTION 6.     Amendments to Section 3.05(b). Section 3.05(b) of the Trust Agreement is hereby amended by deleting that Section in its entirety and inserting the following Section in its place:

(b) [Reserved].

SECTION 7.     Amendments to Section 3.07. Section 3.07 of the Trust Agreement is hereby amended by deleting that Section in its entirety.

SECTION 8.     Amendments to Exhibits. Exhibit B to the Trust Agreement is hereby deleted in its entirety and Schedule 1 attached hereto inserted in its place. Exhibit C and Exhibit D to the Trust Agreement are hereby deleted in their entirety. Within two (2) Business Days of the date of this Amendment, the Transferor shall deliver to the Owner Trustee for exchange the Transferor Certificate issued to the Transferor pursuant to the Trust Agreement. The Transferor directs the Owner Trustee to cancel such Transferor Certificate once received and execute and deliver a Transferor Certificate in the form of attached hereto.

SECTION 9.     Cancellation of Class A Certificate. The Transferor hereby directs the Owner Trustee to cancel the Class A Certificate issued to TSO-Fortiva Certificate Holdco LP and assigned to the Transferor pursuant to the Certificate Assignment Agreement dated as of the date hereof between the Transferor and TSO-Fortiva Certificate Holdco LP and herewith delivers such Class A Certificate for cancellation.      

2

SECTION 10.     Trust Agreement in Full Force and Effect as Amended. Except as specifically amended hereby, all of the terms and conditions of the Trust Agreement shall remain in full force and effect. All references to the Trust Agreement in any other document or instrument among the parties hereto shall be deemed to mean such Trust Agreement as amended by this Amendment. This Amendment shall not constitute a novation of the Trust Agreement, but shall constitute an amendment thereof. The parties hereto agree to be bound by the terms and obligations of the Trust Agreement, as amended by this Amendment, as though the terms and obligations of the Trust Agreement were set forth herein.

SECTION 11.     Counterparts. This Amendment may be executed in any number of counterparts and by separate parties hereto on separate counterparts, each of which when executed shall be deemed an original, but all such counterparts taken together shall constitute one and the same instrument.

SECTION 12.     Governing Law. THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEVADA, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS AND THE OBLIGATIONS, RIGHTS, AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

3

IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to the Trust Agreement to be duly executed by their respective authorized officers as of the day and year first above written.

PERIMETER FUNDING CORPORATION,

as Transferor

By: /s/ William R. McCamey                       

Name: William R. McCamey
Title: President

WILMINGTON TRUST, NATIONAL

ASSOCIATION

as Owner Trustee

By:/s/ Roseline K. Maney                              
Name: Roseline K. Maney
Title: Administrative Vice President

[Signature Page to the First Amendment to

the Trust Agreement]

ACKNOWLEDGMENT AND CONSENT:

U.S. BANK NATIONAL ASSOCIATION,

not in its individual capacity, but solely as

Indenture Trustee

By: /s/ Tamara Schultz-Fugh                          
Name: Tamara Schultz-Fugh
Title: Vice President

TSO-FORTIVA NOTES HOLDCO LP,

as Agent and Holder of 100% of the Series 2017-One Class A Notes

By: TowerBrook TSO GP (Alberta), L.P.,

its General Partner

By: TowerBrook Investors, Ltd.,

its General Partner

By: /s/ Glenn F. Miller                                  
Name: Glenn F. Miller
Title: Attorney-in-Fact

CCFC CORP.,

as Holder of 100% of the Series 2017-One Class B Notes

By: /s/ Mitch Saunders                                 
Name: Mitch Saunders
Title: Treasurer

[Acknowledgement and Consent

to the First Amendment to the Trust Agreement]

Schedule 1

EXHIBIT B

PERIMETER MASTER NOTE BUSINESS TRUST

FORM OF TRANSFEROR CERTIFICATE

EX-10.13G

Exhibit 10.13(g)

SEVENTH AMENDMENT

TO LOAN AND SECURITY AGREEMENT

            THIS SEVENTH AMENDMENT TO LOAN AND SECURITY AGREEMENT (this “Amendment”) is made and entered into as of the 5th day of November, 2019, by and among ATLANTICUS HOLDINGS CORPORATION, a Georgia corporation, as Borrower (“Borrower”), certain Subsidiaries of Borrower as guarantors (“Guarantors”), and DOVE VENTURES, LLC, a Nevada limited liability company, as lender (together with any successors or assigns thereto, “Lender”).

 W I T N E S S E T H:

            WHEREAS, Borrower, Guarantors and Lender are parties to a certain Loan and Security Agreement dated as of November 26, 2014, as amended by (1) a certain First Amendment to Loan and Security Agreement dated as of November 23, 2015, (2) a certain Second Amendment to Loan and Security Agreement dated as of November 22, 2016, (3) a certain Third Amendment to Loan and Security Agreement dated as of November 22, 2017, (4) a certain Fourth Amendment to Loan and Security Agreement and First Amendment to Pledge Agreement dated as of June 5, 2018, (5) a certain Fifth Amendment to Loan and Security Agreement dated as of October 22, 2018 and (6) a certain Sixth Amendment to Loan and Security Agreement dated as of November 21, 2018 (as so amended, the “Loan Agreement”), pursuant to which Lender has made two separate term loans to Borrower, each in the principal amount of Twenty Million Dollars ($20,000,000) (the “Term Loans”); and

WHEREAS, the Credit Parties request that Lender amend the Loan Agreement as set forth herein and Lender is willing to grant such request, subject to the terms and conditions hereof; and

NOW, THEREFORE, for and in consideration of the premises, the terms and conditions set forth herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

1. Defined Terms.  Defined terms used herein, as indicated by the initial capitalization thereof, shall have the same respective meanings ascribed to such terms in the Loan Agreement unless otherwise specifically defined herein.

2. Amendment.  The definition of “Guarantors” contained in Section 1.1 of the Loan Agreement is hereby amended by deleting such definition in its entirety and substituting in lieu thereof a new definition of “Guarantors” to read as follows:

“Guarantors” means, collectively, CIAC Corporation, a Nevada corporation, Wilton Acquisitions, LLC, a Georgia limited liability company, CC Serve Corporation, a Georgia corporation, and Mobile Tech Investments, LLC, a Georgia limited liability company, and “Guarantor” means any one of them.

3. Release of Access Financing, LLC.  Lender hereby (a) absolutely and unconditionally releases and discharges Access Financing, LLC, a Georgia limited liability company (“Access”) from any and all Guaranteed Obligations and all other obligations and liabilities (accrued or unaccrued) of Access to the Lender under the Loan Agreement and any other Loan Document; (b) absolutely and unconditionally releases the security interest granted by Access pursuant to the Loan Agreement and any other Loan Document; (c) acknowledges and agrees that all of its liens on and security interests in Access’ property granted and assigned to the Lender pursuant to the Loan Agreement and any other Loan Document shall be deemed to have been terminated and released and be of no further force or effect, and (d) authorizes the filing of the UCC-3 termination statement in the form attached hereto as Exhibit A with respect to Access.

4. Representations and Warranties; No Default.  The Credit Parties hereby jointly and severally represent and warrant to the Lender as follows:

a. all of the representations and warranties of the Credit Parties contained in the Loan Agreement and the other Loan Documents are true and correct in all material respects (or, to the extent such representation or warranty is qualified as to materiality, remain true and correct) on and as of the date hereof as fully as though such representations and warranties had been made on the date hereof; provided that each reference to the Loan Agreement therein shall be deemed to be a reference to the Loan Agreement after giving effect to this Amendment; and

b. on and as of the date of this Amendment and after giving effect to the waivers contained herein, no Default or Event of Default has occurred and is continuing under the Loan Agreement.

5. Guarantor Reaffirmation.  Each Guarantor hereby consents to and approves all of the terms of this Amendment, including, but not limited to, the release of Access in Section 3 above (the “Access Release”) and further, after giving effect to this Amendment and the Access Release (a) reaffirms all of its covenants, agreements, indebtedness, liabilities and obligations under the Loan Agreement and the other Loan Documents to which it is a party, (b) reaffirms the guaranty by such Guarantor of the Obligations and the grant of Liens in all of such Guarantor’s interests in the Collateral owned by it as security for the payment and performance of the Obligations, (c) agrees that notwithstanding the effectiveness of this Amendment, the Access Release or the transactions contemplated thereby, all such covenants, agreements, indebtedness, liabilities, obligations guaranty, grant of Liens and the terms of the Loan Documents to which it is a party are not impaired or affected in any manner whatsoever (except to the extent expressly modified or waived pursuant to this Amendment) and shall continue to be in full force and effect and shall continue to secure all Obligations, and (d) agrees that the Loan Documents to which it is a party shall and do remain in full force and effect.

6. Expenses.  Borrower agrees to pay, immediately upon demand by Lender, all costs, expenses, attorneys' fees, and other charges and expenses incurred by Lender in connection with the negotiation, preparation, execution and delivery of this Amendment and other instrument, document, agreement or amendment executed in connection with this Amendment.

7. Defaults Hereunder.  The breach of any representation, warranty or covenant contained herein or in any document executed in connection herewith, or the failure to observe or comply with any term or agreement contained herein or in any document executed in conjunction herewith, shall constitute an Event of Default under the Loan Documents and Lender shall be entitled to exercise all rights and remedies it may have under the Loan Agreement, any of the other Loan Documents and applicable law.

8. Conditions Precedent.  This Amendment shall not become effective until executed and delivered by Lender and a duly authorized officer of each Credit Party.

9. References in Loan Documents.  All references in the Loan Agreement and the other Loan Documents to the Loan Agreement shall hereafter be deemed to be references to the Loan Agreement as amended hereby and as the same may hereafter be amended from time to time.

10. No Claims, Offset.  The Credit Parties hereby represent, warrant, acknowledge and agree to and with Lender that (a) no Credit Party holds or claims any right of action, claim, cause of action or damages, either at law or in equity, against Lender which arises from, may arise from, allegedly arise from, are based upon or are related in any manner whatsoever to the Loan Agreement and the Loan Documents or which are based upon acts or omissions of Lender in connection therewith and (b) the Obligations are absolutely owed to Lender, without offset, deduction or counterclaim.

11. No Novation.  The terms of this Amendment are not intended to and do not serve to effect a novation as to the Loan Agreement.  The parties hereto expressly do not intend to extinguish any debt or security interest created pursuant to the Loan Agreement.  Instead, it is the express intention of the parties hereto to affirm the Loan Agreement and the security created thereby.

12. Limitation of Amendment.  Except as expressly set forth herein, this Amendment shall not be deemed to waive, amend or modify any term or condition of the Loan Agreement or any of the other Loan Documents, each of which is hereby ratified and reaffirmed, and which shall remain in full force and effect, nor to serve as a consent to any matter prohibited by the terms and conditions thereof.

13. Loan Document.  This Amendment shall constitute a “Loan Document” for all purposes of the Loan Agreement and the other Loan Documents.

14. Counterparts.  This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all of which counterparts together shall constitute but one and the same instrument.  Signature pages to this Amendment may be detached from multiple separate counterparts and attached to the same document and any facsimile copy of any such executed signature page shall be valid as an original. 

2

15. Successors and Assigns.  This Amendment shall be binding upon and inure to the benefit of the successors and permitted assigns of the parties hereto.  Notwithstanding any other language to this Amendment or the Loan Agreement, any one of the Lenders may at any time assign all or any portion of its rights under the Loan Agreement, as amended hereby, and the Notes, as replaced and substituted pursuant to the Loan Agreement, as amended hereby, in accordance with Section 12.3 of the Loan Agreement.

16. Section References.  Section titles and references used in this Amendment shall be without substantive meaning or content of any kind whatsoever and are not a part of the agreements among the parties hereto evidenced hereby.

17. Further Assurances.  Each Credit Party agrees to take such further action as Lender shall reasonably request in connection herewith to evidence the amendments herein contained to the Loan Agreement.

18. Governing Law.  This Amendment shall be governed by, and construed in accordance with, the laws of the State of Nevada.

[Signature pages to follow]

3

            IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date first written above.

BORROWER:

ATLANTICUS HOLDINGS CORPORATION

By:  /s/William R. McCamey                                           

      William R. McCamey

      Chief Financial Officer

GUARANTORS:

CC SERVE CORPORATION

By:  /s/William R. McCamey                                              

William R. McCamey

Vice President

CIAC CORPORATION

By: /s/William R. McCamey                                                

William R. McCamey

President

MOBILE TECH INVESTMENTS, LLC

By: /s/ Brian Stone                                                                  

Brian Stone

President

[Signatures continue on following page]

4

WILTON ACQUISITIONS, LLC

By: /s/Jeffery A. Howard                                                           

Jeffrey A. Howard

Manager

[Signatures continue on following page]

5

LENDER:

DOVE VENTURES, LLC, as Lender

By: Bravo Two Company, Inc.,

       its manager

By: /s/Joshua C. Miller                                                                  

Joshua C. Miller

Assistant Secretary

6

Exhibit A

Access Financing, LLC

Termination Statement

EX-10.13H

Exhibit 10.13(h)

EIGHTH AMENDMENT

TO LOAN AND SECURITY AGREEMENT

THIS EIGHTH AMENDMENT TO LOAN AND SECURITY AGREEMENT (this “Amendment”) is made and entered into as of the 19th day of November, 2019, by and among ATLANTICUS HOLDINGS CORPORATION, a Georgia corporation, as Borrower (“Borrower”), certain Subsidiaries of Borrower as guarantors (“Guarantors”), and DOVE VENTURES, LLC, a Nevada limited liability company, as lender (together with any successors or assigns thereto, “Lender”).

W I T N E S S E T H:

WHEREAS, Borrower, Guarantors and Lender are parties to a certain Loan and Security Agreement dated as of November 26, 2014, as amended by (1) a certain First Amendment to Loan and Security Agreement dated as of November 23, 2015, (2) a certain Second Amendment to Loan and Security Agreement dated as of November 22, 2016, (3) a certain Third Amendment to Loan and Security Agreement dated as of November 22, 2017, (4) a certain Fourth Amendment to Loan and Security Agreement and First Amendment to Pledge Agreement dated as of June 5, 2018, (5) a certain Fifth Amendment to Loan and Security Agreement dated as of October 22, 2018, (6) a certain Sixth Amendment to Loan and Security Agreement dated as of November 21, 2018 and (7) a certain Seventh Amendment to Loan and Security Agreement dated as of November 5, 2019 (as so amended, the “Loan Agreement”), pursuant to which Lender has made two separate term loans to Borrower, each in the principal amount of Twenty Million Dollars ($20,000,000) (the “Term Loans”); and

WHEREAS, the Credit Parties request that Lender amend the Loan Agreement as set forth herein and Lender is willing to grant such request, subject to the terms and conditions hereof; and

NOW, THEREFORE, for and in consideration of the premises, the terms and conditions set forth herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

1. Defined Terms. Defined terms used herein, as indicated by the initial capitalization thereof, shall have the same respective meanings ascribed to such terms in the Loan Agreement unless otherwise specifically defined herein.

2. Amendments. The Loan Agreement is hereby amended as follows:

a. The definition of “Termination Date” contained in Section 1.1 of the Loan Agreement is hereby amended by deleting such definition in its entirety and substituting in lieu thereof a new definition of “Termination Date” to read as follows:

“Termination Date” means the earliest of (a) the prepayment of the Term Loans in full, (b) the date, if any, of the acceleration of the maturity of the Term Loans pursuant to Section 9.1(a) and (c) December 20, 2019.

b. The definition of “Guarantors” contained in Section 1.1 of the Loan Agreement is hereby amended by deleting such definition in its entirety and substituting in lieu thereof a new definition of “Guarantors” to read as follows:

“Guarantors” means, collectively, CIAC Corporation, a Nevada corporation, CC Serve Corporation, a Georgia corporation, and Mobile Tech Investments, LLC, a Georgia limited liability company, and “Guarantor” means any one of them.

3. Release of Wilton Acquisitions,  LLC. Lender  hereby (a) absolutely and unconditionally releases and discharges Wilton Acquisitions, LLC, a Georgia limited liability company (“Wilton”) from any and all Guaranteed Obligations and all other obligations and liabilities (accrued or unaccrued) of Wilton to the Lender under the Loan Agreement and any other Loan Document; (b) absolutely and unconditionally releases the security interest granted by Wilton pursuant to the Loan Agreement and any other Loan Document; (c) acknowledges and agrees that all of its liens on and security interests in Wilton’s property granted and assigned to the Lender pursuant to the Loan Agreement and any other Loan Document shall be deemed to have been terminated and released and be of no further force or effect, and (d) authorizes the filing of the UCC-3 termination statement in the form attached hereto as Exhibit A with respect to Wilton.

4. Representations and Warranties; No Default. The Credit Parties hereby jointly and severally represent and warrant to the Lender as follows:

a. all of the representations and warranties of the Credit Parties contained in the Loan Agreement and the other Loan Documents are true and correct in all material respects (or, to the extent such representation or warranty is qualified as to materiality, remain true and correct) on and as of the date hereof as fully as though such representations and warranties had been made on the date hereof; provided that each reference to the Loan Agreement therein shall be deemed to be a reference to the Loan Agreement after giving effect to this Amendment; and

b. on and as of the date of this Amendment and after giving effect to the waivers contained herein, no Default or Event of Default has occurred and is continuing under the Loan Agreement.

5. Guarantor Reaffirmation. Each Guarantor hereby consents to and approves all of the terms of this Amendment, including, but not limited to, the release of Wilton in Section 3 above (the “Wilton Release”) and further, after giving effect to this Amendment and the Wilton Release (a) reaffirms all of its covenants, agreements, indebtedness, liabilities and obligations under the Loan Agreement and the other Loan Documents to which it is a party, (b) reaffirms the guaranty by such Guarantor of the Obligations and the grant of Liens in all of such Guarantor’s interests in the Collateral owned by it as security for the payment and performance of the Obligations, (c) agrees that notwithstanding the effectiveness of this Amendment, the Wilton Release or the transactions contemplated thereby, all such covenants, agreements, indebtedness, liabilities, obligations guaranty, grant of Liens and the terms of the Loan Documents to which it is a party are not impaired or affected in any manner whatsoever (except to the extent expressly modified or waived pursuant to this Amendment) and shall continue to be in full force and effect and shall continue to secure all Obligations, and (d) agrees that the Loan Documents to which it is a party shall and do remain in full force and effect.

6. Expenses. Borrower agrees to pay, immediately upon demand by Lender, all costs, expenses, attorneys' fees, and other charges and expenses incurred by Lender in connection with the negotiation, preparation, execution and delivery of this Amendment and other instrument, document, agreement or amendment executed in connection with this Amendment.

7. Defaults Hereunder. The breach of any representation, warranty or covenant contained herein or in any document executed in connection herewith, or the failure to observe or comply with any term or agreement contained herein or in any document executed in conjunction herewith, shall constitute an Event of Default under the Loan Documents and Lender shall be entitled to exercise all rights and remedies it may have under the Loan Agreement, any of the other Loan Documents and applicable law.

8. Conditions Precedent. This Amendment shall not become effective until executed and delivered by Lender and a duly authorized officer of each Credit Party.

9. References in Loan Documents. All references in the Loan Agreement and the other Loan Documents to the Loan Agreement shall hereafter be deemed to be references to the Loan Agreement as amended hereby and as the same may hereafter be amended from time to time.

10. No Claims, Offset. The Credit Parties hereby represent, warrant, acknowledge and agree to and with Lender that (a) no Credit Party holds or claims any right of action, claim, cause of action or damages, either at law or in equity, against Lender which arises from, may arise from, allegedly arise from, are based upon or are related in any manner whatsoever to the Loan Agreement and the Loan Documents or which are based upon acts or omissions of Lender in connection therewith and (b) the Obligations are absolutely owed to Lender, without offset, deduction or counterclaim.

11. No Novation. The terms of this Amendment are not intended to and do not serve to effect a novation as to the Loan Agreement. The parties hereto expressly do not intend to extinguish any debt or security interest created pursuant to the Loan Agreement. Instead, it is the express intention of the parties hereto to affirm the Loan Agreement and the security created thereby.

12. Limitation of Amendment. Except as expressly set forth herein, this Amendment shall not be deemed to waive, amend or modify any term or condition of the Loan Agreement or any of the other Loan Documents, each of which is hereby ratified and reaffirmed, and which shall remain in full force and effect, nor to serve as a consent to any matter prohibited by the terms and conditions thereof.

13. Loan Document. This Amendment shall constitute a “Loan Document” for all purposes of the Loan Agreement and the other Loan Documents.

14. Counterparts. This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all of which counterparts together shall constitute but one and the same instrument. Signature pages to this Amendment may be detached from multiple separate counterparts and attached to the same document and any facsimile copy of any such executed signature page shall be valid as an original.

15. Successors and Assigns. This Amendment shall be binding upon and inure to the benefit of the successors and permitted assigns of the parties hereto. Notwithstanding any other  language to this Amendment or the Loan Agreement, any one of the Lenders may at any time assign all or any portion of its rights under the Loan Agreement, as amended hereby, and the Notes, as replaced and substituted pursuant to the Loan Agreement, as amended hereby, in accordance with Section 12.3 of the Loan Agreement.

16. Section References. Section titles and references used in this Amendment shall be without substantive meaning or content of any kind whatsoever and are not a part of the agreements among the parties hereto evidenced hereby.

17. Further Assurances. Each Credit Party agrees to take such further action as Lender shall reasonably request in connection herewith to evidence the amendments herein contained to the Loan Agreement.

18. Governing Law. This Amendment shall be governed by, and construed  in accordance with, the laws of the State of Nevada.

[Signature pages to follow]

IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date first written above.

BORROWER:

ATLANTICUS HOLDINGS CORPORATION

By:  /s/William R. McCamey                               

William R. McCamey

Chief Financial Officer

GUARANTORS:

CC SERVE CORPORATION

By:  /s/William R. McCamey                               

William R. McCamey Vice President

CIAC CORPORATION

By:  /s/William R. McCamey                               

William R. McCamey President

MOBILE TECH INVESTMENTS, LLC

By:  /s/Mitch Saunders                                                 

Mitch Saunders

Vice President

[Signatures continue on following page]

LENDER:

DOVE VENTURES, LLC, as Lender

By: Bravo Two Company, Inc., its manager

By:  /s/Joshua C. Miller                                          

Joshua C. Miller

Assistant Secretary

Exhibit A

Wilton Acquisitions, LLC

Termination Statement 

EX-10.13I

Exhibit 10.13(i)

NINTH AMENDMENT

TO LOAN AND SECURITY AGREEMENT

            THIS NINTH AMENDMENT TO LOAN AND SECURITY AGREEMENT (this “Amendment”) is made and entered into as of the 20th day of December, 2019, by and among ATLANTICUS HOLDINGS CORPORATION, a Georgia corporation, as Borrower (“Borrower”), certain Subsidiaries of Borrower as guarantors (“Guarantors”), and DOVE VENTURES, LLC, a Nevada limited liability company, as lender (together with any successors or assigns thereto, “Lender”).

W I T N E S S E T H:

            WHEREAS, Borrower, Guarantors and Lender are parties to a certain Loan and Security Agreement dated as of November 26, 2014, as amended by (1) a certain First Amendment to Loan and Security Agreement dated as of November 23, 2015, (2) a certain Second Amendment to Loan and Security Agreement dated as of November 22, 2016, (3) a certain Third Amendment to Loan and Security Agreement dated as of November 22, 2017, (4) a certain Fourth Amendment to Loan and Security Agreement and First Amendment to Pledge Agreement dated as of June 5, 2018, (5) a certain Fifth Amendment to Loan and Security Agreement dated as of October 22, 2018, (6) a certain Sixth Amendment to Loan and Security Agreement dated as of November 21, 2018, (7) a certain Seventh Amendment to Loan and Security Agreement dated as of November 5, 2019 and (8) a certain Eighth Amendment to Loan and Security Agreement dated as of November 19, 2019 (as so amended, the “Loan Agreement”), pursuant to which Lender has made two separate term loans to Borrower, each in the principal amount of Twenty Million Dollars ($20,000,000) (the “Term Loans”); and

WHEREAS, the Credit Parties request that Lender amend the Loan Agreement as set forth herein and Lender is willing to grant such request, subject to the terms and conditions hereof; and

            NOW, THEREFORE, for and in consideration of the premises, the terms and conditions set forth herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

1. Defined Terms.  Defined terms used herein, as indicated by the initial capitalization thereof, shall have the same respective meanings ascribed to such terms in the Loan Agreement unless otherwise specifically defined herein.

2. Amendment.  The definition of “Termination Date” contained in Section 1.1 of the Loan Agreement is hereby amended by deleting such definition in its entirety and substituting in lieu thereof a new definition of “Termination Date” to read as follows:   “Termination Date” means the earliest of (a) the prepayment of the Term Loans in full, (b) the date, if any, of the acceleration of the maturity of the Term Loans pursuant to Section 9.1(a) and (c) December 31, 2019.  

3. Representations and Warranties; No Default.  The Credit Parties hereby jointly and severally represent and warrant to the Lender as follows:

a. all of the representations and warranties of the Credit Parties contained in the Loan Agreement and the other Loan Documents are true and correct in all material respects (or, to the extent such representation or warranty is qualified as to materiality, remain true and correct) on and as of the date hereof as fully as though such representations and warranties had been made on the date hereof; provided that each reference to the Loan Agreement therein shall be deemed to be a reference to the Loan Agreement after giving effect to this Amendment; and

b. on and as of the date of this Amendment and after giving effect to the waivers contained herein, no Default or Event of Default has occurred and is continuing under the Loan Agreement.

4. Guarantor Reaffirmation.  Each Guarantor hereby consents to and approves all of the terms of this Amendment and further, after giving effect to this Amendment (a) reaffirms all of its covenants, agreements, indebtedness, liabilities and obligations under the Loan Agreement and the other Loan Documents to which it is a party, (b) reaffirms the guaranty by such Guarantor of the Obligations and the grant of Liens in all of such Guarantor’s interests in the Collateral owned by it as security for the payment and performance of the Obligations, (c) agrees that notwithstanding the effectiveness of this Amendment or the transactions contemplated thereby, all such covenants, agreements, indebtedness, liabilities, obligations guaranty, grant of Liens and the terms of the Loan Documents to which it is a party are not impaired or affected in any manner whatsoever (except to the extent expressly modified or waived pursuant to this Amendment) and shall continue to be in full force and effect and shall continue to secure all Obligations, and (d) agrees that the Loan Documents to which it is a party shall and do remain in full force and effect.

5. Expenses.  Borrower agrees to pay, immediately upon demand by Lender, all costs, expenses, attorneys' fees, and other charges and expenses incurred by Lender in connection with the negotiation, preparation, execution and delivery of this Amendment and any other instrument, document, agreement or amendment executed in connection with this Amendment.

6. Defaults Hereunder.  The breach of any representation, warranty or covenant contained herein or in any document executed in connection herewith, or the failure to observe or comply with any term or agreement contained herein or in any document executed in conjunction herewith, shall constitute an Event of Default under the Loan Documents and Lender shall be entitled to exercise all rights and remedies it may have under the Loan Agreement, any of the other Loan Documents and applicable law.

7. Conditions Precedent.  This Amendment shall not become effective until executed and delivered by Lender and a duly authorized officer of each Credit Party.

8. References in Loan Documents.  All references in the Loan Agreement and the other Loan Documents to the Loan Agreement shall hereafter be deemed to be references to the Loan Agreement as amended hereby and as the same may hereafter be amended from time to time.

9. No Claims, Offset.  The Credit Parties hereby represent, warrant, acknowledge and agree to and with Lender that (a) no Credit Party holds or claims any right of action, claim, cause of action or damages, either at law or in equity, against Lender which arises from, may arise from, allegedly arise from, are based upon or are related in any manner whatsoever to the Loan Agreement and the Loan Documents or which are based upon acts or omissions of Lender in connection therewith and (b) the Obligations are absolutely owed to Lender, without offset, deduction or counterclaim.

10. No Novation.  The terms of this Amendment are not intended to and do not serve to effect a novation as to the Loan Agreement.  The parties hereto expressly do not intend to extinguish any debt or security interest created pursuant to the Loan Agreement.  Instead, it is the express intention of the parties hereto to affirm the Loan Agreement and the security created thereby.

11. Limitation of Amendment.  Except as expressly set forth herein, this Amendment shall not be deemed to waive, amend or modify any term or condition of the Loan Agreement or any of the other Loan Documents, each of which is hereby ratified and reaffirmed, and which shall remain in full force and effect, nor to serve as a consent to any matter prohibited by the terms and conditions thereof.

12. Loan Document.  This Amendment shall constitute a “Loan Document” for all purposes of the Loan Agreement and the other Loan Documents.

13. Counterparts.  This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all of which counterparts together shall constitute but one and the same instrument.  Signature pages to this Amendment may be detached from multiple separate counterparts and attached to the same document and any facsimile copy of any such executed signature page shall be valid as an original. 

2

14. Successors and Assigns.  This Amendment shall be binding upon and inure to the benefit of the successors and permitted assigns of the parties hereto.  Notwithstanding any other language to this Amendment or the Loan Agreement, any one of the Lenders may at any time assign all or any portion of its rights under the Loan Agreement, as amended hereby, and the Notes, as replaced and substituted pursuant to the Loan Agreement, as amended hereby, in accordance with Section 12.3 of the Loan Agreement.

15. Section References.  Section titles and references used in this Amendment shall be without substantive meaning or content of any kind whatsoever and are not a part of the agreements among the parties hereto evidenced hereby.

16. Further Assurances.  Each Credit Party agrees to take such further action as Lender shall reasonably request in connection herewith to evidence the amendments herein contained to the Loan Agreement.

17. Governing Law.  This Amendment shall be governed by, and construed in accordance with, the laws of the State of Nevada.

3

            IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date first written above.

BORROWER:

ATLANTICUS HOLDINGS CORPORATION

By: /s/ William R. McCamey                          

      William R. McCamey

      Chief Financial Officer

GUARANTORS:

CC SERVE CORPORATION

By: /s/ William R. McCamey                          

William R. McCamey

Vice President

CIAC CORPORATION

By: /s/ William R. McCamey                          

William R. McCamey

President

MOBILE TECH INVESTMENTS, LLC

By: /s/ Brian Stone                                          

Brian Stone

President

[Signatures continue on following page]

4

LENDER:

DOVE VENTURES, LLC, as Lender

By: Bravo Two Company, Inc.,

       its manager

By: /s/ Joshua C. Miller                                    

Joshua C. Miller

Assistant Secretary

5

EX-10.13J

Exhibit 10.13(j)

DOVE VENTURES, LLC

101 Convention Center Drive, Suite 850

Las Vegas, NV  89109

December 27, 2019

ATLANTICUS HOLDINGS CORPORATION

Five Concourse Parkway

Suite 300

Atlanta, GA 30328

Attn:  Chief Financial Officer

Ladies and Gentlemen:

Reference is hereby made to that certain Loan and Security Agreement dated as of November 26, 2014, (as amended, restated, supplemented or otherwise modified from time to time, the “Loan Agreement”), by and among Atlanticus Holdings Corporation, a Georgia corporation (the “Borrower”), certain Subsidiaries party thereto, as Guarantors (the “Guarantors” and, together with the Borrower, the “Credit Parties”) and Dove Ventures, LLC, as lender (the “Lender”).  We understand that, no later than 5:00 p.m. (Nevada time) on December 27, 2019 (such time and date, the “Anticipated Payoff Date”), Borrower desires to repay in full all of the Obligations, including but not limited to, principal, interest, expenses, fees and other charges owing by the Borrower to the Lender under the Loan Agreement, and to terminate the Loan Agreement (and the Commitments thereunder) and the other Loan Documents.  Capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed thereto in the Loan Agreement.

1. This payoff letter (this “Payoff Letter”) confirms that upon receipt by the Lender of:  

a. a stock certificate representing 400,000 shares of the Borrower’s Series A Cumulative Convertible Preferred Stock, no par value (the “Stock Certificate”), with the designation, powers, and preferences and rights, and the qualifications, limitations and restrictions set forth in the Articles of Amendment Establishing Cumulative Convertible Preferred Stock, Series A filed with the Georgia Secretary of State;

b. a wire transfer of immediately available funds in the aggregate amount of $270,000.00 in respect of accrued and unpaid interest on the outstanding principal amount (the “Accrued Interest Payment,” and, together with the Stock Certificate, the “Payoff Amount”); and

c. a fully-executed counterpart of this Payoff Letter signed by Borrower;   (1) all of the Obligations (and any guarantees thereof by any Person) shall be satisfied in full, (2) the Loan Agreement and all other Loan Documents shall be terminated and of no further force and effect, and (3) all Liens granted or created under the Loan Agreement and any other Loan Documents shall be deemed to be automatically released and terminated; provided, that (A) any provision of the Loan Agreement or any Loan Document that by its terms specifically survives termination of such agreement shall remain in full force and effect, including, but not limited to, all of Borrower's Obligations to indemnify each Indemnified Person under Section 11.3 of the Loan Agreement and to reimburse the Lender for fees and expenses owed to the Lender pursuant to the Loan Agreement, as well as Section 14 of the Loan Agreement relating to governing law, consent to jurisdiction and jury trial waiver, shall remain in full force and effect, and (B) to the extent that any payments or proceeds (or any portion thereof) received by the Lender shall be subsequently invalidated, declared to be fraudulent or a fraudulent conveyance or preferential, set aside or required to be repaid to a trustee, receiver, debtor-in-possession or any other party under any bankruptcy law, state or federal law, common law or equitable cause, then to the extent that the payment or proceeds is rescinded or must otherwise be restored by the Lender, whether as a result of any Insolvency Proceeding or otherwise, the Obligations, other Indebtedness of Credit Parties to the Lender, or part thereof which were intended to be satisfied by any such payment or proceeds shall be revived and continue to be in full force and effect, as if the payment or proceeds had never been received by the Lender, and this Payoff Letter shall in no way impair the claims of the Lender with respect to the revived Obligations or other Indebtedness of Credit Parties to the Lender.  If the Payoff Amount is not received by the Lender on or before 5:00 p.m. (Nevada time) on December 31, 2019, then this Payoff Letter shall terminate and be of no further force or effect.  

2. Please transfer:

a. the Stock Certificate to Lender on the Anticipated Payoff Date by Federal Express at the following address:

Dove Ventures, LLC

101 Convention Center Drive, Ste. 850

Las Vegas, Nevada 89109

b. the Accrued Interest Payment to Lender, by wire transfer of immediately available funds, for receipt on the Anticipated Payoff Date, pursuant to the following instructions:

JPMorgan Chase Bank, N.A.

New York, New York

ABA: 021000021

Account Name: NFS

Acct#: 066-196-221

For Further Credit Dove Ventures Acct RJL-002129

3. The Lender, concurrently with the satisfaction of the conditions referred to in Sections 1(a) and 1(b) above (a) authorizes Borrower or its designee to prepare and file any UCC termination statements and other filings necessary to terminate the UCC financing statements filed by Lender against any Credit Party, and (b) agrees to execute and deliver any lien releases, mortgage releases, discharges of security interests, and other similar discharge or release documents (in recordable form if applicable) as Borrower may reasonably request to effectuate the termination and release of the security interests and Liens securing the Obligations, and which are prepared at Borrower's expense.

4. Each Credit Party hereby waives, releases, remises, and forever discharges the Lender, together with each of their respective Affiliates, each of its successors in title, past, present and future officers, directors, employees, limited partners, general partners, investors, attorneys, assigns, subsidiaries, shareholders, trustees, agents and other professionals (collectively, the “Releasees”), from any and all past, present and future claims, demands, suits, liens, lawsuits, adverse consequences, amounts paid in settlement, debts, deficiencies, diminution in value, disbursements, demands, obligations, liabilities, causes of action, damages, losses, costs and expenses of any kind or character, whether based in equity, law, contract, tort, implied or express warranty, strict liability, criminal or civil statute or common law (each a “Claim” and collectively, the “Claims”), whether known or unknown, fixed or contingent, direct, indirect, or derivative, asserted or unasserted, matured or unmatured, foreseen or unforeseen, past or present, liquidated or unliquidated, suspected or unsuspected, which any Credit Party ever had from the beginning of the world, now has or might hereafter have against any such Releasee, which Claims relate, directly or indirectly, to any act or omission by any Releasee that occurred on or prior to the date of this Payoff Letter and relate, directly or indirectly, to the Loan Agreement, any other Loan Document, or any acts or omissions of any such Releasee in connection with, as a result of, arising out of, related to, or with respect to the Loan Agreement or any other Loan Document, or the debtor-creditor relationship evidenced by any of the Loan Documents, except for the duties and obligations set forth in this Payoff Letter.   Each Credit Party acknowledges that it may hereafter discover facts different from or in addition to those now known or believed to be true with respect to such Claims and agrees that this Payoff Letter shall be and remain effective in all respects notwithstanding any such differences or additional facts.  Each Credit Party understands, acknowledges and agrees that the release set forth above may be pleaded as a full and complete defense and may be used as a basis for an injunction against any action, suit or other proceeding which may be instituted, prosecuted or attempted in breach of the provisions of such release.   Each Credit Party hereby agrees, represents, and warrants that such party has not voluntarily, by operation of law or otherwise, assigned, conveyed, transferred or encumbered, either directly or indirectly, in whole or in part, any right to or interest in any of the Claims released pursuant to this Section 4.

2

5. Borrower understands, acknowledges and agrees that the consideration referred to in Section 1 above represent enforceable obligations of it owed to the Lender pursuant to the provisions of the Loan Agreement and the other Loan Documents and confirms its agreement to the terms and provisions of this Payoff Letter by returning to the Lender a signed counterpart of this Payoff Letter.

6. The Lender hereby agrees that it shall execute and deliver such additional documents and shall provide additional information as Borrower may reasonably require to carry out the terms of this Payoff Letter at Borrower's expense.

7. This Payoff Letter may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument, and any of the parties hereto may execute this Payoff Letter by signing any such counterpart.  Delivery of an executed counterpart of this Payoff Letter by telefacsimile or other electronic method shall be equally as effective as delivery of an original executed counterpart.  Any party delivering an executed counterpart of this Payoff Letter by telefacsimile or other electronic method also shall deliver an original executed counterpart, but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Payoff Letter.

8. This Payoff Letter shall be governed by, and construed and enforced in accordance with, the laws of the State of Nevada as applied to agreements among parties resident therein.  Whenever possible, each provision of this Payoff Letter shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Payoff Letter shall be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Payoff Letter.

9. This is the entire agreement between the parties with respect to the subject matter of this Payoff Letter.  There are no other agreements or understandings, written or oral, express or implied.

[Signature pages follow]

3

Very truly yours,

DOVE VENTURES, LLC,


By: /s/ Joshua C. Miller

Joshua C. Miller
Assistant Secretary

4

Agreed to by the undersigned as of the date first written above:

“Borrower”

ATLANTICUS HOLDINGS CORPORATION

By: /s/William R. McCamey

William R. McCamey
Chief Financial Officer

5

EX-10.15

CERTAIN INFORMATION, IDENTIFIED BY [*****], HAS BEEN EXCLUDED FROM THE EXHIBIT BECAUSE IT IS BOTH NOT MATERIAL AND WOULD LIKELY CAUSE COMPETITIVE HARM TO THE COMPANY IF PUBLICLY DISCLOSED.

Exhibit 10.15

Execution Version

AMENDED AND RESTATED
OPERATING AGREEMENT

of

ACCESS FINANCIAL HOLDINGS, LLC

effective as of

November 14, 2019

TABLE OF CONTENTS

Page

Article I Definitions		1
Section 1.01	Definitions	1
Section 1.02	Interpretation	14
Article II Organization		15
Section 2.01	Formation	15
Section 2.02	Name	15
Section 2.03	Principal Office	15
Section 2.04	Registered Office; Registered Agent	15
Section 2.05	Purpose; Powers	15
Section 2.06	Term	15
Section 2.07	No State-Law Partnership; Tax Classification	15
Article III Units		16
Section 3.01	Units Generally	16
Section 3.02	Authorization and Issuance of Class A Units	16
Section 3.03	Authorization and Issuance of Class B Preferred Units	16
Section 3.04	Other Issuances	16
Section 3.05	Conversion Transaction	17
Section 3.06	Certification of Units	17
Section 3.07	Pre-emptive Rights	18
Section 3.08	Income Tax Treatment of Class B Preferred Units and Payments With Respect Thereto	20
Article IV Members		21
Section 4.01	Admission of New Members	21
Section 4.02	No Personal Liability	21
Section 4.03	No Withdrawal	21
Section 4.04	Death	21
Section 4.05	Voting	21
Section 4.06	Action by Members	22
Section 4.07	Power of Members	22
Section 4.08	No Interest in Company Property	22
Section 4.09	No Dissenters’ Rights	22
Section 4.10	Derivative Actions	22
Article V Capital Contributions; Capital Accounts		22
Section 5.01	Initial Capital Contributions	22
Section 5.02	Additional Capital Contributions	23
Section 5.03	Maintenance of Capital Accounts	23
Section 5.04	Succession Upon Transfer	24
Section 5.05	Negative Capital Accounts	24
Section 5.06	No Withdrawal	24
Section 5.07	Member Loans	24
Section 5.08	Modifications	24

TABLE OF CONTENTS
(continued)

Page

Article VI Allocations		25
Section 6.01	Allocation of Net Income and Net Loss	25
Section 6.02	Regulatory and Special Allocations	25
Section 6.03	Net Losses	26
Section 6.04	Tax Allocations	27
Section 6.05	Other Allocation Rules	27
Article VII Distributions		28
Section 7.01	General	28
Section 7.02	Priority of Distributions	28
Section 7.03	Tax Withholding; Withholding Advances	29
Section 7.04	Distributions in Kind	31
Article VIII Management		31
Section 8.01	Managers	31
Section 8.02	Management	31
Section 8.03	Meetings; Manner of Acting	32
Section 8.04	Certain Limitations	32
Section 8.05	Officers	34
Section 8.06	No Personal Liability	34
Article IX Transfer		34
Section 9.01	General Restrictions on Transfer	34
Section 9.02	Permitted Transfers	36
Section 9.03	Drag-along Rights	36
Section 9.04	Tag-along Rights	39
Section 9.05	Put Right.	40
Section 9.06	Call Right.	41
Article X Covenants		42
Section 10.01	Confidentiality	42
Section 10.02	Affirmative Covenants	43
Article XI Records; Tax Matters		45
Section 11.01	Records and Access to Information	45
Section 11.02	Partnership Representative	45
Section 11.03	Member Tax Information	47
Section 11.04	Tax Reporting for Class B Preferred Units	47
Section 11.05	Financial Statements	47
Section 11.06	Company Funds	48
Article XII Dissolution and Liquidation		48
Section 12.01	Events of Dissolution	48
Section 12.02	Effectiveness of Dissolution	49
Section 12.03	Liquidation	49
Section 12.04	Cancellation of Certificate	50

ii

TABLE OF CONTENTS
(continued)

Page

Section 12.05	Survival of Rights, Duties and Obligations	50
Section 12.06	Recourse for Claims	50
Article XIII Exculpation and Indemnification		50
Section 13.01	Exculpation of Covered Persons	50
Section 13.02	Liabilities and Duties of Covered Persons.	51
Section 13.03	Indemnification	51
Section 13.04	Outside Activities	53
Section 13.05	Survival	53
		53
Article XIV Miscellaneous		53
Section 14.01	Expenses	53
Section 14.02	Further Assurances	54
Section 14.03	Notices	54
Section 14.04	Headings	54
Section 14.05	Severability	54
Section 14.06	Entire Agreement	54
Section 14.07	Successors and Assigns	55
Section 14.08	No Third-party Beneficiaries	55
Section 14.09	Amendment	55
Section 14.10	Waiver	55
Section 14.11	Governing Law	55
Section 14.12	Submission to Jurisdiction	56
Section 14.13	Equitable Remedies	56
Section 14.14	Remedies Cumulative	56
Section 14.15	Counterparts	56

iii

AMENDED AND RESTATED OPERATING AGREEMENT

This Amended and Restated Operating Agreement of Access Financial Holdings, LLC, a Georgia limited liability company (the “Company”), is entered into effective as of November 14, 2019 by and among the Company and the Members (as defined herein).

RECITALS

WHEREAS, the Company was formed under the laws of the State of Georgia by the filing of the Articles of Organization with the Secretary of State of Georgia on January 18, 2018 (the “Articles of Organization”); and

WHEREAS, Atlanticus Holdings Corporation, a Georgia corporation (the “Atlanticus Member”), is a party to that certain Operating Agreement of the Company, dated as of January 18, 2018 (the “Original Agreement”).

WHEREAS, as of the date of this Agreement, Alan Fishman, TSO I Access Financial Investment Aggregator L.P., a Delaware limited partnership, and TSO II Access Financial Investment Aggregator L.P., a Delaware limited partnership (collectively “TCP Members,” and each individually a “TCP Member”) and the Company have entered into that certain Class B Preferred Unit Purchase Agreement, pursuant to which the Company has issued to TCP Members Class B Preferred Units (as such term is defined herein) in exchange for TCP Members having made a Capital Contribution (as such term is defined herein) to the Company pursuant to the terms of, and as set forth in, the Class B Preferred Unit Purchase Agreement.

WHEREAS, in connection with the transactions contemplated by the Class B Preferred Unit Purchase Agreement, the parties desire to amend and restate the Original Agreement by entering into this Agreement to set forth, among other things, each Member’s rights and obligations with respect to the Company.

NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

Article I 
Definitions

Section 1.01     Definitions. Capitalized terms used herein and not otherwise defined shall have the meanings set forth in this Section 1.01:

“Acceptance Notice” has the meaning set forth in Section 3.07(d).

“Additional Yield Amount” means the product of .01 multiplied by the Class B Contribution Account of each Member holding Class B Preferred Units.

“Adjusted Capital Account Deficit” means, with respect to any Member, the deficit balance, if any, in such Member’s Capital Account as of the end of the relevant Fiscal Year, after giving effect to the following adjustments:

(a)     crediting to such Capital Account any amount which such Member is obligated to restore or is deemed to be obligated to restore pursuant to Treasury Regulations Sections 1.704-1(b)(2)(ii)(c), 1.704-2(g)(1) and 1.704-2(i); and

(b)     debiting to such Capital Account the items described in Treasury Regulation Section 1.704-1(b)(2)(ii)(d)(4), (5) and (6).

“Affiliate” means, with respect to any Person, any other Person who, directly or indirectly (including through one or more intermediaries), controls, is controlled by, or is under common control with, such Person. For purposes of this definition, “control,” when used with respect to any specified Person, shall mean the power, directly or indirectly, to direct or cause the direction of the management and policies of such Person, whether through ownership of voting securities or partnership or other ownership interests, by contract or otherwise; and the terms “controlling” and “controlled” shall have correlative meanings.

“Agreement” means this Amended and Restated Operating Agreement, as executed and as it may be amended, modified, supplemented or restated from time to time, as provided herein.

“AHYDOs” has the meaning set forth in Section 7.03(f).

“Applicable Law” means all applicable provisions of (a) constitutions, treaties, statutes, laws (including the common law), rules, regulations, decrees, ordinances, codes, proclamations, declarations or orders of any Governmental Authority; (b) any consents or approvals of any Governmental Authority; and (c) any orders, decisions, advisory or interpretative opinions, injunctions, judgments, awards, decrees of, or agreements with, any Governmental Authority.

“Approved Consumer Financial Services” means marketing, underwriting, servicing, investing in, and funding (including through securitizations and other financings) of consumer finance products either (a) governed by the Credit Card Accountability, Responsibility, and Disclosure Act of 2009 (as in effect on the date of this Agreement), or (b) that do not have interest rates that exceed 36% in currently required disclosed annual percentage rate, and the provision of products and financial services relating to such consumer finance products, including the establishment or purchase of a bank or other financial institution.

“Articles of Organization” has the meaning set forth in the Recitals.

“Atlanticus Member” has the meaning set forth in the Recitals.

“Bankruptcy” means, with respect to a Member, the occurrence of any of the following: (a) the filing of an application by such Member for, or a consent to, the appointment of a trustee of such Member’s assets; (b) the filing by such Member of a voluntary petition in bankruptcy or the filing of a pleading in any court of record admitting in writing such Member’s inability to pay its debts as they come due; (c) the making by such Member of a general assignment for the benefit of such Member’s creditors; (d) the filing by such Member of an answer admitting the material allegations of, or such Member’s consenting to, or such Member’s defaulting in answering a bankruptcy petition filed against such Member in any bankruptcy proceeding; or (e) the expiration of sixty (60) days following the entry of an order, judgment or decree by any court of competent jurisdiction adjudicating such Member bankrupt or appointing a trustee of such Member’s assets.

2

“Book Depreciation” means, with respect to any Company asset for each Fiscal Year, the Company’s depreciation, amortization, or other cost recovery deductions determined for federal income tax purposes with respect to such asset for such Fiscal Year, except that if the Book Value of an asset differs from its adjusted tax basis at the beginning of such Fiscal Year, Book Depreciation shall be an amount which bears the same ratio to such beginning Book Value as the federal income tax depreciation, amortization, or other cost recovery deduction for such Fiscal Year bears to such beginning adjusted tax basis; provided, that if the adjusted basis for federal income tax purposes of an asset at the beginning of such Fiscal Year is zero and the Book Value of the asset is positive, Book Depreciation shall be determined with reference to such beginning Book Value using any permitted method selected by the Managers in accordance with Treasury Regulation Section 1.704-1(b)(2)(iv)(g)(3).

“Book Value” means, with respect to any Company asset, the adjusted basis of such asset for federal income tax purposes, except as follows:

(a)     the initial Book Value of any Company asset contributed by a Member to the Company shall be the gross fair market value as determined by the contributing Member and the Managers as of the date of such contribution;

(b)     immediately prior to the Distribution by the Company of any Company asset to a Member, the Book Value of such asset shall be adjusted to its gross fair market value as determined by the Managers as of the date of such Distribution;

(c)     the Book Value of all Company assets shall be adjusted to equal their respective gross fair market values, as determined by the Managers, as of the following times:

(i)     the acquisition of an additional Ownership Interest in the Company by a new or existing Member in consideration of a Capital Contribution of more than a de minimis amount;

(ii)     the payment by the Company to a Member of more than a de minimis amount as consideration for all or a part of such Member’s Ownership Interest in the Company; and

(iii)     the liquidation of the Company within the meaning of Treasury Regulation Section 1.704-1(b)(2)(ii)(g);

provided, that adjustments pursuant to clauses (i), (ii) and (iii) above need not be made if the Managers reasonably determine that such adjustment is not necessary or appropriate to reflect the relative economic interests of the Members and that the absence of such adjustment does not adversely and disproportionately affect any Member;

(d)     the Book Value of each Company asset shall be increased or decreased, as the case may be, to reflect any adjustments to the adjusted tax basis of such Company asset pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent that such adjustments are taken into account in determining Capital Account balances pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m); provided, that Book Values shall not be adjusted pursuant to this paragraph (d) to the extent that an adjustment pursuant to paragraph (c) above is made in conjunction with a transaction that would otherwise result in an adjustment pursuant to this paragraph (d); and

3

(e)     if the Book Value of a Company asset has been determined pursuant to paragraph (a) or adjusted pursuant to paragraph (c) or (d) above, such Book Value shall thereafter be adjusted to reflect the Book Depreciation taken into account with respect to such Company asset for purposes of computing Net Income and Net Losses.

