SALE AND SERVICING

AGREEMENT

between

NICE CARS FUNDING LLC,
as Purchaser,

and

NICE CARS ACCEPTANCE ACQUISITIONCO, INC.,
as Seller,

and

MANCHESTER INC.,
as Servicer

and

NICE CARS OPERATIONS AQUISITIONCO., INC.

 
Dated as of

September 28, 2006
 

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TABLE OF CONTENTS
 

         
Page
     
ARTICLE I DEFINITIONS
 
1
 
Section 1.1.
 
Definitions
 
1
 
Section 1.2.
 
Other Definitional Provisions
 
2
ARTICLE II CONVEYANCE OF RECEIVABLES
 
2
 
Section 2.1.
 
Conveyance of Receivables
 
2
 
Section 2.2.
 
Payment of Purchase Price
 
5
 
Section 2.3.
 
Transfers Intended as Sales
 
5
 
Section 2.4.
 
Further Encumbrance of Receivables and Other Conveyed Property
 
5
 
Section 2.5.
 
Conveyance of All Receivables
 
6
ARTICLE III THE RECEIVABLES
 
6
 
Section 3.1.
 
Representations and Warranties of Seller
 
6
 
Section 3.2.
 
Repurchase upon Breach
 
7
 
Section 3.3.
 
Custody of Custodial Documents
 
8
ARTICLE IV ADMINISTRATION AND SERVICING OF RECEIVABLES
 
8
 
Section 4.1.
 
Duties of Servicer
 
8
 
Section 4.2.
 
Collection of Receivable Payments; Modifications of Receivables; Blocked
Account Agreement.
 
9
 
Section 4.3.
 
Realization Upon Receivables
 
9
 
Section 4.4.
 
Insurance
 
9
 
Section 4.5.
 
Maintenance of Security Interests in Vehicles
 
9
 
Section 4.6.
 
Additional Covenants of Servicer
 
10
 
Section 4.7.
 
Purchase of Receivables Upon Breach of Covenant
 
11
 
Section 4.8.
 
Servicing Fee
 
11
 
Section 4.9.
 
Reports
 
11
 
Section 4.10.
 
Annual Statement as to Compliance, Notice of Servicer Termination Event
 
12
 
Section 4.11.
 
Access to Certain Documentation and Information Regarding Receivables
 
12
 
Section 4.12.
 
Retention and Termination of Servicer
 
12
ARTICLE V THE PURCHASER
 
12
 
Section 5.1.
 
Representations of Purchaser
 
12
ARTICLE VI SELLER, SERVICER AND NCOC
 
13
 
Section 6.1.
 
Representations of Seller, Servicer and NCOC
 
13
 
Section 6.2.
 
Additional Covenants
 
17
 
Section 6.3.
 
Liability of Seller, Servicer and NCOC; Indemnities
 
18
 
Section 6.4.
 
Delegation of Duties
 
19
 
Section 6.5.
 
Servicer Not to Resign
 
20

 
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ARTICLE VII SERVICER TERMINATION EVENTS
 
20
 
Section 7.1.
 
Servicer Termination Events
 
20
 
Section 7.2.
 
Consequences of a Servicer Termination Event
 
21
 
Section 7.3.
 
Appointment of Successor
 
22
 
Section 7.4.
 
Waiver of Past Defaults
 
23
ARTICLE VIII MISCELLANEOUS
 
23
 
Section 8.1.
 
Notices
 
23
 
Section 8.2.
 
Notices
 
23
 
Section 8.3.
 
Prior Agreements Superseded
 
23
 
Section 8.4.
 
Parties Bound
 
23
 
Section 8.5.
 
Execution in Counterparts
 
23
 
Section 8.6.
 
Severability of Provisions
 
24
 
Section 8.7.
 
Further Instruments
 
24
 
Section 8.8.
 
Governing Law
 
24
 
Section 8.9.
 
Consent of Jurisdiction
 
24
 
Section 8.10.
 
Waiver of Jury Trial
 
25
 
Section 8.11.
 
Pledge by Purchaser
 
25
 
Section 8.12.
 
Time of Essence
 
25

 
ANNEXES
 
Annex A - Defined Terms
 
SCHEDULES
 
Schedule A - Schedule of Receivables
 
EXHIBITS
 
Exhibit A - Form of Transfer Instrument
 
Exhibit B - Form of Addition Notice
 
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SALE AND SERVICING AGREEMENT (this “Agreement”) dated as of September 28, 2006,
among Nice Cars Funding LLC, a Delaware limited liability company (the
“Purchaser”), Nice Cars Acceptance AcquisitionCo, Inc. (“Seller”), Manchester
Inc., a Nevada corporation (“Servicer”), and Nice Cars Operations AcquisitionCo,
Inc. a Delaware corporation (“NCOC”).
 
WHEREAS, the Purchaser desires to purchase from Seller, from time to time,
receivables arising in connection with motor vehicle retail installment sale
contracts;
 
WHEREAS, the Purchaser intends to finance such purchases by entering into the
Loan Agreement and issuing the Note, secured by, among other assets, the
Receivables and the Other Conveyed Property;
 
WHEREAS, Seller is willing to sell such Receivables and the Other Conveyed
Property to the Purchaser from time to time; and
 
WHEREAS Servicer is willing to service all such Receivables on the terms of this
Agreement.
 
NOW, THEREFORE, in consideration of the premises and the mutual covenants herein
contained, the parties hereto agree as follows:
 
ARTICLE I

 
DEFINITIONS
 
Section 1.1.  Definitions. Capitalized terms used in this Agreement and not
otherwise defined in this Agreement, shall have the meanings set forth in Annex
A attached hereto.
 
Section 1.2.  Other Definitional Provisions.
 
(a)  All terms defined in this Agreement shall have the defined meanings when
used in any instrument governed hereby and in any certificate or other document
made or delivered pursuant hereto unless otherwise defined therein.
 
(b)  Accounting terms used but not defined or partly defined in this Agreement,
in any instrument governed hereby or in any certificate or other document made
or delivered pursuant hereto, to the extent not defined, shall have the
respective meanings given to them under GAAP as in effect on the date of
determination or any such instrument, certificate or other document, as
applicable. To the extent that the definitions of accounting terms in this
Agreement or in any such instrument, certificate or other document are
inconsistent with the meanings of such terms under GAAP, the definitions
contained in this Agreement or in any such instrument, certificate or other
document shall control.
 
(c)  The words “hereof,” “herein,” “hereunder” and words of similar import when
used in this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement.
 
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(d)  Section, Schedule and Exhibit references contained in this Agreement are
references to Sections, Schedules and Exhibits in or to this Agreement unless
otherwise specified; and the term “including” shall mean “including without
limitation.”
 
(e)  The definitions contained in this Agreement are applicable to the singular
as well as the plural forms of such terms and to the masculine as well as to the
feminine and neuter genders of such terms.
 
Any agreement, instrument or statute defined or referred to herein or in any
instrument or certificate delivered in connection herewith means such agreement,
instrument or statute as the same may from time to time be amended, modified or
supplemented in accordance with the terms thereof and includes (in the case of
agreements or instruments) references to all attachments and instruments
associated therewith; all references to a Person include its permitted
successors and assigns.
 