“Business Day” means a day other than a Saturday, Sunday or other day on which commercial banks in Atlanta, Georgia or New York, New York are authorized or required to close.

“Call Event” has the meaning set forth in Section 9.06(a)

“Call Notice” has the meaning set forth in Section 9.06(a)

“Call Units” has the meaning set forth in Section 9.06(a)

“Capital Account” has the meaning set forth in Section 5.03.

“Capital Contribution” means, for any Member, the total amount of cash and cash equivalents and the Book Value of any property contributed or deemed to have been contributed to the Company by such Member. For the avoidance of doubt, any Preferred Return issued as Class B Preferred Units (i.e., payment-in-kind Units) shall be deemed to have been contributed to the Company by the applicable Member at a value of $1.00 per Unit.

“Change of Control” means: (a) the sale of all or substantially all of the assets of the Company to a Third Party Purchaser; (b) a sale, including through an initial public offering, resulting in no less than a majority of the Class A Units on a Fully Diluted Basis being held by a Third Party Purchaser; or (c) a merger, consolidation, recapitalization or reorganization of the Company with or into a Third Party Purchaser that results in the inability of the Members as of immediately prior to such transaction to designate or elect at least a majority of the managers or directors (or the equivalent) of the resulting entity or its parent company.

“Class A Contribution Account” means, for a Member holding Class A Units, as of any particular time, (a) the aggregate amount of such Member’s Capital Contributions, including any Additional Capital Contributions, as of such time, minus (b) the cumulative amount of all Distributions made by the Company to such Member pursuant to Section 7.02 prior to such time.

“Class A Percentage Interest” means, with respect to any Member holding Class A Units as of any particular time, the ratio (expressed as a percentage) of the number of Class A Units held by such Member on such time to the aggregate Class A Units held by all Members on such time.

4

“Class A Units” means the Units having the privileges, preferences, duties, liabilities, obligations and rights specified with respect to “Class A Units” in this Agreement and shall include the “Units” of the Company existing immediately prior to October ●, 2019.

“Class B Call Purchase Price” has the meaning set forth in Section 9.06(a).

“Class B Contribution Account” means, for a Member holding Class B Preferred Units, as of any particular time, (a) the aggregate amount of such Member’s Capital Contributions made with respect to such Member’s Class B Preferred Units as of such time, minus (b) the cumulative amount of all Distributions made by the Company to such Member pursuant to Section 7.02(d) prior to such time.

“Class B Preferred Unit Purchase Agreement” has the meaning set forth in Section 3.07(b).

“Class B Preferred Units” means the Units having the privileges, preferences, duties, liabilities, obligations and rights specified with respect to “Class B Preferred Units” in this Agreement.

“Class B Put Purchase Price” has the meaning set forth in Section 9.05(a).

“Co-Sale Notice” has the meaning set forth in Section 9.04(b).

“Co-Sale Offerees” has the meaning set forth in Section 9.04(a).

“Co-Sale Offeror” has the meaning set forth in Section 9.04(a).

“Co-Sale Pro Rata Portion” means, with respect to the number of Units (other than Class B Preferred Units) to be sold by each Member pursuant to Section 9.04, the number of Units (other than Class B Preferred Units) equal to the product of (x) the total number of Units the Co-Sale Offeror proposes to purchase and (y) the quotient obtained by dividing (i) the number of Units (other than Class B Preferred Units) held by such Member as of such date, divided by (ii) the aggregate number of Units (other than Class B Preferred Units) held by all Members (including the Co-Sale Offeree) as of such date.

“Code” means the Internal Revenue Code of 1986, as amended.

“Company” has the meaning set forth in the Preamble.

“Company Minimum Gain” means “partnership minimum gain” as defined in Section 1.704-2(b)(2) of the Treasury Regulations, substituting the term “Company” for the term “partnership” as the context requires.

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

“Covered Person” has the meaning set forth in Section 13.01(a).

“Designated Individual” has the meaning set forth in Section 11.02(a).

5

“Distribution” means a distribution made by the Company to a Member, whether in cash, property or securities and whether by liquidating distribution or otherwise; provided, that none of the following shall be a Distribution: (a) any redemption or repurchase by the Company or any Member of any Units or Unit Equivalents; (b) any recapitalization or exchange of securities of the Company; (c) any subdivision (by a split of Units or otherwise) or any combination (by a reverse split of Units or otherwise) of any outstanding Units; or (d) any fees or remuneration paid to any Member in such Member’s capacity as a service provider for the Company so long as such fees or remuneration are determined on an arms’-length basis and otherwise in compliance with Section 8.04. “Distribute” when used as a verb shall have a correlative meaning and “Distributive” when used as an adjective shall have a correlative meaning.

“Drag-along Member” has the meaning set forth in Section 9.03(a).

“Drag-along Notice” has the meaning set forth in Section 9.03(c).

“Drag-along Sale” has the meaning set forth in Section 9.03(a).

“Dragging Member” has the meaning set forth in Section 9.03(a).

“Electronic Transmission” means any form of communication not directly involving the physical transmission of paper that creates a record that may be retained, retrieved and reviewed by a recipient thereof and that may be directly reproduced in paper form by such a recipient through an automated process.

“Exercise Period” has the meaning set forth in Section 3.07(d).

“Exercising Member” has the meaning set forth in Section 3.07(e).

“Fair Market Value” of (a) a Unit as of any time means the purchase price that a willing buyer having all relevant knowledge would pay a willing seller for such Unit in an arm’s length transaction as of such time, as determined in good faith by the Qualified Appraisal Firm applying a reasonable valuation method to determine the equity value of the Company and therefore the value of one Unit assuming such equity valuation, without discounts for liquidity or minority ownership or (b) any other property as of any time means the purchase price that a willing buyer having all relevant knowledge would pay a willing seller for such property in an arm’s length transaction as of such time, as determined in good faith by the Qualified Appraisal Firm applying a reasonable valuation method.

“Family Members” has the meaning set forth in Section 9.02(a).

“Financial Covenant” means, as of the last day of a fiscal quarter of the Company, that the Minimum Adjusted Book Value of the Company as of such day is equal to or greater than $[*****].

“Financial Distribution Test” [*****].

6

“Fiscal Year” means the calendar year, unless the Company is required to have a taxable year other than the calendar year, in which case “Fiscal Year” shall mean the period that conforms to the Company’s taxable year.

“Fully Diluted Basis” means, as of any time of determination, (a) with respect to all the Units, all issued and outstanding Units of the Company and all Units issuable upon the exercise of any outstanding Unit Equivalents as of such time, whether or not such Unit Equivalents are at the time exercisable, or (b) with respect to any specified type, class or series of Units, all issued and outstanding Units designated as such type, class or series and all such designated Units issuable upon the exercise of any outstanding Unit Equivalents as of such time, whether or not such Unit Equivalents are at the time exercisable.

“GAAP” means United States generally accepted accounting principles in effect from time to time.

“Georgia Act” means the Georgia Limited Liability Company Act, and any successor statute, as it may be amended from time to time.

“Governmental Authority” means any federal, state, local or foreign government or political subdivision thereof, or any agency or instrumentality of such government or political subdivision, or any self-regulated organization or other non-governmental regulatory authority or quasi-governmental authority (to the extent that the rules, regulations or orders of such organization or authority have the force of law), or any arbitrator, court or tribunal of competent jurisdiction.

“Indebtedness” means as to any Person at any time (and without duplication) the principal, accrued and unpaid interest, prepayment and redemption premiums or penalties, costs, breakage fees or other amounts payable in order to fully discharge such obligations, unpaid fees or expenses or other monetary obligations in respect of: (a) monetary obligations of such Person for borrowed money; (b) obligations of such Person evidenced by bonds, notes, debentures or other similar instruments; (c) monetary obligations of such Person to pay the deferred purchase price of property or services (other than accrued expenses and trade accounts payable of such Person arising in the ordinary course of business, including marketing expenses), including all seller notes, “earn-out” payments and other similar obligations, whether or not matured, in each case valued at the maximum amount payable thereunder; (d) all obligations of such Person as lessee or lessees under leases that have been recorded as capital leases or that would be required to be capitalized under GAAP; (e) monetary obligations of such Person to guarantee another Person’s Indebtedness; (f) obligations of such Person under any interest rate swap, currency exchange or other hedging contract (valued at the termination value thereof); (g) any unfunded or underfunded liabilities or obligations in respect of any pension or retirement plan; (h) all obligations with respect to interest rate swaps, collars, caps, hedging and other derivative and similar arrangements (valued at the termination date thereof); and (i) any contingent reimbursement obligations in respect of letters of credit, performance bonds (solely to the extent drawn or called) and surety bonds (solely to the extent drawn or called); provided, however, for the avoidance of doubt, that Indebtedness shall not include obligations of or with respect to securitizations of receivables and other assets and obligations with respect thereto, including servicing.

7

“Independent Manager” means any manager who is neither (a) an employee or officer of the Company or any of its Subsidiaries or Affiliates nor (b) a Family Member of any individual referred to in the foregoing clause (a).

“Initial Member” has the meaning set forth in the term Member.

“Issuance Notice” has the meaning set forth in Section 3.07(c).

“Joinder Agreement” means the Joinder Agreement in form and substance attached hereto as Exhibit A.

“Liquidator” has the meaning set forth in Section 12.03(a).

“Losses” has the meaning set forth in Section 13.03(a).

“Managed Earnings” means, with respect to the financial period from October 1, 2019 through the end of the fiscal quarter preceding the date on which a distribution is proposed, (a) the consolidated net income of the Company for such period determined in accordance with GAAP, plus (b) provision for loan losses during such period, plus (c) marketing costs expensed during such period, minus (d) actual receivables charged off, net of any recoveries during such period, minus (e) amortization of current and prior period marketing expenses over the assumed 36-month amortization period for such expenses.

“Manager” has the meaning set forth in Section 8.02.

“Material Adverse Effect” means a material adverse effect on the business, assets (including intangible assets), liabilities, financial condition, property or results of operations of the Company and its Subsidiaries, taken as a whole.

“Material Breach” means (a) a material breach of a covenant set forth in this Agreement (other than the Financial Covenant) that is not cured within forty-five (45) days following delivery of notice to the Company or (b) an Uncured Financial Covenant Breach.

“Member” means (a) each Person who has executed this Agreement or a counterpart thereof (each, an “Initial Member”); and (b) each Person who is hereafter admitted as a Member in accordance with the terms of this Agreement and the Georgia Act, in each case so long as such Person is shown on the Company’s books and records as the owner of one or more Units. The Members shall constitute the “members” (as that term is defined in the Georgia Act) of the Company.

8

“Member Loan” has the meaning set forth in Section 5.07.

“Member Nonrecourse Debt” means “partner nonrecourse debt” as defined in Treasury Regulation Section 1.704-2(b)(4), substituting the term “Company” for the term “partnership” and the term “Member” for the term “partner” as the context requires.

“Member Nonrecourse Debt Minimum Gain” means an amount, with respect to each Member Nonrecourse Debt, equal to the Company Minimum Gain that would result if the Member Nonrecourse Debt were treated as a Nonrecourse Liability, determined in accordance with Treasury Regulation Section 1.704-2(i)(3).

“Member Nonrecourse Deduction” means “partner nonrecourse deduction” as defined in Treasury Regulation Section 1.704-2(i), substituting the term “Member” for the term “partner” as the context requires.

“Members Schedule” has the meaning set forth in Section 3.01.

“Minimum Adjusted Book Value” means, as of any time of determination, (a) the book value of the Company (defined as total assets less total liabilities) as of such time of determination calculated in accordance with GAAP, less (b) the portion of such book value of the Company calculated in accordance with GAAP attributable to the Class B Preferred Units inclusive of any unpaid dividends, plus (b) the allowance for loan losses as of such time of determination calculated in accordance with GAAP, computed in a manner consistent with the illustrative computation of Minimum Adjusted Book Value set forth on Exhibit B hereto.

“Minimum Return” means, with respect to any Class B Preferred Unit, other than a Class B Unit issued as part of the Preferred Return, put to the Company pursuant to Section 9.05 or redeemed pursuant to Section 9.06 prior to such Unit having been outstanding for three full years following issuance, the amount of Preferred Return that would have been earned with respect to such redeemed Units from the date of redemption through the third anniversary of issuance, assuming all dividends in respect of such Class B Preferred Unit had been timely paid in full and assuming that the Preferred Return was at all times during such three year period 10% per annum in cash and 6% per annum in kind through the issuance of additional Class B Preferred Units.

“Net Income” and “Net Loss” mean, for each Fiscal Year or other period specified in this Agreement, an amount equal to the Company’s taxable income or taxable loss, or particular items thereof for such Fiscal Year or other period, determined in accordance with Code Section 703(a) (where, for this purpose, all items of income, gain, loss or deduction required to be stated separately pursuant to Code Section 703(a)(1) shall be included in taxable income or taxable loss), but with the following adjustments:

(a)     any income realized by the Company that is exempt from federal income taxation, as described in Code Section 705(a)(1)(B), shall be added to such taxable income or taxable loss, notwithstanding that such income is not includable in gross income;

(b)     any expenditures of the Company described in Code Section 705(a)(2)(B), including any items treated under Treasury Regulation Section 1.704-1(b)(2)(iv)(i) as items described in Code Section 705(a)(2)(B), shall be subtracted from such taxable income or taxable loss, notwithstanding that such expenditures are not deductible for federal income tax purposes;

9

(c)     any gain or loss resulting from any disposition of Company property with respect to which gain or loss is recognized for federal income tax purposes shall be computed by reference to the Book Value of the property so disposed, notwithstanding that the adjusted tax basis of such property differs from its Book Value;

(d)     any items of depreciation, amortization and other cost recovery deductions with respect to Company property having a Book Value that differs from its adjusted tax basis shall be computed by reference to the property’s Book Value (as adjusted for Book Depreciation) in accordance with Treasury Regulation Section 1.704-1(b)(2)(iv)(g);

(e)     if the Book Value of any Company property is adjusted as provided in the definition of Book Value, then the amount of such adjustment shall be treated as an item of gain or loss and included in the computation of such taxable income or taxable loss; and

(f)     to the extent an adjustment to the adjusted tax basis of any Company property pursuant to Code Sections 732(d), 734(b) or 743(b) is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis).

“New Interests” has the meaning set forth in Section 3.04.

“New Securities” has the meaning set forth in Section 3.07(b).

“Non-Exercising Member” has the meaning set forth in Section 3.07(e).

“Nonrecourse Deductions” has the meaning set forth in Treasury Regulations Sections 1.704-2(b)(1) and 1.704-2(c).

“Nonrecourse Liability” has the meaning set forth in Treasury Regulations Section 1.704-2(b)(3).

“Officers” has the meaning set forth in Section 8.05.

“Original Agreement” has the meaning set forth in the Recitals.

“Over-allotment Exercise Period” has the meaning set forth in Section 3.07(e).

“Over-allotment Notice” has the meaning set forth in Section 3.07(e).

“Ownership Interest” means a “limited liability company interest” in the Company as defined by the Georgia Act, including a Member’s right (based on the type and class of Unit or Units held by such Member), as applicable, (a) to a Distributive share of Net Income, Net Losses and other items of income, gain, loss and deduction of the Company; (b) to a Distributive share of the assets of the Company; (c) to vote on, consent to or otherwise participate in any decision of the Members as provided in this Agreement; and (d) to any and all other benefits to which such Member may be entitled as provided in this Agreement or the Georgia Act.

10

“Partnership Representative” has the meaning set forth in Section 11.02(a).

“Percentage Interest” means, with respect to any Member as of any date, the ratio (expressed as a percentage) of the number of Units held by such Member on such date to the aggregate Units held by all Members on such date.

“Permitted Transfer” means a Transfer of any Units carried out pursuant to Section 9.02. “Permitted Transferee” means a recipient of a Permitted Transfer.

“Person” means an individual, corporation, partnership, joint venture, limited liability company, Governmental Authority, unincorporated organization, trust, association or other entity.

“Pre-emptive Member” has the meaning set forth in Section 3.07(a).

“Preferred Return” means, with respect to a Member holding Class B Preferred Units, a return with respect to the balance, from time to time, of such Member’s Class B Contribution Account of 16.0% per annum accrued daily and, in respect of any portion of the return not paid or issued when due, compounded quarterly, from the date each Capital Contribution with respect to such Member’s Class B Preferred Units is made to the date of payment. The Preferred Return shall be paid or issued, as applicable, by the Company at the end of each fiscal quarter, and at its election (notice of which shall be provided to each Member holding Class B Preferred Units at least 10 Business Days prior to the end of such fiscal quarter), the Company may pay 6.0% per annum (of the total per annum rate) in-kind through the issuance of additional Class B Preferred Units. In the event of, but only during the continuation of, a Material Breach, an Uncured Financial Covenant Breach, or the failure to pay the Class B Put Purchase Price as required by Section 9.05, the cash component of the Preferred Return will increase by 3.0% per annum and will increase by an additional 2.0% per annum on each annual anniversary thereof until the breach or failure is cured, at which time the rate for purposes of accrual thereafter will revert to the initial rate.

“Pro Rata Portion” means, with respect to any Pre-emptive Member, on any issuance date for New Securities, a fraction determined by dividing (i) the number of Class A Units on a Fully Diluted Basis owned by such Pre-emptive Member immediately prior to such issuance by (ii) the total number of Class A Units on a Fully Diluted Basis held by the Members on such date immediately prior to such issuance.

“Property” means any interest in any kind of property or asset, whether real, personal or mixed, and whether tangible or intangible.

“Prospective Purchaser” has the meaning set forth in Section 3.07(c).

“Put Event” has the meaning set forth in Section 9.05(a).

“Put Notice” has the meaning set forth in Section 9.05(a).

11

“Qualified Appraisal Firm” means, unless the Members otherwise agree, an appraisal or valuation firm, an appraisal or valuation firm selected by the Managers that (a) has at least one (1) member of the firm who is in compliance with the American Society of Appraisers certification program, (b) does not have a material economic relationship with any Member or Affiliate thereof and (c) has not rendered services to any Member or Affiliate thereof within five (5) years prior to engagement hereunder.

“Qualified Member” has the meaning set forth in Section 11.05.

“Regulatory Allocations” has the meaning set forth in Section 6.02(h).

“Representative” means, with respect to any Person, any and all directors, officers, employees, consultants, financial advisors, counsel, accountants and other agents of such Person or such Person’s Affiliates.

“Repurchased Units” has the meaning set forth in Section 9.05(a).

“Sale of the Company” means any transaction or series of transactions pursuant to which any Person or group of related Persons in the aggregate acquire(s) (a) Units of the Company possessing the voting power (other than voting rights accruing only in the event of a default or breach) to elect Managers which, in the aggregate, control a majority of the votes of the Managers (whether by merger, consolidation, reorganization, combination, sale or transfer of the Company's equity securities, securityholder or voting agreement, proxy, power of attorney or otherwise), (ii) more than 50% of the total issued and outstanding Class A Units (together with any other common units of the Company then issued and outstanding), or (iii) all or substantially all of the Company's assets determined on a consolidated basis; provided that a public offering shall not constitute a Sale of the Company.

“Securities Act” means the Securities Act of 1933, as amended, or any successor federal statute, and the rules and regulations thereunder, which shall be in effect at the time.

“Specified Permitted Use of Proceeds” means the payment of unallocated expenses retained at the Atlanticus Member comprising the following: interest and principal (other than principal under the Loan and Security Agreement in favor of Dove Ventures, LLC or any other indebtedness for borrowed money of which David Hanna or any of his Affiliates (other than the Company or a Subsidiary) or Family Members is a lender) on the Atlanticus Member’s indebtedness for borrowed money outstanding on the date hereof and any refinancing thereof, salaries and liabilities for benefits for any individuals employed at the Atlanticus Member retained by the Atlanticus Member and not allocated to the Company or other subsidiaries of the Atlanticus Member, public company costs and other professional fees, transportation fees, marketing and solicitation costs related to Curae, and other overhead costs such as occupancy, insurance, and supplies costs, to the extent due and payable at the time of such applicable Distribution.

“Subsidiary” means, with respect to any Person, any other Person of which a majority of the outstanding shares or other equity interests having the power to vote for directors or comparable managers are owned, directly or indirectly, by the first Person.

12

“Tag-Along Notice” has the meaning set forth in Section 9.04(c).

“Tagging Member” has the meaning set forth in Section 9.04(c).

“Tagging Units” has the meaning set forth in Section 9.04(c).

“Tax Rate” means 25%, subject to adjustment as agreed in good faith by the Company and the Members holding the Class B Preferred Units in the event of an increase or decrease in Federal corporate tax rates or a material increase or decrease in effective state tax rates applicable to holders of the Class A Units with respect to income or other amounts separately reported with respect to such Class A Units by the Company.

“Tax Sharing Agreements” means that certain (a) Perimeter Funding Corporation Tax Sharing Agreement, dated as of January 1, 2019, by and among Perimeter Funding Corporation and the Atlanticus Member and (b) FRC Funding Corporation Tax Sharing Agreement, dated as of January 1, 2019, by and between FRC Funding Corporation and the Atlanticus Member.

“Tax Sharing Arrangement” means any written or unwritten agreement or arrangement providing for the allocation or payment of Tax liabilities or for Tax benefits between or among members of any group of corporations that files, will file, or has filed Tax Returns on a combined, consolidated or unitary basis.

“Taxing Authority” has the meaning set forth in Section 7.03(b).

“TCP Majority Holder(s)” means, as of any time of determination, the holder(s) as of such time of a majority of all Class B Preferred Units that are held as of such time by the TCP Members and all Permitted Transferees of the TCP Members that acquired Units pursuant to Section 9.02(a)(ii).

“TCP Member” and “TCP Members” have the meanings set forth in the Recitals.

“Third Party Purchaser” means any Person who, immediately prior to the contemplated transaction, (a) does not directly or indirectly own or have the right to acquire any outstanding Class A Units (or applicable Unit Equivalents) and (b) is not a an eligible Transferee pursuant to Section 9.02 of any Person who directly or indirectly owns or has the right to acquire any Class A Units (or applicable Unit Equivalents).

“Transfer” means to, directly or indirectly, sell, transfer, assign, pledge, encumber, hypothecate or similarly dispose of, either voluntarily or involuntarily, by operation of law or otherwise, or to enter into any contract, option or other arrangement or understanding with respect to the sale, transfer, assignment, pledge, encumbrance, hypothecation or similar disposition of, any Units owned by a Person or any interest (including a beneficial interest) in any Units or Unit Equivalents owned by a Person. “Transfer” when used as a noun shall have a correlative meaning. “Transferor” and “Transferee” mean a Person who makes or receives a Transfer, respectively.

13

“Treasury Regulations” means the final or temporary regulations issued by the United States Department of the Treasury pursuant to its authority under the Code, and any successor regulations.

“Unit” means a unit representing a fractional part of the Ownership Interests of the Members and shall include all types and classes of Units; provided, that any type or class of Unit shall have the privileges, preferences, duties, liabilities, obligations and rights set forth in this Agreement and the Ownership Interests represented by such type or class or series of Unit shall be determined in accordance with such privileges, preferences, duties, liabilities, obligations and rights.

“Uncured Financial Covenant Breach” means the failure by the Company to fulfill the Financial Covenant for two consecutive fiscal quarters.

“Unit Equivalents” means any security or obligation that is by its terms directly or indirectly convertible into, exchangeable for or exercisable for Units, and any option, warrant or other right to subscribe for, purchase or acquire Units.

“Unpaid Preferred Return” shall mean, with respect to a Member holding Class B Preferred Units as of any time, such Member’s Preferred Return as reduced (but not below zero) by the Distributions made to such Member pursuant to Section 7.02(b) prior to such time.

“Withholding Advances” has the meaning set forth in Section 7.03(b).

Section 1.02     Interpretation. For purposes of this Agreement, (a) the words “include,” “includes” and “including” shall be deemed to be followed by the words “without limitation”; (b) the word “or” is not exclusive; and (c) the words “herein,” “hereof,” “hereby,” “hereto” and “hereunder” refer to this Agreement as a whole. The definitions given for any defined terms in this Agreement shall apply equally to both the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. Unless the context otherwise requires, references herein: (x) to Articles, Sections, and Exhibits mean the Articles and Sections of, and Exhibits attached to, this Agreement; (y) to an agreement, instrument or other document means such agreement, instrument or other document as amended, supplemented and modified from time to time to the extent permitted by the provisions thereof; and (z) to a statute means such statute as amended from time to time and includes any successor legislation thereto and any regulations promulgated thereunder. This Agreement shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting an instrument or causing any instrument to be drafted. The 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 forth verbatim herein.

14

Article II
Organization

Section 2.01     Formation.

(a)     The Company was formed on January 18, 2018, pursuant to the provisions of the Georgia Act, upon the filing of the Articles of Organization with the Secretary of State of Georgia.

(b)     This Agreement shall constitute the “operating agreement” (as that term is used in the Georgia Act) of the Company. The rights, powers, duties, obligations and liabilities of the Members shall be determined pursuant to the Georgia Act and this Agreement. To the extent that the rights, powers, duties, obligations and liabilities of any Member are different by reason of any provision of this Agreement than they would be under the Georgia Act in the absence of such provision, this Agreement shall, to the extent permitted by the Georgia Act, control.

Section 2.02     Name. The name of the Company is “Access Financial Holdings, LLC” or such other name or names as the Managers may from time to time designate; provided, that the name shall always contain the words “Limited Liability Company” or the abbreviation “L.L.C.” or the designation “LLC.” The Managers shall give prompt notice to each of the Members of any change to the name of the Company.

Section 2.03     Principal Office. The principal office of the Company is located at Five Concourse Parkway, Suite 300, Atlanta, Georgia 30328, or such other place as may from time to time be determined by the Managers. The Managers shall give prompt notice of any such change to each of the Members.

Section 2.04     Registered Office; Registered Agent. The Managers shall cause the Company to maintain a registered office and registered agent in the manner provided by the Georgia Act and Applicable Law.

Section 2.05     Purpose; Powers.

(a)     The purpose of the Company is to engage in any lawful act or activity for which limited liability companies may be formed under the Georgia Act and to engage in any and all activities necessary or incidental thereto.

(b)     The Company shall have all the powers necessary or convenient to carry out the purposes for which it is formed, including the powers granted by the Georgia Act.

Section 2.06     Term. The term of the Company commenced on the date the Articles of Organization were filed with the Secretary of State of Georgia and shall continue in existence perpetually until the Company is dissolved in accordance with the provisions of this Agreement or as otherwise required by Applicable Law.

Section 2.07     No State-Law Partnership; Tax Classification. The Members intend that the Company shall not be a partnership (including, without limitation, a limited partnership) or joint venture, and that no Member, Manager or Officer of the Company shall be a partner or joint venturer of any other Member, Manager or Officer of the Company, for any purposes other than as set forth in the next sentence of this Section 2.07.  Subject to Section 3.05, the Company has been, and will continue to be, treated as a disregarded entity for U.S. federal, state and local income tax purposes, and the Managers shall undertake all actions necessary or advisable to secure such tax treatment. During any period in which there is more than one Member holding Class A Units, the Company shall be treated as a partnership. Each Member shall file all income tax returns consistent with such treatment.

15

Article III
Units

Section 3.01     Units Generally. The Ownership Interests of the Members shall be represented by issued and outstanding Units, which may be divided into one or more types, classes or series. Each type, class or series of Units shall have the privileges, preferences, duties, liabilities, obligations and rights, including voting rights, if any, set forth in this Agreement with respect to such type, class or series. The Managers shall maintain a schedule of all Members, their respective mailing addresses and the amount and series of Units held by them (the “Members Schedule”), and the Managers shall update the Members Schedule upon the issuance or Transfer of any Units to any new or existing Member; provided, however, that the failure of the Managers to update the Members Schedule or to provide a revised copy of the Members Schedule to the Members shall not prevent the effectiveness of or otherwise affect the underlying adjustments that would be reflected in such an update to the Members Schedule. Notwithstanding anything to the contrary herein, the Managers shall maintain and update the Members Schedule in such manner as to ensure that the Class B Preferred Units are in registered form under Treasury Regulation Section 5f.103-1(c). A copy of the Members Schedule as of the execution of this Agreement is attached hereto as Schedule A.

Section 3.02     Authorization and Issuance of Class A Units. Subject to compliance with Section 3.07 and Section 9.01(b), the Company is hereby authorized to issue a class of Units designated as Class A Units. As of the date hereof, 1,000 Class A Units are issued and outstanding to the Members in the respective amounts set forth on the Members Schedule.

Section 3.03     Authorization and Issuance of Class B Preferred Units. Subject to compliance with Section 8.04 and Section 9.01(b), the Company is hereby authorized to issue a class of Units designated as Class B Preferred Units. As of the date hereof, 50,500,000 Class B Preferred Units are issued and outstanding to the Members in the respective amounts set forth on the Members Schedule. The Company is authorized to issue up to 101,000,000 Class B Preferred Units in the aggregate plus such number of Class B Preferred Units as may be issued as part of the Preferred Return. The Company shall promptly issue any Class B Preferred Units as part of the Preferred Return (i.e., payment-in-kind Units) after the end of each fiscal quarter in which such Class B Preferred Units are issuable as part of the Preferred Return.

Section 3.04     Other Issuances. In addition to the Class A Units and Class B Preferred Units, the Company is hereby authorized, subject to compliance with Section 3.07, Section 8.04 and Section 9.01(b), to authorize and issue or sell to any Person any of the following (collectively, “New Interests”): (a) any new type, class or series of Units not otherwise described in this Agreement, which Units may be designated as classes or series of the Class A Units or Class B Preferred Units but having different rights; and (b) Unit Equivalents. The Managers are hereby authorized, subject to Section 8.04 and Section 14.09, to amend this Agreement to reflect such issuance and to fix the relative privileges, preferences, duties, liabilities, obligations and rights of any such New Interests, including the number of such New Interests to be issued, the preferences (with respect to Distributions, in liquidation or otherwise) over any other Units and any contributions required in connection therewith.

16

Section 3.05     Conversion Transaction. In connection with the consummation of an initial public offering, the Managers, after reasonable consultation with the Class A Members and the prior consent of the TCP Majority Holder(s), which consent will not be unreasonably withheld, delayed or conditioned, may (i) amend this Agreement to provide for (A) a conversion in accordance with applicable law to a corporation or (B) the formation of a parent holding company that is a corporation for U.S. federal income tax purposes and whose primary asset would consist of Units of the Company, which parent holding company would be the offeror in the initial public offering and control the Company following such initial public offering, and into which the Class B Members could, and other Members may, merge in a so-called “up C structure;” (ii) distribute shares of common stock or other equity securities of the resulting company to the Members; (iii) form a subsidiary holding company and distribute its shares to the Members; (iv) move the Company or any successor to another jurisdiction to facilitate any of the foregoing; and/or (v) take such other steps as are reasonably necessary to create a suitable vehicle for an offering or sale, in each such case in accordance with applicable law, on a tax-efficient basis for Members and the equity owners of Members (as applicable), and in each case for the express purpose of effecting an initial public offering.

Section 3.06     Certification of Units.

(a)     The Managers in their sole discretion may, but shall not be required to, issue certificates to the Members representing the Units held by such Members.

(b)     In the event that the Managers shall issue certificates representing Units in accordance with Section 3.06(a), then in addition to any other legend required by Applicable Law, all certificates representing issued and outstanding Units shall bear a legend substantially in the following form:

THE UNITS REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE OPERATING AGREEMENT OF THE COMPANY, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL EXECUTIVE OFFICE OF THE COMPANY. NO TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THE UNITS REPRESENTED BY THIS CERTIFICATE MAY BE MADE EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF SUCH AMENDED AND RESTATED OPERATING AGREEMENT.

THE UNITS REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY OTHER APPLICABLE SECURITIES LAWS AND MAY NOT BE TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT (A) PURSUANT TO A REGISTRATION STATEMENT EFFECTIVE UNDER SUCH ACT AND LAWS, OR (B) PURSUANT TO AN EXEMPTION FROM REGISTRATION THEREUNDER.

17

Section 3.07     Pre-emptive Rights.

(a)     Issuance of New Securities. The Company hereby grants to each Member holding Class A Units (each, a “Pre-emptive Member”) the right to purchase its Pro Rata Portion of any New Securities that the Company may from time to time propose to issue or sell to any party following the date hereof.

(b)     Definition of New Securities. As used herein, the term “New Securities” shall mean new issuances of Units and any Unit Equivalents; provided, that the term “New Securities” shall not include Units or Unit Equivalents issued or sold by the Company in connection with: (i) a grant to any existing or prospective Managers, Officers or other Service Providers pursuant to any incentive plan or similar equity-based plans or other compensation agreement; (ii) the conversion or exchange of any securities of the Company into Units, or the exercise of any warrants or other rights to acquire Units; (iii) any acquisition by the Company of any equity interests, assets, properties or business of any Person; (iv) any merger, consolidation or other business combination involving the Company; (v) any transaction or series of related transactions involving a Change of Control; (vi) any subdivision of Units (by a split of Units or otherwise), payment of Distributions or any similar recapitalization; (vii) any private placement of warrants to purchase Ownership Interests to lenders or other institutional investors (excluding the Members) in any arm’s length transaction in which such lenders or investors provide debt financing to the Company; (viii) that certain Class B Preferred Unit Purchase Agreement, dated as of November 14, 2019, by and between the Company and the “Purchasers” named therein (the “Class B Preferred Unit Purchase Agreement”); or (ix) a joint venture, strategic alliance or other commercial relationship with any Person (including Persons that are customers, suppliers and strategic partners of the Company) relating to the operation of the Company’s business and not for the primary purpose of raising equity capital.

(c)     Additional Issuance Notices. The Company shall give written notice (an “Issuance Notice”) of any proposed issuance or sale described in Section 3.07(a) to the Pre-emptive Members within five (5) Business Days following any meeting of the Managers at which any such issuance or sale is approved. The Issuance Notice shall, if applicable, be accompanied by a written offer from any prospective purchaser seeking to purchase New Securities (a “Prospective Purchaser”) and shall set forth the material terms and conditions of the proposed issuance or sale, including:

(i)     the number and description of the New Securities proposed to be issued and the percentage of the Company’s Units then outstanding on a Fully Diluted Basis (both in the aggregate and with respect to each class or series of Units proposed to be issued) that such issuance would represent;

(ii)     the proposed issuance date, which shall be at least twenty (20) Business Days from the date of the Issuance Notice;

18

(iii)     the proposed purchase price per unit of the New Securities; and

(iv)     if the consideration to be paid by the Prospective Purchaser includes non-cash consideration, the Managers’ good-faith determination of the fair market value thereof.

The Issuance Notice shall also be accompanied by a current copy of the Members Schedule indicating the Pre-emptive Members’ holdings of Class A Units in a manner that enables each Pre-emptive Member to calculate its Pro Rata Portion of any New Securities.

(d)     Exercise of Pre-emptive Rights. Each Pre-emptive Member shall for a period of ten (10) Business Days following the receipt of an Issuance Notice (the “Exercise Period”) have the right to elect irrevocably to purchase all or any portion of its Pro Rata Portion of any New Securities at the purchase price set forth in the Issuance Notice by delivering a written notice to the Company (an “Acceptance Notice”) specifying the number of New Securities it desires to purchase. The delivery of an Acceptance Notice by a Pre-emptive Member shall be a binding and irrevocable offer by such Member to purchase the New Securities described therein, provided that such right and obligation of a Pre-emptive Member is subject to the consummation of the issuance or sale described in the Issuance Notice in accordance with this Section 3.07. The failure of a Pre-emptive Member to deliver an Acceptance Notice by the end of the Exercise Period shall constitute a waiver of its rights under this Section 3.07 with respect to the purchase of such New Securities, but shall not affect its rights with respect to any future issuances or sales of New Securities.

(e)     Over-allotment. No later than five (5) Business Days following the expiration of the Exercise Period, the Company shall notify each Pre-emptive Member in writing of the number of New Securities that each Pre-emptive Member has agreed to purchase (including, for the avoidance of doubt, where such number is zero) (the “Over-allotment Notice”). Each Pre-emptive Member exercising its rights to purchase its Pro Rata Portion of the New Securities in full (an “Exercising Member”) shall have a right of over-allotment such that if any other Pre-emptive Member has failed to exercise its right under this Section 3.07 to purchase its full Pro Rata Portion of the New Securities (each, a “Non-Exercising Member”), such Exercising Member may purchase its Pro Rata Portion of such Non-Exercising Member’s allotment by giving written notice to the Company within five (5) Business Days of receipt of the Over-allotment Notice (the “Over-allotment Exercise Period”).

(f)     Sales to the Prospective Purchaser. Following the expiration of the Exercise Period and, if applicable, the Over-allotment Exercise Period, the Company shall be free to complete the proposed issuance or sale of New Securities described in the Issuance Notice with respect to which Pre-emptive Members declined to exercise the pre-emptive right set forth in this Section 3.07 on terms no less favorable to the Company than those set forth in the Issuance Notice (except that the amount of New Securities to be issued or sold by the Company may be reduced); provided, that: (i) such issuance or sale is closed within twenty (20) Business Days after the expiration of the Exercise Period and, if applicable, the Over-allotment Exercise Period (subject to the extension of such twenty (20) Business Day period for a reasonable time not to exceed forty (40) Business Days to the extent reasonably necessary to obtain any third-party approvals); and (ii) for the avoidance of doubt, the price at which the New Securities are sold to the Prospective Purchaser is at least equal to or higher than the purchase price described in the Issuance Notice. In the event the Company has not sold such New Securities within such time period, the Company shall not thereafter issue or sell any New Securities without first again offering such securities to the Members in accordance with the procedures set forth in this Section 3.07.

19

(g)     Closing of the Issuance. The closing of any purchase by any Pre-emptive Member shall be consummated concurrently with the consummation of the issuance or sale described in the Issuance Notice. Upon the issuance or sale of any New Securities in accordance with this Section 3.07, the Company shall deliver the New Securities free and clear of any liens (other than those arising hereunder and those attributable to the actions of the purchasers thereof). The Company, in the discretion of the Managers pursuant to Section 3.06(a), may deliver to each Exercising Member certificates evidencing the New Securities. Each Exercising Member shall deliver to the Company the purchase price for the New Securities purchased by it by certified or bank check or wire transfer of immediately available funds. Each party to the purchase and sale of New Securities shall take all such other actions as may be reasonably necessary to consummate the purchase and sale including, without limitation, entering into such additional agreements as may be necessary or appropriate.

Section 3.08     Income Tax Treatment of Class B Preferred Units and Payments With Respect Thereto.

(a)     Debt Treatment. For federal, state and local income tax purposes, the Company and all Members intend the Class B Preferred Units to constitute indebtedness. Accordingly, consistent with Section 2.07, during the period in which there is only one Member holding Class A Units, the Company shall be treated as an entity that is disregarded from its sole owner for federal, state and local income tax purposes.

(b)     Registered Form. The Company and Members further agree to treat the Class B Preferred Units as in registered form under Treasury Regulation Section 5f.103-1(c) (in light of documentation requirements relating to new Members under Sections 3.01 and 4.01(b)).

(c)     Additional Yield Amounts. The Company and all Members acknowledge that the Company may be required to pay the Members holding Class B Preferred Units the Additional Yield Amounts pursuant to Section 7.02. The Company believes that the likelihood of payments of Additional Yield Amounts is remote, as determined under Treasury Regulation Section 1.1275-4(a)(5). Therefore, the Company and all Members will treat this contingency in a manner so as not to subject the Class B Preferred Units to Treasury Regulation Section 1.1275-4 governing certain contingent payment debt instruments and so as not to otherwise be taken into account for purposes of determining the yield and maturity of the notes. The Company and all Members will treat the Class B Preferred Units as not constituting contingent interest as defined under Section 871(h) of the Code. Any Additional Yield Amounts in fact paid on the Class B Preferred Units shall be treated as additional interest for tax purposes, in each case, unless otherwise required by applicable Law.

(d)     No Member shall take any tax filing or reporting that is in any manner inconsistent with this Section 3.08, unless otherwise required by applicable Law and with advance written notice to the Company.

20

Article IV
Members

Section 4.01     Admission of New Members.

(a)     New Members may be admitted from time to time (i) in connection with an issuance of Units by the Company, subject to compliance with the provisions of Section 3.07, Section 8.04 and Section 9.01(b), as applicable, and (ii) in connection with a Transfer of Units, subject to compliance with the provisions of Article IX, and in either case, following compliance with the provisions of Section 4.01(b).

(b)     In order for any Person not already a Member of the Company to be admitted as a Member, whether pursuant to an issuance or Transfer of Units, such Person shall have executed and delivered to the Company a written undertaking substantially in the form of the Joinder Agreement. Upon the amendment of the Members Schedule by the Managers and the satisfaction of any other applicable conditions, including, if a condition, the receipt by the Company of payment for the issuance of the applicable Units, such Person shall be admitted as a Member and deemed listed as such on the books and records of the Company and thereupon shall be issued his, her or its Units. The Managers shall also adjust the Capital Accounts of the Members as necessary in accordance with Section 5.03.

Section 4.02     No Personal Liability. Except as otherwise provided in the Georgia Act, by Applicable Law, no Member will be obligated personally for any debt, obligation or liability of the Company or other Members, whether arising in contract, tort or otherwise, solely by reason of being a Member.

Section 4.03     No Withdrawal. A Member shall not cease to be a Member as a result of the Bankruptcy of such Member or as a result of any other events specified in Section 14-11-601(5) of the Georgia Act. So long as a Member continues to hold any Units, such Member shall not have the ability to withdraw or resign as a Member prior to the dissolution and winding up of the Company and any such withdrawal or resignation or attempted withdrawal or resignation by a Member prior to the dissolution or winding up of the Company shall be null and void. As soon as any Person who is a Member ceases to hold any Units, such Person shall no longer be a Member.

Section 4.04     Death. The death of any Member shall not cause the dissolution of the Company. In such event the Company and its business shall be continued by the remaining Member or Members and the Units owned by the deceased Member shall automatically be Transferred to such deceased Member’s heirs; provided, that within a reasonable time after such Transfer, the applicable heirs shall sign a written undertaking substantially in the form of the Joinder Agreement.

Section 4.05     Voting. Except as otherwise provided by this Agreement (including Section 14.09) or as otherwise required by the Georgia Act or Applicable Law:

(a)     each Member shall be entitled to one vote per Class A Unit on all matters upon which the Members have the right to vote under this Agreement; and

21

(b)     the Class B Preferred Units shall not entitle the holders thereof to vote on any matters required or permitted to be voted on by the Members other than as provided in Section 8.04.

Section 4.06     Action by Members.

(a)     No annual meeting of the Members is required to be held. Unless consent or approval by all or a specifically named subset of the Members is required under the terms of this Agreement, the Georgia Act or other Applicable Law, the consent or approval of a Member or Members holding not less than a majority of the Class A Units held by all Members shall constitute an act by the Members hereunder.

(b)     Any action that is to be voted on, consented to or approved by Members may be taken without a meeting, without prior notice and without a vote if consented to, in writing or by Electronic Transmission, by a Member or Members holding not less than the number of Units (or any class thereof) necessary to consent to or approve of such action. A record shall be maintained by the Managers of each such action taken by written consent of a Member or Members.

Section 4.07     Power of Members. The Members shall have the power to exercise any and all rights or powers granted to Members pursuant to the express terms of this Agreement and the Georgia Act. Except as otherwise specifically provided by this Agreement or required by the Georgia Act, no Member, in its capacity as a Member, shall have the power to act for or on behalf of, or to bind, the Company.

Section 4.08     No Interest in Company Property. No real or personal property of the Company shall be deemed to be owned by any Member individually, but shall be owned by, and title shall be vested solely in, the Company. Without limiting the foregoing, each Member hereby irrevocably waives during the term of the Company any right that such Member may have to maintain any action for partition with respect to the property of the Company.

Section 4.09     No Dissenters’ Rights. No Member shall have any right to dissent under Applicable Law.

Section 4.10     Derivative Actions. Except as may be required by the Georgia Act or Applicable Law, derivative actions under Article 8 of the Georgia Act may be discontinued or settled without the court’s approval upon, and only upon, the approval of the Managers.

Article V
Capital Contributions; Capital Accounts

Section 5.01     Initial Capital Contributions. Contemporaneously with the execution of this Agreement, each Initial Member has made or is deemed to have made the Capital Contribution(s) giving rise to the initial credit in such Initial Member’s Capital Account and is deemed to own the number, type, series and class of Units, in each case, in the amounts set forth opposite such Initial Member’s name on the Members Schedule as in effect on the date hereof.

22

Section 5.02     Additional Capital Contributions.

(a)     Except as otherwise agreed by a Member or in accordance with the Class B Preferred Unit Purchase Agreement, no Member shall be required to make any Capital Contributions to the Company.

(b)     Except as otherwise agreed by a member, no Member shall be required to lend any funds to the Company and no Member shall have any personal liability for the payment or repayment of any Capital Contribution by or to any other Member.

(c)     Notwithstanding the other provisions of this Section 5.02, a Member may, under the circumstances set forth in Section 14-11-408 of the Georgia Act, be required to reimburse the Company, for Distributions such Person received knowing that such Distributions were made in violation of Section 14-11-407 of the Georgia Act.

Section 5.03     Maintenance of Capital Accounts. The Company shall establish and maintain for each Member a separate capital account (a “Capital Account”) on its books and records in accordance with this Section 5.03 and Treasury Regulations Section 1.704-1(b)(2)(iv). Each Capital Account shall be established and maintained in accordance with the following provisions:

(a)     Each Member’s Capital Account shall be increased by the amount of:

(i)     such Member’s Capital Contributions, including such Member’s initial Capital Contribution and any Additional Capital Contributions;

(ii)     any Net Income or other item of income or gain allocated to such Member pursuant to Article VI; and

(iii)     any liabilities of the Company that are assumed by such Member or secured by any property Distributed to such Member.

(b)     Each Member’s Capital Account shall be decreased by:

(i)     the cash amount or Book Value of any property Distributed to such Member pursuant to Article VII and Section 12.03(c);

(ii)     the amount of any Net Loss or other item of loss or deduction allocated to such Member pursuant to Article VI; and

(iii)     the amount of any liabilities of such Member assumed by the Company or which are secured by any property contributed by such Member to the Company.

(iv)     At the discretion of the Managers, a Member’s Capital Account may, in the circumstances described in Treasury Regulations Section 1.704-1(b)(2)(iv)(f), be adjusted to reflect revaluations of the Book Value of Company assets in accordance with such provision of the Treasury Regulations, provided that, following such a revaluation, the Capital Accounts shall be adjusted in accordance with Treasury Regulation Section 1.704-1(b)(2)(iv)(g).

23

Section 5.04     Succession Upon Transfer. Except as otherwise decided by the Managers at their discretion, in the event that any Units are Transferred in accordance with the terms of this Agreement, the Transferee shall succeed to the Capital Account of the Transferor to the extent it relates to the Transferred Units and, subject to Section 6.05, shall receive allocations and Distributions pursuant to Article VI, Article VII and Article XII in respect of such Units.

Section 5.05     Negative Capital Accounts. In the event that any Member shall have a deficit balance in his, her or its Capital Account, such Member shall have no obligation, during the term of the Company or upon dissolution or liquidation thereof, to restore such negative balance or make any Capital Contributions to the Company by reason thereof, except as may be required by Applicable Law or in respect of any negative balance resulting from a withdrawal of capital or dissolution in contravention of this Agreement.

Section 5.06     No Withdrawal. No Member shall be entitled to withdraw any part of his, her or its Capital Account or to receive any Distribution from the Company, except as provided in this Agreement. No Member shall receive any interest, salary or drawing with respect to his, her or its Capital Contributions or Capital Account, except as otherwise provided in this Agreement. The Capital Accounts are maintained for the sole purpose of allocating items of income, gain, loss and deduction among the Members.

Section 5.07     Member Loans.

(a)     Member Loans. The Members acknowledge and agree that the Members may, from time to time, make loans to the Company at such times and in such amounts as determined by the Managers (each such loan, a “Member Loan”). Subject to Section 8.04, the terms of Member Loans will be determined in the sole discretion of the Managers.

(b)     Treatment of Loans from Members. Member Loans to the Company shall not be considered Capital Contributions by such Member and shall not affect the maintenance of such Member’s Capital Account, other than to the extent provided in Section 5.03(a)(iii), if applicable.

Section 5.08     Modifications. The foregoing provisions and the other provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with Section 1.704-1(b) of the Treasury Regulations and shall be interpreted and applied in a manner consistent with such Treasury Regulations. If the Managers determine that it is prudent to modify the manner in which the Capital Accounts, or any increases or decreases to the Capital Accounts, are computed in order to comply with such Treasury Regulations, the Managers may authorize such modifications, provided that they are not likely to have a material effect on the amounts distributed to any Member upon the dissolution of the Company. The Managers also shall (a) make any adjustments that are necessary or appropriate to maintain equality between the Capital Accounts of the Members and the amount of capital reflected on the Company’s balance sheet, as computed for book purposes, in accordance with Section 1.704-1(b)(2)(iv)(q) of the Treasury Regulations and (b) make any appropriate modifications in the event unanticipated events might otherwise cause this Agreement not to comply with Section 1.704-1(b) of the Treasury Regulations.

24

Article VI 
Allocations

Section 6.01     Allocation of Net Income and Net Loss. For each Fiscal Year (or portion thereof), except as otherwise provided in this Agreement, Net Income and Net Loss (and, to the extent necessary, individual items of income, gain, loss or deduction) of the Company shall be allocated among the Members in a manner such that, after giving effect to the special allocations set forth in Section 6.02, the Capital Account balance of each Member, immediately after making such allocations, is, as nearly as possible, equal to (a) the Distributions that would be made to such Member pursuant to Section 7.02 if the Company were dissolved, its affairs wound up and its assets sold for cash equal to their Book Value, all Company liabilities were satisfied (limited with respect to each Nonrecourse Liability to the Book Value of the assets securing such liability), and the net assets of the Company were Distributed, in accordance with Section 7.02, to the Members immediately after making such allocations, minus (b) such Member’s share of Company Minimum Gain and Member Nonrecourse Debt Minimum Gain, computed immediately prior to the hypothetical sale of assets.

Section 6.02     Regulatory and Special Allocations. Notwithstanding the provisions of Section 6.01, the following special allocations shall be made in the following order:

(a)     Minimum Gain Chargeback. If there is a net decrease in Company Minimum Gain (determined according to Treasury Regulations Section 1.704-2(d)(1)) during any Fiscal Year, each Member shall be specially allocated Net Income for such Fiscal Year (and, if necessary, subsequent Fiscal Years) in an amount equal to such Member’s share of the net decrease in Company Minimum Gain, determined in accordance with Treasury Regulations Section 1.704-2(g). The items to be so allocated shall be determined in accordance with Treasury Regulations Sections 1.704-2(f)(6) and 1.704-2(j)(2). This Section 6.02(a) is intended to comply with the “minimum gain chargeback” requirement in Treasury Regulation Section 1.704-2(f) and shall be interpreted consistently therewith.

(b)     Member Minimum Gain Chargeback. Member Nonrecourse Deductions shall be allocated in the manner required by Treasury Regulations Section 1.704-2(i). Except as otherwise provided in Treasury Regulations Section 1.704-2(i)(4), if there is a net decrease in Member Nonrecourse Debt Minimum Gain during any Fiscal Year, each Member that has a share of such Member Nonrecourse Debt Minimum Gain shall be specially allocated Net Income for such Fiscal Year (and, if necessary, subsequent Fiscal Years) in an amount equal to that Member’s share of the net decrease in Member Nonrecourse Debt Minimum Gain. Items to be allocated pursuant to this paragraph shall be determined in accordance with Treasury Regulations Sections 1.704-2(i)(4) and 1.704-2(j)(2). This Section 6.02(b) is intended to comply with the “minimum gain chargeback” requirements in Treasury Regulations Section 1.704-2(i)(4) and shall be interpreted consistently therewith.

(c)     Qualified Income Offset. In the event any Member unexpectedly receives any adjustments, allocations or Distributions described in Treasury Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6), Net Income shall be specially allocated to such Member in an amount and manner sufficient to eliminate the Adjusted Capital Account Deficit created by such adjustments, allocations or Distributions as quickly as possible. This Section 6.02(c) is intended to comply with the qualified income offset requirement in Treasury Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.

25

(d)     Gross Income Allocation. In the event any Member has a deficit Capital Account at the end of any Fiscal Year that is in excess of the sum of the amount such Member is obligated to restore pursuant to the penultimate sentences of Treasury Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5), each such Member shall be specially allocated items of Company income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 6.02(d) shall be made only if and to the extent that such Member would have a deficit Capital Account in excess of such sum after all other allocations provided for in this Article VI have been made as if Section 6.02(c) and this Section 6.02(d) were not in this Agreement.

(e)     Nonrecourse Deductions. Nonrecourse Deductions for any Fiscal Year shall be specially allocated to the Members in proportion to their respective Percentage Interests.

(f)     Member Nonrecourse Deductions. Any Member Nonrecourse Deductions for any Fiscal Year shall be specially allocated to the Member who bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Regulations Section 1.704-2(i)(1).

(g)     Section 754 Adjustments. To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Code Section 734(b) or Code Section 743(b) is required, pursuant to Treasury Regulations Sections 1.704-1(b)(2)(iv)(m)(2) or 1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital Accounts as the result of a distribution to a Member in complete liquidation of such Member's interest in the Company, the amount of such adjustment to Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such gain or loss shall be specially allocated to the Members in accordance with their interests in the Company in the event Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(2) applies, or to the Member to whom such distribution was made in the event Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(4) applies.

(h)     Curative Allocations. The allocations set forth in Sections 6.02(a)-(g) and Section 6.03 (the “Regulatory Allocations”) are intended to comply with certain requirements of the Treasury Regulations under Code Section 704. Notwithstanding any other provisions of this Article VI (other than the Regulatory Allocations), the Regulatory Allocations shall be taken into account in allocating Net Income and Net Losses among Members so that, to the extent possible, the net amount of such allocations of Net Income and Net Losses and other items and the Regulatory Allocations to each Member shall be equal to the net amount that would have been allocated to such Member if the Regulatory Allocations had not occurred.

Section 6.03     Net Losses. Net Losses allocated pursuant to Section 6.01 hereof shall not exceed the maximum amount of Net Losses that can be allocated without causing any Member to have an Adjusted Capital Account Deficit at the end of any Fiscal Year. In the event some but not all of the Members would have Adjusted Capital Account Deficits as a consequence of an allocation of Net Losses pursuant to Section 6.01 hereof, the limitation set forth in this Section 6.03 shall be applied on a Member-by-Member basis and Net Losses not allocable to any Member as a result of such limitation shall be allocated to the other Members in proportion to the amounts that can be allocated to each of them without causing or increasing an Adjusted Capital Account Deficit so as to allocate the maximum permissible Net Losses to each Member under Treasury Regulations Section 1.704-1(b)(2)(ii)(d).

26

Section 6.04     Tax Allocations.

(a)     Subject to Section 6.04(b) through Section 6.04(e), all income, gains, losses and deductions of the Company shall be allocated for federal, state and local income tax purposes among the Members in accordance with the allocation of such income, gains, losses and deductions among the Members for computing their Capital Accounts, except that if any such allocation for tax purposes is not permitted by the Code or other Applicable Law, the Company’s subsequent income, gains, losses and deductions shall be allocated among the Members for tax purposes, to the extent permitted by the Code and other Applicable Law, so as to reflect as nearly as possible the allocation set forth herein in computing their Capital Accounts.

(b)     Items of Company taxable income, gain, loss and deduction with respect to any property contributed to the capital of the Company shall be allocated among the Members in accordance with Code Section 704(c), so as to take account of any variation between the adjusted basis of such property to the Company for federal income tax purposes and its Book Value.

(c)     If the Book Value of any Company asset is adjusted pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(f) as provided in clause (c) of the definition of Book Value, subsequent allocations of items of taxable income, gain, loss and deduction with respect to such asset shall take account of any variation between the adjusted basis of such asset for federal income tax purposes and its Book Value in the same manner as under Code Section 704(c).

(d)     Allocations of tax credit, tax credit recapture and any items related thereto shall be allocated to the Members according to their interests in such items as determined by the Managers taking into account the principles of Treasury Regulations Section 1.704-1(b)(4)(ii).

(e)     The Company shall make allocations pursuant to this Section 6.04 in accordance with the traditional method in accordance with Treasury Regulations Section 1.704-3(b).

(f)     Allocations pursuant to this Section 6.04 are solely for purposes of federal, state and local taxes and shall not affect, or in any way be taken into account in computing, any Member’s Capital Account or share of Net Income, Net Losses, Distributions or other items pursuant to any provisions of this Agreement.

Section 6.05     Other Allocation Rules.

(a)     Allocations in Respect of Transferred Units. In the event of a Transfer of Units during any Fiscal Year made in compliance with the provisions of Article IX, Net Income, Net Losses and other items of income, gain, loss and deduction of the Company attributable to such Units for such Fiscal Year shall be determined using the interim closing of the books method.

(b)     Taxable Periods. For purposes of determining the Net Income, Net Losses, or any other items allocable to any period, Net Income, Net Losses, and any such other items shall be determined on a daily, monthly, or other basis, as determined by the Partnership Representative or the Designated Individual using any permissible method under Code Section 706 and the Regulations thereunder.

27

(c)     Excess Nonrecourse Liabilities. Any "excess nonrecourse liability" of the Company, within the meaning of Regulations Section 1.752-3(a)(3), shall be allocated first among the Members in proportion to and to the extent of the amount of built-in gain that is allocable to each Member on Code Section 704(c) property or property for which reverse Code Section 704(c) allocations are applicable where such property is subject to the nonrecourse liability to the extent that such built-in gain exceeds the gain described in Regulations Section 1.752-3(a)(2) with respect to such property. The amount of any excess nonrecourse liabilities not allocated pursuant to the preceding sentence shall be allocated in accordance with the Members' interests in Company profits. Solely for purposes of this Section 6.05(c), the Members' interests in Company profits are in proportion to their Percentage Interests.

Article VII
Distributions

Section 7.01     General.

(a)     Subject to Section 7.02, the Managers shall have sole discretion regarding the amounts and timing of Distributions to Members (including Distributions paid to Members in connection with Members’ annual allocable share of tax liabilities), including to decide to forego payment of Distributions in order to provide for the retention and establishment of reserves of, or payment to third parties of, such funds as it deems necessary with respect to the reasonable business needs of the Company (which needs may include the payment or the making of provision for the payment when due of the Company’s obligations, including, but not limited to, present and anticipated debts and obligations, capital needs and expenses, the payment of any management or administrative fees and expenses, and reasonable reserves for contingencies).

(b)     Notwithstanding any provision to the contrary contained in this Agreement, the Company shall not make any Distribution to Members if such Distribution would violate Section 14-11-407 of the Georgia Act or other Applicable Law.

Section 7.02     Priority of Distributions. Subject to Section 12.03(c), if applicable, all Distributions determined to be made by the Managers pursuant to Section 7.01 shall be made in the following manner:

(a)     first, to the Members holding Class A Units in proportion to the product of (y) each such Member’s allocable share of taxable income of the Company and its Subsidiaries (assuming that none of the Company or its Subsidiaries is a disregarded entity) for a fiscal year of the Company, or such other relevant period, multiplied by (z) the Tax Rate; provided, however, that no Distribution shall be made in respect of any Taxes paid under either of the Tax Sharing Agreements;

(b)     second, to the Members holding Class B Preferred Units pro rata in proportion to each such Member’s Unpaid Preferred Return, until such Member’s Unpaid Preferred Return has been reduced to zero;

28

(c)     third, up to $[*****] with respect to a Fiscal Year of the Company solely for a Specified Permitted Use of Proceeds for such Fiscal Year, to the Atlanticus Member;

(d)     fourth, to the Members holding Class B Preferred Units issued as part of the Preferred Return (i.e., payment-in-kind Units), if any, to the extent of, and in proportion to, the positive balances in their respective Class B Contribution Accounts with respect to such Class B Preferred Units so issued;

(e)     fifth, if any Class B Preferred Units are outstanding, provided that the Financial Distribution Test is satisfied, to the Members holding Class A Units in accordance with their then respective Class A Percentage Interests, up to, in the aggregate, 50% of the Managed Earnings of the Company for all distributions pursuant to this Section 7.02(e);

(f)     sixth, if any Class B Preferred Units are outstanding, provided that the Financial Distribution Test is satisfied, at the election of the Atlanticus Member, (i) to the Members holding the Class B Preferred Units, the Additional Yield Amount, and then (ii) to the Atlanticus Member, up to $[*****] with respect to a Fiscal Year of the Company for all distributions pursuant to this Section 7.02(f) solely for a Specified Permitted use of Proceeds for such Fiscal Year; and

(g)     seventh, if there are no Class B Units outstanding, to the Members holding Class A Units in accordance with their then respective Class A Percentage Interests.

For the avoidance of doubt, once the Members holding Class B Preferred Units issued as part of the Preferred Return (i.e., payment-in-kind Units) have received distributions pursuant to Section 7.02(d) sufficient to reduce their Class B Contribution Accounts to zero, such Preferred Class B Units shall be deemed to have been redeemed in full by the Company without any action on their part and they shall not be entitled to any further distributions or payments from the Company with respect to such Class B Preferred Units.

Section 7.03     Tax Withholding; Withholding Advances.

(a)     Tax Withholding. If requested by the Managers, each Member shall, if able to do so, deliver to the Managers:

(i)     an affidavit in form satisfactory to the Manager that the applicable Member (or its members, as the case may be) is not subject to withholding under the provisions of any federal, state, local, foreign or other Applicable Law;

(ii)     any certificate that the Managers may reasonably request with respect to any such laws; and/or

(iii)     any other form or instrument reasonably requested by the Managers relating to any Member’s status under such laws.

29

If a Member fails or is unable to deliver to the Managers the affidavit described in Section 7.03(a)(i), the Managers may withhold amounts from such Member in accordance with Section 7.03(b).

(b)     Withholding Advances. The Company is hereby authorized at all times to make payments (“Withholding Advances”) with respect to each Member in amounts required to discharge any obligation of the Company (as determined by the Partnership Representative or the Designated Individual based on the advice of legal or tax counsel to the Company) to withhold or make payments to any federal, state, local or foreign taxing authority (a “Taxing Authority”) with respect to any Distribution or allocation by the Company of income or gain to such Member (including payments made pursuant to Code Section 6225 and allocable to a Member as determined by the Partnership Representative or the Designated Individual in its sole discretion) and to withhold the same from Distributions to such Member. Any funds withheld from a Distribution by reason of this Section 7.03(b) shall nonetheless be deemed Distributed to the Member in question for all purposes under this Agreement and, at the option of the Managers, shall be charged against the Member’s Capital Account.

(c)     Repayment of Withholding Advances. Any Withholding Advance made by the Company to a Taxing Authority on behalf of a Member and not simultaneously withheld from a Distribution to that Member shall:

(i)     be promptly repaid to the Company by the Member on whose behalf the Withholding Advance was made (which repayment by the Member shall not constitute a Capital Contribution, but shall credit the Member’s Capital Account if the Managers shall have initially charged the amount of the Withholding Advance to the Capital Account); or

(ii)     with the consent of the Managers, be repaid by reducing the amount of the next succeeding Distribution or Distributions to be made to such Member (which reduction amount shall be deemed to have been Distributed to the Member, but which shall not further reduce the Member’s Capital Account if the Managers shall have initially charged the amount of the Withholding Advance to the Capital Account).

(d)     Indemnification. Each Member hereby agrees to indemnify and hold harmless the Company and the other Members from and against any liability with respect to taxes, interest or penalties which may be asserted by reason of the Company’s failure to deduct and withhold tax on amounts Distributable or allocable to such Member. The provisions of this Section 7.03(d) and the obligations of a Member pursuant to Section 7.03(c) shall survive the termination, dissolution, liquidation and winding up of the Company and the withdrawal of such Member from the Company or Transfer of its Units. The Company may pursue and enforce all rights and remedies it may have against each Member under this Section 7.03, including bringing a lawsuit to collect repayment with interest of any Withholding Advances.

(e)     Overwithholding. Neither the Company nor the Managers shall be liable for any excess taxes withheld in respect of any Distribution or allocation of income or gain to a Member. In the event of an overwithholding, a Member’s sole recourse shall be to apply for a refund from the appropriate Taxing Authority.

30

(f)     AHYDO. Notwithstanding any other provision of this Agreement, on any Preferred Return payment date on or before the last day of each accrual period that ends after the date that is five years after the date of issue of Class B Preferred Units, the Company shall pay a minimum amount of accrued and unpaid interest on the Class B Preferred Units (i.e., a portion of the 6% per annum interest paid-in-kind) in cash as shall be necessary to ensure that the Class B Preferred Units shall not be considered “applicable high yield discount obligations” (“AHYDOs”) within the meaning of Section 163(i) of the Code, or any successor provision. If definitive guidance is published by the Internal Revenue Service clarifying the application of the AHYDO rules in such a way that would require lesser payments than those described in the preceding paragraph, the amounts of the required payments shall be reduced or eliminated to the greatest extent that would permit the Class B Preferred Units to be exempt from treatment as AHYDOs under such guidance.

Section 7.04     Distributions in Kind.

(a)     The Managers are hereby authorized, in their sole discretion, to make Distributions to the Members holding Class A Units in the form of securities or other property held by the Company. In any non-cash Distribution, the securities or property so Distributed will be Distributed among the Members in the same proportion and priority as cash equal to the fair market value of such securities or property as would be Distributed among the Members pursuant to Section 7.02 as applicable.

(b)     Any Distribution of securities shall be subject to such conditions and restrictions as the Managers determine are required or advisable to ensure compliance with Applicable Law. In furtherance of the foregoing, the Managers may require that the Members execute and deliver such documents as the Managers may deem necessary or appropriate to ensure compliance with all federal and state securities laws that apply to such Distribution and any further Transfer of the Distributed securities and may appropriately legend the certificates that represent such securities to reflect any restriction on Transfer with respect to such laws.

Article VIII
Management

Section 8.01     Managers. The Company is managed by managers within the meaning of Section 14-11-101 of the Georgia Act.

Section 8.02     Management. The Members hereby designate Bettie Lass, Mitch Saunders, and Brian Stone to be the “Managers” of the Company. Subject to Section 8.04, the Managers, acting by majority vote, have full and exclusive control over the business and affairs of the Company and full and exclusive power and authority to make all decisions affecting the business and affairs of the Company, including, without limitation, all decisions otherwise requiring Member approval under the Georgia Act. The Managers are authorized to negotiate, execute and deliver all documents, instruments, leases, certificates and agreements on behalf of the Company as it determines to be necessary or appropriate for, or incidental to, the business of the Company. Managers may be removed and replaced by the Class A Members owning at least fifty-one percent (51%) of the Class A Units.

31

Section 8.03     Meetings; Manner of Acting.

(a)     The Managers shall meet at such time and at such place as the Managers may designate. Meetings of the Managers may be held either in person or by means of telephone or video conference or other communications device that permits all Managers participating in the meeting to hear each other, at the offices of the Company or such other place (either within or outside the State of Georgia) as may be determined from time to time by the Managers. Written notice of each meeting of the Managers shall be given to each Manager at least 24 hours prior to each such meeting.

(b)     Attendance and Waiver of Notice. Attendance of a Manager at any meeting shall constitute a waiver of notice of such meeting, except where a Manager attends a meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Board need be specified in the notice or waiver of notice of such meeting.

(c)     Participation. Any Manager may participate in a meeting of the Board by means of telephone or video conference or other communications device that permits all Managers participating in the meeting to hear each other, and participation in a meeting by such means shall constitute presence in person at such meeting. A Manager may vote or be present at a meeting either in person or by proxy, and such proxy may be granted in writing, by means of Electronic Transmission or as otherwise permitted by Applicable Law.

(d)     Binding Act. Each Manager shall have one vote on all matters submitted to the Managers. With respect to any matter before the Managers, the unanimous act of the Managers constituting shall be the act of the Managers.

(e)     Actions by Written Consent. Notwithstanding anything herein to the contrary, any action of the Managers may be taken without a meeting if a written consent constituting all of the Managers shall approve such action. Such consent shall have the same force and effect as a vote at a duly called meeting of the Managers and may be stated as such in any document or instrument filed with the Georgia Department of State, Division of Corporations.

Section 8.04     Certain Limitations. Notwithstanding Section 8.02 and any other delegation to Managers as set forth in this Agreement, so long as there are Class B Preferred Units outstanding, the Company will not directly or indirectly take, or cause or permit any of its Subsidiaries to take, or agree to take, any of the following actions without the approval of the TCP Majority Holder(s):

(a)     redeem, repurchase or otherwise acquire all or any part of any equity securities of the Company other than (i) redemptions of Class B Preferred Units in accordance with the terms of this Agreement, (ii) if such Member is an individual, in connection with the termination of one or more Member’s employment with the Company or an Affiliate, or (iii) equity securities of Subsidiaries that are owned by the Company or another Subsidiary of the Company;

32

(b)     issue any (i) Units or Unit Equivalents if the holders of such Units or Unit Equivalents would have rights to receive distributions, rights upon a liquidity event, or rights upon an initial public offering that are equal to or better than those provided to the holders of the Class B Preferred Units or (ii) Class B Preferred Units other than in accordance with the Class B Preferred Unit Purchase Agreement or in connection with the payment of the Preferred Return in accordance with this Agreement;

(c)     amend the number of Class B Preferred Units authorized under this Agreement;

(d)     form or invest in non-wholly-owned direct or indirect subsidiaries of the Company, other than as the Managers reasonably conclude are appropriate in connection with the provision of Approved Financial Services, provided, however, that any actions that are prohibited by Section 8.04(h) or any formation of or investment in any other Person owned by, directly or indirectly, or affiliated with, any Affiliate, officer, director or unit holder (or Affiliate or Family Member of such officer, director or unit holder or any Affiliate of any such Family Member) of the Company or any of its Subsidiaries shall require the consent of the TCP Majority Holder(s);

(e)     incur any Indebtedness other than Indebtedness for the purpose of funding receivables;

(f)     amend or restate (i) this Agreement or the Articles of Organization of the Company in a manner that adversely affects the powers, preferences or rights set forth in this Agreement of the holders of the Class B Preferred Units or any of (ii) (A) the definitions of “Approved Consumer Financial Services,” “Capital Contribution,” “Change of Control,” “Distribution,” “Financial Distribution Test,” “Indebtedness,” “Independent Manager,” “Material Adverse Effect,” “Material Breach,” “Minimum Return,” “Preferred Return,” “Sale of the Company” in this Agreement and “Specified Permitted Use of Proceeds” or (B) Sections 2.07, 3.03, 3.08, 7.02, 8.04, 9.02(a)(ii), 9.05, 9.06, 10.1(b)(viii), 10.02, 11.04, 11.05, 12.03(c) or 13.04.

(g)     issue options or convertible securities that are exercisable for or convertible into Units that the Company could not issue without the approval of the holders of the Class B Preferred Units;

(h)     enter into or materially amend any transactions or agreements between the Company or any of its Subsidiaries, on the one hand, and any Affiliate (other than the Company or any of its Subsidiaries), officer, director or unit holder (or Affiliate or Family Member of such officer, director or unit holder or any Affiliate of any such Family Member) of the Company or any of its Subsidiaries, on the other hand, other than ordinary course of business commercial transactions or agreements on arms’-length terms approved by either (i) a majority of the Independent Managers or (ii) if there is no Independent Manager, then the TCP Majority Holder(s), provided, for the avoidance of doubt, that a guaranty (including extensions or amendments thereto) by the parent or another Affiliate of the Company of any obligations of the Company or a Subsidiary shall not require approval hereunder;

33

(i)     amend or modify either of the Tax Sharing Agreements in any manner that would increase the payments thereunder by the Company, or enter into any new Tax Sharing Arrangements other than Tax Sharing Agreements with newly-established blocker or similar entities with terms generally consistent with the existing Tax Sharing Agreements;

(j)     make any Distributions other than those delineated in Section 7.02;

(k)     enter into any new lines of business other than Approved Consumer Financial Services;

(l)     except as permitted by Section 3.05, move or enter into any transaction to incorporate or organize the Company or any successor thereto in another jurisdiction if such action would have a materially adverse tax impact on the holders of the Class B Preferred Units; or

(m)     make a voluntary bankruptcy filing, liquidation, receivership or assignment for the benefit of creditors or permit any event of dissolution contemplated by Section 12.01 that does not provide for the redemption in full of all outstanding Class B Preferred Units.

Section 8.05     Officers. The Managers may appoint individuals as officers of the Company (the “Officers”) as they deem necessary or desirable to carry on the business of the Company, and the Managers may delegate to such Officers such power and authority as the Managers deems advisable. Unless the Managers decide otherwise, if the title is one commonly used for officers of a business corporation formed under the Georgia General Corporation Law, the assignment of such title shall constitute the delegation to such Officer of the authority and duties that are normally associated with that office, subject to any specific delegation of authority and duties made to such Officer by the Managers. Any individual may hold two or more offices of the Company. Each Officer shall hold office until his or her successor is designated by the Managers or until his or her earlier death, resignation or removal. Any Officer may resign at any time upon written notice to the Managers. Any Officer may be removed by the Managers, with or without cause, at any time. A vacancy in any office occurring because of death, resignation, removal or otherwise may, but need not, be filled by the Managers. The current officers of the Company shall be those individuals set forth on Schedule B attached hereto.

Section 8.06     No Personal Liability. Except as otherwise provided in the Georgia Act, by Applicable Law or expressly in this Agreement, no Manager will be obligated personally for any debt, obligation or liability of the Company, whether arising in contract, tort or otherwise, solely by reason of being a Manager.

Article IX
Transfer

Section 9.01     General Restrictions on Transfer.

(a)     No Member (or any Permitted Transferee of a Member) shall Transfer any Units or Unit Equivalents without the prior written consent of the Managers except as permitted pursuant to Section 9.02 or in accordance with the procedures described in Section 9.03 or Section 9.04. Such written consent may specify the rights and obligations the Transferee shall have, including whether the Transferee is to be admitted as a Member. No Transfer of Units or Unit Equivalents to a Person not already a Member of the Company shall be deemed completed until the requirements of Section 4.01(b) have been satisfied.

34

(b)     Notwithstanding any other provision of this Agreement (including Section 9.02), no Member (or any Permitted Transferee of a Member) shall, directly or indirectly, Transfer any of its Units or Unit Equivalents, and the Company agrees that it shall not issue any Units or Unit Equivalents:

(i)     except as permitted under the Securities Act and other applicable federal or state securities or blue sky laws, and then, with respect to a Transfer of Units or Unit Equivalents, if requested by the Company, only upon delivery to the Company of an opinion of counsel in form and substance satisfactory to the Company to the effect that such Transfer may be effected without registration under the Securities Act;

(ii)     if such Transfer or issuance would cause the Company to be considered a “publicly traded partnership” under Section 7704(b) of the Code within the meaning of Treasury Regulations Section 1.7704-1(h)(1)(ii), including the look-through rule in Treasury Regulations Section 1.7704-1(h)(3);

(iii)     if such Transfer or issuance would affect the Company’s existence or qualification as a limited liability company under the Georgia Act;

(iv)     if such Transfer or issuance would cause the Company to lose its status as a disregarded entity (or, for any period in which there is more than one Member holding Class A Units, a partnership) for federal income tax purposes;

(v)     if such Transfer or issuance would cause the Company to be required to register as an investment company under the Investment Company Act of 1940, as amended;

(vi)     if such Transfer or issuance would cause the assets of the Company to be deemed “Plan Assets” as defined under the Employee Retirement Income Security Act of 1974 or its accompanying regulations or result in any “prohibited transaction” thereunder involving the Company; or

(vii)     until the transferee provides the Company with any know-your-customer or other information as may reasonably be requested by the Company.

In any event, the Managers may refuse the Transfer to any Person if such Transfer would have a material adverse effect on the Company as a result of any regulatory or other restrictions imposed by any Governmental Authority.

(c)     Any Transfer or attempted Transfer of any Units or Unit Equivalents in violation of this Agreement shall be null and void, and no such Transfer shall be recorded on the Company’s books and the purported Transferee in any such Transfer shall not be treated (and the purported Transferor shall continue be treated) as the owner of such Units or Unit Equivalents for any purposes of this Agreement.

35

(d)     For the avoidance of doubt, any Transfer of Units or Unit Equivalents permitted by Section 9.02 or made in accordance with the procedures described in Section 9.03 or Section 9.04, as applicable, and purporting to be a sale, transfer, assignment or other disposal of the entire Ownership Interest represented by such Units or Unit Equivalents, inclusive of all the rights and benefits applicable to such Ownership Interest as described in the definition of the term “Ownership Interest,” shall be deemed a sale, transfer, assignment or other disposal of such Ownership Interest in its entirety as intended by the parties to such Transfer, and shall not be deemed a sale, transfer, assignment or other disposal of any less than all of the rights and benefits described in the definition of the term “Ownership Interest,” unless otherwise explicitly agreed to by the parties to such Transfer.

Section 9.02     Permitted Transfers. The provisions of Section 9.01(a) and Section 9.03 (with respect to the Dragging Member only) shall not apply to any of the following Transfers by any Member of any of its Units or Unit Equivalents:

(a)     with respect to (i) any Member, to (1) such Member’s spouse, parents, siblings, descendants (including adoptive relationships and stepchildren) and the spouses of each such natural persons (collectively, “Family Members”), (2) a trust under which the distribution of Units may be made only to such Member and/or any Family Member of such Member, (3) a charitable remainder trust, the income from which will be paid to such Member during his or her life, (4) a corporation, partnership or limited liability company, the stockholders, partners or members of which are only such Member and/or Family Members of such Member or (5) by will or by the laws of intestate succession, to such Member’s executors, administrators, testamentary trustees, legatees or beneficiaries and (ii) any holder of Class B Preferred Units, to any Affiliate of such holder; provided, that any Member who Transfers Units shall remain bound by the provisions of Section 10.01;

(b)     with respect to any Member that is an investment fund, to such fund’s members or partners;

(c)     with respect to any Member, to the Company. For the avoidance of doubt, this Section 9.02(c) does not entitle a Member to Transfer such Member’s Units or Unit Equivalents to the Company. Any such Transfer to the Company under this Section 9.02(c) shall only occur if approved by the Company and if permitted pursuant to Section 8.04, in which event the Company shall redeem such Member’s Units or Unit Equivalents at Fair Market Value, as determined by the Qualified Appraisal Firm. The transferring Member, by execution hereof, acknowledges and agrees that the Fair Market Value paid for its Units or Unit Equivalents pursuant to a Transfer under this Section 9.02(c) shall be the total consideration due to it for the Transferred Units or Unit Equivalents, and such transferring Member shall have no other rights or claims whatsoever with respect to such Transferred Units or Unit Equivalents.

Section 9.03     Drag-along Rights.

(a)     Participation. If one or more Members (together with their respective Permitted Transferees) holding at least fifty percent (50%) of all the Class A Units (such Member or Members, the “Dragging Member”), propose to consummate, in one transaction or a series of related transactions, a Change of Control (a “Drag-along Sale”), the Dragging Member shall have the right, after delivering the Drag-along Notice in accordance with Section 9.03(c) and subject to compliance with Section 9.03(d), to require that each other Member holding Class A Units (each, a “Drag-along Member”) participate in such sale (including, if necessary, by converting their Unit Equivalents into the Class A Units to be sold in the Drag-along Sale) in the manner set forth in Section 9.03(b).

36

(b)     Sale of Units. Subject to compliance with Section 9.03(d):

(i)     If the Drag-along Sale is structured as a sale resulting in a majority of the Class A Units of the Company on a Fully Diluted Basis being held by a Third Party Purchaser, then each Drag-along Member shall sell, the number of Class A Units and/or Unit Equivalents of Class A Units equal to the product obtained by multiplying (i) the number of applicable Class A Units on a Fully Diluted Basis held by such Drag-along Member by (ii) a fraction (x) the numerator of which is equal to the number of applicable Class A Units on a Fully Diluted Basis that the Dragging Member proposes to sell in the Drag-along Sale and (y) the denominator of which is equal to the number of applicable Class A Units on a Fully Diluted Basis held by the Dragging Member at such time; and

(ii)     If the Drag-along Sale is structured as a sale of all or substantially all of the assets of the Company or as a merger, consolidation, recapitalization, or reorganization of the Company or other transaction requiring the consent or approval of the Members, then notwithstanding anything to the contrary in this Agreement (including Section 4.05), each Drag-along Member entitled to vote shall vote in favor of the transaction and otherwise consent to and raise no objection to such transaction, including without limitation the valuation of the Units or the consideration to be paid for such Member’s Units.

(iii)     The Distribution of the aggregate consideration of any Drag-along Sale shall be made in accordance with Section 12.03(c).

(c)     Drag-Along Notice. The Dragging Member shall exercise its rights pursuant to this Section 9.03 by delivering a written notice (the “Drag-along Notice”) to the Company and each Drag-along Member no later than ten (10) Business Days prior to the closing date of such Drag-along Sale. The Drag-along Notice shall make reference to the Dragging Member’s rights and obligations hereunder and shall describe in reasonable detail:

(i)     The name of the person or entity to whom such Units are proposed to be sold;

(ii)     The proposed date, time and location of the closing of the sale;

(iii)     The number of each class or series of Units to be sold by the Dragging Member, the proposed amount of consideration for the Drag-along Sale and the other material terms and conditions of the Drag-along Sale, including a description of any non-cash consideration in sufficient detail to permit the valuation thereof and including, if available, the purchase price per Unit of each applicable class or series; and

(iv)     A copy of any form of agreement proposed to be executed in connection therewith.

37

(d)     Conditions of Sale. The obligations of the Drag-along Members in respect of a Drag-along Sale under this Section 9.03 are subject to the satisfaction of the following conditions:

(i)     The consideration to be received by each Drag-along Member shall be the same form and amount of consideration to be received by the Dragging Member per Class A Unit of each applicable class or series (the Distribution of which shall be made in accordance with Section 9.03(b)) and the terms and conditions of such sale shall, except as otherwise provided in Section 9.03(d)(iii), be the same as those upon which the Dragging Member sells its Class A Units;

(ii)     If the Dragging Member or any Drag-along Member is given an option as to the form and amount of consideration to be received, the same option shall be given to all Drag-along Members; and

(iii)     Each Drag-along Member shall execute the applicable purchase agreement, if applicable, and make or provide the same representations, warranties, covenants, indemnities and agreements as the Dragging Member makes or provides in connection with the Drag-along Sale; provided, that each Drag-along Member shall only be obligated to make individual representations and warranties with respect to its title to and ownership of the applicable Units, authorization, execution and delivery of relevant documents, enforceability of such documents against the Drag-along Member, and other matters relating to such Drag-along Member, but not with respect to any of the foregoing with respect to any other Members or their Units; provided, further, that all representations, warranties, covenants and indemnities shall be made by the Dragging Member and each Drag-along Member severally and not jointly and any indemnification obligation shall be pro rata based on the consideration received by the Dragging Member and each Drag-along Member, in each case in an amount not to exceed the aggregate proceeds received by the Dragging Member and each such Drag-along Member in connection with the Drag-along Sale.

(e)     Cooperation. Each Drag-along Member shall take all actions as may be reasonably necessary to consummate the Drag-along Sale, including, without limitation, entering into agreements and delivering certificates and instruments, in each case, consistent with the agreements being entered into and the certificates being delivered by the Dragging Member, but subject to Section 9.03(d)(iii).

(f)     Expenses. The fees and expenses of the Dragging Member incurred in connection with a Drag-along Sale and for the benefit of all Drag-along Members (it being understood that costs incurred by or on behalf of a Dragging Member for its sole benefit will not be considered to be for the benefit of all Drag-along Members), to the extent not paid or reimbursed by the Company or the Third Party Purchaser, shall be shared by the Dragging Member and all the Drag-along Members on a pro rata basis, based on the consideration received by each such Member; provided, that no Drag-along Member shall be obligated to make any out-of-pocket expenditure prior to the consummation of the Drag-along Sale.

38

Section 9.04     Tag-along Rights.

(a)     Participation. If one or more Members (together with their respective Permitted Transferees) holding at least fifty percent (50%) of all the Class A Units (for purposes of this Section 9.04, the “Co-Sale Offerees”) receives and accepts an offer to Transfer any Units then-held by such Co-Sale Offerees to any unrelated third party (the “Co-Sale Offeror”), the parties hereto shall comply with the procedures set forth in this Section 9.04. The terms of this Section 9.04 shall not apply to the extent that the Transfer is a Permitted Transfer in compliance with Section 9.02 or any Transfer pursuant to Section 9.03.

(b)     Co-Sale Notice. The Co-Sale Offerees shall, at least twenty (20) days before the closing of a proposed Transfer to a Co-Sale Offeror, deliver a notice (the “Co-Sale Notice”) to each other holder of Units that sets forth (i) the name of the Co-Sale Offeror, (ii) the estimated date, time and location of the closing of the Transfer, (iii) the class and number of Units that the Co-Sale Offeror is proposing to purchase, (iv) the estimated per Unit purchase price payable in respect of such Units, and (v) that the Co-Sale Offeror has been informed of the tag-along rights provided for in this Section 9.04 and has agreed to purchase Units from the Co-Sale Offerees in accordance with the terms hereof.

(c)     Exercise of Co-Sale Right. Within ten (10) days after delivery of the Co-Sale Notice, each holder of Units other than the Co-Sale Offerees (a “Tagging Member”), respectively, may elect to participate in the proposed Transfer by delivering to the Co-Sale Offerees a written notice (the “Tag-Along Notice”) specifying the number of Units (the “Tagging Units”) with respect to which the Tagging Member elects to exercise its rights under this Section 9.04. If one or more Tagging Members exercise its rights to participate in a Transfer to a Co-Sale Offeror pursuant to this Section 9.04 and gives timely notice of such election, then the Co-Sale Offerees shall not Transfer any Units to the Co-Sale Offeror unless (i) the Co-Sale Offeror agrees to purchase that number of Tagging Units each Tagging Member proposes to Transfer in its respective Tag-Along Notice, at the same time and on the same terms and conditions as the purchase of the Class A Units being purchased from the Co-Sale Offerees or, (ii) if the Co-Sale Offeror does not agree to purchase all of the Tagging Units, each Tagging Member is permitted to Transfer, simultaneously with the purchase of the Class A Units from the Co-Sale Offerees, a number of Units equal to its respective Co-Sale Pro Rata Portion, in each case on the terms and conditions set forth in this Section 9.04; provided, that in the event the Tagging Members Transfer their Co-Sale Pro Rata Portion pursuant to subsection (ii) above, the number of Units that the Co-Sale Offerees may Transfer pursuant to the terms of this Section 9.04 shall be reduced by the number of Tagging Units to be sold by the Tagging Members.

(d)     Waiver. Each Tagging Member who does not deliver a Tag-Along Notice in compliance with Section 9.04(c) shall be deemed to have waived all of such Tagging Member’s rights to participate in the a Transfer under this Section 9.04 with respect to the Units owned by such Tagging Member, and the Co-Sale Offeree shall (subject to the rights of any other participating Tagging Member) thereafter be free to sell to the Co-Sale Offeror the Units identified in the Co-Sale Notice and any Tag-Along Notices at a price that is no greater than the applicable price set forth in the Co-Sale Notice and on other terms and conditions which are not in the aggregate materially more favorable to the Co-Sale Offerees or electing Tagging Members than those set forth in the Co-Sale Notice, without any further obligation to the non-accepting Tagging Members.

39

(e)     Conditions of Sale. Any Tagging Units requested to be Transferred to the Co-Sale Offeror with respect to a proposed Transfer of Units by the Co-Sale Offerees shall be transferred on at least the same terms and conditions as are set forth in the Co-Sale Notice; provided, however, that the price for each Tagging Unit that is of a class or series of Units that is different from the class or series of Units proposed to be Transferred by the Co-Sale Offerees shall be calculated by a Qualified Appraisal Firm, and the determination of such Qualified Appraisal Firm shall be final and binding on, and non-appealable by, the parties hereto. The expenses of such Qualified Appraisal Firm shall be shared equally by the Company and the Tagging Members (with the portion of such expenses payable by the Tagging Members to be allocated among the Tagging Members in proportion to the number of Tagging Units offered to be sold by each Tagging Member). In the event that a Tagging Member that has elected to participate in the proposed Transfer owns Units of a different class or series than are being sold by the Co-Sale Offerees disagrees with the determination of the Qualified Appraisal Firm he, she or it may withdraw such election and not sell Units pursuant to this Section 9.04. If such Transfer is not made within ninety (90) days from delivery of the Co-Sale Notice, the provisions of this Section 9.04 shall again become effective with respect to the proposed Transfer.

(f)     Cooperation. Each Tagging Member shall execute the applicable purchase agreement, if applicable, and make or provide the same representations, warranties, covenants, indemnities and agreements as the Co-Sale Offerees makes or provides in connection with the sale pursuant to this Section 9.04; provided, that each Tagging Member shall only be obligated to make individual representations and warranties with respect to its title to and ownership of the applicable Units, authorization, execution and delivery of relevant documents, enforceability of such documents against the Tagging Member, and other matters relating to such Tagging Member, but not with respect to any of the foregoing with respect to any other Members or their Units; provided, further, that all representations, warranties, covenants and indemnities shall be made by the Co-Sale Offerees and each Tagging Member severally and not jointly and any indemnification obligation shall be pro rata based on the consideration received by the Co-Sale Offerees and each Tagging Member, in each case in an amount not to exceed the aggregate proceeds received by the Co-Sale Offerees and each Tagging Member in connection with the sale pursuant to this Section 9.04.

(g)     Expenses. The fees and expenses of the Co-Sale Offerees incurred in connection with a sale pursuant to this Section 9.04, to the extent not paid or reimbursed by the Company or the Co-Sale Offeror, shall be shared by the Co-Sale Offerees and all of the Tagging Members on a pro-rata basis, based on the consideration received by each such Member.

Section 9.05     Put Right.

(a)     Put Right. Following the earliest to occur of (i) a Sale of the Company, (ii) a Change of Control, (iii) the Company taking one of the actions specified in Section 8.04 without the approval required in such Section, (iv) an Uncured Financial Breach, and (v) October • , 2024, (a “Put Event”), a Member holding Class B Preferred Units may, at its election, require the Company to redeem part or all of such Member’s Class B Preferred Units for cash at a price equal to the positive balances in their respective Class B Contribution Accounts with respect to the Class B Preferred Units being redeemed, including without duplication, any Unpaid Preferred Return through the day of redemption, plus, in the cases of clauses (i), (ii), (iii), and (v), any Minimum Return with respect to such Units (the “Class B Put Purchase Price”). If less than all of the Class B Preferred Units are required to be redeemed, the Units that are redeemed will be determined on a first-in-first out basis. If a Member desires to exercise its right to require the Company to purchase Units pursuant to this Section 9.05, the Member shall deliver to the Company a written notice (the “Put Notice”) specifying the number of Class B Preferred Units to be repurchased by the Company (the “Repurchased Units”). Each applicable Member shall, at the closing of any purchase consummated pursuant to this Section 9.05, represent and warrant to the Company that:

40

(i)     such Member has full right, title and interest in and to the Repurchased Units;

(ii)     such Member has all the necessary power and authority and has taken all necessary action to sell the Repurchased Units; and

(iii)     the Repurchased Units are free and clear of any and all liens other than those arising as a result of or under the terms of this Agreement.

(b)     Procedures; Closing. The closing of any sale of Repurchased Units pursuant to this Section 9.05 shall take place no later than one hundred twenty (120) days following the receipt by the Company of the Put Notice. The Company shall give the Member at least ten (10) days’ written notice of the date of closing. At the closing of any sale and purchase pursuant to this Section 9.05, the Member shall deliver to the Company a certificate or certificates representing the Units to be sold (if any), accompanied by evidence of transfer and all necessary transfer taxes paid and stamps affixed, if necessary. The Company shall pay the Class B Put Purchase Price for the Repurchased Units by wire transfer of immediately available funds or other means agreed to by the Company and the Member.

(c)     Cooperation. The Member shall take all actions as may be reasonably necessary to consummate the sale contemplated by this Section 9.05, including, without limitation, entering into agreements and delivering certificates and instruments and consents as may be deemed reasonably necessary or appropriate.

Section 9.06     Call Right.

(a)     Call Right. At any time (a “Call Event”), the Company may, at its election, require a Member holding Class B Preferred Units to sell part or all of such Member’s Class B Preferred Units for cash at a price equal to the sum of the positive balances in their respective Class B Contribution Accounts with respect to the Class B Preferred Units being redeemed, including without duplication, any Unpaid Preferred Return through the day of redemption, plus any Minimum Return with respect to such Units (the “Class B Call Purchase Price”). If less than all of the Class B Preferred Units are redeemed, the Units that are redeemed will be determined on a first-in-first out basis. If the Company desires to exercise its right to require a Member to sell Units pursuant to this Section 9.06, the Company shall deliver to the Member above a written notice (the “Call Notice”) specifying the number of Class B Preferred Units to be repurchased by the Company (the “Called Units”). Each applicable Member shall, at the closing of any purchase consummated pursuant to this Section 9.06, represent and warrant to the Company that:

(i)     such Member has full right, title and interest in and to the Called Units;

41

(ii)     such Member has all the necessary power and authority and has taken all necessary action to sell the Called Units; and

(iii)     the Called Units are free and clear of any and all liens other than those arising as a result of or under the terms of this Agreement.

(b)     Procedures; Closing. The closing of any sale of Called Units pursuant to this Section 9.06 shall take place no later than ninety (90) days following the receipt by the Member of the Call Notice. The Company shall give the Member at least ten (10) days’ written notice of the date of closing. At the closing of any sale and purchase pursuant to this Section 9.06, the Member shall deliver to the Company a certificate or certificates representing the Units to be sold (if any), accompanied by evidence of transfer and all necessary transfer taxes paid and stamps affixed, if necessary. The Company shall pay the Class B Call Purchase Price for the Called Units by wire transfer of immediately available funds or other means agreed to by the Company and the Member.

(c)     Cooperation. The Member shall take all actions as may be reasonably necessary to consummate the sale contemplated by this Section 9.06, including, without limitation, entering into agreements and delivering certificates and instruments and consents as may be deemed reasonably necessary or appropriate.

Article X
Covenants

Section 10.01     Confidentiality.

(a)     Each Member acknowledges that during the term of this Agreement, he, she or it will have access to and become acquainted with trade secrets, proprietary information and confidential information belonging to the Company and its Affiliates that are not generally known to the public, including, but not limited to, information concerning business plans, financial statements and other information provided pursuant to this Agreement, operating practices and methods, expansion plans, strategic plans, marketing plans, contracts, customer lists or other business documents which the Company treats as confidential, in any format whatsoever (including oral, written, electronic or any other form or medium) (collectively, “Confidential Information”). In addition, each Member acknowledges that: (i) the Company has invested, and continues to invest, substantial time, expense and specialized knowledge in developing its Confidential Information; (ii) the Confidential Information provides the Company with a competitive advantage over others in the marketplace; and (iii) the Company would be irreparably harmed if the Confidential Information were disclosed to competitors or made available to the public. Without limiting the applicability of any other agreement to which any Member is subject, each Member agrees that at all times that he, she or it is a Member of the Company and for a period of five (5) years following such Member ceasing to be a Member of the Company, such Member shall not, directly or indirectly, divulge or make use of any Confidential Information of the Company other than in furtherance of such Member’s engagement or role with the Company or for purposes of such Member’s investment in the Company. While a Member, each Member shall make all reasonable efforts to protect and maintain the confidentiality of the Confidential Information of the Company that such Member receives. In the event any Member becomes aware of unauthorized disclosures of the Confidential Information by anyone at any time, whether intentionally or by accident, such Member shall promptly notify the Company. This Agreement does not limit the remedies available to the Company under common or statutory law as to trade secrets or other types of confidential information, which may impose longer duties of non-disclosure.

42

(b)     Nothing contained in Section 10.01(a) shall prevent any Member from disclosing Confidential Information: (i) upon the order of any court or administrative agency; (ii) upon the request or demand of any regulatory agency or authority having jurisdiction over such Member; (iii) to the extent compelled by legal process or required or requested pursuant to subpoena, interrogatories or other discovery requests; (iv) to the extent necessary in connection with the exercise of any remedy hereunder; (v) to other Members; (vi) to such Member’s Representatives who, in the reasonable judgment of such Member, need to know such Confidential Information and agree to be bound by the provisions of this Section 10.01 as if a Member; (vii) to any potential Permitted Transferee in connection with a proposed Transfer of Units from such Member, as long as such Transferee agrees to be bound by the provisions of this Section 10.01 as if a Member or (viii) in the case of any Member that is (or is controlled by) a private equity fund or other investment fund, the disclosure in a customary manner by such Member of any such information in confidence to such Member’s investors and prospective investors; provided, that in the case of clause (i), (ii) or (iii), such Member shall notify the Company and the Managers of the proposed disclosure as far in advance of such disclosure as practicable (but shall in no event make any such disclosure before notifying the Company and the Managers) and shall use reasonable efforts to ensure that any Confidential Information so disclosed is accorded confidential treatment satisfactory to the Company, when and if available.

(c)     The restrictions of Section 10.01(a) shall not apply to, and the term Confidential Information shall not include information that: (i) is or becomes generally available to the public other than as a result of a disclosure by a Member in violation of this Agreement; (ii) is or becomes available to a Member or any of its Representatives on a non-confidential basis prior to its disclosure by or on behalf of the Company to the receiving Member or any of its Representatives; (iii) is or has been independently developed or conceived by such Member or any of its Representatives without use of Confidential Information; or (iv) becomes available to the receiving Member or any of its Representatives on a non-confidential basis from a source other than the Company, any other Member or any of their respective Representatives; provided, that such source is not known by the receiving Member or any of its Representatives to be bound by a confidentiality agreement with the Company, the disclosing Member or any of their Representatives.

Section 10.02     Affirmative Covenants.

(a)     Notices of Material Events. The Company will furnish to the holders of the Class B Preferred Units prompt written notice of the following:

(i)     the occurrence of any Material Breach, Uncured Financial Covenant Breach or Put Event;

43

(ii)     the occurrence of any default, event of default or receipt of written notice of any breach of any loan documents representing Indebtedness of the Company or any of its Subsidiaries;

(iii)     any notice from any Governmental Authority of any actual or alleged violation of, or non-compliance with, any Applicable Law, which would reasonably be expected to result, either individually or in the aggregate, in a Material Adverse Effect;

(iv)     the institution of any material action, suit, investigation or proceeding against or affecting the Company or any of its Subsidiaries, including any such investigation or proceeding by any Governmental Authority (other than routine inquiries, investigations or reviews) or any material development in any such action, suit, investigation or proceeding, but in the case of any such action, suit, investigation or proceeding initiated by a Person other than a Governmental Authority, only, if adversely determined, it would be reasonably expected, individually or together with any other action, suit, investigation or proceeding, to have a Material Adverse Effect;

(v)     any development that results, or would reasonably be expected to result in, a Material Adverse Effect;

(vi)     any material change in accounting policies or financial reporting practices by the Company or any Subsidiary;

(vii)     any labor controversy resulting in or threatening to result in any strike, work stoppage, boycott, shutdown or other labor disruption against or involving the Company or any Subsidiary of the Company if the same would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect; and

(viii)     any calculation of any estimated amount of tax due to the Atlanticus Member pursuant to any Tax Sharing Agreement or reimbursement of Taxes pursuant to any Tax Sharing Agreement, together with reasonable supporting detail of any such calculations.

Each notice pursuant to this Section 10.2 shall be by Electronic Transmission accompanied by a statement by the Company setting forth details of the occurrence referred to therein.

(b)     Maintenance of Property. For so long as any Class B Preferred Units remain outstanding, the Company shall maintain, and shall cause each of its Subsidiaries to maintain, and preserve all its material Property which is used or useful in its business in good working order and condition, ordinary wear and tear excepted and shall make all necessary repairs thereto and renewals and replacements thereof.

(c)     Insurance. For so long as any Class B Preferred Units remain outstanding, the Company shall, and shall cause each of its Subsidiaries to, maintain or cause to be maintained in full force and effect all policies of insurance of any kind with respect to the Property and businesses of the Company and such Subsidiaries (including policies of life, fire, theft, product liability, public liability, flood insurance, property damage, other casualty, employee fidelity, workers’ compensation, business interruption and employee health and welfare insurance) with financially sound and reputable insurance companies or associations (in each case that are not Affiliates of the Company) of a nature and providing such coverage as is sufficient and as is customarily carried by businesses of the size and character of the business of the Company.

44

(d)     Compliance with Laws. For so long as any Class B Preferred Units remain outstanding, the Company shall, and shall cause each of its Subsidiaries to, comply in all material respects with all Applicable Law.