ARTICLE II

 
CONVEYANCE OF RECEIVABLES
 
Section 2.1.  Conveyance of Receivables.
 
(a)  In consideration of the Purchaser’s delivery to or upon the order of Seller
on any Funding Date of the Purchase Price therefor, Seller does hereby sell,
transfer, assign, set over and otherwise convey to the Purchaser, without
recourse (subject to the obligations set forth herein) all right, title and
interest of Seller, whether now existing or hereafter arising, in, to and under:
 
(i)  the Receivables listed in Schedule A to each Transfer Instrument executed
and delivered by Seller on such Funding Date;
 
(ii)  all monies received under the Receivables on and after the related Cutoff
Date and all Net Liquidation Proceeds received with respect to the Receivables
on and after the related Cutoff Date;
 
(iii)  the security interests in the Financed Vehicles and any accessions
thereto granted by Obligors pursuant to the related Contracts and any other
interest of Seller in such Financed Vehicles, including, without limitation, the
Auto Title;
 
(iv)  any proceeds from claims on any Receivables Insurance Policies or
certificates relating to the Financed Vehicles securing the Receivables or the
Obligors thereunder;
 
(v)  the Custodial Documents related to each Receivable and all other documents
that Seller keeps on file in accordance with its customary procedures relating
to the Receivables for Obligors of the Financed Vehicles;
 
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(vi)  all amounts and property from time to time held in or credited to the
Lockbox, the Collection Account or the Blocked Account;
 
(vii)  all property (including the right to receive future Net Liquidation
Proceeds) that secures a Receivable that has been acquired by or on behalf of
Seller or the Purchaser pursuant to a liquidation of such Receivable;
 
(viii)  the proceeds from any Servicer’s errors and omissions policy or fidelity
bond, to the extent such proceeds relate to any Receivable, Financed Vehicle or
other Collateral; and
 
(ix)  all present and future claims, demands, causes and choses in action in
respect of any or all of the foregoing and all payments on or under and all
proceeds of every kind and nature whatsoever in respect of any or all of the
foregoing, including all proceeds of the conversion, voluntary or involuntary,
into cash or other liquid property, all cash proceeds, accounts, accounts
receivable, notes, drafts, acceptances, chattel paper, checks, deposit accounts,
insurance proceeds, condemnation awards, rights to payment of any and every kind
and other forms of obligations and receivables, instruments and other property
which at any time constitute all or part of or are included in the proceeds of
any of the foregoing.
 
(b)  Seller shall transfer to the Purchaser the Receivables and the Other
Conveyed Property described in paragraph (a) above only upon the satisfaction of
each of the conditions set forth below on or prior to the related Funding Date.
 
(i)  Seller shall have provided the Purchaser, Lender [and the Collateral Agent]
with (A) an Addition Notice substantially in the form of Exhibit B hereto (which
shall include a supplement to the Schedule of Receivables) and (B) a data tape
or other electronic file containing information regarding the Related
Receivables that Lender may request hereto to be transferred on such Funding
Date (the “Data Tape Fields”) no later than 11:00 a.m. (New York City time)
three Business Days prior to such Funding Date and shall have provided any
information reasonably requested by any of the foregoing with respect to the
Purchaser, Servicer and the Related Receivables;
 
(ii)  Seller shall, to the extent required by Section 4.2 of this Agreement,
have deposited in the Blocked Account all collections received on and after the
Cutoff Date in respect of the Related Receivables to be purchased on such
Funding Date;
 
(iii)  as of each Funding Date, (A) Seller shall not be insolvent and shall not
become insolvent as a result of the transfer of Related Receivables on such
Funding Date, (B) Seller shall not intend to incur or believe that it shall
incur debts that would be beyond its ability to pay as such debts mature, (C)
such transfer shall not have been made with actual intent to hinder, delay or
defraud any Person and (D) the assets of Seller shall not constitute
unreasonably small capital to carry out its business as then conducted;
 
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(iv)  the Facility Termination Date shall not have occurred;
 
(v)  each of the representations and warranties made by Seller pursuant to
Section 3.1 and the other Loan Documents with respect to the Related Receivables
to be purchased on such Funding Date shall be true and correct as of the related
Funding Date and Seller shall have performed all obligations to be performed by
it hereunder or in any Transfer Instrument on or prior to such Funding Date;
 
(vi)  Seller shall, at its own expense, on or prior to the Funding Date,
indicate in its computer files that the Related Receivables to be purchased on
such Funding Date have been sold to the Purchaser pursuant to this Agreement or
a Transfer Instrument, as applicable, and have been pledged by the Purchaser to
the Collateral Agent for the benefit of the Lender under the Loan Agreement;
 
(vii)  Seller shall have taken all action required to maintain (i) the first
priority perfected ownership interest of the Purchaser in the Related
Receivables and Other Conveyed Property and (ii) the first priority perfected
security interest of the Collateral Agent for the benefit of the Lender in the
Collateral;
 
(viii)  no selection procedures adverse to the interests of Lender shall have
been utilized in selecting the Related Receivables to be sold on such Funding
Date;
 
(ix)  the addition of any such Related Receivables to be purchased on such
Funding Date shall not result in a material adverse tax consequence to any
Secured Party;
 
(x)  Seller shall have delivered to the Collateral Agent and Lender an Officers’
Certificate confirming the satisfaction of each condition precedent specified in
this paragraph (b);
 
(xi)  no Servicer Termination Event, or any event that, with the giving of
notice or the passage of time, would constitute a Servicer Termination Event,
shall have occurred and be continuing;
 
(xii)  Seller shall have delivered the related Custodial Documents to the
Custodian, and the Custodian shall have confirmed receipt of the related
Custodial Documents for each Related Receivable and shall have delivered a copy
to Lender and the Collateral Agent of a Custodial Certification with respect to
the Custodial Documents related to the Related Receivables to be purchased on
such Funding Date;
 
(xiii)  Seller shall have filed or caused to be filed all necessary UCC-l
financing statements (or amendments thereto) necessary to maintain (in each case
assuming for purposes of this clause (xiii) that such perfection may be achieved
by making the appropriate filings), and taken any other steps necessary to
maintain, (1) the first, priority, perfected ownership interest of Purchaser and
(2) the first priority, perfected security interest of the Collateral Agent for
the benefit of the Lender, with respect to the Related Receivables, the Other
Conveyed Property and any other Collateral to be transferred on such Funding
Date;
 
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(xiv)  Seller shall have executed and delivered an Transfer Instrument in the
form of Exhibit A with respect to such Related Receivables and the Other
Conveyed Property related thereto; and
 
(xv)  the Funding Date shall not occur in the same calendar week as any prior
Funding Date.
 
Section 2.2.  Payment of Purchase Price. In consideration for the sale of the
Related Receivables and Other Conveyed Property described in Section 2.1(a) or
the related Transfer Instrument, the Purchaser shall, on each Funding Date on
which Related Receivables are transferred hereunder, pay to or upon the order of
Seller the applicable Purchase Price in the following manner: (i) cash in an
amount equal to the amount of the Advance received by the Purchaser under the
Loan Agreement on such Funding Date and (ii) to the extent the Purchase Price
for the related Receivables and Other Conveyed Property exceeds the amount of
cash described in (i), such excess shall be treated as a capital contribution by
Seller to the Purchaser.
 