Article XI
Records; Tax Matters

Section 11.01     Records and Access to Information. The Company shall maintain at its principal office the records of the Company, and each Member shall have the right, at the Member’s own expense, to inspect and copy such records upon reasonable request during ordinary business hours in accordance with Section 14-11-313 of the Georgia Act, which shall govern the rights of the Members and the obligations of the Company provided in this Section 11.01. The Company will maintain true books and records of account in which full and correct entries will be made of all business transactions pursuant to a system of accounting established and administered in accordance with generally accepted accounting principles consistently applied (except as noted therein or as disclosed to the recipients thereof), and will set aside on its books all such proper accruals and reserves as shall be required under generally accepted accounting principles consistently applied.

Section 11.02     Partnership Representative.

(a)     Atlanticus Holdings Corp. shall be the “partnership representative” of the Company within the meaning of Section 6223(a) of the Code (the “Partnership Representative”) and the Chief Financial Officer of Atlanticus Holdings Corp. shall be the “designated individual” within the meaning of Section 6223 of the Code and Treasury Regulations promulgated thereunder (the “Designated Individual”).

(b)     The Partnership Representative and the Designated Individual shall have the right to make on behalf of the Company any and all elections and take any and all actions that are available to be made or taken by the Partnership Representative, the Designated Individual or the Company under the Code (including an election under Section 6221(b) or 6226(a) of the Code), and the Members shall take such actions requested by the Partnership Representative consistent with any such elections made and actions taken by the Partnership Representative or the Designated Individual, including filing amended tax returns and paying any tax due in accordance with Section 6225(c)(2) of the Code, it being understood that no such amended tax return shall be filed in accordance with such section with respect to the Company without the advance written consent of the Partnership Representative or the Designated Individual in its sole discretion. The Partnership Representative and the Designated Individual shall have the authority to amend this Agreement to make any changes in good faith consultation with the Company’s tax accountants and tax counsel as are necessary or appropriate: (i) to reduce any Company level assessment under Section 6225 of the Code; (ii) to determine any apportionment of any tax; or (iii) to comply with the Code and administrative, judicial or legislative interpretations thereof or changes thereto.

45

(c)     Each Member shall provide to the Partnership Representative or the Designated Individual such information (or, if applicable, certify as to filing of initial or amended tax returns) as is reasonably requested by the Partnership Representative or the Designated Individual to enable the Partnership Representative or the Designated Individual (i) to reduce any Company level assessment under Section 6225 of the Code, (ii) to determine the allocation of any item of income, gain, loss, deduction or credit of any such Company level assessment among the Members, in good faith consultation with the Company's tax accountants and tax counsel, (iii) to take any and all actions that are available to be made or taken by the Partnership Representative, the Designated Individual or the Company under the Code, or (iv) to comply with or be eligible to invoke any aspect of the Code in any other respect.

(d)     In the event the Company incurs any liability for taxes, interest or penalties:

(i)     The Partnership Representative or the Designated Individual may, or if such amounts are material, shall, cause the Members (including any former Member) to whom such liability relates, as determined by the Partnership Representative or the Designated Individual, in its sole good faith discretion and after consulting with the Company’s and the affected Member’s tax advisors, to pay, and each such Member hereby agrees to pay, such amount to the Company, and such amount shall not be treated as a Capital Contribution; and

(ii)     Any amount not paid by a Member (or former Member) within ten (10) days following the receipt of the request to pay delivered by the Partnership Representative and the Designated Individual shall be treated for purposes of this Agreement as a Withholding Advance governed by Section 7.03(b) hereof.

(e)     The obligations of each Member (or former Member) under this Section 11.02 and Section 7.03(b) shall survive the Transfer or redemption by such Member of its Units and the termination of this Agreement or the dissolution of the Company.

(f)     The Partnership Representative or the Designated Individual shall prepare or cause to be prepared all tax returns required of the Company, which returns shall be reviewed in advance of filing by a certified public accountant selected by the Members. The Members shall file their individual or corporate returns in a manner consistent with the Company’s tax and information returns.

(g)     The Partnership Representative or the Designated Individual may, if it determines that the retention of accountants or other professionals would be in the best interests of the Company, retain such accountants or professionals to assist in any audits. The Company shall indemnify and reimburse the Partnership Representative and the Designated Individual for all expenses, including legal and accounting fees, claims, liabilities, losses and damages to the extent borne by the Partnership Representative or the Designated Individual, incurred in connection with any administrative or judicial proceeding with respect to any audit of the Company’s tax returns. The taking of any action and the incurring of any expense by the Partnership Representative and the Designated Individual in connection with any such proceeding, except to the extent required by Applicable Law, is a matter in the sole discretion of the Partnership Representative and the Designated Individual, as applicable.

46

(h)     The Partnership Representative and the Designated Individual may resign at any time. If Atlanticus Holdings Corp. ceases to be the Partnership Representative for any reason, the holders of a majority of the Class A Units shall appoint a new Partnership Representative. If Chief Financial Officer of Atlanticus Holdings Corp. ceases to be the Designated Individual, the holders of a majority of the Class A Units in consultation with the Partnership Representative shall appoint a new Designated Individual.

Section 11.03     Member Tax Information. As soon as reasonably possible after the end of each Fiscal Year, the Managers or a designated Officer will cause to be delivered to each Person who was a Member at any time during such Fiscal Year, IRS Schedule K-1 to Form 1065 and such other information with respect to the Company as may be necessary for the preparation of such Person’s federal, state and local income tax returns for such Fiscal Year.

Section 11.04     Tax Reporting for Class B Preferred Units. Notwithstanding Section 11.03 or anything to the contrary herein, consistent with Sections 2.07 and 3.08, no Member holding Class B Preferred Units shall be treated as a partner in a partnership for U.S. federal, state and local income tax purposes. Accordingly, no Member holding Class B Preferred Units will be treated as a partner for tax reporting purposes (including for purposes of tax returns filings and the IRS Schedule K-1) and no IRS Schedule K-1 shall be issued to any such Member holding Class B Preferred Units without such Member’s consent. Further, notwithstanding anything to the contrary in Section 11.02, the Partnership Representative shall promptly notify any Member holding Class B Preferred Units of any tax audits, proceedings, assessments or other actions in connection with a taxing authority recharacterizing the Class B Preferred Units as equity for tax purposes. All Members holding Class B Preferred Units shall be entitled to participate in such tax audits, proceedings, assessments or other actions, and the Partnership Representative and Designated Individual shall not settle with such taxing authority in respect of such tax audits, proceedings, assessments or other actions without the consent of the Members holding Class B Preferred Units.

Section 11.05     Financial Statements. The Company shall furnish to each Member the following reports:

(a)     Annual Financial Statements. As soon as available, and in any event within one hundred twenty (120) days after the end of each Fiscal Year, a consolidated audited balance sheet of the Company and its Subsidiaries as at the end of each such Fiscal Year and audited statements of income, cash flows and Members’ equity for such Fiscal Year, in each case setting forth in comparative form the figures for the previous Fiscal Year, all in reasonable detail and all prepared in accordance with GAAP, consistently applied.

(b)     Quarterly Financial Statements. As soon as available, and in any event within forty-five (45) days after the end of each quarterly accounting period in each Fiscal Year (other than the last fiscal quarter of the Fiscal Year), an unaudited consolidated balance sheet of the Company and its Subsidiaries for and as at the end of each such fiscal quarter and an unaudited statement of income, cash flows and Members’ equity for such quarterly accounting period, in each case setting forth in comparative form the figures for the corresponding periods of the previous fiscal quarter, all in reasonable detail and all prepared in accordance with GAAP, consistently applied (subject to normal year-end audit adjustments and the absence of notes thereto).

47

(c)     Monthly Financial Statements. As soon as available, and in any event within thirty (30) days after the end of each monthly accounting period in each Fiscal Year (other than the last month of each fiscal quarter)¹, an unaudited consolidated balance sheet of the Company and its Subsidiaries for and as at the end of each fiscal month, and an unaudited statement of income, cash flows and Members’ equity for such monthly accounting period, in each case prepared in accordance with GAAP and on a managed basis.

(d)     Financial Covenant. Together with the delivery of the financial statements under (a) and (b), the calculation of the Financial Covenant for the most recently completed quarter, certified by the principal financial or accounting Officer of the Company.

(e)     Budget. As soon as available, and in any event prior to the commencement of each Fiscal Year, the operating budget for the Company for such Fiscal Year.

(f)     Compliance Certificates. All compliance certificates delivered pursuant to any warehouse financing facility or securitization vehicle of the Company or any Subsidiary.

Section 11.06     Company Funds. All funds of the Company shall be deposited in its name, or in such name as may be designated by the Managers, in such checking, savings or other accounts, or held in its name in the form of such other investments as shall be designated by the Managers. The funds of the Company shall not be commingled with the funds of any other Person. All withdrawals of such deposits or liquidations of such investments by the Company shall be made exclusively upon the signature or signatures of such Officer or Officers as the Managers may designate.

Article XII
Dissolution and Liquidation

Section 12.01     Events of Dissolution. Except as otherwise provided under the Georgia Act, the Company shall be dissolved and its affairs wound up upon the occurrence of any of the following events:

(a)     The determination of the Managers to dissolve the Company;

(b)     Subject to Section 8.04, an election to dissolve the Company made by the Members holding a majority of the Class A Units;

(c)     The sale, exchange, involuntary conversion, or other disposition or transfer of (other than the grant of a security interest in, the grant of a pledge of or the imposition of a lien on) all or substantially all the assets of the Company; or

¹ The reports due at the end of each quarter and year are covered in (a) and (b).

48

(d)     The entry of a decree of judicial dissolution under Section 14-11-603 the Georgia Act.

Section 12.02     Effectiveness of Dissolution. Dissolution of the Company shall be effective on the day on which the event described in Section 12.01 occurs, but the Company shall not terminate until the winding up of the Company has been completed, the assets of the Company have been distributed as provided in Section 12.03 and the Certificate of Cancellation shall have been filed as provided in Section 12.04.

Section 12.03     Liquidation. If the Company is dissolved pursuant to Section 12.01, the Company shall be liquidated and its business and affairs wound up in accordance with the Georgia Act and the following provisions:

(a)     Liquidator. The Managers or, if the Managers are unable to do so, a Person selected by the holders of a majority of the Class A Units, shall act as liquidator to wind up the Company (the “Liquidator”). The Liquidator shall have full power and authority to sell, assign and encumber any or all of the Company’s assets and to wind up and liquidate the affairs of the Company in an orderly and business-like manner.

(b)     Accounting. As promptly as possible after dissolution and again after final liquidation, the Liquidator shall cause a proper accounting to be made by a recognized firm of certified public accountants of the Company’s assets, liabilities and operations through the last day of the calendar month in which the dissolution occurs or the final liquidation is completed, as applicable.

(c)     Distribution of Proceeds. The Liquidator shall liquidate the assets of the Company and Distribute the proceeds of such liquidation in the following order of priority, unless otherwise required by mandatory provisions of Applicable Law:

(i)     First, to the payment of all of the Company’s debts and liabilities to its creditors (including Members, if applicable) and the expenses of liquidation (including sales commissions incident to any sales of assets of the Company);

(ii)     Second, to the establishment of and additions to reserves that are determined by the Liquidator in its sole discretion to be reasonably necessary for any contingent unforeseen liabilities or obligations of the Company;

(iii)     Third, to the Members holding Class B Preferred Units, at the Class B Put Purchase Price (assuming, for purposes of this Section 12.03(c)(iii), that the date of any distribution shall be the redemption date of the Class B Preferred Units); and

(iv)     Fourth, to the Members, in the same manner as Distributions are made under Section 7.02.

(d)     Discretion of Liquidator. Notwithstanding the provisions of Section 12.03(c) that require the liquidation of the assets of the Company, but subject to the order of priorities set forth in Section 12.03(c), if upon dissolution of the Company the Liquidator determines that an immediate sale of part or all of the Company’s assets would be impractical or could cause undue loss to the Members, the Liquidator may defer the liquidation of any assets except those necessary to satisfy Company liabilities and reserves, and may, in its absolute discretion, Distribute to the Members, in lieu of cash, as tenants in common and in accordance with the provisions of Section 12.03(c), undivided interests in such Company assets as the Liquidator deems not suitable for liquidation. Any such Distribution in kind will be subject to such conditions relating to the disposition and management of such properties as the Liquidator deems reasonable and equitable and to any agreements governing the operating of such properties at such time. For purposes of any such Distribution, any property to be Distributed will be valued at its Fair Market Value.

49

Section 12.04     Cancellation of Certificate. Upon completion of the Distribution of the assets of the Company as provided in Section 12.03(c) hereof, the Company shall be terminated and the Liquidator shall cause the cancellation of the Articles of Organization in the State of Georgia and of all qualifications and registrations of the Company as a foreign limited liability company in jurisdictions other than the State of Georgia and shall take such other actions as may be necessary in connection therewith.

Section 12.05     Survival of Rights, Duties and Obligations. Dissolution, liquidation, winding up or termination of the Company for any reason shall not release any party from any Loss which at the time of such dissolution, liquidation, winding up or termination already had accrued to any other party or which thereafter may accrue in respect of any act or omission prior to such dissolution, liquidation, winding up or termination. For the avoidance of doubt, none of the foregoing shall replace, diminish or otherwise adversely affect any Member’s right to indemnification pursuant to Section 13.03.

Section 12.06     Recourse for Claims. Each Member shall look solely to the assets of the Company for all Distributions with respect to the Company, such Member’s Capital Account, and such Member’s share of Net Income, Net Loss and other items of income, gain, loss and deduction, and shall have no recourse therefor (upon dissolution or otherwise) against the Managers, the Liquidator or any other Member.

Article XIII
Exculpation and Indemnification

Section 13.01     Exculpation of Covered Persons.

(a)     Covered Persons. As used herein, the term “Covered Person” shall mean each Manager, Officer, employee, agent or representative of the Company.

(b)     Standard of Care. No Covered Person shall be liable to the Company or any other Covered Person for any loss, damage or claim incurred by reason of any action taken or omitted to be taken by such Covered Person in good faith reliance on the provisions of this Agreement, so long as such action or omission does not constitute fraud or willful misconduct by such Covered Person.

50

(c)     Good Faith Reliance. A Covered Person shall be fully protected in relying in good faith upon the records of the Company and upon such information, opinions, reports or statements (including financial statements and information, opinions, reports or statements as to the value or amount of the assets, liabilities, Net Income or Net Losses of the Company or any facts pertinent to the existence and amount of assets from which Distributions might properly be paid) of the following Persons or groups: (i) one or more Officers or employees of the Company; (ii) any attorney, independent accountant, appraiser or other expert or professional employed or engaged by or on behalf of the Company; or (iii) any other Person selected in good faith by or on behalf of the Company, in each case as to matters that such relying Person reasonably believes to be within such other Person’s professional or expert competence.

Section 13.02     Liabilities and Duties of Covered Persons.

(a)     Limitation of Liability. This Agreement is not intended to, and does not, create or impose any fiduciary duty on any Covered Person or holder of Class B Preferred Units. Furthermore, each of the Members and the Company hereby waives any and all fiduciary duties that, absent such waiver, may be implied by Applicable Law to be imposed on any Covered Person or holder of Class B Preferred Units, and in doing so, acknowledges and agrees that the duties and obligation of each Covered Person to each other and to the Company and of each holder of Class B Preferred Units to any other Member or the Company are only as expressly set forth in this Agreement. The provisions of this Agreement, to the extent that they restrict the duties and liabilities of a Covered Person or holder of Class B Preferred Units otherwise existing at law or in equity, are agreed by the Members to replace such other duties and liabilities of such Covered Person.

(b)     Duties. Whenever in this Agreement a Covered Person or holder of Class B Preferred Units is permitted or required to make a decision (including a decision that is in such Covered Person’s “discretion” or under a grant of similar authority or latitude), the Covered Person or holder of Class B Preferred Units shall be entitled to consider only such interests and factors as such Covered Person or holder of Class B Preferred Units desires, including its own interests, and shall have no duty or obligation to give any consideration to any interest of or factors affecting the Company or any other Person. Whenever in this Agreement a Covered Person or holder of Class B Preferred Units is permitted or required to make a decision in such Covered Person’s “good faith,” the Covered Person or holder of Class B Preferred Units shall act under such express standard and shall not be subject to any other or different standard imposed by this Agreement or any other Applicable Law.

Section 13.03     Indemnification.

(a)     Indemnification. To the fullest extent permitted by the Georgia Act, as the same now exists or may hereafter be amended, substituted or replaced (but, in the case of any such amendment, substitution or replacement only to the extent that such amendment, substitution or replacement permits the Company to provide broader indemnification rights than the Georgia Act permitted the Company to provide prior to such amendment, substitution or replacement), the Company shall indemnify, hold harmless, defend, pay and reimburse any Covered Person against any and all losses, claims, damages, judgments, fines or liabilities, including reasonable legal fees or other expenses incurred in investigating or defending against such losses, claims, damages, judgments, fines or liabilities, and any amounts expended in settlement of any claims (collectively, “Losses”) to which such Covered Person may become subject by reason of:

(i)     Any act or omission or alleged act or omission performed or omitted to be performed on behalf of the Company, any Member or any direct or indirect Subsidiary of the foregoing in connection with the business of the Company; or

51

(ii)     The fact that such Covered Person is or was acting in connection with the business of the Company as a partner, member, stockholder, controlling Affiliate, manager, director, officer, employee or agent of the Company, any Member or any of their respective controlling Affiliates, or that such Covered Person is or was serving at the request of the Company as a partner, member, manager, director, officer, employee or agent of any Person including the Company;

provided, that (x) such Covered Person acted in good faith and in a manner believed by such Covered Person to be in, or not opposed to, the best interests of the Company and, with respect to any criminal proceeding, had no reasonable cause to believe his conduct was unlawful, and (y) such Covered Person's conduct did not constitute fraud or willful misconduct, in either case as determined by a final, nonappealable order of a court of competent jurisdiction. In connection with the foregoing, the termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the Covered Person did not act in good faith or, with respect to any criminal proceeding, had reasonable cause to believe that such Covered Person's conduct was unlawful, or that the Covered Person's conduct constituted fraud or willful misconduct.

(b)     Reimbursement. The Company shall promptly reimburse (and/or advance to the extent reasonably required) each Covered Person for reasonable legal or other expenses (as incurred) of such Covered Person in connection with investigating, preparing to defend or defending any claim, lawsuit or other proceeding relating to any Losses for which such Covered Person may be indemnified pursuant to this Section 13.03; provided, that if it is finally judicially determined that such Covered Person is not entitled to the indemnification provided by this Section 13.03, then such Covered Person shall promptly reimburse the Company for any reimbursed or advanced expenses.

(c)     Entitlement to Indemnity. The indemnification provided by this Section 13.03 shall not be deemed exclusive of any other rights to indemnification to which those seeking indemnification may be entitled under any agreement or otherwise. The provisions of this Section 13.03 shall continue to afford protection to each Covered Person regardless of whether such Covered Person remains in the position or capacity pursuant to which such Covered Person became entitled to indemnification under this Section 13.03 and shall inure to the benefit of the executors, administrators, legatees and distributees of such Covered Person.

(d)     Insurance. To the extent available on commercially reasonable terms, the Company may purchase, at its expense, insurance to cover Losses covered by the foregoing indemnification provisions and to otherwise cover Losses for any breach or alleged breach by any Covered Person of such Covered Person’s duties in such amount and with such deductibles as the Managers may determine; provided, that the failure to obtain such insurance shall not affect the right to indemnification of any Covered Person under the indemnification provisions contained herein, including the right to be reimbursed or advanced expenses or otherwise indemnified for Losses hereunder. If any Covered Person recovers any amounts in respect of any Losses from any insurance coverage, then such Covered Person shall, to the extent that such recovery is duplicative, reimburse the Company for any amounts previously paid to such Covered Person by the Company in respect of such Losses.

52

(e)     Funding of Indemnification Obligation. Notwithstanding anything contained herein to the contrary, any indemnity by the Company relating to the matters covered in this Section 13.03 shall be provided out of and to the extent of Company assets only, and no Member (unless such Member otherwise agrees in writing) shall have personal liability on account thereof or shall be required to make additional Capital Contributions to help satisfy such indemnity by the Company.

(f)     Savings Clause. If this Section 13.03 or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify and hold harmless each Covered Person pursuant to this Section 13.03 to the fullest extent permitted by any applicable portion of this Section 13.03 that shall not have been invalidated and to the fullest extent permitted by Applicable Law.

(g)     Amendment. The provisions of this Section 13.03 shall be a contract between the Company, on the one hand, and each Covered Person who served in such capacity at any time while this Section 13.03 is in effect, on the other hand, pursuant to which the Company and each such Covered Person intend to be legally bound. No amendment, modification or repeal of this Section 13.03 that adversely affects the rights of a Covered Person to indemnification for Losses incurred or relating to a state of facts existing prior to such amendment, modification or repeal shall apply in such a way as to eliminate or reduce such Covered Person’s entitlement to indemnification for such Losses without the Covered Person’s prior written consent.

Section 13.04     Outside Activities. A holder of Class B Preferred Units or its Affiliates may have business interests and engage in business activities in addition to those relating to the Company, including business interests and activities which compete with the Company, and no holder of Class B Preferred Units or any of its Affiliates shall have any duty or obligation to bring any "corporate opportunity" to the Company. Subject to the terms of any written agreement by any holder of Class B Preferred Units to the contrary, neither the Company nor any other Member shall have any rights by virtue of this Agreement in any business interests or activities of any holder of Class B Preferred Units or any of its Affiliates.

Section 13.05     Survival. The provisions of this Article XIII shall survive the dissolution, liquidation, winding up and termination of the Company.

Article XIV
Miscellaneous

Section 14.01     Expenses. Except as otherwise expressly provided herein or in the Services Agreement, dated as of the date hereof, between the Company and TowerBrook Capital Partners L.P., all costs and expenses, including fees and disbursements of counsel, financial advisors and accountants, incurred in connection with the preparation and execution of this Agreement, or any amendment or waiver hereof, and the transactions contemplated hereby shall be paid by the party incurring such costs and expenses.

53

Section 14.02     Further Assurances. In connection with this Agreement and the transactions contemplated hereby, the Company and each Member hereby agree, at the request of the Company or any other Member, to execute and deliver such additional documents, instruments, conveyances and assurances and to take such further actions as may be required to carry out the provisions hereof and give effect to the transactions contemplated hereby.

Section 14.03     Notices. All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been given: (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by e-mail of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next Business Day if sent after normal business hours of the recipient; or (d) on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications must be sent to the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 14.03):

If to the Company:	Access Financial Holdings, LLC Five Concourse Parkway, Suite 300 Atlanta, Georgia 30328 Attention: General Counsel
If to a Member:	To such Member’s respective mailing address set forth on the Members Schedule.

This Section 14.03 shall govern notices hereunder in lieu of any conflicting provisions of the Georgia Act.

Section 14.04     Headings. The headings in this Agreement are inserted for convenience of reference only and are in no way intended to describe, interpret, define, or limit the scope, extent or intent of this Agreement or any provision of this Agreement.

Section 14.05     Severability. If any term or provision of this Agreement is held to be invalid, illegal or unenforceable under Applicable Law in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction. Upon such determination that any term or other provision is invalid, illegal or unenforceable, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the greatest extent possible.

Section 14.06     Entire Agreement. This Agreement, together with the Articles of Organization and all related Exhibits and Schedules, constitutes the sole and entire agreement of the parties to this Agreement with respect to the subject matter contained herein and therein, and supersedes all prior and contemporaneous understandings, agreements, representations and warranties, both written and oral, with respect to such subject matter.

54

Section 14.07     Successors and Assigns. Subject to the restrictions on Transfers set forth herein, this Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective heirs, executors, administrators, successors and assigns.

Section 14.08     No Third-party Beneficiaries. Except as provided in Article XIII, which shall be for the benefit of and enforceable by Covered Persons as described therein, this Agreement is for the sole benefit of the parties hereto (and their respective heirs, executors, administrators, successors and assigns) and nothing herein, express or implied, is intended to or shall confer upon any other Person, including any creditor of the Company, any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.

Section 14.09     Amendment. Subject to Section 8.04, no provision of this Agreement may be amended or modified except by an instrument in writing executed by the Company and Members holding a majority of the Class A Units. Any such written amendment or modification will be binding upon the Company and each Member; provided, that an amendment or modification modifying the rights or obligations of any Member in a manner that is disproportionately adverse to (i) such Member relative to the rights of other Members in respect of Units of the same class or series or (ii) a class or series of Units relative to the rights of another class or series of Units, shall in each case be effective only with that Member’s consent or the consent of the Members holding a majority of the Units in that class or series, as applicable. Notwithstanding the foregoing, amendments to the Members Schedule following any new issuance, redemption, repurchase or Transfer of Units in accordance with this Agreement may be made by the Managers without the consent of or execution by the Members.

Section 14.10     Waiver. No waiver by any party of any of the provisions hereof shall be effective unless explicitly set forth in writing and signed by the party so waiving. No waiver by any party shall operate or be construed as a waiver in respect of any failure, breach or default not expressly identified by such written waiver, whether of a similar or different character, and whether occurring before or after that waiver. No failure to exercise, or delay in exercising, any right, remedy, power or privilege arising from this Agreement shall operate or be construed 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. For the avoidance of doubt, nothing contained in this Section 14.10 shall diminish any of the explicit and implicit waivers described in this Agreement.

Section 14.11     Governing Law. All issues and questions concerning the application, construction, validity, interpretation and enforcement of this Agreement shall be governed by and construed in accordance with the internal laws of the State of Georgia, without giving effect to any choice or conflict of law provision or rule (whether of the State of Georgia or any other jurisdiction) that would cause the application of laws of any jurisdiction other than those of the State of Georgia.

55

Section 14.12     Submission to Jurisdiction. The parties hereby agree that any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby, whether in contract, tort or otherwise, shall be brought in the courts of the United States District Court for the Northern District of Georgia or in the state courts in the State of Georgia, so long as one of such courts shall have subject-matter jurisdiction over such suit, action or proceeding, and that any cause of action arising out of this Agreement shall be deemed to have arisen from a transaction of business in the State of Georgia. Each of the parties hereby irrevocably consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding which is brought in any such court has been brought in an inconvenient form. Service of process, summons, notice or other document by registered mail to the address set forth in Section 14.03 shall be effective service of process for any suit, action or other proceeding brought in any such court.

Section 14.13     Equitable Remedies. Each party hereto acknowledges that a breach or threatened breach by such party of any of its obligations under this Agreement would give rise to irreparable harm to the other parties, for which monetary damages would not be an adequate remedy, and hereby agrees that in the event of a breach or a threatened breach by such party of any such obligations, each of the other parties hereto shall, in addition to any and all other rights and remedies that may be available to them in respect of such breach, be entitled to seek equitable relief, including a temporary restraining order, an injunction, specific performance and any other relief that may be available from a court of competent jurisdiction (without any requirement to post bond).

Section 14.14     Remedies Cumulative. The rights and remedies under this Agreement are cumulative and are in addition to and not in substitution for any other rights and remedies available at law or in equity or otherwise, except to the extent expressly provided in Section 13.02 to the contrary.

Section 14.15     Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Agreement delivered by facsimile, e-mail or other means of Electronic Transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.

[SIGNATURE PAGE FOLLOWS]

56

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.

The Company:

ACCESS FINANCIAL HOLDINGS, LLC

By: /s/ Brian Stone                                  

Name:  Brian Stone

Title:  President

The Members:

ATLANTICUS HOLDINGS CORP.

By: /s/ Jeff Howard                             

Name: Jeff Howard

Title: President

/s/ Alan Fishman                                 

Alan Fishman 

TSO I ACCESS FINANCIAL

INVESTMENT AGGREGATOR L.P.

By: /s/ Glenn F. Miller                          

Name: Glenn F. Miller

Title: Attorney-in-Fact

TSO II ACCESS FINANCIAL

INVESTMENT AGGREGATOR L.P.

By: /s/ Glenn F. Miller                           

Name: Glenn F. Miller

Title: Attorney-in-Fact

exhibit index

Exhibit A	Form of Joinder Agreement
Exhibit B	Illustrative Calculation of Minimum Adjusted Book Value
Schedule A	Members Schedule
Schedule B	Current Officers

EX-21.1

Exhibit 21.1

Subsidiaries of the Registrant
Name	State or other Jurisdiction of Incorporation or Organization
59DH, LLC (1)	Georgia
AAMG, LLC	Georgia
Access Financial Holdings, LLC	Georgia
Access Financing LLC	Georgia
Agea Capital, LLC	Georgia
Atlanticus Funding IV LLC	Georgia
Atlanticus Funding VII, LLC	Georgia
Atlanticus Holdings Corporation	Georgia
Atlanticus Services Corporation	Georgia
Cahaba Energy LLC	Georgia
CAR Financial Services Guam Inc.	Guam
CAR Financial Services Inc.	Georgia
CAR Financial Services Saipan Inc.	Saipan
CAR Funding II Inc.	Nevada
Card Services Inc.	Georgia
CARS Acquisition LLC	Georgia
CCFC Corp.	Nevada
CCIS LLC	Georgia
CC Serve Corporation	Georgia
CCUK Finance Limited	United Kingdom
CCUK Holding Limited	United Kingdom
CIAC Corporation	Nebraska
Consumer Auto Receivables Servicing LLC	Georgia
Curae Finance, LLC (2)	Georgia
Express Financial LLC	Georgia
Fortiva Financial LLC	Georgia
Fortiva Funding IV LLC	Georgia
Fortiva Funding LLC	Georgia
Fortiva Funding V LLC	Georgia
Fortiva Funding VI, LLC	Georgia
Fortiva Funding X, LLC	Georgia
Fortiva Holdings LLC	Georgia
FRC Funding Corporation	Nevada
Mobile Tech Investments, LLC (3)	Georgia
Ochotiva, LLC	Georgia
Perimeter Funding Corporation	Nevada

Name	State or other Jurisdiction of Incorporation or Organization
Plitvice WF, LLC	Georgia
Polygon Servicing LLC	Georgia
Transistor Holdings LLC (4)	Georgia

(1) The Company owns 50.1% of 59DH, LLC

(2) The Company owns 80.0% of Curae Finance, LLC

(3) The Company owns 89.8% of Mobile Tech Investments, LLC

(4) The Company owns 66.7% of Conductor, LLC, Transistor Holdings, LLC and Transistor, LLC

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm 

Atlanticus Holdings Corporation

Atlanta, Georgia

We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (Nos. 333-150988-99, 333-196041, 333-211351, 333-218058, 333-224981 and 333-231578) of Atlanticus Holdings Corporation of our report dated March 30, 2020, relating to the consolidated financial statements, which appears in the Annual Report on Form 10-K.

/s/ BDO USA, LLP

Atlanta, Georgia

March 30, 2020

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, David G. Hanna, certify that:

1. I have reviewed this Report on Form 10-K of Atlanticus Holdings 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 periods covered by this report; and

3. Based on my knowledge, the financial statements, and other financial information included in this 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)) for the registrant and have:

a) 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;

b) 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;

c) 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

d) 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;

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 functions):

a) all significant deficiencies and material weaknesses 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

b) 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: March 30, 2020

/s/ DAVID G. HANNA

David G. Hanna

Chief Executive Officer and Chairman of the Board

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, William R. McCamey, certify that:

1. I have reviewed this Report on Form 10-K of Atlanticus Holdings 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 periods covered by this report; and

3. Based on my knowledge, the financial statements, and other financial information included in this 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)) for the registrant and have:

a) 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;

b) 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;

c) 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

d) 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;

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 functions):

a) all significant deficiencies and material weaknesses 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

b) 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: March 30, 2020

/s/ WILLIAM R. McCAMEY

William R. McCamey

Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION

The undersigned, as the Chief Executive Officer and Chairman of the Board, and as the Chief Financial Officer, respectively, of Atlanticus Holdings Corporation, certify that, to the best of their knowledge and belief, the Annual Report on Form 10-K for the year ended December 31, 2019, 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 Atlanticus Holdings Corporation at the dates and for the periods indicated. The foregoing certifications are made pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350) and shall not be relied upon for any other purpose.

This 30th day of March, 2020.

/s/ DAVID G. HANNA

David G. Hanna

Chief Executive Officer and

Chairman of the Board

/s/ WILLIAM R. McCAMEY

William R. McCamey

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 Atlanticus Holdings Corporation and will be retained by Atlanticus Holdings Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Note 12 - Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Software development costs/fixed assets		$ 108
Goodwill and intangible assets	113	895
Provision for loan loss	36,172	19,479
Equity-based compensation	792	748
Accrued expenses	386	307
Accruals for state taxes and interest associated with unrecognized tax benefits	108	87
Federal net operating loss carry-forward	18,643	44,485
Minimum tax credit carry-forward	520	1,015
Foreign net operating loss carry-forward	537	256
Other	40	151
State tax benefits, primarily from net operating losses	40,937	42,318
Deferred tax assets, gross	98,248	109,849
Valuation allowances	(39,161)	(40,830)
Deferred tax assets net of valuation allowance	59,087	69,019
Prepaid expenses and other	(1,217)	(210)
Software development costs/fixed assets	(176)
Equity in income of equity-method investee	(1,154)	(1,092)
Credit card fair value election differences	(21,513)	(21,021)
Market discount on loans	(29,834)	(21,749)
Deferred costs	(542)	(469)
Convertible senior notes	(9,309)	(22,106)
Cancellation of indebtedness income		(1,882)
Deferred tax liabilities, gross	(63,745)	(68,529)
Deferred tax liabilities, net	$ (4,658)
Deferred tax (liabilities) assets, net		$ 490

XML

Note 14 - Stock-based Compensation (Details Textual) - USD ($) $ in Thousands		12 Months Ended
	May 09, 2019	Dec. 31, 2019	Dec. 31, 2018
Adjustment to Additional Paid in Capital, Income Tax Effect from Share-based Compensation, Net, Total		$ 0	$ 0
Share-based Payment Arrangement, Nonvested Award, Option, Cost Not yet Recognized, Amount		$ 500	$ 1,200
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period		229,500	533,177
Share-based Payment Arrangement, Expensed and Capitalized, Amount, Total		$ 900	$ 1,300
Share-based Payment Arrangement, Expense		1,000	700
Share-based Payment Arrangement, Nonvested Award, Excluding Option, Cost Not yet Recognized, Amount		$ 700
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition		2 years 36 days
Restricted Stock [Member] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period		1 year
Restricted Stock [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period		5 years
Share-based Payment Arrangement, Option [Member]
Share-based Payment Arrangement, Expense		$ 700	$ 600
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period		10 years
The Fourth Amended 2014 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Additional Shares Authorized	2,000,000
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period Extension	2 years
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant		1,791,565
Employee Stock Purchase Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant		65,771

XML

Note 7 - Property (Details Textual) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Depreciation, Total	$ 1.1	$ 1.0

XML

Note 6 - Fair Values of Assets and Liabilities - Quantitative Information about Level 3 Assets and Liabilities Fair Value Measurements (Details) $ in Thousands	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)
Loans, interest and fees receivable, at fair value	$ 4,386	$ 6,306
Notes Payable Associated with Structured Financings, Fair Value	3,920	5,651
Valuation Technique, Discounted Cash Flow [Member]
Notes Payable Associated with Structured Financings, Fair Value	3,920	5,651
Valuation Technique, Discounted Cash Flow [Member] | Measurement Input, Gross Yield [Member]
Loans, interest and fees receivable, at fair value	$ 4,386	$ 6,306
Valuation Technique, Discounted Cash Flow [Member] | Measurement Input, Gross Yield [Member] | Minimum [Member]
Loans and fees receivable, measurement input	0.275	0.258
Valuation Technique, Discounted Cash Flow [Member] | Measurement Input, Gross Yield [Member] | Maximum [Member]
Loans and fees receivable, measurement input	0.594	0.308
Valuation Technique, Discounted Cash Flow [Member] | Measurement Input, Gross Yield [Member] | Weighted Average [Member]
Loans and fees receivable, measurement input	0.31	0.264
Notes payable associated with structured financings, measurement input	0.275	0.258
Valuation Technique, Discounted Cash Flow [Member] | Measurement Input, Constant Prepayment Rate [Member] | Minimum [Member]
Loans and fees receivable, measurement input	0.022	0.022
Valuation Technique, Discounted Cash Flow [Member] | Measurement Input, Constant Prepayment Rate [Member] | Maximum [Member]
Loans and fees receivable, measurement input	0.055	0.03
Valuation Technique, Discounted Cash Flow [Member] | Measurement Input, Constant Prepayment Rate [Member] | Weighted Average [Member]
Loans and fees receivable, measurement input	0.026	0.023
Valuation Technique, Discounted Cash Flow [Member] | Measurement Input, Default Rate [Member] | Minimum [Member]
Loans and fees receivable, measurement input	0.105	0.087
Valuation Technique, Discounted Cash Flow [Member] | Measurement Input, Default Rate [Member] | Maximum [Member]
Loans and fees receivable, measurement input	0.394	0.113
Valuation Technique, Discounted Cash Flow [Member] | Measurement Input, Default Rate [Member] | Weighted Average [Member]
Loans and fees receivable, measurement input	0.137	0.09
Notes payable associated with structured financings, measurement input	0.105	0.087
Valuation Technique, Discounted Cash Flow [Member] | Measurement Input, Prepayment Rate [Member] | Weighted Average [Member]
Notes payable associated with structured financings, measurement input	0.022	0.022
Valuation Technique, Discounted Cash Flow [Member] | Measurement Input, Servicing Rate [Member] | Minimum [Member]
Loans and fees receivable, measurement input	0.113	0.149
Valuation Technique, Discounted Cash Flow [Member] | Measurement Input, Servicing Rate [Member] | Maximum [Member]
Loans and fees receivable, measurement input	0.169	0.195
Valuation Technique, Discounted Cash Flow [Member] | Measurement Input, Servicing Rate [Member] | Weighted Average [Member]
Loans and fees receivable, measurement input	0.119	0.155
Valuation Technique, Discounted Cash Flow [Member] | Measurement Input, Discount Rate [Member] | Minimum [Member]
Loans and fees receivable, measurement input	0.143	0.149
Valuation Technique, Discounted Cash Flow [Member] | Measurement Input, Discount Rate [Member] | Maximum [Member]
Loans and fees receivable, measurement input	0.143	0.149
Valuation Technique, Discounted Cash Flow [Member] | Measurement Input, Discount Rate [Member] | Weighted Average [Member]
Loans and fees receivable, measurement input	0.143	0.149
Notes payable associated with structured financings, measurement input	0.143	0.149

XML

Note 8 - Leases - Maturities of Lease Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
2020, gross	$ 10,213
2020, payments received from sublease	(7,115)
2020, net lease payment	3,098
2021, gross	10,221
2021, payments received from sublease	(7,315)
2021, net lease payment	2,906
2022, gross	4,407
2022, payments received from sublease	(3,112)
2022, net lease payment	1,295
2023, gross	126
2023, payments received from sublease
2023, net lease payment	126
2024, gross	30
2024, payments received from sublease
2024, net lease payment	30
Thereafter, gross
Thereafter, payments received from sublease
Thereafter, net lease payment
Gross	24,997
Sublease income, payments received from sublease	(17,542)
Lease payments, net lease payment	7,455
Less imputed interest, gross	(2,738)
Less imputed interest, payments received from sublease
Less imputed interest, net
Operating Lease, Liability, Total	22,259
Total, payments received from sublease
Total, net

XML

Note 2 - Significant Accounting Policies and Consolidated Financial Statement Components - Summary of Allowance for Uncollectible Loans and Fees Receivable (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Allowance for uncollectible loans, interest and fees receivable:
Balance at beginning of period	$ (79,200)	$ (63,000)
Provision for loan losses	(248,383)	(100,338)
Charge offs	152,900	90,300
Recoveries	(11,600)	(6,200)
Balance at end of period	(186,300)	(79,200)
Balance at end of period individually evaluated for impairment	(500)	(300)
Balance at end of period collectively evaluated for impairment	(185,800)	(78,900)
Loans, interest and fees receivable:
Loans, interest and fees receivable, gross	998,209	541,344
Loans, interest and fees receivable individually evaluated for impairment	2,200	500
Loans, interest and fees receivable collectively evaluated for impairment	996,000	540,800
Credit Card Receivable [Member]
Allowance for uncollectible loans, interest and fees receivable:
Balance at beginning of period	(35,400)	(18,200)
Provision for loan losses	(161,500)	(46,600)
Charge offs	80,200	29,900
Recoveries	(4,600)	(500)
Balance at end of period	(121,300)	(35,400)
Balance at end of period individually evaluated for impairment
Balance at end of period collectively evaluated for impairment	(121,300)	(35,400)
Loans, interest and fees receivable:
Loans, interest and fees receivable, gross	509,200	188,600
Loans, interest and fees receivable individually evaluated for impairment
Loans, interest and fees receivable collectively evaluated for impairment	509,200	188,600
Automobile Loan [Member]
Allowance for uncollectible loans, interest and fees receivable:
Balance at beginning of period	(1,300)	(2,300)
Provision for loan losses	(3,500)	(300)
Charge offs	4,600	2,200
Recoveries	(1,400)	(900)
Balance at end of period	(1,600)	(1,300)
Balance at end of period individually evaluated for impairment	(400)	(200)
Balance at end of period collectively evaluated for impairment	(1,200)	(1,100)
Loans, interest and fees receivable:
Loans, interest and fees receivable, gross	89,800	88,100
Loans, interest and fees receivable individually evaluated for impairment	2,100	400
Loans, interest and fees receivable collectively evaluated for impairment	87,700	87,700
Other Unsecured Lending Products [Member]
Allowance for uncollectible loans, interest and fees receivable:
Balance at beginning of period	(42,500)	(42,500)
Provision for loan losses	(83,400)	(53,400)
Charge offs	68,100	58,200
Recoveries	(5,600)	(4,800)
Balance at end of period	(63,400)	(42,500)
Balance at end of period individually evaluated for impairment	(100)	(100)
Balance at end of period collectively evaluated for impairment	(63,300)	(42,400)
Loans, interest and fees receivable:
Loans, interest and fees receivable, gross	399,200	264,600
Loans, interest and fees receivable individually evaluated for impairment	100	100
Loans, interest and fees receivable collectively evaluated for impairment	$ 399,100	$ 264,500

XML

Consolidated Statements of Operations - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Interest income:
Consumer loans, including past due fees	$ 260,832	$ 160,968
Other	386	200
Total interest income	261,218	161,168
Interest expense	(50,730)	(36,896)
Net interest income before fees and related income on earning assets and provision for losses on loans, interest and fees receivable	210,488	124,272
Fees and related income on earning assets	71,147	29,992
Net losses upon impairment of loans, interest and fees receivable recorded at fair value	(897)	(549)
Provision for losses on loans, interest and fees receivable recorded at net realizable value	(248,383)	(100,338)
Net interest income, fees and related income on earning assets	32,355	53,377
Other operating income:
Servicing income	13,754	5,556
Other income	117,903	39,820
Gain on repurchase of convertible senior notes	5,127
Equity in income of equity-method investee	1,001	581
Total other operating income	125,817	42,370
Other operating expense:
Salaries and benefits	26,229	23,430
Card and loan servicing	49,459	37,145
Marketing and solicitation	36,388	12,124
Depreciation	1,137	987
Other	13,196	18,579
Total other operating expense	126,409	92,265
Income before income taxes	31,763	3,482
Income tax (expense) benefit	(5,553)	4,130
Net income	26,210	7,612
Net loss attributable to noncontrolling interests	233	244
Net income attributable to controlling interests	26,443	7,856
Preferred dividends	(1,153)
Net income attributable to common shareholders	$ 25,290	$ 7,856
Net income attributable to common shareholders per common share—basic (in dollars per share)	$ 1.74	$ 0.56
Net income attributable to common shareholders per common share—diluted (in dollars per share)	$ 1.66	$ 0.56
Servicing Income [Member]
Other operating income:
Servicing income	$ 1,786	$ 1,969

XML

Note 8 - Leases (Tables)

12 Months Ended

Dec. 31, 2019

Notes Tables

Lease, Cost [Table Text Block]

	For the Year ended December 31,
	2019			2018
Operating lease cost, gross	$	6,875		$	6,758
Sublease income		(5,133	)		(5,080	)
Net Operating lease cost	$	1,742		$	1,678
Cash paid under operating leases, gross	$	10,080		$	9,913
Weighted average remaining lease term - months		29
Weighted average discount rate		6.9	%

Operating Lease, Liability and Payments to be Received, Maturity [Table Text Block]

	Gross Lease Payment			Payments received from Sublease			Net Lease Payment
2020	$	10,213		$	(7,115	)	$	3,098
2021		10,221			(7,315	)		2,906
2022		4,407			(3,112	)		1,295
2023		126			—			126
2024		30			—			30
Thereafter		—			—			—
Total lease payments		24,997			(17,542	)		7,455
Less imputed interest		(2,738	)
Total	$	22,259

XML

Note 1 - Description of Our Business

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

1. Description of Our Business

Our accompanying consolidated financial statements include the accounts of Atlanticus Holdings Corporation (the “Company”) and those entities we control. We are primarily focused on providing financial technology and related services. Through our subsidiaries, we provide technology and other support services to lenders who offer an array of financial products and services to consumers who

may

have been declined under traditional financing options.

In most cases, we invest in the receivables originated by lenders who utilize our technology platform and other related services. From time to time, we also purchase receivables portfolios from

third

parties.  References to "receivables" include receivables purchased from our lending partners and from

third

parties. As discussed further below, we reflect our business lines within

two

reportable segments: Credit and Other Investments; and Auto Finance. See also Note

3,

“Segment Reporting,” for further details.

Within our Credit and Other Investments segment, we facilitate consumer finance programs offered by our bank partner to originate consumer loans through multiple channels, including retail point-of-sale, direct mail solicitation, digital marketing and through partner relationships. In the retail credit (the “point-of-sale” operations) channel, we partner with retailers and service providers in various industries across the United States (“U.S.”) to enable them to provide credit to their customers for the purchase of goods and services. These services of our lending partners are often extended to consumers who

may

have been declined under traditional financing options. We specialize in supporting this “second look” credit service in various market segments across the U.S. Additionally, we support lenders who market general purpose credit cards directly to consumers (collectively, the “direct-to-consumer” operations) through additional channels enabling them to reach consumers through a diverse origination platform that includes retail point-of-sale, direct mail solicitation, digital marketing and partnerships with

third

parties. Using our infrastructure and technology platform, we also provide loan servicing, including risk management and customer service outsourcing, for

third

parties.

Additionally, we report within our Credit and Other Investments segment: 

1

) the servicing income from our legacy credit card receivables,

2

) the income earned from an investment in an equity-method investee that holds credit card receivables for which we are the servicer; and

3

) gains or losses associated with investments previously made in consumer finance technology platforms. These include investments in companies engaged in mobile technologies, marketplace lending and other financial technologies. These investments are carried at the lower of cost or market valuation. 

None

 of these companies are publicly-traded and there are 

no

 material pending liquidity events.

Within our Auto Finance segment, our CAR subsidiary operations principally purchase and/or service loans secured by automobiles from or for, and also provide floor plan financing for, a pre-qualified network of independent automotive dealers and automotive finance companies in the buy-here, pay-here, used car business. We purchase auto loans at a discount and with dealer retentions or holdbacks that provide risk protection. Also within our Auto Finance segment, we are providing certain installment lending products in addition to our traditional loans secured by automobiles.

XML

Note 13 - Net Income Attributable to Controlling Interests Per Common Share (Tables)

12 Months Ended

Dec. 31, 2019

Notes Tables

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	For the Year Ended December 31,
	2019			2018
Numerator:
Net income attributable to controlling interests	$	26,443		$	7,856
Preferred stock dividends and accretion		(1,153	)		—
Net income attributable to common shareholders	$	25,290		$	7,856
Denominator:
Basic (including unvested share-based payment awards) (1)		14,499			13,927
Effect of dilutive stock compensation arrangements		774			75
Diluted (including unvested share-based payment awards) (1)		15,273			14,002
Net income attributable to common shareholders per share—basic	$	1.74		$	0.56
Net income attributable to common shareholders per share—diluted	$	1.66		$	0.56

XML

Note 10 - Convertible Senior Notes

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Long-term Debt [Text Block]

10. Convertible Senior Notes

In

November 

2005,

we issued

$300.0

million aggregate principal amount of

5.875%

convertible senior notes due

November 

30,

2035

. The convertible senior notes are unsecured, subordinate to existing and future secured obligations and structurally subordinate to existing and future claims of our subsidiaries’ creditors. These notes (net of repurchases since the issuance dates) are reflected within convertible senior notes on our consolidated balance sheets. 

No

put rights exist under our convertible senior notes.

On

August 26, 2019,

we repurchased

$54.4

million in face amount of our outstanding convertible senior notes for

$16.3

million in cash (including accrued interest) and the issuance of a

$17.4

million term note, which bears interest at a fixed rate of

8.0%

and is due in

August 2024.

The repurchase resulted in a gain of approximately

$5.1

million (net of the convertible senior notes’ applicable share of deferred costs, which were written off in connection with the repurchase). Upon acquisition, the notes were retired. See Note

9

 "Notes Payable and Variable Interest Entities" for further information regarding the note issuance.

The following summarizes (in thousands) components of our consolidated balance sheets associated with our convertible senior notes:

	As of
	December 31, 2019			December 31, 2018
Face amount of convertible senior notes	$	33,839		$	88,280
Discount		(9,748	)		(26,138	)
Net carrying value	$	24,091		$	62,142
Carrying amount of equity component included in paid-in capital	$	108,714		$	108,714
Excess of instruments’ if-converted values over face principal amounts	$	—		$	—

During certain periods and subject to certain conditions, the remaining

$33.8

million of outstanding convertible senior notes as of

December 31, 2019

 (as referenced in the table above) are convertible by holders into cash and, if applicable, shares of our common stock at an adjusted effective conversion rate of

40.63

shares of common stock per

$1,000

principal amount of notes, subject to further adjustment; the conversion rate is based on an adjusted conversion price of

$24.61

per share of common stock. Upon any conversion of the notes, we will deliver to holders of the notes cash of up to

$1,000

per

$1,000

aggregate principal amount of notes and, at our option, either cash or shares of our common stock in respect of the remainder of the conversion obligation, if any. The maximum number of shares of common stock that any note holder

may

receive upon conversion is fixed at

40.63

shares per

$1,000

aggregate principal amount of notes, and we have a sufficient number of authorized shares of our common stock to satisfy this conversion obligation. We are required to pay contingent interest on the notes during a

6

-month period if the average trading price of the notes is above a specified level. Thus far we have

not

paid any contingent interest on these notes. In addition, holders of the notes

may

require us to repurchase the notes for cash upon certain specified events.

In conjunction with the offering of the convertible senior notes, we entered into a

30

-year share lending agreement with Bear, Stearns International Limited (“BSIL”) and Bear, Stearns & Co. Inc, as agent for BSIL, pursuant to which we lent BSIL

5,677,950

shares of our common stock. The obligations of Bear Stearns were assumed by JP Morgan in

2008.

JP Morgan (as the guarantor of the obligation) is required to return the loaned shares to us at the end of the

30

-year term of the share lending agreement or earlier upon the occurrence of specified events. Such events include the bankruptcy of JP Morgan, its failure to make payments when due, its failure to post collateral when required or return loaned shares when due, notice of its inability to perform obligations, or its untrue representations. If an event of default occurs, then the borrower (JP Morgan)

may

settle the obligation in cash. Further, in the event that JP Morgan’s credit rating drops below

A/A2,

it would be required to post collateral for the market value of the lent shares (

$13.1

million based on the

1,459,233

shares remaining outstanding under the share lending arrangement as of

December 31, 2019

). JP Morgan has agreed to use the loaned shares for the purpose of directly or indirectly facilitating the hedging of our convertible senior notes by the holders thereof or for such other purpose as reasonably determined by us. We deem it highly remote that any event of default will occur and therefore cash settlement, while an option, is an unlikely scenario. We exclude the loaned shares from earnings per share computations.

We analogize the share lending agreement to a prepaid forward contract, which we have evaluated under applicable accounting guidance. We determined that the instrument was

not

a derivative in its entirety and that the embedded derivative would

not

require separate accounting. The net effect on shareholders’ equity of the shares lent pursuant to the share lending agreement, which includes our requirement to lend the shares and the counterparties’ requirement to return the shares, is the fee received upon our lending of the shares.

Accounting for Convertible Senior Notes

Under applicable accounting literature, the accounting for the issuance of the notes includes (

1

) allocation of the issuance proceeds between the notes and paid-in capital, (

2

) establishment of a discount to the face amount of the notes equal to the portion of the issuance proceeds that are allocable to paid-in capital, (

3

) creation of a deferred tax liability related to the discount on the notes, and (

4

) an allocation of issuance costs between the portion of such costs considered to be associated with the notes and the portion of such costs considered to be associated with the equity component of the notes’ issuances (i.e., paid-in capital). We are amortizing the discount to the remaining face amount of the notes into interest expense over the expected life of the notes, which results in a corresponding release of associated deferred tax liability. Amortization for the years ended

December 31, 2019

 and 

2018

totaled

$0.5

 million and

$0.6

 million, respectively. Actual incurred interest (based on the contractual interest rate) totaled

$3.9

million and 

$5.2

million for the years ended

December 31, 2019

 and

2018

, respectively. We will amortize the discount remaining at

December 31, 2019

 into interest expense over the expected term of the convertible senior notes (currently expected to be

October 2035).

The weighted average effective interest rate for the convertible senior notes was

9.2%

for all periods presented.

XML

Note 6 - Fair Values of Assets and Liabilities

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Fair Value Disclosures [Text Block]

6. Fair Values of Assets and Liabilities

We elected the fair value option with respect to our investments in equity securities, included in other assets, as well as our credit card loans, interest and fees receivable portfolios, the retained interests in which we historically recorded at fair value under securitization structures that were off balance sheet prior to accounting rules changes requiring their consolidation into our financial statements. The legal structure qualifies as a VIE but is consolidated as the Company is the primary beneficiary.  With respect to our

equity securities, we decided to carry these assets at fair value due to our intent to invest and redeem these investments with expected frequency. For our credit card loans, interest and fees receivable portfolios underlying our formerly off-balance-sheet securitization structures, we elected the fair value option because, at the time of election, in contrast to substantially all of our other assets, we had significant experiences in determining the fair value of these assets in connection with our historical fair value accounting for our retained interests in their associated securitization structures. Because we elected to account for the credit card receivables underlying our formerly off-balance-sheet securitization structures at fair value, accounting rules require that we account for the notes payable issued by such securitization structures at fair value as well. For our other credit card receivables that have never been owned by our formerly off-balance-sheet securitization structures, we have

not

elected the fair value option, and we record such receivables at net realizable value within loans, interest and fees receivable, net on our consolidated balance sheets. As of

January 1, 2020,

we have elected the fair value option to account for certain additional loan receivables associated with our point-of-sale and direct-to-consumer platform that were originated on or after

January 1, 2020. 

For all of our other debt other than the notes payable underlying our formerly off-balance sheet credit card securitization structures, we have

not

elected the fair value option. Nevertheless, pursuant to applicable requirements, we include disclosures of the fair value of this other debt to the extent practicable within the disclosures below. Additionally, we have other liabilities, associated with consolidated legacy credit card securitization trusts, that we are required to carry at fair value in our consolidated financial statements, and they also are addressed within the disclosures below.

Where applicable as noted above, we account for our financial assets and liabilities at fair value based upon a

three

-tiered valuation system. In general, fair values determined by Level

1

inputs use quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access. Fair values determined by Level

2

inputs use inputs other than quoted prices included in Level

1

that are observable for the asset or liability, either directly or indirectly. Level

2

inputs include quoted prices for similar assets and liabilities in active markets, and inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly quoted intervals. Level

3

inputs are unobservable inputs for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability. Where inputs used to measure fair value

may

fall into different levels of the fair value hierarchy, the level in the fair value hierarchy within which the fair value measurement in its entirety has been determined is based on the lowest level input that is significant to the fair value measurement in its entirety.

Valuations and Techniques for Assets

Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. The table below summarizes (in thousands) by fair value hierarchy the

December 31, 2019

and

December 31, 2018

fair values and carrying amounts of (

1

) our assets that are required to be carried at fair value in our consolidated financial statements and (

2

) our assets

not

carried at fair value, but for which fair value disclosures are required:

Assets – As of December 31, 2019 (1)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Carrying Amount of Assets
Loans, interest and fees receivable, net for which it is practicable to estimate fair value	$	—	$	—	$	781,208	$	721,573
Loans, interest and fees receivable, at fair value	$	—	$	—	$	4,386	$	4,386

Assets – As of December 31, 2018 (1)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Carrying Amount of Assets
Loans, interest and fees receivable, net for which it is practicable to estimate fair value	$	—	$	—	$	470,496	$	418,236
Loans, interest and fees receivable, at fair value	$	—	$	—	$	6,306	$	6,306

( 1 ) For cash, deposits and investments in equity securities, the carrying amount is a reasonable estimate of fair value.

For those asset classes above that are required to be carried at fair value in our consolidated financial statements, gains and losses associated with fair value changes are detailed on our fees and related income on earning assets table within Note

2,

“Significant Accounting Policies and Consolidated Financial Statement Components.” For our loans, interest and fees receivable included in the above tables, we assess the fair value of these assets based on our estimate of future cash flows net of servicing costs, and to the extent that such cash flow estimates change from period to period, any such changes are considered to be attributable to changes in instrument-specific credit risk.

For Level

3

assets carried at fair value measured on a recurring basis using significant unobservable inputs, the following table presents (in thousands) a reconciliation of the beginning and ending balances for the years ended

December 31, 2019

and

2018

:

	Loans, Interest and Fees Receivables, at Fair Value
	2019			2018
Balance at January 1,	$	6,306		$	11,109
Total gains—realized/unrealized:
Net revaluations of loans, interest and fees receivable, at fair value		1,251			606
Settlements		(3,171	)		(5,395	)
Impact of foreign currency translation		—			(14	)
Balance at December 31,	$	4,386		$	6,306

The unrealized gains and losses for assets within the Level

3

category presented in the tables above include changes in fair value that are attributable to both observable and unobservable inputs. Impacts related to foreign currency translation are included as a component of other operating expense on the consolidated statements of operations when recognized.

Net Revaluation of Loans, Interest and Fees Receivable.

We record the net revaluation of loans, interest and fees receivable (including those pledged as collateral) in the fees and related income on earning assets category in our consolidated statements of operations, specifically as changes in fair value of loans, interest and fees receivable recorded at fair value. The net revaluation of loans, interest and fees receivable is based on the present value of future cash flows using a valuation model of expected cash flows and the estimated cost to service and collect those cash flows. We estimate the present value of these future cash flows using a valuation model consisting of internally developed estimates of assumptions

third

-party market participants would use in determining fair value, including estimates of net collected yield, principal payment rates, expected principal credit loss rates, costs of funds, discount rates and servicing costs. Interest income on receivables underlying our asset classes that are carried at fair value in our consolidated financial statements is recorded in Interest income - Consumer loans, including past due fees in our Consolidated Statements of Operations.

For Level

3

assets carried at fair value measured on a recurring basis using significant unobservable inputs, the following table presents (in thousands) quantitative information about the valuation techniques and the inputs used in the fair value measurement as of

December 31, 2019

and

December 31, 2018

:

Quantitative Information about Level

3

Fair Value Measurements

Fair Value Measurement	Fair Value at December 31, 2019 (in thousands)		Valuation Technique	Unobservable Input	Range (Weighted Average)
Loans, interest and fees receivable, at fair value	$	4,386	Discounted cash flows	Gross yield		27.5% to 59.4% (31.0%)
				Principal payment rate		2.2% to 5.5% (2.6%)
				Expected credit loss rate		10.5% to 39.4% (13.7%)
				Servicing rate		11.3% to 16.9% (11.9%)
				Discount rate		14.3% to 14.3% (14.3%)

Quantitative Information about Level

3

Fair Value Measurements

Fair Value Measurement	Fair Value at December 31, 2018 (in thousands)		Valuation Technique	Unobservable Input	Range (Weighted Average)
Loans, interest and fees receivable, at fair value	$	6,306	Discounted cash flows	Gross yield		25.8% to 30.8% (26.4%)
				Principal payment rate		2.2% to 3.0% (2.3%)
				Expected credit loss rate		8.7% to 11.3% (9.0%)
				Servicing rate		14.9% to 19.5% (15.5%)
				Discount rate		14.9% to 14.9% (14.9%)

Valuations and Techniques for Liabilities

Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the liability. The table below summarizes (in thousands) by fair value hierarchy the

December 31, 2019

and

December 31, 2018

fair values and carrying amounts of (

1

) our liabilities that are required to be carried at fair value in our consolidated financial statements and (

2

) our liabilities

not

carried at fair value, but for which fair value disclosures are required:

Liabilities – As of December 31, 2019	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Carrying Amount of Liabilities
Liabilities not carried at fair value
Revolving credit facilities	$	—	$	—	$	720,687	$	720,687
Amortizing debt facilities	$	—	$	—	$	28,522	$	28,522
Notes payable to related parties	$	—	$	—	$	—	$	—
Convertible senior notes	$	—	$	16,920	$	—	$	24,091
Liabilities carried at fair value
Notes payable associated with structured financings, at fair value	$	—	$	—	$	3,920	$	3,920

Liabilities – As of December 31, 2018	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Carrying Amount of Liabilities
Liabilities not carried at fair value
Revolving credit facilities	$	—	$	—	$	389,707	$	389,707
Amortizing debt facilities	$	—	$	—	$	1,220	$	1,220
Notes payable to related parties	$	—	$	—	$	40,000	$	40,000
Convertible senior notes	$	—	$	47,230	$	—	$	62,142
Liabilities carried at fair value
Notes payable associated with structured financings, at fair value	$	—	$	—	$	5,651	$	5,651

For our notes payable, we assess the fair value of these liabilities based on our estimate of future cash flows generated from their underlying credit card receivables collateral, net of servicing compensation required under the note facilities, and to the extent that such cash flow estimates change from period to period, any such changes are considered to be attributable to changes in instrument-specific credit risk. Gains and losses associated with fair value changes for our notes payable associated with structured financing liabilities that are carried at fair value are detailed on our fees and related income on earning assets table within Note

2,

“Significant Accounting Policies and Consolidated Financial Statement Components.” For our

5.875%

convertible senior notes due

2035

(

“5.875%

convertible senior notes”), we assess fair value based upon the most recent trade data available from

third

-party providers. We have evaluated the fair value of our

third

party debt by analyzing the expected repayment terms and credit spreads included in our recent financing arrangements obtained with similar terms. These recent financing arrangements provide positive evidence that the underlying data used in our assessment of fair value has

not

changed relative to the general market and therefore the fair value of our debt continues to be the same as the carrying value. See Note

9,

“Notes Payable and Variable Interest Entities,” for further discussion on our other notes payable.

For our material Level

3

liabilities carried at fair value measured on a recurring basis using significant unobservable inputs, the following table presents (in thousands) a reconciliation of the beginning and ending balances for the years ended

December 31, 2019

and

2018

.

	Notes Payable Associated with Structured Financings, at Fair Value
	2019			2018
Balance at January 1,	$	5,651		$	9,240
Total (gains) losses—realized/unrealized:
Net revaluations of notes payable associated with structured financings, at fair value		(1,731	)		(3,589	)
Repayments on outstanding notes payable, net		—			—
Balance at December 31,	$	3,920		$	5,651

The unrealized gains and losses for liabilities within the Level

3

category presented in the table above include changes in fair value that are attributable to both observable and unobservable inputs. We provide below a brief description of the valuation techniques used for Level

3

liabilities.

Net Revaluation of Notes Payable Associated with Structured Financings, at Fair Value.

We record the net revaluations of notes payable associated with structured financings, at fair value, in the changes in fair value of notes payable associated with structured financings line item within the fees and related income on earning assets category of our consolidated statements of operations. The legal entity associated with the securitization transaction is consolidated as a VIE as the Company is deemed the primary beneficiary of the entity.  The Company is

not

liable for the full face value of the liability in the VIE so it is carried at fair value based upon amounts the borrower will receive from the legal entity. The net revaluation of these notes is based on the present value of future cash flows utilized in repayment of the outstanding principal and interest under the facilities using a valuation model of expected cash flows net of the contractual service expenses within the facilities. We estimate the present value of these future cash flows using a valuation model consisting of internally developed estimates of assumptions

third

-party market participants would use in determining fair value, including: estimates of net collected yield, principal payment rates and expected principal credit loss rates on the credit card receivables that secure the non-recourse notes payable; costs of funds; discount rates; and contractual servicing fees. Accrued interest expense on notes payable underlying our notes payable associated with structured financings, at fair value is recorded in Interest expense in our consolidated statements of operations.

For material Level

3

liabilities carried at fair value measured on a recurring basis using significant unobservable inputs, the following table presents (in thousands) quantitative information about the valuation techniques and the inputs used in the fair value measurement as of

December 31, 2019

and

December 31, 2018

:

Quantitative Information about Level

3

Fair Value Measurements

Fair Value Measurement	Fair Value at December 31, 2019 (in thousands)		Valuation Technique	Unobservable Input	Weighted Average
Notes payable associated with structured financings, at fair value	$	3,920	Discounted cash flows	Gross yield		27.5	%
				Principal payment rate		2.2	%
				Expected credit loss rate		10.5	%
				Discount rate		14.3	%

Quantitative Information about Level

3

Fair Value Measurements

Fair Value Measurement	Fair Value at December 31, 2018 (in thousands)		Valuation Technique	Unobservable Input	Weighted Average
Notes payable associated with structured financings, at fair value	$	5,651	Discounted cash flows	Gross yield		25.8	%
				Principal payment rate		2.2	%
				Expected credit loss rate		8.7	%
				Discount rate		14.9	%

Other Relevant Data

Other relevant data (in thousands) as of

December 31, 2019

and

December 31, 2018

concerning certain assets and liabilities we carry at fair value are as follows:

As of December 31, 2019	Loans, Interest and Fees Receivable at Fair Value		Loans, Interest and Fees Receivable Pledged as Collateral under Structured Financings at Fair Value
Aggregate unpaid principal balance within loans, interest and fees receivable that are reported at fair value	$	644	$	5,280
Aggregate fair value of loans, interest and fees receivable that are reported at fair value	$	466	$	3,920
Aggregate fair value of receivables carried at fair value that are 90 days or more past due (which also coincides with finance charge and fee non-accrual policies)	$	1	$	8
Unpaid principal balance of receivables within loans, interest and fees receivable that are reported at fair value and are 90 days or more past due (which also coincides with finance charge and fee non-accrual policies) over the fair value of such loans, interest and fees receivable	$	28	$	185

As of December 31, 2018	Loans, Interest and Fees Receivable at Fair Value		Loans, Interest and Fees Receivable Pledged as Collateral under Structured Financings at Fair Value
Aggregate unpaid principal balance within loans, interest and fees receivable that are reported at fair value	$	1,160	$	7,708
Aggregate fair value of loans, interest and fees receivable that are reported at fair value	$	655	$	5,651
Aggregate fair value of receivables carried at fair value that are 90 days or more past due (which also coincides with finance charge and fee non-accrual policies)	$	3	$	7
Unpaid principal balance of receivables within loans, interest and fees receivable that are reported at fair value and are 90 days or more past due (which also coincides with finance charge and fee non-accrual policies) over the fair value of such loans, interest and fees receivable	$	35	$	224

Notes Payable	Notes Payable Associated with Structured Financings, at Fair Value as of December 31, 2019		Notes Payable Associated with Structured Financings, at Fair Value as of December 31, 2018
Aggregate unpaid principal balance of notes payable	$	101,314	$	101,314
Aggregate fair value of notes payable	$	3,920	$	5,651

XML

Note 2 - Significant Accounting Policies and Consolidated Financial Statement Components (Tables)

12 Months Ended

Dec. 31, 2019

Notes Tables

Financing Receivable, Current, Allowance for Credit Loss [Table Text Block]

For the Year ended December 31, 2019	Credit Cards			Auto Finance			Other Unsecured Lending Products			Total
Allowance for uncollectible loans, interest and fees receivable:
Balance at beginning of period	$	(35.4	)	$	(1.3	)	$	(42.5	)	$	(79.2	)
Provision for loan losses		(161.5	)		(3.5	)		(83.4	)		(248.4	)
Charge offs		80.2			4.6			68.1			152.9
Recoveries		(4.6	)		(1.4	)		(5.6	)		(11.6	)
Balance at end of period	$	(121.3	)	$	(1.6	)	$	(63.4	)	$	(186.3	)

As of December 31, 2019	Credit Cards			Auto Finance			Other Unsecured Lending Products			Total
Allowance for uncollectible loans, interest and fees receivable:
Balance at end of period individually evaluated for impairment	$	—		$	(0.4	)	$	(0.1	)	$	(0.5	)
Balance at end of period collectively evaluated for impairment	$	(121.3	)	$	(1.2	)	$	(63.3	)	$	(185.8	)
Loans, interest and fees receivable:
Loans, interest and fees receivable, gross	$	509.2		$	89.8		$	399.2		$	998.2
Loans, interest and fees receivable individually evaluated for impairment	$	—		$	2.1		$	0.1		$	2.2
Loans, interest and fees receivable collectively evaluated for impairment	$	509.2		$	87.7		$	399.1		$	996.0

For the Year ended December 31, 2018	Credit Cards			Auto Finance			Other Unsecured Lending Products			Total
Allowance for uncollectible loans, interest and fees receivable:
Balance at beginning of period	$	(18.2	)	$	(2.3	)	$	(42.5	)	$	(63.0	)
Provision for loan losses		(46.6	)		(0.3	)		(53.4	)		(100.3	)
Charge offs		29.9			2.2			58.2			90.3
Recoveries		(0.5	)		(0.9	)		(4.8	)		(6.2	)
Balance at end of period	$	(35.4	)	$	(1.3	)	$	(42.5	)	$	(79.2	)

As of December 31, 2018	Credit Cards			Auto Finance			Other Unsecured Lending Products			Total
Allowance for uncollectible loans, interest and fees receivable:
Balance at end of period individually evaluated for impairment	$	—		$	(0.2	)	$	(0.1	)	$	(0.3	)
Balance at end of period collectively evaluated for impairment	$	(35.4	)	$	(1.1	)	$	(42.4	)	$	(78.9	)
Loans, interest and fees receivable:
Loans, interest and fees receivable, gross	$	188.6		$	88.1		$	264.6		$	541.3
Loans, interest and fees receivable individually evaluated for impairment	$	—		$	0.4		$	0.1		$	0.5
Loans, interest and fees receivable collectively evaluated for impairment	$	188.6		$	87.7		$	264.5		$	540.8

Financing Receivable, Past Due [Table Text Block]

As of December 31, 2019	Credit Cards		Auto Finance		Other Unsecured Lending Products		Total
30-59 days past due	$	21.7	$	8.1	$	14.0	$	43.8
60-89 days past due		18.5		3.0		11.5		33.0
90 or more days past due		46.6		2.6		27.2		76.4
Delinquent loans, interest and fees receivable, gross		86.8		13.7		52.7		153.2
Current loans, interest and fees receivable, gross		422.4		76.1		346.5		845.0
Total loans, interest and fees receivable, gross	$	509.2	$	89.8	$	399.2	$	998.2
Balance of loans greater than 90-days delinquent still accruing interest and fees	$	—	$	1.9	$	—	$	1.9

As of December 31, 2018	Credit Cards		Auto Finance		Other Unsecured Lending Products		Total
30-59 days past due	$	7.1	$	7.9	$	9.7	$	24.7
60-89 days past due		5.3		2.8		7.6		15.7
90 or more days past due		12.3		2.2		18.5		33.0
Delinquent loans, interest and fees receivable, gross		24.7		12.9		35.8		73.4
Current loans, interest and fees receivable, gross		163.9		75.2		228.8		467.9
Total loans, interest and fees receivable, gross	$	188.6	$	88.1	$	264.6	$	541.3
Balance of loans greater than 90-days delinquent still accruing interest and fees	$	—	$	1.5	$	—	$	1.5

Financing Receivable, Troubled Debt Restructuring [Table Text Block]

	As of
	December 31, 2019				December 31, 2018
	Point-of-sale		Direct-to-consumer		Point-of-sale		Direct-to-consumer
Number of TDRs		10,682		14,553		6,095		3,584
Number of TDRs that have been re-aged		2,788		2,854		2,759		1,111
Amount of TDRs on non-accrual status (in thousands)	$	14,468	$	13,037	$	4,885	$	1,942
Amount of TDRs on non-accrual status above that have been re-aged (in thousands)	$	5,118	$	3,104	$	3,782	$	955
Carrying value of TDRs (in thousands)	$	8,864	$	7,312	$	3,333	$	1,363
TDRs - Performing (carrying value, in thousands)*	$	6,754	$	6,106	$	2,525	$	1,191
TDRs - Nonperforming (carrying value, in thousands)*	$	2,110	$	1,206	$	808	$	172

	Twelve Months Ended
	December 31, 2019				December 31, 2018
	Point-of-sale		Direct-to-consumer		Point-of-sale		Direct-to-consumer
Number of accounts		2,835		3,339		6,903		5,415
Loan balance at time of charge off (in thousands)	$	4,397	$	3,545	$	9,634	$	4,963

Components of Fees and Related Income on Earning Assets [Table Text Block]

	Year Ended December 31,
	2019			2018
Fees on credit products	$	68,639		$	25,694
Changes in fair value of loans, interest and fees receivable recorded at fair value		1,251			606
Changes in fair value of notes payable associated with structured financings recorded at fair value		1,731			3,589
Other		(474	)		103
Total fees and related income on earning assets	$	71,147		$	29,992

Disaggregation of Revenue [Table Text Block]

	Credit and
For the Year ended December 31, 2019	Other Investments		Auto Finance		Total
Interchange revenues, net (1)	$	8,495	$	—	$	8,495
Servicing income		857		929		1,786
Service charges and other customer related fees		3,407		66		3,473
Total revenue from contracts with customers	$	12,759	$	995	$	13,754

	Credit and
For the Year ended December 31, 2018	Other Investments		Auto Finance		Total
Interchange revenues, net (1)	$	2,881	$	—	$	2,881
Servicing income		947		1,022		1,969
Service charges and other customer related fees		637		69		706
Total revenue from contracts with customers	$	4,465	$	1,091	$	5,556

XML

Note 14 - Stock-based Compensation

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Share-based Payment Arrangement [Text Block]

14. Stock-Based Compensation

We currently have

two

stock-based compensation plans, the Second Amended and Restated Employee Stock Purchase Plan (the “ESPP”) and the Fourth Amended and Restated

2014

Equity Incentive Plan (the “Fourth Amended

2014

Plan”). The Fourth Amended

2014

Plan was approved by our shareholders in May

2019.

Among other things, the Fourth Amended

2014

Plan (i) increased the number of shares of Common Stock available for issuance under the plan by

2,000,000

shares and (ii) extended the term of the plan by approximately

two

years. As of December

31,

2019,

65,771

shares remained available for issuance under the ESPP and

1,791,565

shares remained available for issuance under the Fourth Amended

2014

Plan.

Exercises and vestings under our stock-based compensation plans resulted in

no

income tax-related charges to paid-in capital during the years ended

December 31, 2019

and

2018

.

Restricted Stock and Restricted Stock Units

During the years ended

December 31, 2019

and

2018

, we granted

229,500

and

533,177

shares of restricted stock and restricted stock units (net of any forfeitures), respectively, with aggregate grant date fair values of

$0.9

 million and

$1.3

million, respectively. We incurred expenses of

$1.0

 million and

$0.7

 million during the years ended

December 31, 2019

and

2018

, respectively, related to restricted stock awards. When we grant restricted stock and restricted stock units, we defer the grant date value of the restricted stock and restricted stock unit and amortize that value (net of the value of anticipated forfeitures) as compensation expense with an offsetting entry to the paid-in capital component of our consolidated shareholders’ equity. Our restricted stock awards typically vest over a range of

12

to

60

months (or other term as specified in the grant which may include the achievement of performance measures) and are amortized to salaries and benefits expense ratably over applicable vesting periods. As of

December 31, 2019

,

our unamortized deferred compensation costs associated with non-vested restricted stock awards were

$0.7

 million with a weighted-average remaining amortization period of

2

.1

 years.

Stock Options

Our Fourth Amended 

2014

Plan provides that we

may

grant options on or shares of our common stock (and other types of equity awards) to members of our Board of Directors, employees, consultants and advisors. The exercise price per share of the options must be equal to or greater than the market price on the date the option is granted. The option period

may

not

exceed

10

years from the date of grant. The vesting requirements for options are determined by the Compensation Committee of the Board of Directors. We had expense of

$0.7

 million and 

$0.6

 million related to stock option-related compensation costs during the years ended

December 31, 2019

and

2018

, respectively. When applicable, 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 table below includes additional information about outstanding options:

	Number of Shares			Weighted-Average Exercise Price		Weighted-Average of Remaining Contractual Life (in years)		Aggregate Intrinsic Value
Outstanding at December 31, 2018		3,121,200		$	3.50
Issued		50,000		$	3.13
Exercised		(469,701	)	$	2.59
Cancelled/Forfeited		(14,000	)	$	3.13
Outstanding at December 31, 2019		2,687,499		$	3.66		2.2	$	14,386,956
Exercisable at December 31, 2019		1,076,836		$	3.50		1.5	$	5,930,463

We had

$0.5

 million and

$1.2

 million of unamortized deferred compensation costs associated with non-vested stock options as of

December 31, 2019

and

December 31, 2018

,

respectively.

XML

Note 7 - Property (Tables)

12 Months Ended

Dec. 31, 2019

Notes Tables

Property, Plant and Equipment [Table Text Block]

	As of December 31,
	2019			2018
Software	$	3,543		$	3,467
Furniture and fixtures		6,431			6,307
Data processing and telephone equipment		7,675			7,625
Leasehold improvements		10,570			10,570
Other		1,156			1,156
Total cost		29,375			29,125
Less accumulated depreciation		(26,637	)		(25,500	)
Property, net	$	2,738		$	3,625

XML

Note 10 - Convertible Senior Notes - Summary of Convertible Senior Notes (Details) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Aug. 26, 2019	Nov. 30, 2005
Net carrying value	$ 24,091,000	$ 62,142,000
Five Point Eight Seven Five Percent Convertible Senior Notes Due Two Thousand Thirty Five [Member] | Convertible Debt [Member]
Face amount of convertible senior notes	33,839,000	88,280,000	$ 54,400,000	$ 300,000,000
Discount	(9,748,000)	(26,138,000)
Net carrying value	24,091,000	62,142,000
Carrying amount of equity component included in paid-in capital	108,714,000	108,714,000
Excess of instruments’ if-converted values over face principal amounts

XML

Note 9 - Notes Payable and Variable Interest Entities - Schedule of Structured Financing Notes Payable (Details) (Parentheticals) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Amortizing securitization facility, amount secured by credit card receivables and restricted cash	$ 3,900
Securitization Financing Facility [Member]
Amortizing securitization facility, maturity date	Dec. 31, 2021	Dec. 31, 2021
Amortizing securitization facility, outstanding face amount	$ 101,300	$ 101,300
Amortizing securitization facility, amount secured by credit card receivables and restricted cash	$ 3,900	$ 5,700
Securitization Financing Facility [Member] | London Interbank Offered Rate (LIBOR) [Member]
Amortizing securitization facility, weighted average interest rate	6.90%	7.50%

XML

Note 6 - Fair Values of Assets and Liabilities (Details Textual)	Dec. 31, 2019
The 5.875% Convertible Senior Notes Due 2035 [Member]
Debt Instrument, Interest Rate, Stated Percentage	5.875%

XML

Note 2 - Significant Accounting Policies and Consolidated Financial Statement Components - Summary of Troubled Debt Restructurings (Details) $ in Thousands		12 Months Ended
		Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)
Amount of TDRs on non-accrual status (in thousands)		$ 43,300	$ 33,200
Point-of-Sale [Member]
Number of TDRs		10,682	6,095
Amount of TDRs on non-accrual status (in thousands)		$ 14,468	$ 4,885
Carrying value of TDRs (in thousands)		$ 8,864	$ 3,333
Number of accounts		2,835	6,903
Loan balance at time of charge off (in thousands)		$ 4,397	$ 9,634
Point-of-Sale [Member] | Performing Financial Instruments [Member]
Carrying value of TDRs (in thousands)	[1]	6,754	2,525
Point-of-Sale [Member] | Nonperforming Financial Instruments [Member]
Carrying value of TDRs (in thousands)	[1]	$ 2,110	$ 808
Point-of-Sale [Member] | Extended Maturity [Member]
Number of TDRs		2,788	2,759
Amount of TDRs on non-accrual status (in thousands)		$ 5,118	$ 3,782
Direct-to-Consumer [Member]
Number of TDRs		14,553	3,584
Amount of TDRs on non-accrual status (in thousands)		$ 13,037	$ 1,942
Carrying value of TDRs (in thousands)		$ 7,312	$ 1,363
Number of accounts		3,339	5,415
Loan balance at time of charge off (in thousands)		$ 3,545	$ 4,963
Direct-to-Consumer [Member] | Performing Financial Instruments [Member]
Carrying value of TDRs (in thousands)	[1]	6,106	1,191
Direct-to-Consumer [Member] | Nonperforming Financial Instruments [Member]
Carrying value of TDRs (in thousands)	[1]	$ 1,206	$ 172
Direct-to-Consumer [Member] | Extended Maturity [Member]
Number of TDRs		2,854	1,111
Amount of TDRs on non-accrual status (in thousands)		$ 3,104	$ 955

[1] "TDRs - Performing" include accounts that are current on all amounts owed, while "TDRs - Nonperforming" include all accounts with past due amounts owed.

XML

Note 3 - Segment Reporting - Summary of Operating Segment Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Consumer loans, including past due fees	$ 260,832	$ 160,968
Other	386	200
Total interest income	261,218	161,168
Interest expense	(50,730)	(36,896)
Net interest income before fees and related income on earning assets and provision for losses on loans, interest and fees receivable	210,488	124,272
Fees and related income on earning assets	71,147	29,992
Revenue from contracts with customers	13,754	5,556
Gain on repurchase of convertible senior notes	5,127
Equity in income of equity-method investee	1,001	581
Income before income taxes	31,763	3,482
Income tax benefit (expense)	(5,553)	4,130
Assets, Total	936,266	582,608
Servicing Income [Member]
Revenue from contracts with customers	1,786	1,969
Credit and Other Investments [Member]
Consumer loans, including past due fees	229,388	131,096
Other	386	200
Total interest income	229,774	131,296
Interest expense	(49,065)	(35,564)
Net interest income before fees and related income on earning assets and provision for losses on loans, interest and fees receivable	180,709	95,732
Fees and related income on earning assets	70,984	29,912
Revenue from contracts with customers	12,759	4,465
Gain on repurchase of convertible senior notes	5,127
Equity in income of equity-method investee	1,001	581
Income before income taxes	25,005	(6,767)
Income tax benefit (expense)	(3,830)	6,345
Assets, Total	856,354	507,232
Credit and Other Investments [Member] | Servicing Income [Member]
Revenue from contracts with customers	857	947
Auto Finance [Member]
Consumer loans, including past due fees	31,444	29,872
Other
Total interest income	31,444	29,872
Interest expense	(1,665)	(1,332)
Net interest income before fees and related income on earning assets and provision for losses on loans, interest and fees receivable	29,779	28,540
Fees and related income on earning assets	163	80
Revenue from contracts with customers	995	1,091
Gain on repurchase of convertible senior notes
Equity in income of equity-method investee
Income before income taxes	6,758	10,249
Income tax benefit (expense)	(1,723)	(2,215)
Assets, Total	79,912	75,376
Auto Finance [Member] | Servicing Income [Member]
Revenue from contracts with customers	$ 929	$ 1,022

XML

Note 6 - Fair Values of Assets and Liabilities (Tables)

12 Months Ended

Dec. 31, 2019

Notes Tables

Fair Value, Assets Measured on Recurring Basis [Table Text Block]

Assets – As of December 31, 2019 (1)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Carrying Amount of Assets
Loans, interest and fees receivable, net for which it is practicable to estimate fair value	$	—	$	—	$	781,208	$	721,573
Loans, interest and fees receivable, at fair value	$	—	$	—	$	4,386	$	4,386

Assets – As of December 31, 2018 (1)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Carrying Amount of Assets
Loans, interest and fees receivable, net for which it is practicable to estimate fair value	$	—	$	—	$	470,496	$	418,236
Loans, interest and fees receivable, at fair value	$	—	$	—	$	6,306	$	6,306

Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block]

	Loans, Interest and Fees Receivables, at Fair Value
	2019			2018
Balance at January 1,	$	6,306		$	11,109
Total gains—realized/unrealized:
Net revaluations of loans, interest and fees receivable, at fair value		1,251			606
Settlements		(3,171	)		(5,395	)
Impact of foreign currency translation		—			(14	)
Balance at December 31,	$	4,386		$	6,306

Fair Value Measurement Inputs and Valuation Techniques [Table Text Block]

Fair Value Measurement	Fair Value at December 31, 2019 (in thousands)		Valuation Technique	Unobservable Input	Range (Weighted Average)
Loans, interest and fees receivable, at fair value	$	4,386	Discounted cash flows	Gross yield		27.5% to 59.4% (31.0%)
				Principal payment rate		2.2% to 5.5% (2.6%)
				Expected credit loss rate		10.5% to 39.4% (13.7%)
				Servicing rate		11.3% to 16.9% (11.9%)
				Discount rate		14.3% to 14.3% (14.3%)

Fair Value Measurement	Fair Value at December 31, 2018 (in thousands)		Valuation Technique	Unobservable Input	Range (Weighted Average)
Loans, interest and fees receivable, at fair value	$	6,306	Discounted cash flows	Gross yield		25.8% to 30.8% (26.4%)
				Principal payment rate		2.2% to 3.0% (2.3%)
				Expected credit loss rate		8.7% to 11.3% (9.0%)
				Servicing rate		14.9% to 19.5% (15.5%)
				Discount rate		14.9% to 14.9% (14.9%)

Fair Value Measurement	Fair Value at December 31, 2019 (in thousands)		Valuation Technique	Unobservable Input	Weighted Average
Notes payable associated with structured financings, at fair value	$	3,920	Discounted cash flows	Gross yield		27.5	%
				Principal payment rate		2.2	%
				Expected credit loss rate		10.5	%
				Discount rate		14.3	%

Fair Value Measurement	Fair Value at December 31, 2018 (in thousands)		Valuation Technique	Unobservable Input	Weighted Average
Notes payable associated with structured financings, at fair value	$	5,651	Discounted cash flows	Gross yield		25.8	%
				Principal payment rate		2.2	%
				Expected credit loss rate		8.7	%
				Discount rate		14.9	%

Fair Value, Liabilities Measured on Recurring Basis [Table Text Block]

Liabilities – As of December 31, 2019	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Carrying Amount of Liabilities
Liabilities not carried at fair value
Revolving credit facilities	$	—	$	—	$	720,687	$	720,687
Amortizing debt facilities	$	—	$	—	$	28,522	$	28,522
Notes payable to related parties	$	—	$	—	$	—	$	—
Convertible senior notes	$	—	$	16,920	$	—	$	24,091
Liabilities carried at fair value
Notes payable associated with structured financings, at fair value	$	—	$	—	$	3,920	$	3,920

Liabilities – As of December 31, 2018	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Carrying Amount of Liabilities
Liabilities not carried at fair value
Revolving credit facilities	$	—	$	—	$	389,707	$	389,707
Amortizing debt facilities	$	—	$	—	$	1,220	$	1,220
Notes payable to related parties	$	—	$	—	$	40,000	$	40,000
Convertible senior notes	$	—	$	47,230	$	—	$	62,142
Liabilities carried at fair value
Notes payable associated with structured financings, at fair value	$	—	$	—	$	5,651	$	5,651

Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block]

	Notes Payable Associated with Structured Financings, at Fair Value
	2019			2018
Balance at January 1,	$	5,651		$	9,240
Total (gains) losses—realized/unrealized:
Net revaluations of notes payable associated with structured financings, at fair value		(1,731	)		(3,589	)
Repayments on outstanding notes payable, net		—			—
Balance at December 31,	$	3,920		$	5,651

Fair Value Option, Disclosures [Table Text Block]

As of December 31, 2019	Loans, Interest and Fees Receivable at Fair Value		Loans, Interest and Fees Receivable Pledged as Collateral under Structured Financings at Fair Value
Aggregate unpaid principal balance within loans, interest and fees receivable that are reported at fair value	$	644	$	5,280
Aggregate fair value of loans, interest and fees receivable that are reported at fair value	$	466	$	3,920
Aggregate fair value of receivables carried at fair value that are 90 days or more past due (which also coincides with finance charge and fee non-accrual policies)	$	1	$	8
Unpaid principal balance of receivables within loans, interest and fees receivable that are reported at fair value and are 90 days or more past due (which also coincides with finance charge and fee non-accrual policies) over the fair value of such loans, interest and fees receivable	$	28	$	185

As of December 31, 2018	Loans, Interest and Fees Receivable at Fair Value		Loans, Interest and Fees Receivable Pledged as Collateral under Structured Financings at Fair Value
Aggregate unpaid principal balance within loans, interest and fees receivable that are reported at fair value	$	1,160	$	7,708
Aggregate fair value of loans, interest and fees receivable that are reported at fair value	$	655	$	5,651
Aggregate fair value of receivables carried at fair value that are 90 days or more past due (which also coincides with finance charge and fee non-accrual policies)	$	3	$	7
Unpaid principal balance of receivables within loans, interest and fees receivable that are reported at fair value and are 90 days or more past due (which also coincides with finance charge and fee non-accrual policies) over the fair value of such loans, interest and fees receivable	$	35	$	224

Notes Payable	Notes Payable Associated with Structured Financings, at Fair Value as of December 31, 2019		Notes Payable Associated with Structured Financings, at Fair Value as of December 31, 2018
Aggregate unpaid principal balance of notes payable	$	101,314	$	101,314
Aggregate fair value of notes payable	$	3,920	$	5,651

XML

Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2019

Accounting Policies [Abstract]

Basis of Accounting, Policy [Policy Text Block]

Basis of Presentation and Use of Estimates

We prepare our consolidated financial statements in accordance with generally accepted accounting principles in the U.S. (“GAAP”). The preparation of financial statements in accordance with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of our consolidated financial statements, as well as the reported amounts of revenues and expenses during each reporting period. We base these estimates on information available to us as of the date of the financial statements. Actual results could differ materially from these estimates. Certain estimates, such as credit losses, payment rates, costs of funds, discount rates and the yields earned on credit card receivables, significantly affect the reported amount of credit card receivables that we report at fair value and our notes payable associated with structured financings, at fair value; these estimates likewise affect the changes in these amounts reflected within our fees and related income on earning assets line item on our consolidated statements of operations. Additionally, estimates of future credit losses have a significant effect on loans, interest and fees receivable, net, as shown on our consolidated balance sheets, as well as on the provision for losses on loans, interest and fees receivable within our consolidated statements of operations.

We have eliminated all significant intercompany balances and transactions for financial reporting purposes.

Cash and Cash Equivalents, Unrestricted Cash and Cash Equivalents, Policy [Policy Text Block]

Unrestricted Cash and Cash Equivalents

Unrestricted cash and cash equivalents consist of cash, money market investments and overnight deposits. We consider all highly liquid cash investments with low interest rate risk and original maturities of

three

months or less to be cash equivalents. Cash equivalents are carried at cost, which approximates market. We maintain unrestricted cash and cash equivalents for general operating purposes and to meet our longer term debt obligations. The majority of these cash balances are

not

insured.

Cash and Cash Equivalents, Restricted Cash and Cash Equivalents, Policy [Policy Text Block]

Restricted Cash

Restricted cash as of

December 31, 2019

 and

2018

 includes certain collections on loans, interest and fees receivable, the cash balances of which are required to be distributed to noteholders under our debt facilities. Our restricted cash balances also include minimum cash balances held in accounts at the request of certain of our business partners.

Receivable [Policy Text Block]

Loans, Interest and Fees Receivable

Loans, Interest and Fees Receivable, at Fair Value.

Loans, interest and fees receivable held at fair value represent receivables underlying credit card securitization trusts, and which qualify as a variable interest entity ("VIE"), that are consolidated onto our consolidated balance sheet, some portfolios of which are unencumbered and some of which are still encumbered under structured financing facilities. Further details concerning our loans, interest and fees receivable held at fair value are presented within Note

6,

“Fair Values of Assets and Liabilities.”

Loans, Interest and Fees Receivable.

Our loans, interest and fees receivable, gross, currently consist of receivables associated with (a) our U.S. point-of-sale and direct-to-consumer financing and other credit products platform within our Credit and Other Investments segment and (b) our Auto Finance segment’s operations. Our Credit and Other Investments segment loans, interest and fees receivable generally are unsecured, while our Auto Finance segment loans, interest and fees receivable generally are secured by the underlying automobiles in which we hold the vehicle title. We purchased loans with outstanding principal of

$182.9

million and

$179.4

million for the years ended

December 31, 2019

and

2018

, respectively, through our pre-qualified network of independent automotive dealers and automotive finance companies.

We show both an allowance for uncollectible loans, interest and fees receivable and unearned fees (or “deferred revenue”) for our loans, interest and fees receivable (i.e., as opposed to those carried at fair value). Our loans, interest and fees receivable consist of smaller-balance, homogeneous loans, divided into 

two

 portfolio segments:  Credit and Other Investments; and Auto Finance. While each of these categories has unique features, they share many of the same credit risk characteristics and thus share a similar approach to the establishment of an allowance for loan losses. Each portfolio segment is divided into pools based on common characteristics such as contract or acquisition channel. For each pool, we determine the necessary allowance for uncollectible loans, interest and fees receivable by analyzing some or all of the following unique attributes for each type of receivable pool:  historical loss rates; current delinquency and roll-rate trends; vintage analyses based on the number of months an account has been in existence; the effects of changes in the economy on our customers; changes in underwriting criteria; and estimated recoveries. For our Auto Finance segment we

may

further reduce the expected charge-off, taking into consideration specific dealer level reserves which

may

allow us to offset our losses and, in the case of secured loans, the impact of collateral available to offset a potential loss. Conversely, for receivables in our Credit and Other Investments segment, which generally do

not

have a secured interest in collateral, we look to reserve for the gross expected exposure to charge-offs.

These reserves are considered in conjunction with (and potentially reduced by) any unearned fees and discounts that 

may 

be applicable for an outstanding loan receivable. A considerable amount of judgment is required to assess the ultimate amount of uncollectible loans, interest and fees receivable, and we continuously evaluate and update our methodologies to determine the most appropriate allowance necessary. We 

may 

individually evaluate a receivable or pool of receivables for impairment if circumstances indicate that the receivable or pool of receivables 

may 

be at higher risk for non-performance than other receivables (e.g., if a particular retail or auto-finance partner has indications of non-performance (such as a bankruptcy) that could impact the underlying pool of receivables we purchased from the partner).

Certain of our loans, interest and fees receivable also contain components of deferred revenue including merchant fees on the purchases of receivables for our point-of-sale receivables and annual fee billings for our direct-to-consumer credit card receivables. Our point-of-sale and auto finance loans, interest and fees receivable include principal balances and associated fees and interest due from customers which are earned each period a loan is outstanding, net of the unearned portion of merchant fees and loan discounts. Additionally, many of our direct-to-consumer credit card receivables have an annual membership fee that is billed to the consumer on card activation and for each anniversary of that date thereafter. As of

December 31, 2019

 and

December 31, 2018

, the weighted average remaining accretion period for the

$90.3

million and

$43.9

 million of deferred revenue reflected in the consolidated balance sheets was

11

months. Included within deferred revenue, are merchant fees and discounts on purchased loans of

$48.1

million and

$30.0

million as of

December 31, 2019

 and

December 31, 2018

, respectively.

A roll-forward (in millions) of our allowance for uncollectible loans, interest and fees receivable by class of receivable is as follows: 

For the Year ended December 31, 2019	Credit Cards			Auto Finance			Other Unsecured Lending Products			Total
Allowance for uncollectible loans, interest and fees receivable:
Balance at beginning of period	$	(35.4	)	$	(1.3	)	$	(42.5	)	$	(79.2	)
Provision for loan losses		(161.5	)		(3.5	)		(83.4	)		(248.4	)
Charge offs		80.2			4.6			68.1			152.9
Recoveries		(4.6	)		(1.4	)		(5.6	)		(11.6	)
Balance at end of period	$	(121.3	)	$	(1.6	)	$	(63.4	)	$	(186.3	)

As of December 31, 2019	Credit Cards			Auto Finance			Other Unsecured Lending Products			Total
Allowance for uncollectible loans, interest and fees receivable:
Balance at end of period individually evaluated for impairment	$	—		$	(0.4	)	$	(0.1	)	$	(0.5	)
Balance at end of period collectively evaluated for impairment	$	(121.3	)	$	(1.2	)	$	(63.3	)	$	(185.8	)
Loans, interest and fees receivable:
Loans, interest and fees receivable, gross	$	509.2		$	89.8		$	399.2		$	998.2
Loans, interest and fees receivable individually evaluated for impairment	$	—		$	2.1		$	0.1		$	2.2
Loans, interest and fees receivable collectively evaluated for impairment	$	509.2		$	87.7		$	399.1		$	996.0

For the Year ended December 31, 2018	Credit Cards			Auto Finance			Other Unsecured Lending Products			Total
Allowance for uncollectible loans, interest and fees receivable:
Balance at beginning of period	$	(18.2	)	$	(2.3	)	$	(42.5	)	$	(63.0	)
Provision for loan losses		(46.6	)		(0.3	)		(53.4	)		(100.3	)
Charge offs		29.9			2.2			58.2			90.3
Recoveries		(0.5	)		(0.9	)		(4.8	)		(6.2	)
Balance at end of period	$	(35.4	)	$	(1.3	)	$	(42.5	)	$	(79.2	)

As of December 31, 2018	Credit Cards			Auto Finance			Other Unsecured Lending Products			Total
Allowance for uncollectible loans, interest and fees receivable:
Balance at end of period individually evaluated for impairment	$	—		$	(0.2	)	$	(0.1	)	$	(0.3	)
Balance at end of period collectively evaluated for impairment	$	(35.4	)	$	(1.1	)	$	(42.4	)	$	(78.9	)
Loans, interest and fees receivable:
Loans, interest and fees receivable, gross	$	188.6		$	88.1		$	264.6		$	541.3
Loans, interest and fees receivable individually evaluated for impairment	$	—		$	0.4		$	0.1		$	0.5
Loans, interest and fees receivable collectively evaluated for impairment	$	188.6		$	87.7		$	264.5		$	540.8

Delinquent loans, interest and fees receivable reflect the principal, fee and interest components of loans we did

not

collect on or prior to the contractual due date. Amounts we believe we will

not

ultimately collect are included as a component in our overall allowance for uncollectible loans, interest and fees receivable. For most products we service other than our Auto Finance receivables, interest and fees are discontinued when loans, interest and fees receivable become contractually

90

or more days past due. We charge off our Credit and Other Investments and Auto Finance segment receivables when they become contractually more than

180

days past due. For all of our products, we charge off receivables within

30

days of notification and confirmation of a customer’s bankruptcy or death. However, in some cases of death, we do

not

charge off receivables if there is a surviving, contractually liable individual or an estate large enough to pay the debt in full.

Recoveries on accounts previously charged off are credited to the allowance for uncollectible loans, interest and fees receivable and effectively offset our provision for losses on loans, interest and fees receivable recorded at net realizable value on our consolidated statements of operations. (All of the above discussion relates only to our loans, interest and fees receivable for which we use net realizable value, as opposed to fair value accounting. For loans, interest and fees receivable recorded at fair value, recoveries offset losses upon impairment of the underlying loans, interest and fees receivable recorded at fair value, net of recoveries on our consolidated statements of operations.)

We consider loan delinquencies a key indicator of credit quality because this measure provides the best ongoing estimate of how a particular class of receivables is performing. An aging of our delinquent loans, interest and fees receivable, gross (in millions) by class of receivable as of

December 31, 2019

and

December 31, 2018

 is as follows:

As of December 31, 2019	Credit Cards		Auto Finance		Other Unsecured Lending Products		Total
30-59 days past due	$	21.7	$	8.1	$	14.0	$	43.8
60-89 days past due		18.5		3.0		11.5		33.0
90 or more days past due		46.6		2.6		27.2		76.4
Delinquent loans, interest and fees receivable, gross		86.8		13.7		52.7		153.2
Current loans, interest and fees receivable, gross		422.4		76.1		346.5		845.0
Total loans, interest and fees receivable, gross	$	509.2	$	89.8	$	399.2	$	998.2
Balance of loans greater than 90-days delinquent still accruing interest and fees	$	—	$	1.9	$	—	$	1.9

As of December 31, 2018	Credit Cards		Auto Finance		Other Unsecured Lending Products		Total
30-59 days past due	$	7.1	$	7.9	$	9.7	$	24.7
60-89 days past due		5.3		2.8		7.6		15.7
90 or more days past due		12.3		2.2		18.5		33.0
Delinquent loans, interest and fees receivable, gross		24.7		12.9		35.8		73.4
Current loans, interest and fees receivable, gross		163.9		75.2		228.8		467.9
Total loans, interest and fees receivable, gross	$	188.6	$	88.1	$	264.6	$	541.3
Balance of loans greater than 90-days delinquent still accruing interest and fees	$	—	$	1.5	$	—	$	1.5

Troubled Debt Restructurings.