Section 2.3.  Transfers Intended as Sales. It is the intention of Seller and the
Purchaser that each transfer and assignment contemplated by this Agreement and
each Transfer Instrument shall constitute a sale of the Related Receivables and
Other Conveyed Property from Seller to the Purchaser free and clear of all liens
and rights of others and it is intended that the beneficial interest in and
title to the Related Receivables and Other Conveyed Property shall not be part
of Seller’s estate in the event of the filing of a bankruptcy petition by or
against Seller under any bankruptcy law. In the event that, notwithstanding the
intent of Seller and the Purchaser, the transfer and assignment contemplated
hereby or by any Transfer Instrument is held not to be a sale, this Agreement
and each Transfer Instrument shall constitute a security agreement under
applicable law and Seller hereby grants to the Purchaser a security interest in
the Receivables and Other Conveyed Property, which security interest has been
assigned to the Collateral Agent for the benefit of the Lender.
 
Section 2.4.  Further Encumbrance of Receivables and Other Conveyed Property.
 
(a)  Immediately upon the conveyance to the Purchaser by Seller of the Related
Receivables and any item of the related Other Conveyed Property pursuant to
Section 2.1 and the related Transfer Instrument, all right, title and interest
of Seller in and to such Related Receivables and Other Conveyed Property shall
terminate, and all such right, title and interest shall vest in the Purchaser.
 
(b)  Immediately upon the vesting of any Related Receivables and the related
Other Conveyed Property in the Purchaser, the Purchaser shall have the sole
right to pledge or otherwise encumber such Related Receivables and the related
Other Conveyed Property. Pursuant to the Loan Agreement, the Purchaser shall
grant a security interest in the Collateral to secure the repayment of the Loan
and the other Secured Obligations.
 
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Section 2.5.  Conveyance of All Receivables. Seller covenants, represents and
warrants that (i) on the date of the first sale hereunder it will sell to the
Purchaser pursuant to this Agreement all Receivables (including all Receivables
which are Eligible Receivables and all Receivables which are not Eligible
Receivables) owned by it on such date and (ii) thereafter it will sell to the
Purchaser pursuant to this Agreement all such Receivables that it purchases or
originates within one week of such purchase or origination.
 
ARTICLE III

 
THE RECEIVABLES
 
Section 3.1.  Representations and Warranties of Seller.
 
(a)  Seller makes the following representations and warranties as to the
Receivables to the Purchaser, on which the Purchaser relies in acquiring the
Receivables, and on which Lender will rely in making the Advances to the
Purchaser pursuant to the Loan Agreement. Such representations and warranties
speak as of the Closing Date and as of each Funding Date; provided that to the
extent such representations and warranties relate to the Receivables conveyed on
any Funding Date, such representations and warranties shall speak as of the
related Funding Date, but shall survive the sale, transfer and assignment of the
Receivables to the Purchaser and the pledge thereof by the Purchaser to the
Collateral Agent for the benefit of the Lender pursuant to the Loan Agreement.
 
(b)  Characteristics of Receivables.
 
(i)  Each Receivable indicated in the Addition Notice to be an Eligible
Receivable is an Eligible Receivable,
 
(ii)  Each Receivable is genuine, is in all respects what it purports to be and
the Contract evidencing such Receivable has only one original counterpart and,
if evidenced by an instrument, includes only one original promissory note which
constitutes an instrument under the UCC and no Person other than Lender or the
Custodian is in actual or constructive possession of any such original Contract
or Auto Title;
 
(iii)  The Receivables represent undisputed, bona fide transactions completed in
accordance with the terms and provisions contained in any documents related
thereto;
 
(iv)  The amounts of the face value shown on any schedule of Receivables
provided to Borrower, Lender or Custodian, and/or all invoices or statements
delivered to Borrower, Lender or Custodian with respect to any Receivables, are
actually and absolutely owing to Seller and are not contingent for any reason;
 
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(c)  No set-offs, counterclaims or disputes as to payments or liability thereon
exist or have been asserted with respect thereto and neither Seller nor any
Related Party has made any agreement with any Obligor thereunder for any
deduction therefrom, except a discount or allowance allowed by Seller or
Servicer in the ordinary course of business for prompt payment, all of which
discounts or allowances are reflected in the calculation of the outstanding
amount of such Receivable;
 
(d)  No facts, events or occurrences exist that, in any way, impair the validity
or enforcement thereof or tend to reduce the amount payable thereunder from the
amount of the Receivable shown on any schedule, or on all contracts, invoices or
statements delivered to Lender or the Custodian with respect thereto;
 
(e)  All Obligors in connection with Receivables: (i) had the capacity to
contract at the time any contract or other document giving rise to the
Receivable was executed; and (ii) generally have the ability to pay their debts
as they become due;
 
(f)  To Seller’s knowledge, no proceedings or actions are threatened or pending
against any Obligor that might result in any material adverse effect in the
Obligor’s financial condition;
 
(g)  The Receivables have not been assigned or pledged to any Person other than
as permitted pursuant to the Loan Documents;
 
(h)  The goods giving rise to the Receivables are not, and were not at the time
of the sale, rental and/or lease thereof, subject to any Lien, except those of
the Collateral Agent for the benefit of the Lender, or those removed or
terminated prior to the date hereof;
 
(i)  The Delinquency set forth in the Availability Report shall be delivered to
Lender by Servicer on behalf of Borrower under the Loan Agreement as determined
pursuant to the Aging Procedures and Eligibility Test.
 
(j)  All Contracts represent the legal, valid and binding payment obligation of
the applicable Obligors, enforceable in accordance with their terms, subject to
bankruptcy, insolvency and other Laws (including, but not limited to principles
of equity) affecting the rights of creditors.
 
(k)  No instrument of release or waiver has been executed in connection with any
Contract, and no Obligor has been released from its obligations thereunder, in
whole or in part, and no action has been taken by Seller or any Related Party to
release any collateral under any Contract.
 
Section 3.2.  Repurchase upon Breach. Seller or, Servicer, as the case may be,
shall inform the other parties to this Agreement promptly, in writing, upon the
discovery of any breach of Seller’s representations and warranties made pursuant
to Section 3.1 with respect to a Receivable (without regard to any limitations
therein as to Seller’s knowledge). Unless the breach shall have been cured
within thirty (30) days of the breach, Seller shall repurchase such Receivable.
In consideration of the repurchase of any Receivable, Seller shall remit the
Purchase Amount to the Collection Account on the date of such repurchase. Upon
receipt of the Purchase Amount in respect of any Defective Receivables and
written instructions from Servicer, the Custodian shall release to Seller or its
designee the related Custodial Documents and the Purchaser shall execute and
deliver all reasonable instruments of transfer or assignment, without recourse,
as are prepared by Seller and delivered to the Purchaser and necessary to vest
in Seller or such designee title to such Defective Receivables. The parties
hereto hereby acknowledge that the Collateral Agent for the benefit of the
Lender shall have the right to enforce directly against Seller Seller’s
repurchase and indemnity obligations pursuant to this Section 3.2.
 