As part of ongoing collection efforts, once an account in our Credit and Other Investments segment is 

90

 days or more past due, the account is placed on a non-accrual status. Placement on a non-accrual status results in the use of programs under which the contractual interest associated with a receivable

may

be reduced or eliminated, or a certain amount of accrued fees is waived, provided a minimum number or amount of payments have been made. Following this adjustment, if a customer demonstrates a willingness and ability to resume making monthly payments and meets certain additional criteria, we will re-age the customer’s account. When we re-age an account, we adjust the status of the account to bring a delinquent account current, but generally do 

not

 make any further modifications to the payment terms or amount owed. Once an account is placed on a non-accrual status, it is closed for further purchases. Accounts that are placed on a non-accrual status and thereafter make at least 

one

 payment qualify as troubled debt restructurings (“TDRs”).

The following table details by class of receivable, the number and amount of modified loans, including TDRs that have been re-aged, as of

December 31, 2019

and

December 31, 2018

:

	As of
	December 31, 2019				December 31, 2018
	Point-of-sale		Direct-to-consumer		Point-of-sale		Direct-to-consumer
Number of TDRs		10,682		14,553		6,095		3,584
Number of TDRs that have been re-aged		2,788		2,854		2,759		1,111
Amount of TDRs on non-accrual status (in thousands)	$	14,468	$	13,037	$	4,885	$	1,942
Amount of TDRs on non-accrual status above that have been re-aged (in thousands)	$	5,118	$	3,104	$	3,782	$	955
Carrying value of TDRs (in thousands)	$	8,864	$	7,312	$	3,333	$	1,363
TDRs - Performing (carrying value, in thousands)*	$	6,754	$	6,106	$	2,525	$	1,191
TDRs - Nonperforming (carrying value, in thousands)*	$	2,110	$	1,206	$	808	$	172

*“TDRs - Performing” include accounts that are current on all amounts owed, while “TDRs - Nonperforming” include all accounts with past due amounts owed.

Given that the above TDRs have a high reserve rate prior to modification as TDRs, we do

not

separately reserve or impair these receivables outside of our general reserve process.

The Company modified

31,409

and

21,997

accounts in the amount of

$43.3

million and

$33.2

 million during the

twelve

month periods ended

December 31, 2019

 and

December 31, 2018

, respectively, that qualified as TDRs. The following table details by class of receivable, the number of accounts and balance of loans that completed a modification (including those that were classified as TDRs) within the prior

twelve

months and subsequently defaulted.

	Twelve Months Ended
	December 31, 2019				December 31, 2018
	Point-of-sale		Direct-to-consumer		Point-of-sale		Direct-to-consumer
Number of accounts		2,835		3,339		6,903		5,415
Loan balance at time of charge off (in thousands)	$	4,397	$	3,545	$	9,634	$	4,963

Property, Plant and Equipment, Policy [Policy Text Block]

Property at Cost, Net of Depreciation

We capitalize costs related to internal development and implementation of software used in our operating activities in accordance with applicable accounting literature. These capitalized costs consist almost exclusively of fees paid to

third

-party consultants to develop code and install and test software specific to our needs and to customize purchased software to maximize its benefit to us.

We record our property at cost less accumulated depreciation or amortization. We compute depreciation expense using the straight-line method over the estimated useful lives of our assets, which are approximately

5

years for furniture, fixtures and equipment, and

3

years for computers and software. We amortize leasehold improvements over the shorter of their estimated useful lives or the terms of their respective underlying leases.

We periodically review our property to determine if it is impaired. We incurred

no

impairment costs in

2019

and

no

 impairment costs in

2018

.

Equity Method Investments [Policy Text Block]

Investment in Equity-Method Investee

We account for an investment using the equity method of accounting if we have the ability to exercise significant influence, but

not

control, over the investee. Significant influence is generally deemed to exist based on ownership interest, although other factors, such as representation on an investee’s board of managers, specific voting and veto rights held by each investor and the effects of commercial arrangements, are considered in determining whether equity method accounting is appropriate. We record our interests in the income of our equity-method investee within the equity in income of equity-method investee category on our consolidated statements of operations.

We use the equity method for our

66.7%

investment in a limited liability company formed in

2004

to acquire a portfolio of credit card receivables. We account for this investment using the equity method of accounting due to specific voting and veto rights held by each investor, which do

not

allow us to control this investee.

We evaluate our investments in the equity-method investee for impairment each quarter by comparing the carrying amount of the investment to its fair value. Because

no

active market exists for the investee’s limited liability company membership interests, we evaluate our investment for impairment based on our evaluation of the fair value of the equity-method investee’s net assets relative to its carrying value. If we ever were to determine that the carrying value of our investment in the equity-method investee was greater than its fair value, we would write the investment down to its fair value.

Prepaid Expenses and Other Assets [Policy Text Block]

Prepaid Expenses and Other Assets

Prepaid expenses and other assets include amounts paid to 

third

 parties for marketing and other services as well as amounts owed to us by 

third

 parties. Prepaid amounts are expensed as the underlying related services are performed.  Also included are (

1

) commissions paid associated with our various office leases which we amortize into expense over the lease terms, (

2

) ongoing deferred costs associated with service contracts and (

3

) investments in consumer finance technology platforms carried at the lower of cost or market valuation.

Accounts Payable and Accrued Expenses [Policy Text Block]

Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses reflect both the billed and unbilled amounts owed at the end of a period for services rendered. Commencing in

July 2019,

accounts payable and accrued expenses includes payments owed under a deferred payment program started with an unrelated

third

-party for a portion of our marketing expenditures. As a result of this agreement, we were able to extend the payment terms associated with our growing marketing spend between

10

-

37

months. Also included within accounts payable and accrued expenses are amounts which

may

be payable in respect of

one

of our portfolios.

Revenue from Contract with Customer [Policy Text Block]

Revenue Recognition and Revenue from Contracts with Customers

Consumer Loans, Including Past Due Fees

Consumer loans, including past due fees reflect interest income, including finance charges, and late fees on loans in accordance with the terms of the related customer agreements. Premiums, discounts and merchant fees paid or received associated with an installment or auto loan are generally deferred and amortized over the average life of the related loans using the effective interest method. Finance charges and fees, net of amounts that we consider uncollectible, are included in loans, interest and fees receivable and revenue when the fees are earned based upon the contractual terms of the loans.

Fees and Related Income on Earning Assets

Fees and related income on earning assets primarily include: (

1

) fees associated with the credit products, including the receivables underlying our U.S. point-of-sale finance and direct-to-consumer platform, and our legacy credit card receivables; (

2

) changes in the fair value of loans, interest and fees receivable recorded at fair value; (

3

) changes in fair value of notes payable associated with structured financings recorded at fair value; and (

4

) gains or losses associated with our investments in securities. 

We assess fees on credit card accounts underlying our credit card receivables according to the terms of the related cardholder agreements and, except for annual membership fees, we recognize these fees as income when they are charged to the customers’ accounts. We accrete annual membership fees associated with our credit card receivables into income on a straight-line basis over the cardholder privilege period which is generally

12

months. Similarly, fees on our other credit products are recognized when earned, which coincides with the time they are charged to the customer’s account. Fees and related income on earning assets, net of amounts that we consider uncollectible, are included in loans, interest and fees receivable and revenue when the fees are earned based upon the contractual terms of the loans.

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

	Year Ended December 31,
	2019			2018
Fees on credit products	$	68,639		$	25,694
Changes in fair value of loans, interest and fees receivable recorded at fair value		1,251			606
Changes in fair value of notes payable associated with structured financings recorded at fair value		1,731			3,589
Other		(474	)		103
Total fees and related income on earning assets	$	71,147		$	29,992

The above changes in the fair value of loans, interest and fees receivable recorded at fair value category exclude the impact of current period charge offs associated with these receivables which are separately stated in Net losses upon impairment of loans, interest and fees receivable recorded at fair value on our consolidated statements of operations. See Note

6,

“Fair Values of Assets and Liabilities,” for further discussion of these receivables and their effects on our consolidated statements of operations.

Other income

Other income includes revenues associated with ancillary product offerings and interchange revenues.  We recognize these fees as income in the period earned. Included in Other income for

2019

is

$105.9

million associated with reductions in accruals related to

one

of our portfolios. The accrual was based upon our estimate of the amount that

may

be claimed by customers and was based upon several factors including customer claims volume, average claim amount and a determination of the amount, if any, which

may

be offered to resolve such claims. The assumptions used in the accrual estimate were subjective, mainly due to uncertainty associated with future claims volumes and the resolution costs, if any, per claim. As of 

December 31, 2019,

we had

no

reserves associated with this matter. For

2018,

Other income also includes the receipt of 

£34

million (approximately

$42.9

 million) in settlement of litigation, resulting in income recognition of approximately

$36.2

million after adjusting for amounts previously recorded.  

Revenue from Contracts with Customers

In the

first

quarter of

2018

, we adopted Accounting Standards Update (“ASU”)

No.

2014

-

09,

“Revenue from Contracts with Customers” under the modified retrospective transition method. There was

no

material change in the timing of revenue recognition upon adoption. The majority of our revenue is earned from financial instruments and is

not

included within the scope of this standard. We have determined that revenue from contracts with customers would primarily consist of interchange revenues in our Credit and Other Investments segment and servicing revenue and other customer-related fees in both our Credit and Other Investments segment and our Auto Finance segment. Servicing revenue is generated by meeting contractual performance obligations related to the collection of amounts due on receivables, and is settled with the customer net of our fee. Revenue from these contracts with customers is included as a component of Other income on our consolidated statements of operations. Service charges and other customer related fees are earned from customers based on the occurrence of specific services that do

not

result in an ongoing obligation beyond what has already been rendered. Components (in thousands) of our revenue from contracts with customers is as follows:

	Credit and
For the Year ended December 31, 2019	Other Investments		Auto Finance		Total
Interchange revenues, net (1)	$	8,495	$	—	$	8,495
Servicing income		857		929		1,786
Service charges and other customer related fees		3,407		66		3,473
Total revenue from contracts with customers	$	12,759	$	995	$	13,754

(

1

) Interchange revenue is presented net of customer reward expense.

	Credit and
For the Year ended December 31, 2018	Other Investments		Auto Finance		Total
Interchange revenues, net (1)	$	2,881	$	—	$	2,881
Servicing income		947		1,022		1,969
Service charges and other customer related fees		637		69		706
Total revenue from contracts with customers	$	4,465	$	1,091	$	5,556

(

1

) Interchange revenue is presented net of customer reward expense.

Selling, General and Administrative Expenses, Policy [Policy Text Block]

Card and Loan Servicing Expenses

Card and loan servicing costs primarily include collections and customer service expenses. Within this category of expenses are personnel, service bureau, cardholder correspondence and other direct costs associated with our collections and customer service efforts. Card and loan servicing costs also include outsourced collections and customer service expenses. We expense card and loan servicing costs as we incur them, with the exception of prepaid costs, which we expense over respective service periods.

Advertising Cost [Policy Text Block]

Marketing and Solicitation Expenses

We expense product solicitation costs, including printing, credit bureaus, list processing, telemarketing, postage, and internet marketing fees, as we incur these costs or expend resources. 

New Accounting Pronouncements, Policy [Policy Text Block]

Recent Accounting Pronouncements

In 

June 2016,

the FASB issued ASU

2016

-

13,

Measurement of Credit Losses on Financial Instruments. The guidance requires an assessment of credit losses based on expected rather than incurred losses (known as the current expected credit loss model). This generally will result in the recognition of allowances for losses earlier than under current accounting guidance for trade and other receivables, held to maturity debt securities and other instruments. The FASB has added several technical amendments (ASU

2018

-

19,

2019

-

04,

2019

-

10

and

2019

-

11

) to clarify technical aspects of the guidance and applicability to specific financial instruments or transactions. In

May 2019

the FASB issued ASU

2019

-

05

which allows entities to measure assets in the scope of ASC

326

-

20,

except held to maturity securities, using the fair value option when they adopt the new credit impairment standard. The election can be made on an instrument by instrument basis. The standard will be adopted on a prospective basis with a cumulative-effect adjustment to retained earnings as of the beginning of the

first

reporting period in which the guidance is effective. ASU

2016

-

13

(and ASU

2019

-

05

) was initially effective for annual and interim periods beginning after

December 15, 2019,

with early adoption permitted. The FASB recently delayed the effective date of this standard until annual and interim periods beginning after

December 15, 2022

for non-accelerated and smaller reporting company filers, with early adoption permitted for smaller reporting companies (among others). We are currently in the process of reviewing accounting interpretations, including the recently added fair value option, expected data requirements and necessary changes to our loss estimation methods, processes and systems. This standard is expected to result in an increase to our allowance for loan losses (unless the fair value option is elected) given the change to expected losses for the estimated life of the financial asset. If the fair value option is elected for some or all of our eligible receivables, we would expect an increase in the recorded value of the assets but more potential volatility as these receivables are remeasured each period. The extent of the financial statement impact will depend on the asset quality of the portfolio, and economic conditions and forecasts at adoption.

In 

February 2016, 

the FASB issued ASU 

No.

 

2016

-

02,

 Leases, along with subsequent guidance, which requires lessees to recognize assets and liabilities for most leases and changes certain aspects of current lessor accounting, among other things. We adopted these standards using a modified retrospective transition approach for leases existing at, or entered into after,

January 1, 2019

and did

not

restate the comparative periods presented in the Consolidated Financial Statements upon adoption.

ASU

2016

-

02

provides a number of optional practical expedients and policy elections in transition. We elected the ‘package of practical expedients’ under which we did

not

reassess prior conclusions about lease identification, lease classification and initial direct costs. We did

not

elect the use-of-hindsight or the practical expedient pertaining to land easements, the latter

not

being applicable to us. We also elected the short-term lease recognition exemption for all leases that qualify, meaning we do

not

recognize right-of-use assets or lease liabilities for these short term leases. 

Upon adoption, we recognized additional lease liabilities of

$30.2

million and a corresponding right-of-use asset of

$18.6

million with a

$0.6

million cumulative effect on our opening retained deficit. The impact of our status as a lessor in the sublease arrangements we maintain did

not

result in a material change upon adoption. See Note

8,

"Leases" for additional disclosure.     

Subsequent Events, Policy [Policy Text Block]

Subsequent Events

We evaluate subsequent events that occur after our consolidated balance sheet date but before our consolidated financial statements are issued. There are

two

types of subsequent events: (

1

) recognized, or those that provide additional evidence with respect to conditions that existed at the date of the balance sheet, including the estimates inherent in the process of preparing financial statements; and (

2

) nonrecognized, or those that provide evidence with respect to conditions that did

not

exist at the date of the balance sheet but arose subsequent to that date. We have evaluated subsequent events occurring after

December 31, 2019

,

and based on our evaluation we did

not

identify any recognized or nonrecognized subsequent events that would have required further adjustments to our consolidated financial statements other than the development described below.

As of

January 1, 2020,

we have elected the fair value option to account for certain loans receivable associated with our point-of-sale and direct-to-consumer platform that were originated on or after

January 1, 2020 (

the "Fair Value Receivables"). We believe the use of fair value for these receivables more closely approximates the true economics of these receivables, better matching the yields and corresponding charge-offs. We believe the fair value option also enables us to report GAAP net income that provides increased transparency into our profitability and asset quality. Receivables acquired prior to

January 1, 2020 

will continue to be accounted for in our

2020

 and subsequent financial statements at amortized cost, net. We will estimate the Fair Value Receivables using a discounted cash flow model, which considers various factors such as expected yields on consumer receivables, customer default rates, the timing of expected payments, estimated costs to service the portfolio, interest rates, and valuations of comparable portfolios. As a result of this fair value adoption, our loans, interest and fees receivable acquired subsequent to

January 1, 2020 

will be carried at fair value with changes in fair value recognized directly in earnings, and certain fee billings (such as annual membership fees and merchant fees) and origination costs associated with these receivables will

no

longer be deferred. We will reevaluate the fair value of our Fair Value Receivables at the end of each quarter.

On

January 30, 2020,

the World Health Organization (“WHO”) announced a global health emergency because of a new strain of coronavirus originating in Wuhan, China (the “COVID-

19

outbreak”) and the risks to the international community as the virus spreads globally beyond its point of origin. In

March 2020,

the WHO classified the COVID-

19

outbreak as a pandemic, based on the rapid increase in exposure globally.

The full impact of the COVID-

19

outbreak continues to evolve as of the date of this report. As such, it is uncertain as to the magnitude of the effect the pandemic will have on the Company’s financial condition, liquidity, and future results of operations. Management is actively monitoring the global situation on its financial condition, liquidity, operations, industry, and workforce. Given the daily evolution of the COVID-

19

outbreak and the global responses to curb its spread, it is premature for the Company to estimate the effects of the COVID-

19

outbreak on its results of operations, financial condition, or liquidity for fiscal year

2020.

 

XML

Note 13 - Net Income Attributable to Controlling Interests Per Common Share

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Earnings Per Share [Text Block]

13. Net Income Attributable to Controlling Interests Per Common Share

We compute net income (loss) attributable to controlling interests per common share by dividing net income (loss) attributable to controlling interests by the weighted-average number of shares of common stock (including participating securities) outstanding during the period, as discussed below. Diluted computations applicable in financial reporting periods in which we report income reflect the potential dilution to the basic income per share of common stock computations that could occur if securities or other contracts to issue common stock were exercised, were converted into common stock or were to result in the issuance of common stock that would share in our results of operations. In performing our net income (loss) attributable to controlling interests per share of common stock computations, we apply accounting rules that require us to include all unvested stock awards that contain non-forfeitable rights to dividends or dividend equivalents, whether paid or unpaid, in the number of shares outstanding in our basic and diluted calculations. Common stock and certain unvested share-based payment awards earn dividends equally, and we have included all outstanding restricted stock awards in our basic and diluted calculations for current and prior periods.

The following table sets forth the computations of net income attributable to controlling interests per share of common stock (in thousands, except per share data): 

	For the Year Ended December 31,
	2019			2018
Numerator:
Net income attributable to controlling interests	$	26,443		$	7,856
Preferred stock dividends and accretion		(1,153	)		—
Net income attributable to common shareholders	$	25,290		$	7,856
Denominator:
Basic (including unvested share-based payment awards) (1)		14,499			13,927
Effect of dilutive stock compensation arrangements		774			75
Diluted (including unvested share-based payment awards) (1)		15,273			14,002
Net income attributable to common shareholders per share—basic	$	1.74		$	0.56
Net income attributable to common shareholders per share—diluted	$	1.66		$	0.56

( 1 ) Shares related to unvested share-based payment awards included in our basic and diluted share counts were 512,636 for the year ended   December 31, 2019 , compared to 272,172 for the year ended   December 31, 2018 .

As their effects were anti-dilutive, we excluded stock options to purchase

0.5

 million and

2.9

 million shares from our net income attributable to controlling interests per share of common stock calculations for the years ended

December 31, 2019

and

2018,

respectively.  Additionally, as their effects were anti-dilutive, we excluded all shares associated with our Series A Preferred Stock. See Note

16

"Related Party Transactions" for a further discussion of our Series A Preferred Stock.

For the years ended

December 31, 2019

and

2018

, there were

no

shares potentially issuable and thus includible in the diluted net income attributable to controlling interests per share of common stock calculations pursuant to our convertible senior notes. However, in future reporting periods during which our closing stock price is above the

$24.61

conversion price for the convertible senior notes, and depending on the closing stock price at conversion, the maximum potential dilution under the conversion provisions of such notes is

1

.4

 million shares, which could be included in diluted share counts in net income per share of common stock calculations. See Note

10

, “Convertible Senior Notes,” for a further discussion of these convertible securities.

XML

Note 10 - Convertible Senior Notes (Details Textual)			12 Months Ended
	Aug. 26, 2019 USD ($)	Nov. 30, 2005 USD ($) shares	Dec. 31, 2019 USD ($) $ / shares shares	Dec. 31, 2018 USD ($) shares
Gain (Loss) on Repurchase of Debt Instrument			$ 5,127,000
Own-share Lending Arrangement, Shares, Outstanding | shares			1,459,233	1,459,233
Amortization of Debt Discount (Premium)			$ 818,000	$ 890,000
Bear Sterns International Limited [Member]
Own-share Lending Arrangement, Shares, Outstanding | shares		5,677,950	1,459,233
Own-share Lending Arrangement, Shares, Outstanding, Value			$ 13,100,000
Term Note [Member]
Debt Instrument, Interest Rate, Stated Percentage	8.00%
Long-term Debt, Total	$ 17,400,000
Five Point Eight Seven Five Percent Convertible Senior Notes Due Two Thousand Thirty Five [Member]
Debt Instrument, Convertible, Conversion Price | $ / shares			$ 24.61
Five Point Eight Seven Five Percent Convertible Senior Notes Due Two Thousand Thirty Five [Member] | Convertible Debt [Member]
Debt Instrument, Face Amount	54,400,000	$ 300,000,000	$ 33,839,000	88,280,000
Debt Instrument, Interest Rate, Stated Percentage		5.875%
Debt Instrument, Maturity Date		Nov. 30, 2035
Debt Instrument, Repurchase Amount	16,300,000
Gain (Loss) on Repurchase of Debt Instrument	$ 5,100,000
Debt Instrument, Convertible, Conversion Ratio			40.63
Debt Instrument, Convertible, Conversion Price | $ / shares			$ 24.61
Debt Instrument, Convertible, Cash Paid Per $1,000 Principal Held			$ 1,000
Amortization of Debt Discount (Premium)			500,000	600,000
Interest Payable			$ 3,900,000	$ 5,200,000
Debt, Weighted Average Interest Rate			9.20%	9.20%

XML

Note 9 - Notes Payable and Variable Interest Entities - Schedule of Structured Financing Notes Payable (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Securitization facility (stated maturity of December 2021), outstanding face amount of $101.3 million as of December 31, 2019 ($101.3 million as of December 31, 2018) bearing interest at a weighted average 6.9% interest rate, based upon LIBOR, at December 31, 2019 (7.5% at December 31, 2018), which is secured by credit card receivables and restricted cash aggregating $3.9 million as of December 31, 2019 ($5.7 million as of December 31, 2018) in carrying amount	$ 3,920	$ 5,651
Securitization Financing Facility [Member]
Securitization facility (stated maturity of December 2021), outstanding face amount of $101.3 million as of December 31, 2019 ($101.3 million as of December 31, 2018) bearing interest at a weighted average 6.9% interest rate, based upon LIBOR, at December 31, 2019 (7.5% at December 31, 2018), which is secured by credit card receivables and restricted cash aggregating $3.9 million as of December 31, 2019 ($5.7 million as of December 31, 2018) in carrying amount	$ 3,900	$ 5,700

XML

Note 2 - Significant Accounting Policies and Consolidated Financial Statement Components - Summary of Fees and Related Income on Earning Assets (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Fees on credit products	$ 68,639	$ 25,694
Changes in fair value of loans, interest and fees receivable recorded at fair value	1,251	606
Changes in fair value of notes payable associated with structured financings recorded at fair value	1,731	3,589
Other	(474)	103
Total fees and related income on earning assets	$ 71,147	$ 29,992

XML

Note 4 - Shareholders' Equity and Preferred Stock (Details Textual) - USD ($)		12 Months Ended
	Dec. 27, 2019	Dec. 31, 2019	Dec. 31, 2018	Nov. 14, 2019	Nov. 26, 2014
Stock Repurchased and Retired During Period, Shares		357,461	281,787
Stock Repurchased and Retired During Period, Value		$ 2,517,000	$ 723,000
Own-share Lending Arrangement, Shares, Outstanding		1,459,233	1,459,233
Class B Preferred Units [Member]
Preferred Units, Issued				50,500,000
Preferred Unit Purchase Price				$ 1
Preferred Units Issued, Percentage of Preferred Return				16.00%
Preferred Units Issued, Maximum Percentage Points of Preferred Return in Form of Issuance of Additional Units or Cash				6.00%
Preferred Units, Authorized				50,500,000
Series A Preferred Stock [Member]
Temporary Equity, Shares Issued	400,000	400,000	0
Temporary Equity, Shares Authorized	10,000,000	10,000,000	0
Temporary Equity, Shares Outstanding	400,000	400,000	0
Temporary Equity, Liquidation Preference	$ 40,000,000
Preferred Stock, Dividend Rate, Percentage	6.00%
Temporary Equity, Redemption Price Per Share	$ 100
Temporary Equity, Conversion Price Per Share	$ 10
Dove Ventures, LLC [Member] | Senior Secured Term Loan Facility [Member]
Line of Credit Facility, Maximum Borrowing Capacity					$ 40,000,000
Extinguishment of Debt, Amount	$ 40,000,000

XML

Note 6 - Fair Values of Assets and Liabilities - Summary of Fair Value Hierarchy for Assets (Details) - USD ($) $ in Thousands		Dec. 31, 2019	Dec. 31, 2018
Loans, interest and fees receivable, at fair value		$ 4,386	$ 6,306
Fair Value, Recurring [Member]
Loans, interest and fees receivable, net for which it is practicable to estimate fair value	[1]	721,573	418,236
Loans, interest and fees receivable, at fair value	[1]	4,386	6,306
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]
Loans, interest and fees receivable, net for which it is practicable to estimate fair value	[1]
Loans, interest and fees receivable, at fair value	[1]
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
Loans, interest and fees receivable, net for which it is practicable to estimate fair value	[1]
Loans, interest and fees receivable, at fair value	[1]
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]
Loans, interest and fees receivable, net for which it is practicable to estimate fair value	[1]	781,208	470,496
Loans, interest and fees receivable, at fair value	[1]	$ 4,386	$ 6,306

[1] For cash, deposits and investments in equity securities, the carrying amount is a reasonable estimate of fair value.

XML

Note 12 - Income Taxes - Unrecognized Tax Benefits Rollforward (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Balance	$ (414)	$ (373)
Reductions based on tax positions related to prior years	13	51
Additions based on tax positions related to the current year	(83)	(71)
Interest and penalties accrued	(29)	(21)
Balance	$ (513)	$ (414)

XML

Note 14 - Stock-based Compensation - Summary of Outstanding Options (Details)	12 Months Ended
	Dec. 31, 2019 USD ($) $ / shares shares
Outstanding (in shares) | shares	3,121,200
Outstanding, weighted average exercise price (in dollars per share) | $ / shares	$ 3.50
Issued (in shares) | shares	50,000
Issued, weighted average exercise price (in dollars per share) | $ / shares	$ 3.13
Exercised (in shares) | shares	(469,701)
Exercised, weighted average exercise price (in dollars per share) | $ / shares	$ 2.59
Cancelled/Forfeited (in shares) | shares	(14,000)
Cancelled/Forfeited, weighted average exercise price (in dollars per share) | $ / shares	$ 3.13
Outstanding (in shares) | shares	2,687,499
Outstanding, weighted average exercise price (in dollars per share) | $ / shares	$ 3.66
Outstanding, weighted average remaining contractual life (Year)	2 years 73 days
Outstanding, aggregate intrinsic value | $	$ 14,386,956
Exercisable (in shares) | shares	1,076,836
Exercisable, weighted average exercise price (in dollars per share) | $ / shares	$ 3.50
Exercisable, weighted average remaining contractual life (Year)	1 year 182 days
Exercisable, aggregate intrinsic value | $	$ 5,930,463

XML

Note 8 - Leases - Lease Cost (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Cash paid under operating leases, gross	$ 10,080
Accounting Standards Update 2016-02 [Member]
Operating lease cost, gross	6,875	6,758
Sublease income	(5,133)	(5,080)
Net Operating lease cost	1,742	1,678
Cash paid under operating leases, gross	$ 10,080	$ 9,913
Weighted average remaining lease term - months (Month)	2 years 150 days
Weighted average discount rate	6.90%

XML

Note 6 - Fair Values of Assets and Liabilities - Summary of Other Relevant Data (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Loans, interest and fees receivable, at fair value	$ 4,386	$ 6,306
Loans and Fees Receivable at Fair Value [Member]
Aggregate unpaid principal balance within loans, interest and fees receivable that are reported at fair value	644	1,160
Loans, interest and fees receivable, at fair value	466	655
Aggregate fair value of receivables carried at fair value that are 90 days or more past due (which also coincides with finance charge and fee non-accrual policies)	1	3
Unpaid principal balance of receivables within loans, interest and fees receivable that are reported at fair value and are 90 days or more past due (which also coincides with finance charge and fee non-accrual policies) over the fair value of such loans, interest and fees receivable	28	35
Structured Financing Notes Payable [Member]
Aggregate unpaid principal balance within loans, interest and fees receivable that are reported at fair value	101,314	101,314
Aggregate fair value of notes payable	3,920	5,651
Loans and Fees Receivable Pledged as Collateral, Fair Value [Member]
Aggregate unpaid principal balance within loans, interest and fees receivable that are reported at fair value	5,280	7,708
Loans, interest and fees receivable, at fair value	3,920	5,651
Aggregate fair value of receivables carried at fair value that are 90 days or more past due (which also coincides with finance charge and fee non-accrual policies)	8	7
Unpaid principal balance of receivables within loans, interest and fees receivable that are reported at fair value and are 90 days or more past due (which also coincides with finance charge and fee non-accrual policies) over the fair value of such loans, interest and fees receivable	$ 185	$ 224

XML

Note 6 - Fair Values of Assets and Liabilities - Reconciliation of Level 3 Assets (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Balance	$ 6,306	$ 11,109
Net revaluations of loans, interest and fees receivable, at fair value	1,251	606
Settlements	(3,171)	(5,395)
Impact of foreign currency translation		(14)
Balance	$ 4,386	$ 6,306

XML

Note 9 - Notes Payable and Variable Interest Entities (Tables)

12 Months Ended

Dec. 31, 2019

Notes Tables

Schedule of Variable Interest Entities [Table Text Block]

	As of
	December 31, 2019			December 31, 2018
Unrestricted cash and cash equivalents	$	78.7		$	16.8
Restricted cash and cash equivalents	$	25.9		$	61.0
Loans, interest and fees receivable, at fair value	$	3.9		$	5.7
Loans, interest and fees receivable, gross	$	857.2		$	403.4
Allowances for uncollectible loans, interest and fees receivable	$	(168.8	)	$	(57.4	)
Deferred revenue	$	(40.7	)	$	(13.2	)
Total Assets held by VIEs	$	756.2		$	416.3
Notes Payable, at face value held by VIEs	$	701.1		$	366.7
Notes Payable, at fair value held by VIEs	$	3.9		$	5.7
Maximum exposure to loss due to involvement with VIEs	$	654.3		$	438.5

Schedule of Debt [Table Text Block]

	As of
	December 31, 2019			December 31, 2018
Revolving credit facilities at a weighted average interest rate equal to 6.0% at December 31, 2019 (7.6% at December 31, 2018) secured by the financial and operating assets of CAR and/or certain receivables and restricted cash with a combined aggregate carrying amount of $740.4 million as of December 31, 2019 ($468.8 million at December 31, 2018)
Revolving credit facility, not to exceed $55.0 million (expiring November 1, 2021) (1) (2) (3)	$	39.1		$	30.0
Revolving credit facility, not to exceed $50.0 million (expiring October 30, 2022) (2) (3) (4) (5)		40.5			49.9
Revolving credit facility, not to exceed $20.0 million (expiring March 31, 2020) (2) (4) (5)	19.4				—
Revolving credit facility, not to exceed $70.0 million (expiring February 8, 2022) (3) (4) (5) (6)		25.8			61.0
Revolving credit facility, not to exceed $100.0 million (expiring June 11, 2021) (3) (4) (5) (6)		—			80.5
Revolving credit facility, not to exceed $15.0 million (expiring July 15, 2021) (2) (4) (5)		14.6			—
Revolving credit facility, not to exceed $100.0 million (expiring November 16, 2020) (3) (4) (5) (6)		—			8.0
Revolving credit facility, not to exceed $167.3 million (expiring November 15, 2023) (3) (4) (5) (6)		167.3			167.3
Revolving credit facility, not to exceed $200.0 million (expiring December 15, 2022) (3) (4) (5) (6)		200.0			—
Revolving credit facility, not to exceed $200.0 million (expiring May 15, 2024) (3) (4) (5) (6)		200.0			—
Revolving credit facility, not to exceed $15.0 million (expiring December 21, 2020) (2) (3) (4) (5)		8.6			—
Revolving credit facility, not to exceed $50.0 million (expiring September 19, 2021) (2) (3) (4) (5)		15.0			—
Other facilities
Other secured debt (expiring September 8, 2023) that is secured by certain assets of the Company with an annual rate equal to 5.5%		1.2			1.2
Unsecured term debt (expiring August 26, 2024) with an annual rate equal to 8.0% (3)		17.4			—
Amortizing debt facility (expiring September 30, 2021) with an annual rate equal to 6.2% (2) (3) (4) (5)		10.0			—
Senior secured term loan to related parties (paid-off on December 27, 2019) that was secured by certain assets of the Company with an annual rate equal to 9.0% (3)		—			40.0
Total notes payable before unamortized debt issuance costs and discounts		758.9			437.9
Unamortized debt issuance costs and discounts		(9.7	)		(7.0	)
Total notes payable outstanding	$	749.2		$	430.9

Structured Financing Notes Payable [Member]

Notes Tables

Schedule of Debt [Table Text Block]

	Carrying Amounts at Fair Value as of
	December 31, 2019		December 31, 2018
Securitization facility (stated maturity of December 2021), outstanding face amount of $101.3 million as of December 31, 2019 ($101.3 million as of December 31, 2018) bearing interest at a weighted average 6.9% interest rate, based upon LIBOR, at December 31, 2019 (7.5% at December 31, 2018), which is secured by credit card receivables and restricted cash aggregating $3.9 million as of December 31, 2019 ($5.7 million as of December 31, 2018) in carrying amount	$	3.9	$	5.7

XML

Note 14 - Stock-based Compensation (Tables)

12 Months Ended

Dec. 31, 2019

Notes Tables

Share-based Payment Arrangement, Option, Activity [Table Text Block]

	Number of Shares			Weighted-Average Exercise Price		Weighted-Average of Remaining Contractual Life (in years)		Aggregate Intrinsic Value
Outstanding at December 31, 2018		3,121,200		$	3.50
Issued		50,000		$	3.13
Exercised		(469,701	)	$	2.59
Cancelled/Forfeited		(14,000	)	$	3.13
Outstanding at December 31, 2019		2,687,499		$	3.66		2.2	$	14,386,956
Exercisable at December 31, 2019		1,076,836		$	3.50		1.5	$	5,930,463

XML

Note 2 - Significant Accounting Policies and Consolidated Financial Statement Components

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Significant Accounting Policies [Text Block]

2. Significant Accounting Policies and Consolidated Financial Statement Components

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

Basis of Presentation and Use of Estimates

We prepare our consolidated financial statements in accordance with generally accepted accounting principles in the U.S. (“GAAP”). The preparation of financial statements in accordance with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of our consolidated financial statements, as well as the reported amounts of revenues and expenses during each reporting period. We base these estimates on information available to us as of the date of the financial statements. Actual results could differ materially from these estimates. Certain estimates, such as credit losses, payment rates, costs of funds, discount rates and the yields earned on credit card receivables, significantly affect the reported amount of credit card receivables that we report at fair value and our notes payable associated with structured financings, at fair value; these estimates likewise affect the changes in these amounts reflected within our fees and related income on earning assets line item on our consolidated statements of operations. Additionally, estimates of future credit losses have a significant effect on loans, interest and fees receivable, net, as shown on our consolidated balance sheets, as well as on the provision for losses on loans, interest and fees receivable within our consolidated statements of operations.

We have eliminated all significant intercompany balances and transactions for financial reporting purposes.

Unrestricted Cash and Cash Equivalents

Unrestricted cash and cash equivalents consist of cash, money market investments and overnight deposits. We consider all highly liquid cash investments with low interest rate risk and original maturities of

three

months or less to be cash equivalents. Cash equivalents are carried at cost, which approximates market. We maintain unrestricted cash and cash equivalents for general operating purposes and to meet our longer term debt obligations. The majority of these cash balances are

not

insured.

Restricted Cash

Restricted cash as of

December 31, 2019

 and

2018

 includes certain collections on loans, interest and fees receivable, the cash balances of which are required to be distributed to noteholders under our debt facilities. Our restricted cash balances also include minimum cash balances held in accounts at the request of certain of our business partners.

Loans, Interest and Fees Receivable

Loans, Interest and Fees Receivable, at Fair Value.

Loans, interest and fees receivable held at fair value represent receivables underlying credit card securitization trusts, and which qualify as a variable interest entity ("VIE"), that are consolidated onto our consolidated balance sheet, some portfolios of which are unencumbered and some of which are still encumbered under structured financing facilities. Further details concerning our loans, interest and fees receivable held at fair value are presented within Note

6,

“Fair Values of Assets and Liabilities.”

Loans, Interest and Fees Receivable.

Our loans, interest and fees receivable, gross, currently consist of receivables associated with (a) our U.S. point-of-sale and direct-to-consumer financing and other credit products platform within our Credit and Other Investments segment and (b) our Auto Finance segment’s operations. Our Credit and Other Investments segment loans, interest and fees receivable generally are unsecured, while our Auto Finance segment loans, interest and fees receivable generally are secured by the underlying automobiles in which we hold the vehicle title. We purchased loans with outstanding principal of

$182.9

million and

$179.4

million for the years ended

December 31, 2019

and

2018

, respectively, through our pre-qualified network of independent automotive dealers and automotive finance companies.

We show both an allowance for uncollectible loans, interest and fees receivable and unearned fees (or “deferred revenue”) for our loans, interest and fees receivable (i.e., as opposed to those carried at fair value). Our loans, interest and fees receivable consist of smaller-balance, homogeneous loans, divided into 

two

 portfolio segments:  Credit and Other Investments; and Auto Finance. While each of these categories has unique features, they share many of the same credit risk characteristics and thus share a similar approach to the establishment of an allowance for loan losses. Each portfolio segment is divided into pools based on common characteristics such as contract or acquisition channel. For each pool, we determine the necessary allowance for uncollectible loans, interest and fees receivable by analyzing some or all of the following unique attributes for each type of receivable pool:  historical loss rates; current delinquency and roll-rate trends; vintage analyses based on the number of months an account has been in existence; the effects of changes in the economy on our customers; changes in underwriting criteria; and estimated recoveries. For our Auto Finance segment we

may

further reduce the expected charge-off, taking into consideration specific dealer level reserves which

may

allow us to offset our losses and, in the case of secured loans, the impact of collateral available to offset a potential loss. Conversely, for receivables in our Credit and Other Investments segment, which generally do

not

have a secured interest in collateral, we look to reserve for the gross expected exposure to charge-offs.

These reserves are considered in conjunction with (and potentially reduced by) any unearned fees and discounts that 

may 

be applicable for an outstanding loan receivable. A considerable amount of judgment is required to assess the ultimate amount of uncollectible loans, interest and fees receivable, and we continuously evaluate and update our methodologies to determine the most appropriate allowance necessary. We 

may 

individually evaluate a receivable or pool of receivables for impairment if circumstances indicate that the receivable or pool of receivables 

may 

be at higher risk for non-performance than other receivables (e.g., if a particular retail or auto-finance partner has indications of non-performance (such as a bankruptcy) that could impact the underlying pool of receivables we purchased from the partner).

Certain of our loans, interest and fees receivable also contain components of deferred revenue including merchant fees on the purchases of receivables for our point-of-sale receivables and annual fee billings for our direct-to-consumer credit card receivables. Our point-of-sale and auto finance loans, interest and fees receivable include principal balances and associated fees and interest due from customers which are earned each period a loan is outstanding, net of the unearned portion of merchant fees and loan discounts. Additionally, many of our direct-to-consumer credit card receivables have an annual membership fee that is billed to the consumer on card activation and for each anniversary of that date thereafter. As of

December 31, 2019

 and

December 31, 2018

, the weighted average remaining accretion period for the

$90.3

million and

$43.9

 million of deferred revenue reflected in the consolidated balance sheets was

11

months. Included within deferred revenue, are merchant fees and discounts on purchased loans of

$48.1

million and

$30.0

million as of

December 31, 2019

 and

December 31, 2018

, respectively.

A roll-forward (in millions) of our allowance for uncollectible loans, interest and fees receivable by class of receivable is as follows: 

For the Year ended December 31, 2019	Credit Cards			Auto Finance			Other Unsecured Lending Products			Total
Allowance for uncollectible loans, interest and fees receivable:
Balance at beginning of period	$	(35.4	)	$	(1.3	)	$	(42.5	)	$	(79.2	)
Provision for loan losses		(161.5	)		(3.5	)		(83.4	)		(248.4	)
Charge offs		80.2			4.6			68.1			152.9
Recoveries		(4.6	)		(1.4	)		(5.6	)		(11.6	)
Balance at end of period	$	(121.3	)	$	(1.6	)	$	(63.4	)	$	(186.3	)

As of December 31, 2019	Credit Cards			Auto Finance			Other Unsecured Lending Products			Total
Allowance for uncollectible loans, interest and fees receivable:
Balance at end of period individually evaluated for impairment	$	—		$	(0.4	)	$	(0.1	)	$	(0.5	)
Balance at end of period collectively evaluated for impairment	$	(121.3	)	$	(1.2	)	$	(63.3	)	$	(185.8	)
Loans, interest and fees receivable:
Loans, interest and fees receivable, gross	$	509.2		$	89.8		$	399.2		$	998.2
Loans, interest and fees receivable individually evaluated for impairment	$	—		$	2.1		$	0.1		$	2.2
Loans, interest and fees receivable collectively evaluated for impairment	$	509.2		$	87.7		$	399.1		$	996.0

For the Year ended December 31, 2018	Credit Cards			Auto Finance			Other Unsecured Lending Products			Total
Allowance for uncollectible loans, interest and fees receivable:
Balance at beginning of period	$	(18.2	)	$	(2.3	)	$	(42.5	)	$	(63.0	)
Provision for loan losses		(46.6	)		(0.3	)		(53.4	)		(100.3	)
Charge offs		29.9			2.2			58.2			90.3
Recoveries		(0.5	)		(0.9	)		(4.8	)		(6.2	)
Balance at end of period	$	(35.4	)	$	(1.3	)	$	(42.5	)	$	(79.2	)

As of December 31, 2018	Credit Cards			Auto Finance			Other Unsecured Lending Products			Total
Allowance for uncollectible loans, interest and fees receivable:
Balance at end of period individually evaluated for impairment	$	—		$	(0.2	)	$	(0.1	)	$	(0.3	)
Balance at end of period collectively evaluated for impairment	$	(35.4	)	$	(1.1	)	$	(42.4	)	$	(78.9	)
Loans, interest and fees receivable:
Loans, interest and fees receivable, gross	$	188.6		$	88.1		$	264.6		$	541.3
Loans, interest and fees receivable individually evaluated for impairment	$	—		$	0.4		$	0.1		$	0.5
Loans, interest and fees receivable collectively evaluated for impairment	$	188.6		$	87.7		$	264.5		$	540.8

Delinquent loans, interest and fees receivable reflect the principal, fee and interest components of loans we did

not

collect on or prior to the contractual due date. Amounts we believe we will

not

ultimately collect are included as a component in our overall allowance for uncollectible loans, interest and fees receivable. For most products we service other than our Auto Finance receivables, interest and fees are discontinued when loans, interest and fees receivable become contractually

90

or more days past due. We charge off our Credit and Other Investments and Auto Finance segment receivables when they become contractually more than

180

days past due. For all of our products, we charge off receivables within

30

days of notification and confirmation of a customer’s bankruptcy or death. However, in some cases of death, we do

not

charge off receivables if there is a surviving, contractually liable individual or an estate large enough to pay the debt in full.

Recoveries on accounts previously charged off are credited to the allowance for uncollectible loans, interest and fees receivable and effectively offset our provision for losses on loans, interest and fees receivable recorded at net realizable value on our consolidated statements of operations. (All of the above discussion relates only to our loans, interest and fees receivable for which we use net realizable value, as opposed to fair value accounting. For loans, interest and fees receivable recorded at fair value, recoveries offset losses upon impairment of the underlying loans, interest and fees receivable recorded at fair value, net of recoveries on our consolidated statements of operations.)

We consider loan delinquencies a key indicator of credit quality because this measure provides the best ongoing estimate of how a particular class of receivables is performing. An aging of our delinquent loans, interest and fees receivable, gross (in millions) by class of receivable as of

December 31, 2019

and

December 31, 2018

 is as follows:

As of December 31, 2019	Credit Cards		Auto Finance		Other Unsecured Lending Products		Total
30-59 days past due	$	21.7	$	8.1	$	14.0	$	43.8
60-89 days past due		18.5		3.0		11.5		33.0
90 or more days past due		46.6		2.6		27.2		76.4
Delinquent loans, interest and fees receivable, gross		86.8		13.7		52.7		153.2
Current loans, interest and fees receivable, gross		422.4		76.1		346.5		845.0
Total loans, interest and fees receivable, gross	$	509.2	$	89.8	$	399.2	$	998.2
Balance of loans greater than 90-days delinquent still accruing interest and fees	$	—	$	1.9	$	—	$	1.9

As of December 31, 2018	Credit Cards		Auto Finance		Other Unsecured Lending Products		Total
30-59 days past due	$	7.1	$	7.9	$	9.7	$	24.7
60-89 days past due		5.3		2.8		7.6		15.7
90 or more days past due		12.3		2.2		18.5		33.0
Delinquent loans, interest and fees receivable, gross		24.7		12.9		35.8		73.4
Current loans, interest and fees receivable, gross		163.9		75.2		228.8		467.9
Total loans, interest and fees receivable, gross	$	188.6	$	88.1	$	264.6	$	541.3
Balance of loans greater than 90-days delinquent still accruing interest and fees	$	—	$	1.5	$	—	$	1.5

Troubled Debt Restructurings.

As part of ongoing collection efforts, once an account in our Credit and Other Investments segment is 

90

 days or more past due, the account is placed on a non-accrual status. Placement on a non-accrual status results in the use of programs under which the contractual interest associated with a receivable

may

be reduced or eliminated, or a certain amount of accrued fees is waived, provided a minimum number or amount of payments have been made. Following this adjustment, if a customer demonstrates a willingness and ability to resume making monthly payments and meets certain additional criteria, we will re-age the customer’s account. When we re-age an account, we adjust the status of the account to bring a delinquent account current, but generally do 

not

 make any further modifications to the payment terms or amount owed. Once an account is placed on a non-accrual status, it is closed for further purchases. Accounts that are placed on a non-accrual status and thereafter make at least 

one

 payment qualify as troubled debt restructurings (“TDRs”).

The following table details by class of receivable, the number and amount of modified loans, including TDRs that have been re-aged, as of

December 31, 2019

and

December 31, 2018

:

	As of
	December 31, 2019				December 31, 2018
	Point-of-sale		Direct-to-consumer		Point-of-sale		Direct-to-consumer
Number of TDRs		10,682		14,553		6,095		3,584
Number of TDRs that have been re-aged		2,788		2,854		2,759		1,111
Amount of TDRs on non-accrual status (in thousands)	$	14,468	$	13,037	$	4,885	$	1,942
Amount of TDRs on non-accrual status above that have been re-aged (in thousands)	$	5,118	$	3,104	$	3,782	$	955
Carrying value of TDRs (in thousands)	$	8,864	$	7,312	$	3,333	$	1,363
TDRs - Performing (carrying value, in thousands)*	$	6,754	$	6,106	$	2,525	$	1,191
TDRs - Nonperforming (carrying value, in thousands)*	$	2,110	$	1,206	$	808	$	172

*“TDRs - Performing” include accounts that are current on all amounts owed, while “TDRs - Nonperforming” include all accounts with past due amounts owed.

Given that the above TDRs have a high reserve rate prior to modification as TDRs, we do

not

separately reserve or impair these receivables outside of our general reserve process.

The Company modified

31,409

and

21,997

accounts in the amount of

$43.3

million and

$33.2

 million during the

twelve

month periods ended

December 31, 2019

 and

December 31, 2018

, respectively, that qualified as TDRs. The following table details by class of receivable, the number of accounts and balance of loans that completed a modification (including those that were classified as TDRs) within the prior

twelve

months and subsequently defaulted.

	Twelve Months Ended
	December 31, 2019				December 31, 2018
	Point-of-sale		Direct-to-consumer		Point-of-sale		Direct-to-consumer
Number of accounts		2,835		3,339		6,903		5,415
Loan balance at time of charge off (in thousands)	$	4,397	$	3,545	$	9,634	$	4,963

Property at Cost, Net of Depreciation

We capitalize costs related to internal development and implementation of software used in our operating activities in accordance with applicable accounting literature. These capitalized costs consist almost exclusively of fees paid to

third

-party consultants to develop code and install and test software specific to our needs and to customize purchased software to maximize its benefit to us.

We record our property at cost less accumulated depreciation or amortization. We compute depreciation expense using the straight-line method over the estimated useful lives of our assets, which are approximately

5

years for furniture, fixtures and equipment, and

3

years for computers and software. We amortize leasehold improvements over the shorter of their estimated useful lives or the terms of their respective underlying leases.

We periodically review our property to determine if it is impaired. We incurred

no

impairment costs in

2019

and

no

 impairment costs in

2018

.

Investment in Equity-Method Investee

We account for an investment using the equity method of accounting if we have the ability to exercise significant influence, but

not

control, over the investee. Significant influence is generally deemed to exist based on ownership interest, although other factors, such as representation on an investee’s board of managers, specific voting and veto rights held by each investor and the effects of commercial arrangements, are considered in determining whether equity method accounting is appropriate. We record our interests in the income of our equity-method investee within the equity in income of equity-method investee category on our consolidated statements of operations.

We use the equity method for our

66.7%

investment in a limited liability company formed in

2004

to acquire a portfolio of credit card receivables. We account for this investment using the equity method of accounting due to specific voting and veto rights held by each investor, which do

not

allow us to control this investee.

We evaluate our investments in the equity-method investee for impairment each quarter by comparing the carrying amount of the investment to its fair value. Because

no

active market exists for the investee’s limited liability company membership interests, we evaluate our investment for impairment based on our evaluation of the fair value of the equity-method investee’s net assets relative to its carrying value. If we ever were to determine that the carrying value of our investment in the equity-method investee was greater than its fair value, we would write the investment down to its fair value.

Prepaid Expenses and Other Assets

Prepaid expenses and other assets include amounts paid to 

third

 parties for marketing and other services as well as amounts owed to us by 

third

 parties. Prepaid amounts are expensed as the underlying related services are performed.  Also included are (

1

) commissions paid associated with our various office leases which we amortize into expense over the lease terms, (

2

) ongoing deferred costs associated with service contracts and (

3

) investments in consumer finance technology platforms carried at the lower of cost or market valuation.

Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses reflect both the billed and unbilled amounts owed at the end of a period for services rendered. Commencing in

July 2019,

accounts payable and accrued expenses includes payments owed under a deferred payment program started with an unrelated

third

-party for a portion of our marketing expenditures. As a result of this agreement, we were able to extend the payment terms associated with our growing marketing spend between

10

-

37

months. Also included within accounts payable and accrued expenses are amounts which

may

be payable in respect of

one

of our portfolios.

Revenue Recognition and Revenue from Contracts with Customers

Consumer Loans, Including Past Due Fees

Consumer loans, including past due fees reflect interest income, including finance charges, and late fees on loans in accordance with the terms of the related customer agreements. Premiums, discounts and merchant fees paid or received associated with an installment or auto loan are generally deferred and amortized over the average life of the related loans using the effective interest method. Finance charges and fees, net of amounts that we consider uncollectible, are included in loans, interest and fees receivable and revenue when the fees are earned based upon the contractual terms of the loans.

Fees and Related Income on Earning Assets

Fees and related income on earning assets primarily include: (

1

) fees associated with the credit products, including the receivables underlying our U.S. point-of-sale finance and direct-to-consumer platform, and our legacy credit card receivables; (

2

) changes in the fair value of loans, interest and fees receivable recorded at fair value; (

3

) changes in fair value of notes payable associated with structured financings recorded at fair value; and (

4

) gains or losses associated with our investments in securities. 

We assess fees on credit card accounts underlying our credit card receivables according to the terms of the related cardholder agreements and, except for annual membership fees, we recognize these fees as income when they are charged to the customers’ accounts. We accrete annual membership fees associated with our credit card receivables into income on a straight-line basis over the cardholder privilege period which is generally

12

months. Similarly, fees on our other credit products are recognized when earned, which coincides with the time they are charged to the customer’s account. Fees and related income on earning assets, net of amounts that we consider uncollectible, are included in loans, interest and fees receivable and revenue when the fees are earned based upon the contractual terms of the loans.

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

	Year Ended December 31,
	2019			2018
Fees on credit products	$	68,639		$	25,694
Changes in fair value of loans, interest and fees receivable recorded at fair value		1,251			606
Changes in fair value of notes payable associated with structured financings recorded at fair value		1,731			3,589
Other		(474	)		103
Total fees and related income on earning assets	$	71,147		$	29,992

The above changes in the fair value of loans, interest and fees receivable recorded at fair value category exclude the impact of current period charge offs associated with these receivables which are separately stated in Net losses upon impairment of loans, interest and fees receivable recorded at fair value on our consolidated statements of operations. See Note

6,

“Fair Values of Assets and Liabilities,” for further discussion of these receivables and their effects on our consolidated statements of operations.

Other income

Other income includes revenues associated with ancillary product offerings and interchange revenues.  We recognize these fees as income in the period earned. Included in Other income for

2019

is

$105.9

million associated with reductions in accruals related to

one

of our portfolios. The accrual was based upon our estimate of the amount that

may

be claimed by customers and was based upon several factors including customer claims volume, average claim amount and a determination of the amount, if any, which

may

be offered to resolve such claims. The assumptions used in the accrual estimate were subjective, mainly due to uncertainty associated with future claims volumes and the resolution costs, if any, per claim. As of 

December 31, 2019,

we had

no

reserves associated with this matter. For

2018,

Other income also includes the receipt of 

£34

million (approximately

$42.9

 million) in settlement of litigation, resulting in income recognition of approximately

$36.2

million after adjusting for amounts previously recorded.  

Revenue from Contracts with Customers

In the

first

quarter of

2018

, we adopted Accounting Standards Update (“ASU”)

No.

2014

-

09,

“Revenue from Contracts with Customers” under the modified retrospective transition method. There was

no

material change in the timing of revenue recognition upon adoption. The majority of our revenue is earned from financial instruments and is

not

included within the scope of this standard. We have determined that revenue from contracts with customers would primarily consist of interchange revenues in our Credit and Other Investments segment and servicing revenue and other customer-related fees in both our Credit and Other Investments segment and our Auto Finance segment. Servicing revenue is generated by meeting contractual performance obligations related to the collection of amounts due on receivables, and is settled with the customer net of our fee. Revenue from these contracts with customers is included as a component of Other income on our consolidated statements of operations. Service charges and other customer related fees are earned from customers based on the occurrence of specific services that do

not

result in an ongoing obligation beyond what has already been rendered. Components (in thousands) of our revenue from contracts with customers is as follows:

	Credit and
For the Year ended December 31, 2019	Other Investments		Auto Finance		Total
Interchange revenues, net (1)	$	8,495	$	—	$	8,495
Servicing income		857		929		1,786
Service charges and other customer related fees		3,407		66		3,473
Total revenue from contracts with customers	$	12,759	$	995	$	13,754

(

1

) Interchange revenue is presented net of customer reward expense.

	Credit and
For the Year ended December 31, 2018	Other Investments		Auto Finance		Total
Interchange revenues, net (1)	$	2,881	$	—	$	2,881
Servicing income		947		1,022		1,969
Service charges and other customer related fees		637		69		706
Total revenue from contracts with customers	$	4,465	$	1,091	$	5,556

(

1

) Interchange revenue is presented net of customer reward expense.

Card and Loan Servicing Expenses

Card and loan servicing costs primarily include collections and customer service expenses. Within this category of expenses are personnel, service bureau, cardholder correspondence and other direct costs associated with our collections and customer service efforts. Card and loan servicing costs also include outsourced collections and customer service expenses. We expense card and loan servicing costs as we incur them, with the exception of prepaid costs, which we expense over respective service periods.

Marketing and Solicitation Expenses

We expense product solicitation costs, including printing, credit bureaus, list processing, telemarketing, postage, and internet marketing fees, as we incur these costs or expend resources. 

Recent Accounting Pronouncements

In 

June 2016,

the FASB issued ASU

2016

-

13,

Measurement of Credit Losses on Financial Instruments. The guidance requires an assessment of credit losses based on expected rather than incurred losses (known as the current expected credit loss model). This generally will result in the recognition of allowances for losses earlier than under current accounting guidance for trade and other receivables, held to maturity debt securities and other instruments. The FASB has added several technical amendments (ASU

2018

-

19,

2019

-

04,

2019

-

10

and

2019

-

11

) to clarify technical aspects of the guidance and applicability to specific financial instruments or transactions. In

May 2019

the FASB issued ASU

2019

-

05

which allows entities to measure assets in the scope of ASC

326

-

20,

except held to maturity securities, using the fair value option when they adopt the new credit impairment standard. The election can be made on an instrument by instrument basis. The standard will be adopted on a prospective basis with a cumulative-effect adjustment to retained earnings as of the beginning of the

first

reporting period in which the guidance is effective. ASU

2016

-

13

(and ASU

2019

-

05

) was initially effective for annual and interim periods beginning after

December 15, 2019,

with early adoption permitted. The FASB recently delayed the effective date of this standard until annual and interim periods beginning after

December 15, 2022

for non-accelerated and smaller reporting company filers, with early adoption permitted for smaller reporting companies (among others). We are currently in the process of reviewing accounting interpretations, including the recently added fair value option, expected data requirements and necessary changes to our loss estimation methods, processes and systems. This standard is expected to result in an increase to our allowance for loan losses (unless the fair value option is elected) given the change to expected losses for the estimated life of the financial asset. If the fair value option is elected for some or all of our eligible receivables, we would expect an increase in the recorded value of the assets but more potential volatility as these receivables are remeasured each period. The extent of the financial statement impact will depend on the asset quality of the portfolio, and economic conditions and forecasts at adoption.

In 

February 2016, 

the FASB issued ASU 

No.

 

2016

-

02,

 Leases, along with subsequent guidance, which requires lessees to recognize assets and liabilities for most leases and changes certain aspects of current lessor accounting, among other things. We adopted these standards using a modified retrospective transition approach for leases existing at, or entered into after,

January 1, 2019

and did

not

restate the comparative periods presented in the Consolidated Financial Statements upon adoption.

ASU

2016

-

02

provides a number of optional practical expedients and policy elections in transition. We elected the ‘package of practical expedients’ under which we did

not

reassess prior conclusions about lease identification, lease classification and initial direct costs. We did

not

elect the use-of-hindsight or the practical expedient pertaining to land easements, the latter

not

being applicable to us. We also elected the short-term lease recognition exemption for all leases that qualify, meaning we do

not

recognize right-of-use assets or lease liabilities for these short term leases. 

Upon adoption, we recognized additional lease liabilities of

$30.2

million and a corresponding right-of-use asset of

$18.6

million with a

$0.6

million cumulative effect on our opening retained deficit. The impact of our status as a lessor in the sublease arrangements we maintain did

not

result in a material change upon adoption. See Note

8,

"Leases" for additional disclosure.     

Subsequent Events

We evaluate subsequent events that occur after our consolidated balance sheet date but before our consolidated financial statements are issued. There are

two

types of subsequent events: (

1

) recognized, or those that provide additional evidence with respect to conditions that existed at the date of the balance sheet, including the estimates inherent in the process of preparing financial statements; and (

2

) nonrecognized, or those that provide evidence with respect to conditions that did

not

exist at the date of the balance sheet but arose subsequent to that date. We have evaluated subsequent events occurring after

December 31, 2019

,

and based on our evaluation we did

not

identify any recognized or nonrecognized subsequent events that would have required further adjustments to our consolidated financial statements other than the development described below.

As of

January 1, 2020,

we have elected the fair value option to account for certain loans receivable associated with our point-of-sale and direct-to-consumer platform that were originated on or after

January 1, 2020 (

the "Fair Value Receivables"). We believe the use of fair value for these receivables more closely approximates the true economics of these receivables, better matching the yields and corresponding charge-offs. We believe the fair value option also enables us to report GAAP net income that provides increased transparency into our profitability and asset quality. Receivables acquired prior to

January 1, 2020 

will continue to be accounted for in our

2020

 and subsequent financial statements at amortized cost, net. We will estimate the Fair Value Receivables using a discounted cash flow model, which considers various factors such as expected yields on consumer receivables, customer default rates, the timing of expected payments, estimated costs to service the portfolio, interest rates, and valuations of comparable portfolios. As a result of this fair value adoption, our loans, interest and fees receivable acquired subsequent to

January 1, 2020 

will be carried at fair value with changes in fair value recognized directly in earnings, and certain fee billings (such as annual membership fees and merchant fees) and origination costs associated with these receivables will

no

longer be deferred. We will reevaluate the fair value of our Fair Value Receivables at the end of each quarter.

On

January 30, 2020,

the World Health Organization (“WHO”) announced a global health emergency because of a new strain of coronavirus originating in Wuhan, China (the “COVID-

19

outbreak”) and the risks to the international community as the virus spreads globally beyond its point of origin. In

March 2020,

the WHO classified the COVID-

19

outbreak as a pandemic, based on the rapid increase in exposure globally.

The full impact of the COVID-

19

outbreak continues to evolve as of the date of this report. As such, it is uncertain as to the magnitude of the effect the pandemic will have on the Company’s financial condition, liquidity, and future results of operations. Management is actively monitoring the global situation on its financial condition, liquidity, operations, industry, and workforce. Given the daily evolution of the COVID-

19

outbreak and the global responses to curb its spread, it is premature for the Company to estimate the effects of the COVID-

19

outbreak on its results of operations, financial condition, or liquidity for fiscal year

2020.

 

XML

Document And Entity Information - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Mar. 20, 2020	Jun. 30, 2019
Document Information [Line Items]
Entity Registrant Name	Atlanticus Holdings Corp
Entity Central Index Key	0001464343
Trading Symbol	atlc
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Entity Emerging Growth Company	false
Entity Small Business	true
Entity Interactive Data Current	Yes
Entity Common Stock, Shares Outstanding (in shares)		15,919,360
Entity Public Float			$ 21.7
Entity Shell Company	false
Document Type	10-K
Document Period End Date	Dec. 31, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	FY
Amendment Flag	false
Title of 12(b) Security	Common stock, no par value per share

XML

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Net income	$ 26,210	$ 7,612
Other comprehensive income (loss):
Foreign currency translation adjustment	2,282	5,774
Reclassifications of foreign currency translation gains to Other operating expense on the consolidated statements of operations	(5,840)	(38)
Income tax expense related to other comprehensive income
Comprehensive income	22,652	13,348
Comprehensive loss attributable to noncontrolling interests	233	244
Comprehensive income attributable to controlling interests	22,885	13,592
Comprehensive income attributable to controlling interests to common shareholders	$ 21,732	$ 13,592

XML

Note 2 - Significant Accounting Policies and Consolidated Financial Statement Components - Summary of Aging of Delinquent Loans and Fees Receivable (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Delinquent loans and fees receivable, gross	$ 153,200	$ 73,400
Current loans, interest and fees receivable, gross	845,000	467,900
Loans, interest and fees receivable, gross	998,209	541,344
Balance of loans greater than 90-days delinquent still accruing interest and fees	1,900	1,500
Financial Asset, 30 to 59 Days Past Due [Member]
Delinquent loans and fees receivable, gross	43,800	24,700
Financial Asset, 60 to 89 Days Past Due [Member]
Delinquent loans and fees receivable, gross	33,000	15,700
Financial Asset, Equal to or Greater than 90 Days Past Due [Member]
Delinquent loans and fees receivable, gross	76,400	33,000
Credit Card Receivable [Member]
Delinquent loans and fees receivable, gross	86,800	24,700
Current loans, interest and fees receivable, gross	422,400	163,900
Loans, interest and fees receivable, gross	509,200	188,600
Balance of loans greater than 90-days delinquent still accruing interest and fees
Credit Card Receivable [Member] | Financial Asset, 30 to 59 Days Past Due [Member]
Delinquent loans and fees receivable, gross	21,700	7,100
Credit Card Receivable [Member] | Financial Asset, 60 to 89 Days Past Due [Member]
Delinquent loans and fees receivable, gross	18,500	5,300
Credit Card Receivable [Member] | Financial Asset, Equal to or Greater than 90 Days Past Due [Member]
Delinquent loans and fees receivable, gross	46,600	12,300
Automobile Loan [Member]
Delinquent loans and fees receivable, gross	13,700	12,900
Current loans, interest and fees receivable, gross	76,100	75,200
Loans, interest and fees receivable, gross	89,800	88,100
Balance of loans greater than 90-days delinquent still accruing interest and fees	1,900	1,500
Automobile Loan [Member] | Financial Asset, 30 to 59 Days Past Due [Member]
Delinquent loans and fees receivable, gross	8,100	7,900
Automobile Loan [Member] | Financial Asset, 60 to 89 Days Past Due [Member]
Delinquent loans and fees receivable, gross	3,000	2,800
Automobile Loan [Member] | Financial Asset, Equal to or Greater than 90 Days Past Due [Member]
Delinquent loans and fees receivable, gross	2,600	2,200
Other Unsecured Lending Products [Member]
Delinquent loans and fees receivable, gross	52,700	35,800
Current loans, interest and fees receivable, gross	346,500	228,800
Loans, interest and fees receivable, gross	399,200	264,600
Balance of loans greater than 90-days delinquent still accruing interest and fees
Other Unsecured Lending Products [Member] | Financial Asset, 30 to 59 Days Past Due [Member]
Delinquent loans and fees receivable, gross	14,000	9,700
Other Unsecured Lending Products [Member] | Financial Asset, 60 to 89 Days Past Due [Member]
Delinquent loans and fees receivable, gross	11,500	7,600
Other Unsecured Lending Products [Member] | Financial Asset, Equal to or Greater than 90 Days Past Due [Member]
Delinquent loans and fees receivable, gross	$ 27,200	$ 18,500

XML

Note 9 - Notes Payable and Variable Interest Entities

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Debt Disclosure [Text Block]

9. Notes Payable and Variable Interest Entities

The Company contributes certain receivables to VIEs.  These entities are sometimes established to facilitate

third

party financing. When assets are contributed to the VIE, they serve as collateral for the debt securities issued by the VIE. The evaluation of whether the entity qualifies as a VIE is based upon the sufficiency of the equity at risk in the legal entity. This evaluation is generally a function of the level of excess collateral in the legal entity. We consolidate VIEs when we hold a variable interest and are the primary beneficiary. We are the primary beneficiary when we have the power to direct activities that most significantly affect the economic performance and have the obligation to absorb the majority of the losses or benefits. In certain circumstances we guarantee the performance of the underlying debt or agree to contribute additional collateral when necessary.  When collateral is pledged it is

not

available for the general use of the Company and can only be used to satisfy the related debt obligation. The results of operations and financial position of consolidated VIEs are included in our consolidated financial statements.

The following table presents a summary of VIEs in which we had continuing involvement or held a variable interest (in millions):

	As of
	December 31, 2019			December 31, 2018
Unrestricted cash and cash equivalents	$	78.7		$	16.8
Restricted cash and cash equivalents	$	25.9		$	61.0
Loans, interest and fees receivable, at fair value	$	3.9		$	5.7
Loans, interest and fees receivable, gross	$	857.2		$	403.4
Allowances for uncollectible loans, interest and fees receivable	$	(168.8	)	$	(57.4	)
Deferred revenue	$	(40.7	)	$	(13.2	)
Total Assets held by VIEs	$	756.2		$	416.3
Notes Payable, at face value held by VIEs	$	701.1		$	366.7
Notes Payable, at fair value held by VIEs	$	3.9		$	5.7
Maximum exposure to loss due to involvement with VIEs	$	654.3		$	438.5

Notes Payable Associated with Structured Financings, at Fair Value

Scheduled (in millions) in the table below are (

1

) the carrying amount of our structured financing note secured by certain credit card receivables and reported at fair value as of

December 31, 2019

and

December 31, 2018

, (

2

) the outstanding face amount of our structured financing note secured by certain credit card receivables and reported at fair value as of

December 31, 2019

and

December 31, 2018

, and (

3

) the carrying amount of the credit card receivables and restricted cash that provide the exclusive means of repayment for the note (i.e., lenders have recourse only to the specific credit card receivables and restricted cash underlying each respective facility and cannot look to our general credit for repayment) as of

December 31, 2019

and

December 31, 2018

.

	Carrying Amounts at Fair Value as of
	December 31, 2019		December 31, 2018
Securitization facility (stated maturity of December 2021), outstanding face amount of $101.3 million as of December 31, 2019 ($101.3 million as of December 31, 2018) bearing interest at a weighted average 6.9% interest rate, based upon LIBOR, at December 31, 2019 (7.5% at December 31, 2018), which is secured by credit card receivables and restricted cash aggregating $3.9 million as of December 31, 2019 ($5.7 million as of December 31, 2018) in carrying amount	$	3.9	$	5.7

Contractual payment allocations within this credit card receivables structured financing provide for a priority distribution of cash flows to us to service the credit card receivables, a distribution of cash flows to pay interest and principal due on the notes, and a distribution of all excess cash flows (if any) to us. The structured financing facility included in the above table is amortizing down along with collections of the underlying receivables and there are

no

provisions within the debt agreement that allow for acceleration or bullet repayment of the facility prior to its scheduled expiration date. The aggregate carrying amount of the credit card receivables and restricted cash that provide security for the

$3.9

 million in fair value of the structured financing facility indicated in the above table is

$3.9

 million, which means that we have

no

aggregate exposure to pre-tax equity loss associated with the above structured financing arrangement at

December 31, 2019

.

As discussed elsewhere, the legal entity holding the securitization facility discussed in the table above, is a VIE.  Beyond our role as servicer of the underlying assets within the credit cards receivables structured financing, we have provided

no

other financial or other support to the structure, and we have

no

explicit or implicit arrangements that could require us to provide financial support to the structure.

Notes Payable, at Face Value and Notes Payable to Related Parties

Other notes payable outstanding as of

December 31, 2019

and

December 31, 2018

that are secured by the financial and operating assets of either the borrower, another of our subsidiaries or both, include the following, scheduled (in millions); except as otherwise noted, the assets of our holding company (Atlanticus Holdings Corporation) are subject to creditor claims under these scheduled facilities:

	As of
	December 31, 2019			December 31, 2018
Revolving credit facilities at a weighted average interest rate equal to 6.0% at December 31, 2019 (7.6% at December 31, 2018) secured by the financial and operating assets of CAR and/or certain receivables and restricted cash with a combined aggregate carrying amount of $740.4 million as of December 31, 2019 ($468.8 million at December 31, 2018)
Revolving credit facility, not to exceed $55.0 million (expiring November 1, 2021) (1) (2) (3)	$	39.1		$	30.0
Revolving credit facility, not to exceed $50.0 million (expiring October 30, 2022) (2) (3) (4) (5)		40.5			49.9
Revolving credit facility, not to exceed $20.0 million (expiring March 31, 2020) (2) (4) (5)	19.4				—
Revolving credit facility, not to exceed $70.0 million (expiring February 8, 2022) (3) (4) (5) (6)		25.8			61.0
Revolving credit facility, not to exceed $100.0 million (expiring June 11, 2021) (3) (4) (5) (6)		—			80.5
Revolving credit facility, not to exceed $15.0 million (expiring July 15, 2021) (2) (4) (5)		14.6			—
Revolving credit facility, not to exceed $100.0 million (expiring November 16, 2020) (3) (4) (5) (6)		—			8.0
Revolving credit facility, not to exceed $167.3 million (expiring November 15, 2023) (3) (4) (5) (6)		167.3			167.3
Revolving credit facility, not to exceed $200.0 million (expiring December 15, 2022) (3) (4) (5) (6)		200.0			—
Revolving credit facility, not to exceed $200.0 million (expiring May 15, 2024) (3) (4) (5) (6)		200.0			—
Revolving credit facility, not to exceed $15.0 million (expiring December 21, 2020) (2) (3) (4) (5)		8.6			—
Revolving credit facility, not to exceed $50.0 million (expiring September 19, 2021) (2) (3) (4) (5)		15.0			—
Other facilities
Other secured debt (expiring September 8, 2023) that is secured by certain assets of the Company with an annual rate equal to 5.5%		1.2			1.2
Unsecured term debt (expiring August 26, 2024) with an annual rate equal to 8.0% (3)		17.4			—
Amortizing debt facility (expiring September 30, 2021) with an annual rate equal to 6.2% (2) (3) (4) (5)		10.0			—
Senior secured term loan to related parties (paid-off on December 27, 2019) that was secured by certain assets of the Company with an annual rate equal to 9.0% (3)		—			40.0
Total notes payable before unamortized debt issuance costs and discounts		758.9			437.9
Unamortized debt issuance costs and discounts		(9.7	)		(7.0	)
Total notes payable outstanding	$	749.2		$	430.9

( 1 ) Loan is subject to certain affirmative covenants, including a coverage ratio, a leverage ratio and a collateral performance test, the failure of which could result in required early repayment of all or a portion of the outstanding balance by our CAR Auto Finance operations.

( 2 ) These notes reflect modifications to either extend the maturity date, increase the loan amount or both, and are treated as accounting modifications.

( 3 )	See below for additional information.
( 4 )	Loans are subject to certain affirmative covenants tied to default rates and other performance metrics the failure of which could result in required early repayment of the remaining unamortized balances of the notes.

( 5 ) Loans are associated with variable interest entities.

( 6 )	Creditors do not have recourse against the general assets of the Company but only to the collateral within the VIEs.
*	As of December 31, 2019, the LIBOR rate was 1.75% and the prime rate was 4.75%.

On 

November 26, 2014,

we and certain of our subsidiaries entered into a Loan and Security Agreement with Dove. The agreement provides for a senior secured term loan facility in an amount of up to

$40.0

million at any time outstanding. On

December 27, 2019,

the Company issued

400,000

shares (aggregate initial liquidation preference of

$40

 million) of its Series A Preferred Stock in exchange for full satisfaction of the

$40.0

million that the Company owed Dove under the Loan and Security Agreement. See Note

4

"Shareholders' Equity and Preferred Stock" for additional information. Dove is a limited liability company owned by

three

trusts. David G. Hanna is the sole shareholder and the President of the corporation that serves as the sole trustee of

one

of the trusts, and David G. Hanna and members of his immediate family are the beneficiaries of this trust. Frank J. Hanna, III is the sole shareholder and the President of the corporation that serves as the sole trustee of the other

two

trusts, and Frank J. Hanna, III and members of his immediate family are the beneficiaries of these other

two

trusts.

In 

October 2015,

we (through a wholly owned subsidiary) entered a revolving credit facility with a (as subsequently amended)

$50.0

million revolving borrowing limit that can be drawn to the extent of outstanding eligible principal receivables (of which

$40.5

million was drawn as of

December 

31,

2019

). This facility is secured by the loans, interest and fees receivable and related restricted cash and accrues interest at an annual rate equal to LIBOR plus

3.0%.

The facility matures on

October 30, 2022

and is subject to certain affirmative covenants, including a liquidity test and an eligibility test, the failure of which could result in required early repayment of all or a portion of the outstanding balance. The facility is guaranteed by Atlanticus who is required to maintain certain minimum liquidity levels.

In 

October 2016,

we (through a wholly owned subsidiary) entered a revolving credit facility with an initial

$40.0

million borrowing limit available to the extent of outstanding eligible principal receivables of our CAR subsidiary (of which

$39.1

million was drawn as of

December 31, 2019).

This facility is secured by the financial and operating assets of CAR and accrues interest at an annual rate equal to LIBOR plus a range between

2.4%

and

3.0%

based on certain ratios. The loan is subject to certain affirmative covenants, including a coverage ratio, a leverage ratio and a collateral performance test, the failure of which could result in required early repayment of all or a portion of the outstanding balance. In periods subsequent to

October 2016,

we amended the original agreement to either extend the maturity date and/or expand the capacity of this revolving credit facility. As of

December 31, 2019,

the borrowing limit was

$55.0

million and the maturity was

November 1, 2021

.

There were

no

other material changes to the existing terms or conditions as a result of these amendments and the new maturity date and borrowing limit are reflected in the table above.

In

December 2016,

we (through a wholly owned subsidiary) entered a revolving credit facility with a

$20.0

million revolving borrowing limit available to the extent of outstanding eligible principal receivables (of which

$19.4

 million was drawn as of

December 31, 2019).

The facility matures on

March 31, 2020

and is secured by the loans, interest and fees receivable and related restricted cash and accrues interest at an annual rate equal to LIBOR plus

5.0%.

The note is guaranteed by Atlanticus.

In 

February 2017,

we (through a wholly owned subsidiary) established a program under which we sell certain receivables to a consolidated trust in exchange for notes issued by the trust. The notes are secured by the receivables and other assets of the trust. Simultaneously with the establishment of the program, the trust issued a series of variable funding notes and sold an aggregate amount of up to

$90.0

million (subsequently reduced to

$70.0

million) of such notes (of which

$25.8

 million was outstanding as of

December 31, 2019)

to an unaffiliated

third

party pursuant to a facility that can be drawn upon to the extent of outstanding eligible receivables. The interest rate on the notes is fixed at

14.0%.

The facility matures on

February 8, 2022

and is subject to certain affirmative covenants and collateral performance tests, the failure of which could result in required early repayment of all or a portion of the outstanding balance of notes. The facility also

may

be prepaid subject to payment of a prepayment or other fee.

In

December 2017,

we (through a wholly owned subsidiary) entered a revolving credit facility with a (as subsequently amended)

$15.0

million revolving borrowing limit that is available to the extent of outstanding eligible principal receivables (of which

$8.6

million was drawn as of

December 31, 2019).

This facility is secured by the loans, interest and fees receivable and related restricted cash and accrues interest at an annual rate equal to LIBOR plus

3.5%.

The facility matures on

December 21, 2020

and is subject to certain affirmative covenants, including payment, delinquency and charge-off tests, the failure of which could result in required early repayment of all or a portion of the outstanding balance. The note is guaranteed by Atlanticus.

In 

2018,

we (through a wholly owned subsidiary) entered into

two

separate facilities associated with the above mentioned program to sell up to an aggregate

$200.0

million of notes which are secured by the receivables and other assets of the trust (of which

$0.0

million was outstanding as of

December 31, 2019)

to separate unaffiliated

third

parties pursuant to facilities that can be drawn upon to the extent of outstanding eligible receivables. Interest rates on the notes are based on commercial paper rates plus

3.75%

and LIBOR plus

4.875%,

respectively. The facilities mature on

June 11, 2021

 

and

November 16, 2020

,

respectively, and are subject to certain affirmative covenants and collateral performance tests, the failure of which could result in required early repayment of all or a portion of the outstanding balance of notes. The facilities also

may

be prepaid subject to payment of a prepayment or other fee.

In

September 2018,

we (through a wholly owned subsidiary) entered a revolving credit facility with a (as subsequently amended)

$50.0

million revolving borrowing limit that is available to the extent of outstanding eligible principal receivables (of which

$15.0

million was drawn as of

December 31, 2019).

This facility is secured by the loans, interest and fees receivable and related restricted cash and accrues interest at an annual rate equal to LIBOR plus

6.5%.

The loan is subject to certain affirmative covenants, including a charge-off and delinquency test, the failure of which could result in required early repayment of all or a portion of the outstanding balance. The note is guaranteed by Atlanticus.

In 

November 2018,

we sold

$167.3

million of asset backed securities (“ABS”) secured by certain retail point-of-sale receivables. A portion of the proceeds from the sale were used to pay-down our existing term and revolving facilities associated with our point-of-sale receivables, noted in the table above, and the remaining proceeds are available to fund the acquisition of future receivables. The terms of the ABS allow for a

two

-year revolving structure with a subsequent

18

-month amortization period. The weighted average interest rate on the securities is fixed at

5.76%.

In

June 2019,

we (through a wholly owned subsidiary) entered a revolving credit facility with a

$15.0

million revolving borrowing limit that is available to the extent of outstanding eligible principal receivables (of which

$14.6

 million was drawn as of

December 31, 2019).

This facility is secured by the loans, interest and fees receivable and related restricted cash and accrues interest at an annual rate equal to the prime rate. The note is guaranteed by Atlanticus.

In

June 2019,

we sold

$200.0

million of ABS secured by certain credit card receivables. A portion of the proceeds from the sale was used to pay-down our existing facilities associated with our credit card receivables. The terms of the ABS allow for a

two

-year revolving structure with a subsequent

12

-month to

18

-month amortization period. The weighted average interest rate on the securities is fixed at

5.37%.

In

August 2019,

we repurchased

$54.4

million in face amount of our outstanding convertible senior notes for

$16.3

million in cash (including accrued interest) and the issuance of a

$17.4

million term note, which bears interest at a fixed rate of

8.0%

and is due in

August 2024.

See Note

10

 "Convertible Senior Notes" for additional information.

In

September 2019,

we (through a wholly owned subsidiary) entered a term facility with a

$30.0

million revolving borrowing limit (of which

$10.0

was drawn as of

December 31, 2019)

that is available to the extent of outstanding eligible principal receivables. This facility is secured by the loans, interest and fees receivable and related restricted cash and accrues interest at an annual rate equal to LIBOR plus

4.5%.

The facility matures on

September 30, 2021

and is subject to certain affirmative covenants, including a liquidity test and an eligibility test, the failure of which could result in required early repayment of all or a portion of the outstanding balance. The note is guaranteed by Atlanticus, which is required to maintain certain minimum liquidity levels.

In

November 2019,

we sold

$200.0

million of ABS secured by certain credit card receivables. A portion of the proceeds from the sale was used to pay-down our existing facilities associated with our credit card receivables and the remaining proceeds were available to fund the acquisition of future receivables. The terms of the ABS allow for a

three

-year revolving structure with a subsequent

12

-month to

18

-month amortization period. The weighted average interest rate on the securities is fixed at

4.91%.

As of

December 31, 2019,

we are in compliance with the covenants underlying our various notes payable.

XML

Note 5 - Investment in Equity-method Investee

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Equity Method Investments and Joint Ventures Disclosure [Text Block]

5. Investment in Equity-Method Investee

Our equity-method investment outstanding at

December 31, 2019

consists of our

66.7%

interest in a joint venture formed to purchase a credit card receivable portfolio.

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

	As of
	December 31, 2019		December 31, 2018
Loans, interest and fees receivables, at fair value	$	2,757	$	3,546
Total assets	$	2,922	$	3,732
Total liabilities	$	13	$	18
Members’ capital	$	2,909	$	3,714

	Year ended December 31,
	2019		2018
Net interest income (loss), fees and related income on earning assets	$	1,505	$	875
Net income	$	1,318	$	613
Net income attributable to investee	$	1,001	$	581

XML

Note 3 - Segment Reporting (Tables)

12 Months Ended

Dec. 31, 2019

Notes Tables

Schedule of Segment Reporting Information, by Segment [Table Text Block]

Year ended December 31, 2019	Credit and Other Investments			Auto Finance			Total
Interest income:
Consumer loans, including past due fees	$	229,388		$	31,444		$	260,832
Other		386			—			386
Total interest income		229,774			31,444			261,218
Interest expense		(49,065	)		(1,665	)		(50,730	)
Net interest income before fees and related income on earning assets and provision for losses on loans, interest and fees receivable	$	180,709		$	29,779		$	210,488
Fees and related income on earning assets	$	70,984		$	163		$	71,147
Servicing income	$	857		$	929		$	1,786
Gain on repurchase of convertible senior notes	$	5,127		$	—		$	5,127
Equity in income of equity-method investee	$	1,001		$	—		$	1,001
Income before income taxes	$	25,005		$	6,758		$	31,763
Income tax expense	$	(3,830	)	$	(1,723	)	$	(5,553	)
Total assets	$	856,354		$	79,912		$	936,266

Year ended December 31, 2018	Credit and Other Investments			Auto Finance			Total
Interest income:
Consumer loans, including past due fees	$	131,096		$	29,872		$	160,968
Other		200			—			200
Total interest income		131,296			29,872			161,168
Interest expense		(35,564	)		(1,332	)		(36,896	)
Net interest income before fees and related income on earning assets and provision for losses on loans, interest and fees receivable	$	95,732		$	28,540		$	124,272
Fees and related income on earning assets	$	29,912		$	80		$	29,992
Servicing income	$	947		$	1,022		$	1,969
Equity in income of equity-method investee	$	581		$	—		$	581
(Loss) income before income taxes	$	(6,767	)	$	10,249		$	3,482
Income tax benefit (expense)	$	6,345		$	(2,215	)	$	4,130
Total assets	$	507,232		$	75,376		$	582,608

XML

Note 15 - Employee Benefit Plans

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Compensation and Employee Benefit Plans, Other than Share-based Compensation [Text Block]

15. Employee Benefit Plans

We maintain a defined contribution retirement plan (

“401

(k) plan”) for our U.S. employees that provides for a matching contribution by us. All full time U.S. employees are eligible to participate in the

401

(k) plan.  Our U.K. credit card subsidiary offers eligible employees membership in a Group Personal Pension Plan which is set up with Friends Provident. This plan is a defined contribution plan in which all permanent employees who have completed

3

months of continuous service are eligible to join the plan. Company matching contributions are available to U.K. employees who contribute a minimum of

3%

of their salaries under our Group Personal Pension Plan and to U.S. employees who participate in our

401

(k) plan. We made matching contributions under our U.S. and U.K. plans of

$285,618

and

$285,477

in

2019

and

2018

, respectively.

Also, all employees, excluding executive officers, are eligible to participate in the ESPP. Under the ESPP, employees can elect to have up to

10%

of their annual wages withheld to purchase our common stock up to a fair market value of

$10,000.

The amounts deducted and accumulated by each participant are used to purchase shares of common stock on or as promptly as practicable after the last business day of each month. The price of stock purchased under the ESPP is approximately

85%

of the fair market value per share of our common stock on the purchase date. Employees contributed

$108,466

to purchase

19,641

 shares of common stock in

2019

 and

$51,593

to purchase

23,681

shares of common stock in

2018

 under the ESPP. The ESPP covers up to

100,000

shares of common stock. Our charge to expense associated with the ESPP was

$31,954

and

$28,629

in

2019

and

2018

, respectively.

XML

Note 3 - Segment Reporting (Details Textual) $ in Thousands	12 Months Ended
	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)
Number of Reportable Segments	2
Assets, Total	$ 936,266	$ 582,608
Non-US [Member]
Assets, Total	$ 0	$ 0

XML

Note 5 - Investment in Equity-method Investee - Summary of Equity-method Investee (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Loans, interest and fees receivables, at fair value	$ 2,757	$ 3,546
Total assets	2,922	3,732
Total liabilities	13	18
Members’ capital	2,909	3,714
Net interest income (loss), fees and related income on earning assets	1,505	875
Net income	1,318	613
Net income attributable to investee	$ 1,001	$ 581

XML

Note 9 - Notes Payable and Variable Interest Entities - Schedule of Notes Payable at Face Value and Notes Payable to Related Parties (Details) - USD ($) $ in Thousands		Dec. 31, 2019		Dec. 31, 2018
Revolving credit facilities		$ 720,687		$ 389,707
Amortizing debt facilities		28,522		1,220
Notes payable to related parties				40,000
Total notes payable before unamortized debt issuance costs and discounts		758,900	[1]	437,900
Unamortized debt issuance costs and discounts		(9,700)	[1]	(7,000)
Total notes payable outstanding		749,200	[1]	430,900
Other Secured Debt [Member]
Amortizing debt facilities		1,200	[1]	1,200
Phoenix [Member]
Unsecured term debt (expiring August 26, 2024) with an annual rate equal to 8.0% (3)	[2]	17,400	[1]
Amortizing Debt Facility Two [Member]
Amortizing debt facilities	[2],[3],[4],[5]	10,000
Senior Secured Term Loan Facility [Member]
Notes payable to related parties	[2]		[1]	40,000
Revolving Credit Facility Expiring November 1, 2020 [Member]
Revolving credit facilities	[2],[5],[6]	39,100	[1]	30,000
Revolving Credit Facility Expiring October 30, 2022 [Member]
Revolving credit facilities	[2],[3],[4],[5]	40,500	[1]	49,900
Revolving Credit Facility Expiring March 31, 2020 [Member]
Revolving credit facilities	[3],[4],[5]	19,400	[1]
Revolving Credit Facility Expiring February 8, 2022 [Member]
Revolving credit facilities	[2],[3],[4],[7]	25,800	[1]	61,000
Revolving Credit Facility Expiring June 11, 2021 [Member]
Revolving credit facilities	[2],[3],[4],[7]		[1]	80,500
Revolving Credit Facility Expiring July 15 2021 [Member]
Revolving credit facilities	[3],[4],[5]	14,600	[1]
Revolving Credit Facility Expiring November 16, 2020 [Member]
Revolving credit facilities	[2],[3],[4],[7]			8,000
Revolving Credit Facility Expiring November 15, 2023 [Member]
Revolving credit facilities	[2],[3],[4],[7]	167,300	[1]	167,300
Revolving Credit Facility Expiring December 15, 2022 [Member]
Revolving credit facilities	[2],[3],[4],[7]	200,000	[1]
Revolving Credit Facility Expiring May 15, 2024 [Member]
Revolving credit facilities	[2],[3],[4],[7]	200,000	[1]
Revolving Credit Facility Expiring December 21, 2020 [Member]
Revolving credit facilities	[2],[3],[4],[5]	8,600	[1]
Revolving Credit Facility Expiring September 19, 2021 [Member]
Revolving credit facilities		$ 15,000	[1],[2],[3],[4],[5]

[1] As of December 31, 2019, the LIBOR rate was 1.75% and the prime rate was 4.75%.

[2] See below for additional information.

[3] Loans are associated with variable interest entities.

[4] Loans are subject to certain affirmative covenants tied to default rates and other performance metrics the failure of which could result in required early repayment of the remaining unamortized balances of the notes.

[5] These notes reflect modifications to either extend the maturity date, increase the loan amount or both, and are treated as accounting modifications.

[6] Loan is subject to certain affirmative covenants, including a coverage ratio, a leverage ratio and a collateral performance test, the failure of which could result in required early repayment of all or a portion of the outstanding balance by our CAR Auto Finance operations.

[7] Creditors do not have recourse against the general assets of the Company but only to the collateral within the VIEs.

XML

Note 9 - Notes Payable and Variable Interest Entities (Details Textual) - USD ($)		1 Months Ended							4 Months Ended	12 Months Ended
	Dec. 27, 2019	Nov. 30, 2019	Jun. 30, 2019	Nov. 30, 2018	Sep. 30, 2018	Dec. 31, 2017	Dec. 31, 2016	Oct. 31, 2016	Dec. 31, 2019	Dec. 31, 2019	Dec. 31, 2018	Sep. 30, 2019	Aug. 26, 2019	Feb. 28, 2017	Oct. 31, 2015	Nov. 26, 2014	Nov. 30, 2005
Credit Card Receivables and Restricted Cash Carrying Amount as Security for Notes Payable									$ 3,900,000	$ 3,900,000
Notes Payable Associated with Structured Financings, Fair Value									3,920,000	3,920,000	$ 5,651,000
Aggregate Exposure to Pretax Equity Loss, Structured Financing at Fair Value									0	0
Long-term Line of Credit, Total									720,687,000	720,687,000	389,707,000
Proceeds from Issuance of Long-term Debt, Total		$ 200,000,000	$ 200,000,000	$ 167,300,000						873,340,000	632,043,000
Asset Backed Securities, Term of Revolving Structure		3 years	2 years	2 years
Asset Backed Securities, Term of Revolving Structure, Subsequent Amortization Period				1 year 180 days
Asset Backed Securities, Weighted Average Interest Rate		4.91%	5.37%	5.76%
Convertible Debt [Member] | Five Point Eight Seven Five Percent Convertible Senior Notes Due Two Thousand Thirty Five [Member]
Debt Instrument, Interest Rate, Stated Percentage																	5.875%
Debt Instrument, Face Amount									$ 33,839,000	$ 33,839,000	$ 88,280,000		$ 54,400,000				$ 300,000,000
Debt Instrument, Repurchase Amount													$ 16,300,000
Term Note [Member]
Debt Instrument, Interest Rate, Stated Percentage													8.00%
Long-term Debt, Total													$ 17,400,000
Minimum [Member]
Asset Backed Securities, Term of Revolving Structure, Subsequent Amortization Period		1 year	1 year
Maximum [Member]
Asset Backed Securities, Term of Revolving Structure, Subsequent Amortization Period		1 year 180 days	1 year 180 days
Debt Satisfied By Issuance of Series A Preferred Stock [Member]
Debt Conversion, Original Debt, Amount	$ 40,000,000
Series A Preferred Stock [Member]
Temporary Equity, Shares Issued	400,000								400,000	400,000	0
Temporary Equity, Liquidation Preference	$ 40,000,000
Revolving Credit Facility [Member]
Line of Credit Facility, Maximum Borrowing Capacity															$ 50,000,000
Long-term Line of Credit, Total									$ 40,500,000	$ 40,500,000
Revolving Credit Facility [Member] | Term Note [Member]
Line of Credit Facility, Maximum Borrowing Capacity												$ 30,000,000
Long-term Line of Credit, Total									10,000,000	10,000,000
Secured by the Financial and Operating Assets of CAR [Member]
Line of Credit Facility, Maximum Borrowing Capacity								$ 40,000,000	55,000,000	55,000,000
Long-term Line of Credit, Total									39,100,000	$ 39,100,000
Line of Credit Facility, Expiration Date										Nov. 01, 2021
December 2016 Revolving Credit Facility [Member]
Line of Credit Facility, Maximum Borrowing Capacity							$ 20,000,000
Long-term Line of Credit, Total									19,400,000	$ 19,400,000
Trust Funding Notes Facility [Member]
Line of Credit Facility, Maximum Borrowing Capacity									70,000,000	70,000,000				$ 90,000,000
Long-term Line of Credit, Total									25,800,000	25,800,000
Trust Funding Notes Facility [Member] | Maximum [Member]
Debt Instrument, Interest Rate, Stated Percentage														14.00%
December 2017 Revolving Credit Facility [Member]
Line of Credit Facility, Maximum Borrowing Capacity						$ 15,000,000
Long-term Line of Credit, Total									8,600,000	8,600,000
Additional Trust Funding Notes Facilities [Member]
Line of Credit Facility, Maximum Borrowing Capacity											$ 200,000,000
Long-term Line of Credit, Total									0	0
September 2018 Revolving Credit Facility [Member]
Line of Credit Facility, Maximum Borrowing Capacity					$ 50,000,000
Long-term Line of Credit, Total									15,000,000	15,000,000
June 2019 Revolving Credit Facility [Member]
Line of Credit Facility, Maximum Borrowing Capacity			$ 15,000,000
Long-term Line of Credit, Total									$ 14,600,000	$ 14,600,000
Additional Trust Funding Notes Facility One [Member]
Line of Credit Facility, Expiration Date										Jun. 11, 2021
Additional Trust Funding Notes Facility Two [Member]
Line of Credit Facility, Expiration Date										Nov. 16, 2020
Dove Ventures, LLC [Member] | Senior Secured Term Loan Facility [Member]
Line of Credit Facility, Maximum Borrowing Capacity																$ 40,000,000
London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument, Variable Rate									1.75%	1.75%
London Interbank Offered Rate (LIBOR) [Member] | Revolving Credit Facility [Member]
Debt Instrument, Basis Spread on Variable Rate										3.00%
London Interbank Offered Rate (LIBOR) [Member] | Revolving Credit Facility [Member] | Term Note [Member]
Debt Instrument, Basis Spread on Variable Rate									4.50%
London Interbank Offered Rate (LIBOR) [Member] | Secured by the Financial and Operating Assets of CAR [Member] | Minimum [Member]
Debt Instrument, Basis Spread on Variable Rate								2.40%
London Interbank Offered Rate (LIBOR) [Member] | Secured by the Financial and Operating Assets of CAR [Member] | Maximum [Member]
Debt Instrument, Basis Spread on Variable Rate								3.00%
London Interbank Offered Rate (LIBOR) [Member] | December 2016 Revolving Credit Facility [Member]
Debt Instrument, Basis Spread on Variable Rate							5.00%
London Interbank Offered Rate (LIBOR) [Member] | December 2017 Revolving Credit Facility [Member]
Debt Instrument, Basis Spread on Variable Rate						3.50%
London Interbank Offered Rate (LIBOR) [Member] | Additional Trust Funding Notes Facilities [Member]
Debt Instrument, Basis Spread on Variable Rate										4.875%
London Interbank Offered Rate (LIBOR) [Member] | September 2018 Revolving Credit Facility [Member]
Debt Instrument, Basis Spread on Variable Rate					6.50%
Prime Rate [Member]
Debt Instrument, Variable Rate									4.75%	4.75%
Commercial Paper Rates [Member] | Additional Trust Funding Notes Facilities [Member]
Debt Instrument, Basis Spread on Variable Rate										3.75%

XML

Note 11 - Commitments and Contingencies (Details Textual) $ in Millions	Dec. 31, 2019 USD ($)
Pledged Assets, Other, Not Separately Reported on Statement of Financial Position, Total	$ 15.1
Unfunded Individual Credit Commitment [Member]
Other Commitment, Total	1,100.0
Unfunded Outstanding Floor-Plan Financing Commitment [Member]
Other Commitment, Total	$ 9.2

XML

Note 7 - Property - Schedule of Property (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Property, plant and equipment	$ 29,375	$ 29,125
Less accumulated depreciation	(26,637)	(25,500)
Property, net	2,738	3,625
Software and Software Development Costs [Member]
Property, plant and equipment	3,543	3,467
Furniture and Fixtures [Member]
Property, plant and equipment	6,431	6,307
Data Processing and Telephone Equipment [Member]
Property, plant and equipment	7,675	7,625
Leasehold Improvements [Member]
Property, plant and equipment	10,570	10,570
Other Capitalized Property Plant and Equipment [Member]
Property, plant and equipment	$ 1,156	$ 1,156

XML

Note 6 - Fair Values of Assets and Liabilities - Summary of Fair Value Hierarchy for Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Revolving credit facilities	$ 720,687	$ 389,707
Amortizing debt facilities	28,522	1,220
Notes payable to related parties		40,000
Convertible senior notes	24,091	62,142
Notes Payable Associated with Structured Financings, Fair Value	3,920	5,651
Fair Value, Inputs, Level 1 [Member]
Revolving credit facilities
Amortizing debt facilities
Notes payable to related parties
Convertible senior notes
Notes Payable Associated with Structured Financings, Fair Value
Fair Value, Inputs, Level 2 [Member]
Revolving credit facilities
Amortizing debt facilities
Notes payable to related parties
Convertible senior notes	16,920	47,230
Notes Payable Associated with Structured Financings, Fair Value
Fair Value, Inputs, Level 3 [Member]
Revolving credit facilities	720,687	389,707
Amortizing debt facilities	28,522	1,220
Notes payable to related parties		40,000
Convertible senior notes
Notes Payable Associated with Structured Financings, Fair Value	$ 3,920	$ 5,651

XML

Note 16 - Related Party Transactions (Details Textual)		12 Months Ended
	Dec. 27, 2019 USD ($) $ / shares shares	Dec. 31, 2019 USD ($) ft² shares	Dec. 31, 2018 USD ($) shares	Nov. 26, 2014 USD ($)	Jun. 30, 2007 ft²
Related Party Transaction, Percent of Common Stock Purchase to Trigger Share Sale		50.00%
Debt Satisfied By Issuance of Series A Preferred Stock [Member]
Debt Conversion, Original Debt, Amount	$ 40,000,000
Series A Preferred Stock [Member]
Temporary Equity, Shares Issued | shares	400,000	400,000	0
Temporary Equity, Liquidation Preference	$ 40,000,000
Preferred Stock, Dividend Rate, Percentage	6.00%
Temporary Equity, Redemption Price Per Share | $ / shares	$ 100
Temporary Equity, Conversion Price Per Share | $ / shares	$ 10
Chief Executive Officer [Member]
Area of Real Estate Property | ft²		600			1,000
Related Party Transaction, Other Revenues from Transactions with Related Party		$ 16,627	$ 18,089
Related Party Transaction, Due from (to) Related Party, Noncurrent, Total		41,527
Related Party Transaction, Amounts of Transaction		$ 269,072	$ 270,932
Dove Ventures, LLC [Member] | Senior Secured Term Loan Facility [Member]
Line of Credit Facility, Maximum Borrowing Capacity				$ 40,000,000

XML

Note 12 - Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Statutory expense rate	21.00%	21.00%
Federal valuation allowance	(4.40%)	(132.00%)
Global intangible low-taxed income	0.80%	9.60%
Interest and penalties related to uncertain tax positions and IRS settlement adjustment	0.60%	(27.20%)
Foreign taxes, net of valuation allowance	(0.50%)	(8.20%)
Permanent and other prior year true ups and tax effect of non-controlling interest	(1.10%)	4.70%
State taxes, net of valuation allowance	1.10%	13.50%
Effective expense (benefit) rate	17.50%	(118.60%)

XML

Note 13 - Net Income Attributable to Controlling Interests Per Common Share - Summary of Earning Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands		12 Months Ended
		Dec. 31, 2019	Dec. 31, 2018
Net income attributable to controlling interests		$ 26,443	$ 7,856
Preferred stock dividends and accretion		(1,153)
Net income attributable to common shareholders		$ 25,290	$ 7,856
Basic (including unvested share-based payment awards) (1) (in shares)	[1]	14,499	13,927
Effect of dilutive stock compensation arrangements (in shares)		774	75
Diluted (including unvested share-based payment awards) (1) (in shares)	[1]	15,273	14,002
Net income attributable to common shareholders per common share—basic (in dollars per share)		$ 1.74	$ 0.56
Net income attributable to common shareholders per common share—diluted (in dollars per share)		$ 1.66	$ 0.56

[1] Shares related to unvested share-based payment awards included in our basic and diluted share counts were 512,636 for the year ended December 31, 2019, compared to 272,172 for the year ended December 31, 2018.