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Section 3.3.  Custody of Custodial Documents. In connection with each sale,
transfer and assignment of Receivables and related Other Conveyed Property to
the Purchaser pursuant to this Agreement and each Transfer Instrument, and each
pledge thereof by the Purchaser to Lender pursuant to the Loan Agreement, the
Custodian shall act as custodian of the related Custodial Documents and any
other documents or instruments delivered to the Custodian pursuant to the
Custodian Agreement.
 
ARTICLE IV

 
ADMINISTRATION AND SERVICING OF RECEIVABLES
 
Section 4.1.  Duties of Servicer. Servicer, as agent for the Purchaser and the
Lender, shall manage, service, administer and make collections on the
Receivables with reasonable care, using that degree of skill and attention
customary and usual for institutions which service motor vehicle retail
installment sale contracts and other auto loans similar to the Receivables and,
to the extent more exacting, that Servicer exercises with respect to all
comparable automotive receivables that it or any of its Affiliates services for
itself, theirselves or others. In performing such duties, Servicer shall comply
with the Servicing Guidelines and the Credit and Collection Policy. Without
limiting the generality of the foregoing, and subject to the servicing standards
set forth in this Agreement including, without limitation, the restrictions set
forth in Section 4.6, Servicer is authorized and empowered by the Purchaser to
execute and deliver, on behalf of itself, the Purchaser, the Lender, or the
Collateral Agent for the benefit of the Lender, any and all instruments of
satisfaction or cancellation, or partial or full release or discharge, and all
other comparable instruments, with respect to such Receivables or to the
Financed Vehicles securing such Receivables and/or the Auto Title. If Servicer
shall commence a legal proceeding to enforce a Receivable, the Purchaser shall
thereupon be deemed to have automatically assigned, solely for the purpose of
collection, such Receivable to Servicer. If in any enforcement suit or legal
proceeding it shall be held that Servicer may not enforce a Receivable on the
ground that it shall not be a real party in interest or a holder entitled to
enforce such Receivable, the Purchaser shall, at Servicer’s expense and
direction, take steps to enforce such Receivable, including bringing suit in its
name or the name of the Collateral Agent for the benefit of the Lender. Without
limiting any of the Servicer’s duties and obligations hereunder, Servicer shall
perform on behalf of Borrower the affirmation obligations of Borrower under
Sections 3.3., 3.7, 3.8, 3.9 and 3.10 of the Loan Agreement, and shall perform
the Auto Title Procedures on behalf of the Borrower.
 
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Section 4.2.  Collection of Receivable Payments; Modifications of Receivables;
Blocked Account Agreement.
 
(a)  Consistent with the standards, policies and procedures required by this
Agreement, Servicer shall make reasonable efforts to collect all payments called
for under the terms and provisions of the Receivables as and when the same shall
become due and shall follow such collection procedures as it follows with
respect to all comparable automotive receivables that it services for itself or
others. Servicer, for so long as Manchester is Servicer, may in accordance with
Servicer’s Servicing Guidelines grant extensions on a Receivable; provided,
however, that Servicer may not grant more than one (1) extension per calendar
year with respect to a Receivable or grant an extension with respect to a
Receivable for more than one (1) calendar month or grant more than four (4)
extensions in the aggregate with respect to a Receivable without the prior
written consent of the Lender. If Servicer is not Manchester, Servicer may not
make any extension on a Receivable without the prior written consent of the
Lender. Notwithstanding anything to the contrary contained herein, Servicer
shall not agree to any alteration of the interest rate on any Receivable or of
the amount of any Scheduled Receivable Payment on Receivables, other than to the
extent that such alteration is required by applicable law.
 
(b)  Servicer shall remit all payments by or on behalf of the Obligors received
by Servicer with respect to the Receivables (other than Purchased Receivables)
and all Net Liquidation Proceeds into the Blocked Account or the Collection
Account on the date of receipt thereof, or, if not a Business Day, on the next
following Business Day. Servicer shall not commingle its assets and funds with
those on deposit in the Blocked Account or the Collection Account.
 
Section 4.3.  Realization Upon Receivables. On behalf of the Purchaser and the
Collateral Agent for the benefit of the Lender, Servicer shall use its best
efforts, consistent with the servicing procedures set forth herein, to repossess
or otherwise convert the ownership of the Financed Vehicle securing any
Receivable as to which Servicer shall have determined eventual payment in full
is unlikely.
 
Section 4.4.  Insurance. Servicer, in accordance with the servicing procedures
and standards set forth herein, shall require that each Obligor shall have
obtained any insurance required by the related Contract (each, a “Receivables
Insurance Policy”).
 
Section 4.5.  Maintenance of Security Interests in Vehicles.
 
(a)  Consistent with the policies and procedures required by this Agreement,
Servicer shall take such steps on behalf of the Purchaser and the Collateral
Agent for the benefit of the Lender as are necessary to maintain perfection of
the security interest created by each Receivable in the related Financed
Vehicle.
 
(b)  Upon the occurrence and continuance of a Servicer Termination Event, the
Collateral Agent for the benefit of the Lender and Servicer shall take or cause
to be taken such action as may, in the opinion to the Lender or the Collateral
Agent for the benefit of the Lender, be necessary to perfect or re-perfect the
security interests in the Financed Vehicles securing the Receivables in the name
of the Collateral Agent for the benefit of the Lender by amending the title
documents of such Financed Vehicles or by such other reasonable means as may, in
the opinion of the Lender or the Collateral Agent for the benefit of the Lender,
be necessary or prudent.
 
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(c)  Servicer hereby agrees to pay all expenses related to such perfection or
re-perfection in accordance with clauses (a) and (b) above and to take all
action necessary therefor. In addition, Lender may instruct Servicer to take or
cause to be taken, and Servicer shall take or cause to be taken, such action as
may, in the judgment of Lender be necessary to perfect or re-perfect the
security interest in the Financed Vehicles underlying the Receivables in the
name of the Collateral Agent for the benefit of the Lender including by amending
the title documents of such Financed Vehicles or by such other reasonable means
as may, in the judgment of the Lender, be necessary or prudent.
 
Section 4.6.  Additional Covenants of Servicer.
 
(a)  Servicer shall not release the Financed Vehicle securing any Receivable
from the security interest granted by such Receivable in whole or in part except
in the event of payment in full by the Obligor thereunder or repossession or
other liquidation of the Financed Vehicle, nor shall Servicer impair the rights
of the Collateral Agent for the benefit of the Lender in such Receivables, nor
shall Servicer amend or otherwise modify a Receivable, except as permitted in
accordance with Section 4.2.
 
(b)  Servicer shall reimburse the Secured Parties for any and all fees or
expenses that the Secured Parties pay to a bank arising out of a return of
payments in respect of the Receivables.
 