XML

Note 7 - Property

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Property, Plant and Equipment Disclosure [Text Block]

7. Property

Details (in thousands) of our property on our consolidated balance sheets are as follows: 

	As of December 31,
	2019			2018
Software	$	3,543		$	3,467
Furniture and fixtures		6,431			6,307
Data processing and telephone equipment		7,675			7,625
Leasehold improvements		10,570			10,570
Other		1,156			1,156
Total cost		29,375			29,125
Less accumulated depreciation		(26,637	)		(25,500	)
Property, net	$	2,738		$	3,625

Depreciation expense totaled

$1.1

 million and

$1.0

million for the years ended

December 31, 2019

 and

2018

, respectively.

XML

Note 3 - Segment Reporting

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

3. Segment Reporting

We operate primarily within

one

industry consisting of

two

reportable segments by which we manage our business. Our

two

reportable segments are: Credit and Other Investments, and Auto Finance.

As of both

December 31, 2019

and

December 31, 2018

, we did

not

have a material amount of long-lived assets located outside of the U.S., and only a negligible portion of our revenues for the years ended

December 31, 2019

and

2018

were generated outside of the U.S.

We measure the profitability of our reportable segments based on their income after allocation of specific costs and corporate overhead; however, our segment results do

not

reflect any charges for internal capital allocations among our segments. 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:

Year ended December 31, 2019	Credit and Other Investments			Auto Finance			Total
Interest income:
Consumer loans, including past due fees	$	229,388		$	31,444		$	260,832
Other		386			—			386
Total interest income		229,774			31,444			261,218
Interest expense		(49,065	)		(1,665	)		(50,730	)
Net interest income before fees and related income on earning assets and provision for losses on loans, interest and fees receivable	$	180,709		$	29,779		$	210,488
Fees and related income on earning assets	$	70,984		$	163		$	71,147
Servicing income	$	857		$	929		$	1,786
Gain on repurchase of convertible senior notes	$	5,127		$	—		$	5,127
Equity in income of equity-method investee	$	1,001		$	—		$	1,001
Income before income taxes	$	25,005		$	6,758		$	31,763
Income tax expense	$	(3,830	)	$	(1,723	)	$	(5,553	)
Total assets	$	856,354		$	79,912		$	936,266

Year ended December 31, 2018	Credit and Other Investments			Auto Finance			Total
Interest income:
Consumer loans, including past due fees	$	131,096		$	29,872		$	160,968
Other		200			—			200
Total interest income		131,296			29,872			161,168
Interest expense		(35,564	)		(1,332	)		(36,896	)
Net interest income before fees and related income on earning assets and provision for losses on loans, interest and fees receivable	$	95,732		$	28,540		$	124,272
Fees and related income on earning assets	$	29,912		$	80		$	29,992
Servicing income	$	947		$	1,022		$	1,969
Equity in income of equity-method investee	$	581		$	—		$	581
(Loss) income before income taxes	$	(6,767	)	$	10,249		$	3,482
Income tax benefit (expense)	$	6,345		$	(2,215	)	$	4,130
Total assets	$	507,232		$	75,376		$	582,608

XML

Note 11 - Commitments and Contingencies

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

11. Commitments and Contingencies

General

Under finance products available in the point-of-sale and direct-to-consumer channels, consumers have the ability to borrow up to the maximum credit limit assigned to each individual’s account. Unfunded commitments under these products aggregated

$1.1

 billion at

December 31, 2019

.

We have never experienced a situation in which all borrowers have exercised their entire available lines of credit at any given point in time, nor do we anticipate this will ever occur in the future. Moreover, there would be a concurrent increase in assets should there be any exercise of these lines of credit. We also have the effective right to reduce or cancel these available lines of credit at any time.

Additionally, our CAR operations provide floor-plan financing for a pre-qualified network of independent automotive dealers and automotive finance companies in the buy-here, pay-here used car business. The floor plan financing allows dealers and finance companies to borrow up to the maximum pre-approved credit limit allowed in order to finance ongoing inventory needs. These loans are secured by the underlying auto inventory and, in certain cases where we have other lending products outstanding with the dealer, are secured by the collateral under those lending arrangements as well, including any outstanding dealer reserves. As of

December 31, 2019

,

CAR had unfunded outstanding floor-plan financing commitments totaling

$9.2

 million. Each draw against unused commitments is reviewed for conformity to pre-established guidelines.

Under agreements with

third

-party originating and other financial institutions, we have pledged security (collateral) related to their issuance of consumer credit and purchases thereunder, of which

$15.1

 million remains pledged as of

December 31, 2019

to support various ongoing contractual obligations. 

Under agreements with

third

-party originating and other financial institutions, we have agreed to indemnify the financial institutions for certain liabilities associated with the services we provide on behalf of the financial institutions—such indemnification obligations generally being limited to instances in which we either (a) have been afforded the opportunity to defend against any potentially indemnifiable claims or (b) have reached agreement with the financial institutions regarding settlement of potentially indemnifiable claims. As of

December 31, 2019

,

we have assessed the likelihood of any potential payments related to the aforementioned contingencies as remote. We will accrue liabilities related to these contingencies in any future period if and in which we assess the likelihood of an estimable payment as probable.

We also are subject to certain minimum payments under cancelable and non-cancelable lease arrangements. For further information regarding these commitments, see Note

8,

“Leases”

.

Litigation

We are involved in various legal proceedings that are incidental to the conduct of our business. There are currently

no

pending legal proceedings that are expected to be material to us.

XML

Note 12 - Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Notes Tables

Schedule of Components of Income Tax Expense (Benefit) [Table Text Block]

	For the Year Ended December 31,
	2019			2018
Federal income tax (expense) benefit:
Current tax benefit (expense)	$	279		$	5,932
Deferred tax (expense) benefit		(5,395	)		(1,159	)
Total federal income tax (expense) benefit	$	(5,116	)	$	4,773
Foreign income tax benefit (expense):
Current tax benefit (expense)	$	25		$	(53	)
Deferred tax (expense) benefit		(15	)		3
Total foreign income tax benefit (expense)	$	10		$	(50	)
State and other income tax (expense) benefit:
Current tax expense	$	(709	)	$	(3	)
Deferred tax benefit (expense)		262			(590	)
Total state and other income tax expense	$	(447	)	$	(593	)
Total income tax (expense) benefit	$	(5,553	)	$	4,130

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]

	For the Year Ended December 31,
	2019			2018
Statutory expense rate		21.0	%		21.0	%
Increase (decrease) in statutory tax expense rate resulting from:
Federal valuation allowance		(4.4	)		(132.0	)
Global intangible low-taxed income		0.8			9.6
Interest and penalties related to uncertain tax positions and IRS settlement adjustment		0.6			(27.2	)
Foreign taxes, net of valuation allowance		(0.5	)		(8.2	)
Permanent and other prior year true ups and tax effect of non-controlling interest		(1.1	)		4.7
State taxes, net of valuation allowance		1.1			13.5
Effective expense (benefit) rate		17.5	%		(118.6	)%

Schedule of Deferred Tax Assets and Liabilities [Table Text Block]

	As of December 31,
	2019			2018
Deferred tax assets:
Software development costs/fixed assets	$	—		$	108
Goodwill and intangible assets		113			895
Provision for loan loss		36,172			19,479
Equity-based compensation		792			748
Accrued expenses		386			307
Accruals for state taxes and interest associated with unrecognized tax benefits		108			87
Federal net operating loss carry-forward		18,643			44,485
Minimum tax credit carry-forward		520			1,015
Foreign net operating loss carry-forward		537			256
Other		40			151
State tax benefits, primarily from net operating losses		40,937			42,318
Deferred tax assets, gross	$	98,248		$	109,849
Valuation allowances		(39,161	)		(40,830	)
Deferred tax assets net of valuation allowance	$	59,087		$	69,019
Deferred tax liabilities:
Prepaid expenses and other	$	(1,217	)	$	(210	)
Software development costs/fixed assets		(176	)		—
Equity in income of equity-method investee		(1,154	)		(1,092	)
Credit card fair value election differences		(21,513	)		(21,021	)
Market discount on loans		(29,834	)		(21,749	)
Deferred costs		(542	)		(469	)
Convertible senior notes		(9,309	)		(22,106	)
Cancellation of indebtedness income		—			(1,882	)
Deferred tax liabilities, gross	$	(63,745	)	$	(68,529	)
Deferred tax (liabilities) assets, net	$	(4,658	)	$	490

Summary of Positions for which Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Table Text Block]

	2019			2018
Balance at January 1,	$	(414	)	$	(373	)
Reductions based on tax positions related to prior years		13			51
Additions based on tax positions related to the current year		(83	)		(71	)
Interest and penalties accrued		(29	)		(21	)
Balance at December 31,	$	(513	)	$	(414	)

XML

Note 2 - Significant Accounting Policies and Consolidated Financial Statement Components (Details Textual) $ in Thousands, £ in Millions		12 Months Ended
	Jan. 01, 2019 USD ($)	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2018 GBP (£)
Payments to Acquire Loans and Leases Held-for-investment, Total		$ 182,900	$ 179,400
Loans and Leases Receivable, Deferred Income, Total		$ 90,307	43,897
Weighted Average Remaining Accretion Period of Deferred Revenue		330 days
Unamortized Loan Commitment and Origination Fees and Unamortized Discounts or Premiums, Total		$ 48,100	$ 30,000
Financing Receivable, Modifications, Number of Contracts		31,409	21,997	21,997
Financing Receivable, Troubled Debt Restructuring		$ 43,300	$ 33,200
Asset Impairment Charges, Total		0	0
Proceeds from Legal Settlements			42,900	£ 34
Gain (Loss) Related to Litigation Settlement, Total			36,200
Operating Lease, Liability, Total		22,259
Operating Lease, Right-of-Use Asset		14,091
Accounting Standards Update 2016-02 [Member]
Operating Lease, Liability, Total	$ 30,200
Operating Lease, Right-of-Use Asset	18,600
Cumulative Effect on Retained Earnings, before Tax	$ 600
Other Income [Member]
Reduction in Accruals		$ 105,900
Equity Method Investment to Acquire Portfolio of Credit Card Receivables [Member]
Equity Method Investment, Ownership Percentage		66.70%
Furniture and Fixtures [Member]
Property, Plant and Equipment, Useful Life		5 years
Computer Equipment [Member]
Property, Plant and Equipment, Useful Life		3 years

XML

Consolidated Balance Sheets (Parentheticals) - USD ($) $ / shares in Thousands, $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Unrestricted cash and cash equivalents	$ 135,379	$ 60,968
Restricted cash and cash equivalents	41,015	80,786
Loans, interest and fees receivable, at fair value	4,386	6,306
Loans, interest and fees receivable, gross	998,209	541,344
Allowances for uncollectible loans, interest and fees receivable	(186,329)	(79,211)
Deferred revenue	(90,307)	(43,897)
Notes payable, at face value	$ 749,209	$ 390,927
Common stock, par value (in dollars per share)	$ 0	$ 0
Common stock, authorized (in shares)	150,000,000	150,000,000
Common stock, issued (in shares)	15,885,314	15,563,574
Common stock, outstanding (in shares)	15,885,314	15,563,574
Own-share lending arrangement, outstanding (in shares)	1,459,233	1,459,233
Series A Preferred Stock [Member]
Preferred stock, par value (in dollars per share)	$ 0	$ 0
Preferred stock, shares authorized (in shares)	10,000,000	0
Preferred stock, shares issued (in shares)	400,000	0
Preferred stock, shares outstanding (in shares)	400,000	0
Variable Interest Entity, Primary Beneficiary [Member]
Unrestricted cash and cash equivalents	$ 78,700	$ 16,800
Restricted cash and cash equivalents	25,900	61,000
Loans, interest and fees receivable, at fair value	3,900	5,700
Loans, interest and fees receivable, gross	857,200	403,400
Allowances for uncollectible loans, interest and fees receivable	(168,800)	(57,400)
Deferred revenue	(40,700)	(13,200)
Notes payable, at face value	$ 701,100	$ 366,700

XML

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Operating activities
Net income	$ 26,210	$ 7,612
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and accretion, net	7,693	987
Losses upon impairment of loans, interest and fees receivable recorded at fair value	897	549
Provision for losses on loans, interest and fees receivable	248,383	100,338
Interest expense from accretion of discount on notes	818	890
Income from accretion of merchant fees and discount associated with receivables purchases	(116,252)	(75,517)
Unrealized gain on loans, interest and fees receivable and underlying notes payable held at fair value	(2,982)	(4,195)
Amortization of deferred loan costs	3,518	2,128
Income from equity-method investments	(1,001)	(581)
Gain on repurchase of convertible senior notes	(5,127)
Deferred stock-based compensation costs	1,712	1,323
Lease liability payments	(10,080)
Changes in assets and liabilities:
Decrease (increase) in uncollected fees on earning assets	1,765	(8,754)
Increase (decrease) in income tax liability	5,533	(8,880)
Decrease in deposits	20	126
(Decrease) increase in accounts payable and accrued expenses	(52,720)	(5,411)
Other	(8,424)	32,241
Net cash provided by operating activities	99,963	42,856
Investing activities
Proceeds from equity-method investee	1,520	2,349
Investments in earning assets	(1,098,764)	(607,981)
Proceeds from earning assets	663,805	472,497
Purchases and development of property, net of disposals	(250)	(1,383)
Net cash used in investing activities	(433,689)	(134,518)
Financing activities
Noncontrolling interests contributions	50,500
Issuance costs for nonontrolling interests	(1,500)
Proceeds from issuance of preferred stock	40,000
Proceeds from exercise of stock options	1,215	50
Purchase and retirement of outstanding stock	(2,517)	(723)
Proceeds from borrowings	873,340	632,043
Repayment of borrowings	(592,318)	(469,623)
Net cash provided by financing activities	368,720	161,747
Effect of exchange rate changes on cash	(354)	1,011
Net increase in cash and cash equivalents	34,640	71,096
Cash and cash equivalents and restricted cash at beginning of period	141,754	70,658
Cash and cash equivalents and restricted cash at end of period	176,394	141,754
Supplemental cash flow information
Cash paid for interest	46,302	33,467
Net cash income tax payments	$ 20	$ 4,750

XML

Note 8 - Leases (Details Textual) $ in Thousands	12 Months Ended
	Dec. 31, 2019 USD ($) ft²	Dec. 31, 2018 USD ($)
Operating Leases, Rent Expense, Net, Total	$ 1,700	$ 1,700
Operating Leases, Rent Expense, Sublease Rentals	$ 5,100	$ 5,100
Lessee, Operating Lease, Term of Contract	15 years
Area Under Operating Lease, Gross | ft²	335,372
Area Under Operating Lease, Net | ft²	254,710
Tenant Improvements	$ 21,200
Capital Lease Obligations, Total	$ 0

XML

Note 6 - Fair Values of Assets and Liabilities - Reconciliation of Level 3 Liabilities (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Balance	$ 5,651	$ 9,240
Net revaluations of notes payable associated with structured financings, at fair value	(1,731)	(3,589)
Repayments on outstanding notes payable, net
Balance	$ 3,920	$ 5,651

XML

Note 12 - Income Taxes - Schedule of Components of Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Current tax benefit (expense)	$ 279	$ 5,932
Deferred tax (expense) benefit	(5,395)	(1,159)
Total federal income tax expense (benefit), federal	(5,116)	4,773
Current tax benefit (expense), foreign	25	(53)
Deferred tax (expense) benefit, foreign	(15)	3
Total foreign income tax benefit (expense)	10	(50)
Current tax (expense) benefit, foreign	(709)	(3)
Deferred tax benefit (expense)	262	(590)
Total state and other income tax expense	(447)	(593)
Total federal income tax expense (benefit)	$ (5,553)	$ 4,130

XML

Note 13 - Net Income Attributable to Controlling Interests Per Common Share (Details Textual) xbrli-pure in Millions	12 Months Ended
	Dec. 31, 2019 $ / shares shares	Dec. 31, 2018 shares
Weighted Average Number of Shares, Restricted Stock	512,636	272,172
Five Point Eight Seven Five Percent Convertible Senior Notes Due Two Thousand Thirty Five [Member]
Incremental Common Shares Attributable to Conversion of Debt Securities, Total	0	0
Debt Instrument, Convertible, Conversion Price | $ / shares	$ 24.61
Debt Instrument, Convertible, Number of Equity Instruments	1.4
Share-based Payment Arrangement, Option [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	500,000	2,900,000

XML

Note 15 - Employee Benefit Plans (Details Textual) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Defined Contribution Plan Eligibility	90 days
Defined Contribution Plan, Employer Matching Contribution, Percent of Match	3.00%
Defined Contribution Plan, Employer Discretionary Contribution Amount	$ 285,618	$ 285,477
Employee Stock Purchase Plan, Percent of Wages Withheld, Maximum	10.00%
Employee Stock Purchase Plan, Max Annual Contribution by Employees	$ 10,000
Percent of Purchase Price to Company's Common Stock on Last Day of Offering Period	85.00%
Stock Issued During Period, Value, Employee Stock Purchase Plan	$ 108,466	$ 51,593
Stock Issued During Period, Shares, Employee Stock Purchase Plans	19,641	23,681
Employee Stock Purchase Plan, Shares Authorized	100,000
Employee Stock Purchase Plan, Employer Expense During Period	$ 31,954	$ 28,629

XML

Note 12 - Income Taxes

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Income Tax Disclosure [Text Block]

12. Income Taxes

Deferred tax assets and liabilities reflect the effects of tax losses, credits, and the future income tax effects of temporary differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases and are measured using enacted tax rates that apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

The current and deferred portions (in thousands) of federal, foreign and state income tax benefit or expense are as follows:

	For the Year Ended December 31,
	2019			2018
Federal income tax (expense) benefit:
Current tax benefit (expense)	$	279		$	5,932
Deferred tax (expense) benefit		(5,395	)		(1,159	)
Total federal income tax (expense) benefit	$	(5,116	)	$	4,773
Foreign income tax benefit (expense):
Current tax benefit (expense)	$	25		$	(53	)
Deferred tax (expense) benefit		(15	)		3
Total foreign income tax benefit (expense)	$	10		$	(50	)
State and other income tax (expense) benefit:
Current tax expense	$	(709	)	$	(3	)
Deferred tax benefit (expense)		262			(590	)
Total state and other income tax expense	$	(447	)	$	(593	)
Total income tax (expense) benefit	$	(5,553	)	$	4,130

We experienced an effective income tax expense rate of

17.5%

for the year ended

December 31, 2019,

compared to a negative effective income tax expense rate of

118.6%

for the year ended

December 31, 2018.

Our effective income tax expense rate for the year ended

December 31, 2019

was below the statutory rate principally as a result of the release of federal valuation allowances. Our negative effective income tax expense rate for the year ended

December 31, 2018 

was significantly below the statutory rate principally as a result of our settlement during

2018

of an IRS examination of our

2008

tax return and the carryback of its resulting net operating losses to pre-

2008

tax years. The settlement resulted in a decrease in our federal tax valuation allowance and net reductions in our accruals of interest on liabilities for uncertain tax positions and unpaid taxes.

We report income tax-related interest and penalties (including those associated with both our accrued liabilities for uncertain tax positions and unpaid tax liabilities) within our income tax line item on our consolidated statements of operations.  We likewise report the reversal of income tax-related interest and penalties within such line item to the extent we resolve our liabilities for uncertain tax positions or unpaid tax liabilities in a manner favorable to our accruals therefor.  For

2019,

we reported a net accrual of income tax-related interest and penalties of

$0.1

 million within our income tax line item, and, for

2018,

we reported a net reversal of income tax-related interest and penalties of

$1.2

 million within our income tax line item.

In

December 2014,

we reached a settlement with the IRS concerning the tax treatment of net operating losses we incurred in

2007

and

2008

and carried back to obtain refunds of federal income taxes paid in earlier years dating back to

2003.

 In

2015,

we filed an amended return claim that, if accepted, would have eliminated the

$7.4

million assessment (and corresponding interest and penalties) under a negotiated provision of the

December 2014

IRS settlement. The IRS filed a lien (as is customarily the case) associated with the assessment.  Subsequently, an IRS examination team denied our amended return claims, and we filed a protest with IRS Appeals. Following correspondence and conferences held with IRS Appeals, we received and accepted a settlement offer from IRS Appeals in

June 2018

that reduced our

$7.4

million net unpaid income tax assessment referenced above to

$3.7

million (such

$3.7

million remaining unpaid assessment relating to the

2006

year to which we had originally carried back the aforementioned net operating losses). In

July 2018,

we paid

$5.4

million to the IRS to cover the

$3.7

million unpaid income tax assessment and most of the interest that had accrued thereon. Subsequently, during the

three

months ended

September 30, 2018,

the IRS refunded

$0.5

million of our

$5.4

million payment, and in

2019,

we paid

$0.7

 million to the IRS to cover the interest on the

2006

income tax liability.  Although we have paid all assessed income taxes related to this matter, we still have an outstanding accrued liability for failure-to-pay penalties (and accrued interest thereon) related to this matter. We are pursuing complete abatement of the failure-to-pay penalties of

$0.9

million, and once this matter is resolved through either abatement or payment, we expect the IRS to remove the aforementioned lien in due course.

The following table reconciles our effective income tax expense or benefit rates for

2019

and

2018

:

	For the Year Ended December 31,
	2019			2018
Statutory expense rate		21.0	%		21.0	%
Increase (decrease) in statutory tax expense rate resulting from:
Federal valuation allowance		(4.4	)		(132.0	)
Global intangible low-taxed income		0.8			9.6
Interest and penalties related to uncertain tax positions and IRS settlement adjustment		0.6			(27.2	)
Foreign taxes, net of valuation allowance		(0.5	)		(8.2	)
Permanent and other prior year true ups and tax effect of non-controlling interest		(1.1	)		4.7
State taxes, net of valuation allowance		1.1			13.5
Effective expense (benefit) rate		17.5	%		(118.6	)%

As of

December 31, 2019

and

December 31, 2018

, the respective significant components (in thousands) of our deferred tax assets and liabilities were:

	As of December 31,
	2019			2018
Deferred tax assets:
Software development costs/fixed assets	$	—		$	108
Goodwill and intangible assets		113			895
Provision for loan loss		36,172			19,479
Equity-based compensation		792			748
Accrued expenses		386			307
Accruals for state taxes and interest associated with unrecognized tax benefits		108			87
Federal net operating loss carry-forward		18,643			44,485
Minimum tax credit carry-forward		520			1,015
Foreign net operating loss carry-forward		537			256
Other		40			151
State tax benefits, primarily from net operating losses		40,937			42,318
Deferred tax assets, gross	$	98,248		$	109,849
Valuation allowances		(39,161	)		(40,830	)
Deferred tax assets net of valuation allowance	$	59,087		$	69,019
Deferred tax liabilities:
Prepaid expenses and other	$	(1,217	)	$	(210	)
Software development costs/fixed assets		(176	)		—
Equity in income of equity-method investee		(1,154	)		(1,092	)
Credit card fair value election differences		(21,513	)		(21,021	)
Market discount on loans		(29,834	)		(21,749	)
Deferred costs		(542	)		(469	)
Convertible senior notes		(9,309	)		(22,106	)
Cancellation of indebtedness income		—			(1,882	)
Deferred tax liabilities, gross	$	(63,745	)	$	(68,529	)
Deferred tax (liabilities) assets, net	$	(4,658	)	$	490

We undertook a detailed review of our deferred taxes and determined that a valuation allowance was required for certain deferred tax assets in the U.S. for states and in the U.K. We reduce our deferred tax assets by a valuation allowance if it is more likely than

not

that some portion or all of a deferred tax asset will

not

be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences are deductible. In making our valuation allowance determinations, we consider all available positive and negative evidence affecting specific deferred tax assets, including our past and anticipated future performance, the reversal of deferred tax liabilities, the length of carry-back and carry-forward periods, and the implementation of tax planning strategies. Because our valuation allowance evaluations require consideration of future events, significant judgment is required in making the evaluations, and our conclusions could be materially different should certain of our expectations

not

be met. Our valuation allowances totaled

$39.2

million and

$40.8

million at

December 31, 2019

and

December 31, 2018,

respectively.

Certain of our deferred tax assets relate to federal, foreign and state net operating losses, capital losses, and credits, and we have

no

other net operating losses, capital losses, or credit carryforwards other than those noted herein. We have recorded a federal deferred tax asset of

$18.0

million (based on federal net operating loss carryforwards of

$85.6

million, which expire in varying amounts between

2029

and 

2037

). We have also recorded a federal deferred tax asset of

$0.6

million (based on federal capital loss carryovers of

$2.8

million, which expire in

2021

).

Our subsidiaries file federal, state and/or foreign income tax returns. In the normal course of our business, we are subject to examination by taxing authorities throughout the world, including such major jurisdictions as the U.S., the U.K., and various U.S. states and territories. With a few exceptions of a non-material nature and considering our

2008

-related settlement with the IRS discussed previously, we are

no

longer subject to federal, state, local, or foreign income tax examinations for years prior to

2015.

Reconciliations (in thousands) of our unrecognized tax benefits from the beginning to the end of

2019

and

2018

, respectively, are as follows:

	2019			2018
Balance at January 1,	$	(414	)	$	(373	)
Reductions based on tax positions related to prior years		13			51
Additions based on tax positions related to the current year		(83	)		(71	)
Interest and penalties accrued		(29	)		(21	)
Balance at December 31,	$	(513	)	$	(414	)

Further, our unrecognized tax benefits that, if recognized, would affect the effective tax rate are

not

material at only

$0.5

 million and

$0.4

 million at

December 31, 2019

, and

2018

, respectively.

XML

Note 8 - Leases

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Leases of Lessee Disclosure [Text Block]

8. Leases

We lease premises and certain equipment under cancelable and non-cancelable leases, some of which contain renewal options under various terms. Total rental expense associated with these operating leases was

$1.7

million in 

2019

and

$1.7

 million in

2018

, net of sublease income of

$5.1

million and

$5.1

 million for the years ended

December 31, 2019

and

2018

, respectively.  During the

fourth

quarter of

2006,

we entered into a

15

-year lease for

335,372

square feet in Atlanta, Georgia (net of space which was surrendered to the landlord through our exercise of a termination option and therefore

not

included in the computed impact of adoption),

254,710

square feet of which we have subleased, and the remainder of which houses our corporate offices. In connection with this lease, we received a

$21.2

million construction allowance for the build-out of our corporate offices. We are amortizing the construction allowance as a reduction of rent expense over the term of the lease. The terms of the sublease arrangements generally coincide with the underlying lease.

The components of lease expense associated with our lease liabilities and supplemental cash flow information related to those leases were as follows:

	For the Year ended December 31,
	2019			2018
Operating lease cost, gross	$	6,875		$	6,758
Sublease income		(5,133	)		(5,080	)
Net Operating lease cost	$	1,742		$	1,678
Cash paid under operating leases, gross	$	10,080		$	9,913
Weighted average remaining lease term - months		29
Weighted average discount rate		6.9	%

As of

December 31, 2019

, maturities of lease liabilities were as follows:

	Gross Lease Payment			Payments received from Sublease			Net Lease Payment
2020	$	10,213		$	(7,115	)	$	3,098
2021		10,221			(7,315	)		2,906
2022		4,407			(3,112	)		1,295
2023		126			—			126
2024		30			—			30
Thereafter		—			—			—
Total lease payments		24,997			(17,542	)		7,455
Less imputed interest		(2,738	)
Total	$	22,259

In addition, we occasionally lease certain equipment under cancelable and non-cancelable leases, which are accounted for as capital leases in our consolidated financial statements. As of

December 31, 2019

, we had

no

material non-cancelable capital leases with initial or remaining terms of more than

one

year.

XML

Note 4 - Shareholders' Equity and Preferred Stock

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Stockholders' Equity Note Disclosure [Text Block]

4. Shareholders’ Equity and Preferred Stock

On 

November 26, 2014,

we and certain of our subsidiaries entered into a Loan and Security Agreement with Dove Ventures, LLC, a Nevada limited liability company (“Dove”). The agreement provided for a senior secured term loan facility in an amount of up to

$40.0

million at any time outstanding. On

December 27, 2019,

the Company issued

400,000

shares (

10,000,000

shares authorized,

400,000

shares outstanding) of its Series A Preferred Stock with an aggregate initial liquidation preference of

$40.0

million, in exchange for full satisfaction of the

$40.0

million that the Company owed Dove under the Loan and Security Agreement.  Dividends on the preferred stock are 

6%

per annum (cumulative, non-compounding) and are payable as declared, and in preference to any common stock dividends, in cash. The Series A Preferred Stock is perpetual and has

no

maturity date. The Company

may,

at its option, redeem the shares of Series A Preferred Stock on or after

January 1, 2025

at a redemption price equal to

$100

per share, plus any accumulated and unpaid dividends. At the request of a majority of the holders of the Series A Preferred Stock, the Company shall offer to redeem all of the Series A Preferred Stock at a redemption price equal to

$100

per share, plus any accumulated and unpaid dividends, at the option of the holders thereof, on or after

January 1, 2024. 

Upon the election by the holders of a majority of the Series A Preferred Stock, each share of the Series A Preferred Stock is convertible into the number of shares of the Company’s common stock as is determined by dividing (i) the sum of (a)

$100

and (b) any accumulated and unpaid dividends on such share by (ii) an initial conversion price equal to

$10

per share, subject to certain adjustment in certain circumstances to prevent dilution. Given the redemption rights contained within the Series A Preferred Stock, we account for the outstanding preferred stock as temporary equity in the consolidated balance sheets.

Dove is a limited liability company owned by

three

trusts. David G. Hanna is the sole shareholder and the President of the corporation that serves as the sole trustee of

one

of the trusts, and David G. Hanna and members of his immediate family are the beneficiaries of this trust. Frank J. Hanna, III is the sole shareholder and the President of the corporation that serves as the sole trustee of the other

two

trusts, and Frank J. Hanna, III and members of his immediate family are the beneficiaries of these other

two

trusts.

During the years ended

December 31, 2019

and

2018

, we repurchased and contemporaneously retired

357,461

and

281,787

shares of our common stock at an aggregate cost of

$2,517,000

and

$723,000,

respectively, pursuant to both open market and private purchases and the return of stock by holders of equity incentive awards to pay tax withholding obligations.

We had

1,459,233

loaned shares outstanding at

December 31, 2019

and

December 31, 2018

, which were originally lent in connection with our

November 2005

issuance of convertible senior notes. We retire lent shares as they are returned to us.

On

November 14, 2019,

a wholly-owned subsidiary issued

50.5

million Class B preferred units at a purchase price of

$1.00

per unit to an unrelated

third

party. The units carry a

16%

preferred return to be paid quarterly, with up to

6

percentage points of the preferred return to be paid through the issuance of additional units or cash, at our election. The units have both call and put rights and are also subject to various covenants including a minimum book value, which if

not

satisfied, could allow for the securities to be put back to the subsidiary. Subject to satisfying certain closing conditions, the subsidiary has the right to issue up to

50.5

million additional units on the same terms. The proceeds from the transaction will be used for general corporate purposes.  We have included the issuance of these Class B preferred units as temporary noncontrolling interest on the consolidated balance sheets.

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Assets
Unrestricted cash and cash equivalents	$ 135,379	$ 60,968
Restricted cash and cash equivalents	41,015	80,786
Loans, interest and fees receivable:
Loans, interest and fees receivable, at fair value	4,386	6,306
Loans, interest and fees receivable, gross	998,209	541,344
Allowances for uncollectible loans, interest and fees receivable	(186,329)	(79,211)
Deferred revenue	(90,307)	(43,897)
Net loans, interest and fees receivable	725,959	424,542
Property at cost, net of depreciation	2,738	3,625
Investments in equity-method investee	1,957	2,476
Deposits	104	124
Operating lease right-of-use assets	14,091
Prepaid expenses and other assets	15,023	10,087
Total assets	936,266	582,608
Liabilities
Accounts payable and accrued expenses	41,617	105,765
Operating lease liabilities	22,259
Notes payable, at face value	749,209	390,927
Notes payable to related parties		40,000
Notes payable associated with structured financings, at fair value (associated with variable interest entities)	3,920	5,651
Convertible senior notes	24,091	62,142
Income tax liability	5,785	252
Total liabilities	846,881	604,737
Commitments and contingencies (Note 11)
Shareholders' Equity
Common stock, no par value, 150,000,000 shares authorized: 15,885,314 shares issued and outstanding (including 1,459,233 loaned shares to be returned) at December 31, 2019; and 15,563,574 shares issued and outstanding (including 1,459,233 loaned shares to be returned) at December 31, 2018
Paid-in capital	212,692	213,435
Accumulated other comprehensive income		3,558
Retained deficit	(211,786)	(238,784)
Total shareholders’ equity (deficit)	906	(21,791)
Noncontrolling interests	(571)	(338)
Total equity (deficit)	335	(22,129)
Total liabilities, preferred stock and shareholders' equity (deficit)	936,266	582,608
Series A Preferred Stock [Member]
Liabilities
Preferred stock, no par value, 10,000,000 shares authorized: Series A preferred stock, 400,000 shares issued and outstanding at December 31, 2019; 0 shares at December 31, 2018 (Note 4)	40,000
Series B Preferred Stock [Member]
Liabilities
Preferred stock, no par value, 10,000,000 shares authorized: Series A preferred stock, 400,000 shares issued and outstanding at December 31, 2019; 0 shares at December 31, 2018 (Note 4)	$ 49,050

XML

Consolidated Statements of Shareholders' Equity (Deficit) - USD ($)	Common Stock [Member]	Additional Paid-in Capital [Member]	AOCI Attributable to Parent [Member]	Retained Earnings [Member]	Noncontrolling Interest [Member]	Temporary Equity Associated with Noncontrolling Interests [Member]	Preferred Stock [Member] Series A Preferred Stock [Member]	Total
Balance (in shares) at Dec. 31, 2017	15,291,884
Balance at Dec. 31, 2017		$ 212,785,000	$ (2,178,000)	$ (246,640,000)	$ (94,000)			$ (36,127,000)
Stock options exercises and proceeds related thereto (in shares)	20,300
Stock options exercises and proceeds related thereto		50,000						50,000
Compensatory stock issuances, net of forfeitures (in shares)	533,177
Compensatory stock issuances, net of forfeitures
Deferred stock-based compensation costs		1,323,000						$ 1,323,000
Redemption and retirement of shares (in shares)	(281,787)							(281,787)
Redemption and retirement of shares		(723,000)						$ (723,000)
Comprehensive income (loss)			5,736,000	7,856,000	(244,000)			13,348,000
Balance (in shares) at Dec. 31, 2018	15,563,574
Balance at Dec. 31, 2018		213,435,000	3,558,000	(238,784,000)	(338,000)			$ (22,129,000)
Stock options exercises and proceeds related thereto (in shares)	469,701							469,701
Stock options exercises and proceeds related thereto		1,215,000						$ 1,215,000
Compensatory stock issuances, net of forfeitures (in shares)	209,500
Compensatory stock issuances, net of forfeitures
Deferred stock-based compensation costs		1,712,000						$ 1,712,000
Redemption and retirement of shares (in shares)	(357,461)							(357,461)
Redemption and retirement of shares		(2,517,000)						$ (2,517,000)
Comprehensive income (loss)			(3,558,000)	26,443,000	(233,000)			22,652,000
Cumulative effects from adoption of new lease standard (Note 2)				555,000				555,000
Accretion of discount associated with issuance of subsidiary equity		(50,000)				50,000		(50,000)
Preferred dividends		(1,103,000)						(1,103,000)
Contributions by preferred shareholders						50,500,000	40,000,000
Costs associated with contributions by preferred shareholders						(1,500,000)
Balance (in shares) at Dec. 31, 2019	15,885,314
Balance at Dec. 31, 2019		$ 212,692,000		$ (211,786,000)	$ (571,000)	$ 49,050,000	$ 40,000,000	$ 335,000

XML

Note 10 - Convertible Senior Notes (Tables)

12 Months Ended

Dec. 31, 2019

Notes Tables

Schedule of Long-term Debt Instruments [Table Text Block]

	As of
	December 31, 2019			December 31, 2018
Face amount of convertible senior notes	$	33,839		$	88,280
Discount		(9,748	)		(26,138	)
Net carrying value	$	24,091		$	62,142
Carrying amount of equity component included in paid-in capital	$	108,714		$	108,714
Excess of instruments’ if-converted values over face principal amounts	$	—		$	—

XML

Note 1 - Description of Our Business (Details Textual)	12 Months Ended
	Dec. 31, 2019
Number of Reportable Segments	2

XML

Note 5 - Investment in Equity-method Investee (Tables)

12 Months Ended

Dec. 31, 2019

Notes Tables

Equity Method Investments [Table Text Block]

	As of
	December 31, 2019		December 31, 2018
Loans, interest and fees receivables, at fair value	$	2,757	$	3,546
Total assets	$	2,922	$	3,732
Total liabilities	$	13	$	18
Members’ capital	$	2,909	$	3,714

	Year ended December 31,
	2019		2018
Net interest income (loss), fees and related income on earning assets	$	1,505	$	875
Net income	$	1,318	$	613
Net income attributable to investee	$	1,001	$	581

XML

Note 16 - Related Party Transactions

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Related Party Transactions Disclosure [Text Block]

16. Related Party Transactions

Under a shareholders’ agreement which we entered into with certain shareholders, including David G. Hanna, Frank J. Hanna, III and certain trusts that were Hanna affiliates, following our initial public offering (

1

) if

one

or more of the shareholders accepts a bona fide offer from a

third

party to purchase more than

50%

of the outstanding common stock, each of the other shareholders that is a party to the agreement

may

elect to sell his shares to the purchaser on the same terms and conditions, and (

2

) if shareholders that are a party to the agreement owning more than

50%

of the common stock propose to transfer all of their shares to a

third

party, then such transferring shareholders

may

require the other shareholders that are a party to the agreement to sell all of the shares owned by them to the proposed transferee on the same terms and conditions.

In

June 2007,

we entered into a sublease for

1,000

 square feet (as later adjusted to

600

square feet) of excess office space at our Atlanta headquarters with HBR Capital, Ltd. (“HBR”), a company co-owned by David G. Hanna and his brother Frank J. Hanna, III. The sublease rate per square foot is the same as the rate that we pay under the prime lease. Under the sublease, HBR paid us

$16,627

and

$18,089

for

2019

and

2018

, respectively. The aggregate amount of payments required under the sublease from

January 1, 2020 

to the expiration of the sublease in

May 2022

is

$41,527.

In

January 2013,

HBR began leasing the services of

four

employees from us. HBR reimburses us for the full cost of the employees, based on the amount of time devoted to HBR. In the years ended

December 31, 2019

 and

2018

, we received

$269,072

 and

$270,932,

respectively, of reimbursed costs from HBR associated with these leased employees.

On 

November 26, 2014,

we and certain of our subsidiaries entered into a Loan and Security Agreement with Dove. The agreement provided for a senior secured term loan facility in an amount of up to

$40.0

million at any time outstanding. On

December 27, 2019,

the Company issued

400,000

shares (aggregate initial liquidation preference of

$40

 million) of its Series A Preferred Stock in exchange for full satisfaction of the

$40.0

million that the Company owed Dove under the Loan and Security Agreement.  Dividends on the preferred stock are 

6%

per annum (cumulative, non-compounding) and are payable in preference to any common stock dividends, in cash. The Series A Preferred Stock is perpetual and has

no

maturity date. The Company

may,

at its option, redeem the shares of Series A Preferred Stock on or after

January 1, 2025

at a redemption price equal to

$100

per share, plus any accumulated and unpaid dividends. At the request of a majority of the holders of the Series A Preferred Stock, the Company shall offer to redeem all of the Series A Preferred Stock at a redemption price equal to

$100

per share, plus any accumulated and unpaid dividends, at the option of the holders thereof, on or after

January 1, 2024. 

Upon the election by the holders of a majority of the Series A Preferred Stock, each share of the Series A Preferred Stock is convertible into the number of shares of the Company’s common stock as is determined by dividing (i) the sum of (a)

$100

and (b) any accumulated and unpaid dividends on such share by (ii) an initial conversion price equal to

$10

per share, subject to certain adjustment in certain circumstances to prevent dilution. Given the redemption rights contained within the Series A Preferred Stock, we account for the outstanding preferred stock as temporary equity in the consolidated balance sheets.  Dove is a limited liability company owned by

three

trusts. David G. Hanna is the sole shareholder and the President of the corporation that serves as the sole trustee of

one

of the trusts, and David G. Hanna and members of his immediate family are the beneficiaries of this trust. Frank J. Hanna, III is the sole shareholder and the President of the corporation that serves as the sole trustee of the other

two

trusts, and Frank J. Hanna, III and members of his immediate family are the beneficiaries of these other

two

trusts.

XML

Note 2 - Significant Accounting Policies and Consolidated Financial Statement Components - Components of Revenue from Contracts with Customers (Details) - USD ($) $ in Thousands		12 Months Ended
		Dec. 31, 2019	Dec. 31, 2018
Revenue from contracts with customers		$ 13,754	$ 5,556
Credit and Debit Card [Member]
Revenue from contracts with customers	[1]	8,495	2,881
Servicing Income [Member]
Revenue from contracts with customers		1,786	1,969
Service Charges and Other Customer Related Fees [Member]
Revenue from contracts with customers		3,473	706
Credit and Other Investments [Member]
Revenue from contracts with customers		12,759	4,465
Credit and Other Investments [Member] | Credit and Debit Card [Member]
Revenue from contracts with customers	[1]	8,495	2,881
Credit and Other Investments [Member] | Servicing Income [Member]
Revenue from contracts with customers		857	947
Credit and Other Investments [Member] | Service Charges and Other Customer Related Fees [Member]
Revenue from contracts with customers		3,407	637
Auto Finance [Member]
Revenue from contracts with customers		995	1,091
Auto Finance [Member] | Credit and Debit Card [Member]
Revenue from contracts with customers	[1]
Auto Finance [Member] | Servicing Income [Member]
Revenue from contracts with customers		929	1,022
Auto Finance [Member] | Service Charges and Other Customer Related Fees [Member]
Revenue from contracts with customers		$ 66	$ 69

[1] Interchange revenue is presented net of customer reward expense.

XML

Note 5 - Investment in Equity-method Investee (Details Textual)	Dec. 31, 2019
Equity Method Investment to Acquire Portfolio of Credit Card Receivables [Member]
Equity Method Investment, Ownership Percentage	66.70%

XML

Note 12 - Income Taxes (Details Textual) - USD ($) $ in Thousands	1 Months Ended	12 Months Ended
	Jul. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Dec. 31, 2015
Effective Income Tax Rate Reconciliation, Percent, Total		17.50%	(118.60%)
Income Tax Settlement Amount with Taxing Authority					$ 3,700	$ 7,400
Payments for Income Tax Settlement with Taxing Authority	$ 5,400	$ 700
Income Tax Examination, Liability (Refund) Adjustment from Settlement with Taxing Authority				$ (500)
Income Tax Examination, Penalties Accrued		900
Deferred Tax Assets, Valuation Allowance, Total		39,161	$ 40,830
Deferred Tax Assets, Operating Loss Carryforwards, Domestic		18,643	44,485
Deferred Tax Assets, Capital Loss Carryforwards		600
Unrecognized Tax Benefits that Would Impact Effective Tax Rate		500	400
Capital Loss Carryforward [Member]
Tax Credit Carryforward, Amount		2,800
Domestic Tax Authority [Member]
Operating Loss Carryforwards, Total		85,600
Income Tax Expense (Benefit) [Member]
Income Tax Examination, Penalties and Interest Expense, Total		$ 100
Income Tax Examination, Penalties and Interest Expense, Net Reversal			$ 1,200

XML

Note 9 - Notes Payable and Variable Interest Entities - Schedule of Notes Payable at Face Value and Notes Payable to Related Parties (Details) (Parentheticals) - USD ($) $ in Thousands		12 Months Ended
		Dec. 31, 2019		Dec. 31, 2018	Oct. 31, 2015
Other Secured Debt [Member]
Amortizing securitization facility, maturity date		Sep. 08, 2023	[1]	Sep. 08, 2023
Loan, interest rate		5.50%	[1]	5.50%
Phoenix [Member]
Amortizing securitization facility, maturity date	[2]	Aug. 26, 2024	[1]	Aug. 26, 2024
Loan, interest rate	[2]	8.00%	[1]	8.00%
Amortizing Debt Facility Two [Member]
Amortizing securitization facility, maturity date	[2],[3],[4],[5]	Sep. 30, 2021	[1]	Sep. 30, 2021
Loan, interest rate	[2],[3],[4],[5]	6.20%	[1]	6.20%
Senior Secured Term Loan Facility [Member]
Amortizing securitization facility, maturity date	[2]	Nov. 21, 2019	[1]	Nov. 21, 2019
Loan, interest rate	[2]	9.00%	[1]	9.00%
Revolving Credit Facility Expiring November 1, 2020 [Member]
Revolving credit facility, maximum borrowing capacity	[2],[5],[6]	$ 55,000	[1]	$ 55,000
Revolving credit facility, expiration date	[2],[5],[6]	Nov. 01, 2021	[1]	Nov. 01, 2021
Revolving Credit Facility Expiring October 30, 2022 [Member]
Revolving credit facility, maximum borrowing capacity	[2],[3],[4],[5]	$ 50,000	[1]	$ 50,000
Revolving credit facility, expiration date	[2],[3],[4],[5]	Oct. 30, 2022	[1]	Oct. 30, 2022
Revolving Credit Facility Expiring March 31, 2020 [Member]
Revolving credit facility, maximum borrowing capacity	[3],[4],[5]	$ 20,000	[1]	$ 20,000
Revolving credit facility, expiration date		Mar. 31, 2020	[1],[3],[4],[5]	Mar. 31, 2020
Revolving Credit Facility Expiring February 8, 2022 [Member]
Revolving credit facility, maximum borrowing capacity	[2],[3],[4],[7]	$ 70,000	[1]	$ 70,000
Revolving credit facility, expiration date	[2],[3],[4],[7]	Feb. 08, 2022	[1]	Feb. 08, 2022
Revolving Credit Facility Expiring June 11, 2021 [Member]
Revolving credit facility, maximum borrowing capacity	[2],[3],[4],[7]	$ 100,000	[1]	$ 100,000
Revolving credit facility, expiration date	[2],[3],[4],[7]	Jun. 11, 2021	[1]	Jun. 11, 2021
Revolving Credit Facility Expiring July 15 2021 [Member]
Revolving credit facility, maximum borrowing capacity	[3],[4],[5]	$ 15,000	[1]	$ 15,000
Revolving credit facility, expiration date	[3],[4],[5]	Jul. 15, 2021	[1]	Jul. 15, 2021
Revolving Credit Facility Expiring November 16, 2020 [Member]
Revolving credit facility, maximum borrowing capacity	[2],[3],[4],[7]	$ 100,000		$ 100,000
Revolving credit facility, expiration date	[2],[3],[4],[7]	Nov. 16, 2020		Nov. 16, 2020
Revolving Credit Facility Expiring November 15, 2023 [Member]
Revolving credit facility, maximum borrowing capacity	[2],[3],[4],[7]	$ 167,300	[1]	$ 167,300
Revolving credit facility, expiration date	[2],[3],[4],[7]	Nov. 15, 2023	[1]	Nov. 15, 2023
Revolving Credit Facility Expiring December 15, 2022 [Member]
Revolving credit facility, maximum borrowing capacity	[2],[3],[4],[7]	$ 200,000	[1]	$ 200,000
Revolving credit facility, expiration date	[2],[3],[4],[7]	Dec. 15, 2022	[1]	Dec. 15, 2022
Revolving Credit Facility Expiring May 15, 2024 [Member]
Revolving credit facility, maximum borrowing capacity	[2],[3],[4],[7]	$ 152,024,000	[1]	$ 152,024,000
Revolving Credit Facility Expiring December 21, 2020 [Member]
Revolving credit facility, maximum borrowing capacity	[2],[3],[4],[5]	$ 15,000	[1]	$ 15,000
Revolving credit facility, expiration date	[2],[3],[4],[5]	Dec. 21, 2020	[1]	Dec. 21, 2020
Revolving Credit Facility Expiring September 19, 2021 [Member]
Revolving credit facility, maximum borrowing capacity		$ 50,000	[1]	$ 50,000
Revolving credit facility, expiration date		Sep. 19, 2021	[1],[2],[3],[4],[5]	Sep. 19, 2021
Revolving Credit Facility [Member]
Revolving credit facility, maximum borrowing capacity					$ 50,000
Amortizing securitization facility, weighted average interest rate		6.00%	[1]	7.60%
Amount of securing assets		$ 740,400	[1]	$ 468,800

[1] As of December 31, 2019, the LIBOR rate was 1.75% and the prime rate was 4.75%.

[2] See below for additional information.

[3] Loans are associated with variable interest entities.

[4] Loans are subject to certain affirmative covenants tied to default rates and other performance metrics the failure of which could result in required early repayment of the remaining unamortized balances of the notes.

[5] These notes reflect modifications to either extend the maturity date, increase the loan amount or both, and are treated as accounting modifications.

[6] Loan is subject to certain affirmative covenants, including a coverage ratio, a leverage ratio and a collateral performance test, the failure of which could result in required early repayment of all or a portion of the outstanding balance by our CAR Auto Finance operations.

[7] Creditors do not have recourse against the general assets of the Company but only to the collateral within the VIEs.

XML

Note 9 - Notes Payable and Variable Interest Entities - Summary of Variable Interest Entities (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Unrestricted cash and cash equivalents	$ 135,379	$ 60,968
Restricted cash and cash equivalents	41,015	80,786
Loans, interest and fees receivable, at fair value	4,386	6,306
Loans, interest and fees receivable, gross	998,209	541,344
Allowances for uncollectible loans, interest and fees receivable	(186,329)	(79,211)
Deferred revenue	(90,307)	(43,897)
Total Assets held by VIEs	936,266	582,608
Notes Payable, at face value held by VIEs	749,209	390,927
Notes Payable, at fair value held by VIEs	3,920	5,651
Maximum exposure to loss due to involvement with VIEs	654,300	438,500
Variable Interest Entity, Primary Beneficiary [Member]
Unrestricted cash and cash equivalents	78,700	16,800
Restricted cash and cash equivalents	25,900	61,000
Loans, interest and fees receivable, at fair value	3,900	5,700
Loans, interest and fees receivable, gross	857,200	403,400
Allowances for uncollectible loans, interest and fees receivable	(168,800)	(57,400)
Deferred revenue	(40,700)	(13,200)
Total Assets held by VIEs	756,200	416,300
Notes Payable, at face value held by VIEs	701,100	366,700
Notes Payable, at fair value held by VIEs	$ 3,900	$ 5,700