(c)  Servicer will not (i) create, incur or suffer to exist, or agree to create,
incur or suffer to exist, or consent to cause or permit in the future (upon the
happening of a contingency or otherwise) the creation, incurrence or existence
of any lien, security interest, charge, pledge, equity, encumbrance or
restriction on transferability of the Receivables and the Other Conveyed
Property except (x) for the lien in favor of the Collateral Agent for the
benefit of the Lender and the restrictions on transferability imposed by this
Agreement or any other Loan Document or (y) with respect to any portion of the
Receivables and the Other Conveyed Property released in a manner permitted by
the Loan Documents from the lien in favor of the Collateral Agent for the
benefit of the Lender, or (ii) sign or file under the UCC of any jurisdiction
any financing statement which names Seller, Servicer or the Purchaser as a
debtor, or sign any security agreement authorizing any secured party thereunder
to file such financing statement, with respect to the Receivables and Other
Conveyed Property, except in each case any such instrument solely securing the
rights and preserving the lien of the Collateral Agent for the benefit of the
Lender.
 
(d)  Servicer shall maintain (i) a modern system of accounting in accordance
with GAAP or other systems of accounting acceptable to Lender and (ii) standard
operating procedures applicable to all of their locations with respect to the
handling and disposition of cash receipts and other proceeds of Collateral on a
daily basis, including the depositing thereof, aging of account receivables,
record keeping and such other matters as Lender may reasonably request. For the
purpose of determining compliance with the covenants and representations in the
Loan Documents, Lender shall have the right to recast any financial statement or
report presented to Lender by or on behalf of any Related Party to comply with
GAAP.
 
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(e)  Servicer agrees to furnish to Lender from time to time, promptly upon
request, a list of all Obligors’ names and their most current addresses.
Servicer agrees that Lender may from time to time, consistent with standard or
generally accepted auditing practices, verify the validity, amount and any other
matters relating to the Receivables by means of mail, telephone or otherwise, in
the name of Servicer or Borrower and upon the occurrence of an Event of Default
in the name of Lender or such other name as Lender may choose.
 
Section 4.7.  Purchase of Receivables Upon Breach of Covenant. Upon discovery by
any of Servicer, Seller, the Purchaser of a breach of any of the covenants of
Servicer set forth in Section 4.2(a), 4.4, 4.5 or 4.6, the party discovering
such breach shall give prompt written notice to the others; provided, however,
that the failure to give any such notice shall not affect any obligation of
Servicer under this Section 4.7. Unless the breach shall have been cured within
30 days following such discovery, Servicer shall purchase any Receivable
materially and adversely affected by such breach. In consideration of the
purchase of such Receivable, Servicer shall remit the Purchase Amount for such
Receivable to the Collection Account on the date of such purchase. Servicer
shall indemnify the Secured Parties, and the Purchaser against all costs,
expenses, losses, damages, claims and liabilities, including reasonable fees and
expenses of counsel, which may be asserted against or incurred by any of them as
a result of third party claims arising out of the events or facts giving rise to
such breach.
 
Section 4.8.  Servicing Fee. The “Servicing Fee” for each Settlement Date shall
be equal to 4% of the average daily Net Pool Balance (as defined in the Fee
Letter) of the Receivables per annum.
 
Section 4.9.  Reports.
 
(a)  No later than 12:00 noon New York City time on each Determination Date and
on each Monday (or, if not a Business Day, on the next following Business Day),
Servicer shall deliver (in computer-readable format reasonably acceptable to
each such Person to the Lender, the Collateral Agent and the Purchaser, a report
containing the information specified in Exhibit B to the Loan Agreement. Within
two business days of receipt, the Lender will notify the Servicer of any
deficiencies in any report. If no notification is made, the report will be
deemed accepted but, notwithstanding the foregoing, if deficiencies or errors
are later discovered, the Servicer will work in good faith with the Lender to
correct the report.
 
(b)  No later than 12:00 noon New York City time on each Determination Date,
Servicer shall deliver (in computer-readable format reasonably acceptable to
Lender) a 13-week cash-flow report containing such information as Lender shall
request from Servicer.
 
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Section 4.10.  Annual Statement as to Compliance, Notice of Servicer Termination
Event. Servicer shall deliver to the Purchaser and to the Lender, on or before
March 31 of each year beginning 2007, an Officer’s Certificate, dated as of
December 31 of the preceding year, stating that (i) a review of the activities
of Servicer during the preceding 12-month period (or, in the case of the first
such certificate, the period from the initial Cutoff Date to December 31, 2006)
and of its performance under this Agreement has been made under such officer’s
supervision and (ii) to the best of such officer’s knowledge, based on such
review, Servicer has fulfilled all its obligations under this Agreement
throughout such year (or, in the case of the first such certificate, such
shorter period), or, if there has been a default in the fulfillment of any such
obligation, specifying each such default known to such officer and the nature
and status thereof.
 
Section 4.11.  Access to Certain Documentation and Information Regarding
Receivables. Servicer shall provide to representatives of the Secured Parties,
full and unrestricted access to the documentation regarding the Receivables.
Nothing in this Section shall derogate from the obligation of Servicer to
observe any applicable law prohibiting disclosure of information regarding the
Obligors, and the failure of Servicer to provide access as provided in this
Section as a result of such obligation shall not constitute a breach of this
Section.
 
Section 4.12.  Retention and Termination of Servicer. Servicer hereby covenants
and agrees to act as such under this Agreement for an initial term commencing on
the Closing Date and ending on the Maturity Date unless terminated in accordance
with the Loan Documents.
 
ARTICLE V

 
THE PURCHASER
 
Section 5.1.  Representations of Purchaser. The Purchaser hereby continuously
represents and warrants that, during the term of this Agreement and so long as
the Loan remains outstanding:
 
(a)  The Purchaser is a limited liability company duly formed, validly existing
and in good standing under the laws of the State of Delaware, is duly qualified
to do business and is in good standing as a foreign limited liability company in
all states where such qualification is required, has all necessary limited
liability company power and authority to enter into this Agreement and each of
the other Loan Documents to which it is a party and to perform all of its
obligations hereunder and thereunder.
 
(b)  The Purchaser has all requisite right and power and is duly authorized and
empowered to enter into, execute, deliver and perform this Agreement and each
other Loan Document to which it is a party and this Agreement and each other
Loan Document to which the Purchaser is a party are the legal, valid and binding
obligations of the Purchaser and are enforceable against the Purchaser in
accordance with their terms.
 
(c)  The execution, delivery and performance by the Purchaser of this Agreement
and each of the Loan Documents to which it is a party does not and shall not (i)
violate any provision of any Law, order, writ, judgment, injunction, decree,
determination or award presently in effect having applicability to the
Purchaser; (ii) violate any provision of its charter documents, bylaws, limited
liability company agreement, operating agreement or partnership agreement, as
applicable; or (iii) result in a breach of or constitute a default under any
indenture or loan or credit agreement or any other agreement, lease or
instrument to which the Purchaser is a party or by which it or any of its assets
or properties may be bound or affected; and the Purchaser is not in default of
any such Law, order, writ, judgment, injunction, decree, determination or award
or any such indenture, agreement, lease or instrument.
 
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(d)  No consent, approval, license, exemption of or filing or registration with,
giving of notice to, or other authorization of or by, any court, administrative
agency or other governmental authority is or shall be required in connection
with the execution, delivery or performance by the Purchaser of this Agreement
and each other Loan Document for the valid consummation of the transactions
contemplated hereby or thereby.
 
(e)  No event has occurred and is continuing which constitutes a Default or an
Event of Default. There is no action, suit, proceeding or investigation pending
or threatened against or affecting the Purchaser before or by any court,
administrative agency or other governmental authority that brings into question
the validity of the transactions contemplated hereby, or that might result in
any Material Adverse Effect.
 
(f)  The Purchaser is solvent, generally able to pay its obligations as they
become due, has sufficient capital to carry on its business and transactions and
all businesses and transactions in which it intends to engage, and the current
value of the Purchaser’s assets, at fair saleable valuation, exceeds the sum of
its liabilities. The Purchaser shall not be rendered insolvent by the execution
and delivery of this Agreement and the other Loan Documents and the consummation
of the transactions contemplated hereby and thereby and the capital remaining in
the Purchaser is not now and shall not foreseeably become unreasonably small to
permit the Purchaser to carry on its business and transactions and all
businesses and transactions in which it is about to engage. The Purchaser does
not intend to, nor does it reasonably believe it shall, incur debts beyond its
ability to repay the same as they mature.
 
ARTICLE VI

 
SELLER, SERVICER AND NCOC
 
Section 6.1.  Representations of Seller, Servicer and NCOC. Each of Seller,
Servicer and NCOC hereby jointly and severally and continuously represent and
warrant that, during the term of this Agreement and so long as any Loan remains
outstanding under the Loan Agreement:
 
(a)  Each of Seller, Servicer and NCOC is a corporation duly formed, validly
existing and in good standing under the laws of its state of incorporation, is
duly qualified to do business and is in good standing as a foreign corporation
in all states where such qualification is required, has all necessary corporate
power and authority to enter into this Agreement and each other Loan Document to
which it is a party and to perform all of its obligations hereunder and
thereunder.
 
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(b)  Each of Seller, Servicer and NCOC operates its business only under the
assumed names listed on Schedule 5.1(b) of Schedule A attached to the Loan
Agreement.
 
(c)  Each of Seller, Servicer and NCOC has all requisite right and power and is
duly authorized and empowered to enter into, execute, deliver and perform this
Agreement and each other Loan Document to which it is a party and this Agreement
and each other Loan Document to which Seller, Servicer and NCOC is a party are
the legal, valid and binding obligations of Seller, Servicer or NCOC, as
applicable, and are enforceable against such Person in accordance with their
terms.
 
(d)  The execution, delivery and performance by each of Seller, Servicer and
NCOC of this Agreement and each other Loan Document to which it is a party does
not and shall not (i) violate any provision of any Law, order, writ, judgment,
injunction, decree, determination or award presently in effect having
applicability to such Person; (ii) violate any provision of its charter
documents, bylaws, limited liability company agreement, operating agreement or
partnership agreement, as applicable; or (iii) result in a breach of or
constitute a default under any indenture or loan or credit agreement or any
other agreement, lease or instrument to which such Person is a party or by which
it or any of its assets or properties may be bound or affected; and none of
Seller, Servicer or NCOC is in default of any such Law, order, writ, judgment,
injunction, decree, determination or award or any such indenture, agreement,
lease or instrument.
 
(e)  No consent, approval, license, exemption of or filing or registration with,
giving of notice to, or other authorization of or by, any court, administrative
agency or other governmental authority is or shall be required in connection
with the execution, delivery or performance by Seller, Servicer or NCOC, of this
Agreement and each of the Loan Document to which it is a party for the valid
consummation of the transactions contemplated hereby or thereby.
 
(f)  No event has occurred and is continuing which constitutes a Default, Event
of Default, a Seller Default or a Servicer Termination Event. There is no
action, suit, proceeding or investigation pending or threatened against or
affecting Seller, Servicer or NCOC, before or by any court, administrative
agency or other governmental authority that brings into question the validity of
the transactions contemplated hereby or by the other Loan Documents, or that
might result in any Material Adverse Effect.
 
(g)  None of Seller, Servicer or NCOC is in default in the payment of any taxes
levied or assessed against it or any of its assets or properties, except for
taxes being contested in good faith and by appropriate proceedings and for which
adequate reserves have been established.
 
(h)  Each of Seller, Servicer and NCOC has good and marketable title to its
assets and properties as reflected in its financial statements furnished to
Purchaser or Lender.
 
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(i)  Each of the financial statements furnished to Purchaser or Lender by
Seller, Servicer or NCOC was prepared in accordance with GAAP and fairly and
accurately reflects their financial condition as of the date thereof; and
Seller, Servicer and NCOC hereby certify that there have been no Material
Adverse Effects, since the date of such statements, and there are no known
contingent liabilities not provided for or disclosed in such statements.
 
(j)  Neither this Agreement, any Availability Report or any statement or
document referred to herein or delivered to Lender, the Collateral Agent, the
Custodian or the Purchaser by any of Seller, Servicer or NCOC contains any
untrue statement of a material fact or omits to state a material fact necessary
to make the statements made herein or therein not misleading.
 
(k)  Seller has good, indefeasible and merchantable title to and ownership of
the Collateral, free and clear of all Liens, except those of the Collateral
Agent for the benefit of the Lender.
 
(l)  All books, records and documents relating to the Collateral are and shall
be genuine and in all respects what they purport to be; the original amount and
the unpaid balance of each Receivable shown on the books and records of Seller
or the Servicer and in the schedules represented as owing by each Obligor is and
shall be the correct amount actually owing or to be owing by such Obligor at
maturity; each Obligor liable upon the Receivables has and shall have capacity
to contract; none of Seller, Servicer or NCOC has knowledge of any fact which
would impair the validity or collectibility of any of the Receivables; and the
payments shown to have been made by each Obligor on the books and records of
Seller reflects the amounts of and dates on which said payments were actually
made.
 
(m)  Each place of business of each of Seller, Servicer or NCOC is only at the
locations set forth in Section 5.1(n) of Schedule A of the Loan Agreement. None
of Seller, Servicer or NCOC shall begin or do business (either directly or
through subsidiaries) at other locations or cease to do business at any of the
above locations or at Purchaser’s principal place of business without first
notifying Lender.
 
(n)  The present value of all benefits vested under all Plans of Seller,
Servicer and NCOC or any Commonly Controlled Entity (based on the assumptions
used to fund the Plans) did not, as of the last annual valuation date (which in
case of any Plan was not earlier than December 31, 1982) exceed the value of the
assets of the Plans applicable to such vested benefits.
 
(o)  The liability to which any of Seller, Servicer, NCOC or any Commonly
Controlled Entity would become subject under Sections 4063 or 4064 of ERISA if
such Person or any Commonly Controlled Entity were to withdraw from all
Multi-employer Plans or if such Multi- employer Plans were to be terminated as
of the valuation date most closely preceding the date hereof, is not in excess
of One Thousand Dollars ($1,000.00);
 
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(p)  None of Seller, Servicer or NCOC is engaged nor shall it engage,
principally or as one of its important activities, in a business of extending
credit for the purpose of “purchasing” or “carrying” any “margin stock” within
the respective meanings of each of the quoted terms under Regulations G or X of
the Board of Governors of the Federal Reserve System as now and from time to
time hereafter in effect. No part of the proceeds of any advances hereunder
shall be used for “purchasing” or “carrying” “margin stock” as so defined or for
any purpose which violates, or which would be inconsistent with, the provisions
of the Regulations of such Board of Governors. If requested by Lender, Seller
and Servicer shall furnish to Lender a statement in conformity with the
requirement of Federal Reserve Form G-3 referred to in said Regulation G to the
foregoing effect. All of the outstanding securities of each of Seller, Servicer
and NCOC have been offered, issued, sold and delivered in compliance with, or
are exempt from, all federal and state laws and rules and regulations of federal
and state regulatory bodies governing the offering, issuance, sale and delivery
of securities.
 
(q)  None of Seller, Servicer or NCOC is an “investment company” or a company
“controlled” by an “investment company,” within the meaning of the Investment
Company Act of 1940, as amended.
 
(r)  To the best knowledge of each of Seller, Servicer and NCOC, the land and
improvements owned or leased by each of Seller, Servicer and NCOC for use in
their business operations (including the locations listed in Section 5.1(n) of
Schedule (A) of the Loan Agreement are free of dangerous levels of contaminates,
oils, asbestos, radon, PCB’s, hazardous substances or waste as defined by
federal, state or local environmental laws, regulations or administrative orders
or other materials, the removal of which is required or the maintenance of which
is prohibited, regulated or penalized by any federal, state or local
governmental authority.
 
(s)  Each of Seller, Servicer and NCOC is solvent, generally able to pay its
obligations as they become due, has sufficient capital to carry on its business
and transactions and all businesses and transactions in which it intends to
engage, and the current value of such Person’s assets, at fair saleable
valuation, exceeds the sum of its liabilities. Each of Seller, Servicer and NCOC
shall not be rendered insolvent by the execution and delivery of this Agreement
and the other Loan Documents and the consummation of the transactions
contemplated hereby and thereby and the capital remaining in such Person is not
now and shall not foreseeably become unreasonably small to permit such Person to
carry on its business and transactions and all businesses and transactions in
which it is about to engage. Each of Seller, Servicer and NCOC does not intend
to, nor does it reasonably believe it shall, incur debts beyond its ability to
repay the same as they mature.
 
(t)  There are no material actions, suits or proceedings pending, or threatened
against or affecting the assets of any Seller, Servicer or NCOC, or the
consummation of the transactions contemplated hereby or by the other Loan
Documents, at law, or in equity, or before or by any governmental authority or
instrumentality or before any arbitrator of any kind. None of Seller, Servicer
or NCOC is subject to any judgment, order, writ, injunction or decree of any
court or governmental agency. There is not a reasonable likelihood of an adverse
determination of any pending proceeding which would, individually or in the
aggregate, have a Material Adverse Effect.
 
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(u)  Section 5.1(x) of Schedule A attached to the Loan Agreement correctly and
completely sets forth for each of Seller, Servicer and NCOC, (i) its full legal
name and state of organization, (ii) its Federal Tax Identification Number;
(iii) its chief executive office, (iv) all prior names used in the last five (5)
years (including, without limitation, Seller, Servicer’s or NCOC’s predecessors
in interest as a result of a merger or consolidation) and (v) the charter or
other similar number for such of Seller, Servicer or NCOC in its state of
organization.
 
(v)  None of Seller, Servicer or NCOC (i) is a person whose property or interest
in property is 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)), (ii) engages in any dealings or transactions prohibited by
Section 2 of such executive order, or is otherwise associated with any such
person in any manner violative of Section 2, or (iii) is a Person on the list of
Specially Designated Nationals and Blocked Persons or subject to the limitations
or prohibitions under any other U.S. Department of Treasury’s Office of Foreign
Assets Control regulation or executive order.
 
(w)  Each of Seller, Servicer and NCOC is in compliance with the Patriot Act. No
part of the proceeds received under any Loan Documents 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.
 
Section 6.2.  Additional Covenants.
 
(a)  Sale. Seller agrees to treat the conveyances hereunder as financings for
tax and accounting purposes and as sales for all other purposes (including
without limitation legal and bankruptcy purposes) on all relevant books,
records, tax returns, financial statements and other applicable documents.
 
(b)  Non-Petition. In the event of any breach of a representation and warranty
made by the Purchaser hereunder, each of Seller, Servicer and NCOC covenants and
agrees that it will not take any action to pursue any remedy that it may have
hereunder, in law, in equity or otherwise, until a year and a day have passed
since the date on which all Secured Obligations have been paid in full. The
Purchaser, Seller, Servicer and NCOC agree that damages will not be an adequate
remedy for breach of this covenant and that this covenant may be specifically
enforced by the Purchaser, by the Collateral Agent or by the Lender.
 
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(c)  Cooperation. If an Event of Default shall have occurred and be continuing,
Seller, Servicer and NCOC shall cooperate with and provide all information and
access requested by Lender and the Collateral Agent, in connection with any
actions taken in connection therewith pursuant to the Loan Agreement.
 
(d)  Disposal of Interests. Servicer shall not sell, assign, pledge, or
otherwise dispose of any of the limited liability company interests in the
Purchaser or the equity interests in NCAC or NCOC without the prior written
consent of the Lender.
 
Section 6.3.  Liability of Seller, Servicer and NCOC; Indemnities.
 
(a)  Seller, Servicer and NCOC shall defend, indemnify and hold harmless the
Purchaser, the Lender and each other Secured Party and their respective
officers, directors, agents and employees for:
 
(i)  any liability as a result of the failure of a Receivable to be originated
in compliance with all requirements of law and for any breach of any of its
representations, warranties, covenants or other agreements contained herein,
including:
 
(ii)  from and against any and all costs, expenses, losses, damages, claims, and
liabilities, arising out of or resulting from the use, ownership, or operation
by Seller, Servicer, NCOC, any Affiliate thereof or any of their respective
agents or subcontractors, of a Financed Vehicle;
 
(iii)  from and against any taxes that may at any time be asserted against any
such Person with respect to the transactions contemplated in this Agreement and
any of the Loan Documents (except any income taxes arising out of fees paid to
the Lender and except any taxes to which the Lender may otherwise be subject),
including without limitation any sales, gross receipts, general corporation,
tangible personal property, privilege or license taxes (but, in the case of the
Purchaser, not including any taxes asserted with respect to federal or other
income taxes arising out of payments on the Loan) and costs and expenses in
defending against the same;
 
(iv)  from and against any loss, liability or expense incurred by reason of
Seller’s, Servicer’s or NCOC’s willful misfeasance, bad faith or negligence in
the performance of its duties under this Agreement, or by reason of reckless
disregard of its obligations and duties under this Agreement;
 
(v)  from and against any and all costs, expenses, losses, claims, damages and
liabilities arising out of, or incurred in connection with the acceptance or
performance of the trusts and duties set forth herein and in the Loan Documents,
except to the extent that such cost, expense, loss, claim, damage or liability
shall be due to the willful misfeasance, bad faith or negligence (except for
errors in judgment) of such indemnified Party;
 
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(vi)  from and against any and all costs, expenses, losses, claims, damages and
liabilities arising out of or relating to any of Seller’s, Servicer’s or NCOC’s
representations and warranties, covenants or other agreements contained herein
or in any other Loan Document to which Seller, Servicer or NCOC is a party; or
 
(vii)  from and against any and all costs, expenses, losses, claims, damages and
liabilities arising out of or relating to the failure of a Receivable to be
serviced in compliance with all requirements of law, including without
limitation all Consumer Laws, and for any breach of any of Servicer’s
representations and warranties, covenants or other agreements contained herein
or in any other Loan Document to which Servicer is a party.
 
(b)  Indemnification under this Section shall survive the resignation or removal
of Servicer or the Collateral Agent and the termination of this Agreement and
the other Loan Documents and shall include reasonable fees and expenses of
counsel and other expenses of litigation. These indemnity obligations shall be
in addition to any obligation that Seller, Servicer or NCOC may otherwise have
under applicable law, hereunder or under any other Loan Document.
 
Notwithstanding any provision of this Section 6.3 or any other provision of this
Agreement, nothing in this Agreement shall be construed as to require Seller,
Servicer or NCOC to provide any indemnification hereunder or under any other
Loan Document for any costs, expenses, losses, claims, damages or liabilities
arising out of, or incurred in connection with, credit losses with respect to
the Receivables.
 
Section 6.4.  Delegation of Duties. Servicer may not delegate duties under this
Agreement, except in accordance with this Section 6.4.
 
(a)  The Servicer may, at its own expense, enter into subservicing agreements
with one or more subservicers (each a "Subservicer") for the servicing and
administration of a portion of the Receivables with the prior written consent
of  Lender (which shall be deemed given with respect to the appointment of NCAC
in (c), below).   References in this Agreement to actions taken or to be taken
by the Servicer in servicing and managing the Receivables shall be deemed to
include actions taken or to be taken by a Subservicer on behalf of the
Servicer.  To the extent required by applicable Law, each Subservicer shall be
authorized to transact business in the state or states in which any Receivables
that it services or manages are situated.  The terms and conditions of each
subservicing agreement between the Servicer and its Subservicers shall not be
inconsistent with this Agreement.  For purposes of this Agreement, the Servicer
shall be deemed to have received any payment when a Subservicer receives such
payment.  The Servicer shall notify the Lender in writing promptly upon the
appointment of any Subservicer. 
 
(b)  As part of its duties hereunder, the Servicer, for the benefit of the
Secured Parties, shall enforce the obligations of each Subservicer under the
related subservicing agreement.  Such enforcement, including, without
limitation, the prosecution of all legal claims, termination of subservicing
agreements and pursuit of other appropriate remedies, shall be in accordance
with the Credit and Collection Policy and the Servicing Guidelines.  The
Servicer shall pay the costs of such enforcement at its own expense and shall be
reimbursed therefor solely from (i) a general recovery resulting from such
enforcement, but only to the extent, if any, that such recovery exceeds all
amounts due in respect of the related Receivables, or (ii) from a specific
recovery of costs, expenses and/or attorneys' fees from the party against whom
such enforcement is directed.
 
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(c)  The Servicer and NCAC hereby agree that NCAC is appointed as the Servicer’s
Subservicer with respect to all of the Receivables on the terms of this Section
6.4, for a fee payable by the Servicer to NCAC in such amount as may be agreed
by such parties from time to time.
 
(d)  Notwithstanding any subservicing agreement or arrangement between the
Servicer and a Subservicer, the Servicer shall remain obligated and liable to
the Secured Parties for the servicing, management, collection and administration
of the Receivables in accordance with the provisions of this Agreement, as if
the Servicer alone were servicing, managing, collecting and administering such
Receivables.
 
Section 6.5.  Servicer Not to Resign. Subject to the provisions of Section 7.3,
Servicer shall not resign from the obligations and duties imposed on it by this
Agreement as Servicer except upon a determination that by reason of a change in
legal requirements the performance of its duties under this Agreement would
cause it to be in violation of such legal requirements in a manner which would
have a material adverse effect on Servicer and Lender does not elect to waive
the obligations of Servicer to perform the duties which render it legally unable
to act or to delegate those duties to another Person. Any such determination
permitting the resignation of Servicer pursuant to the immediately preceding
sentence shall be evidenced by an Opinion of Counsel to such effect delivered
and acceptable to the Lender. No resignation of Servicer shall become effective
until an entity acceptable to Lender shall have assumed the responsibilities and
obligations of Servicer.
 
ARTICLE VII

 
SERVICER TERMINATION EVENTS
 
Section 7.1.  Servicer Termination Events. For purposes of this Agreement, each
of the following shall constitute a “Servicer Termination Event”:
 
(a)  Any failure by Servicer to deliver or cause to be delivered any proceeds or
payment required to be so delivered under this Agreement or any other Loan
Document within one (1) Business Day of the date when the same becomes due;
 
(b)  Failure by Servicer to deliver, or cause to be delivered, to Lender and the
Collateral Agent any Availability Report by the Determination Date prior to the
related Settlement Date, which failure continues unremedied for a period of one
(1) Business Day;
 
(c)  Failure by Servicer to perform or observe in any material respect any term,
covenant, or agreement under this Agreement or any other Loan Document (other
than any term, covenant or agreement referred to in another subparagraph of this
Section 7.1), which failure is not cured within 10 calendar days after written
notice is received by Servicer from Lender or the Collateral Agent or after
discovery of such failure by a Responsible Officer of Servicer;
 
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(d)  Any representation, warranty or statement of Servicer made in this
Agreement or any other Loan Document to which it is a party or any certificate,
report or other writing delivered pursuant hereto or thereto shall prove to be
incorrect in any material respect as of the time when the same shall have been
made, and such incorrectness is not cured within 10 calendar days after written
notice is received by Servicer from any Secured Party or after discovery of such
failure by a Responsible Officer of Servicer;
 
(e)  An application is made by Servicer for the appointment of a receiver,
trustee or custodian for the Collateral or any other material assets of
Purchaser or Servicer; a petition under any section or chapter of the Bankruptcy
Code or federal or State law or regulation shall be filed by Servicer, or
Servicer shall make an assignment for the benefit of its creditors, or any case
or proceeding shall be filed by Servicer for its dissolution, liquidation, or
termination; or Servicer ceases to conduct its business;
 
(f)  Servicer is enjoined, restrained or prevented by court order from
conducting all or any material part of its business affairs, or a petition under
any section or chapter of the Bankruptcy Code or any similar federal or State
law or regulation is filed against Servicer, or any case or proceeding is filed
against Servicer, for its dissolution or liquidation, and such injunction,
restraint, petition, case or proceeding is not dismissed within sixty (60) days
after the entry of filing thereof; and
 
(g)  An Event of Default or a Default shall have occurred (so long as Manchester
is Servicer).
 
In the event that Servicer or Purchaser gains knowledge of the occurrence of a
Servicer Termination Event, Servicer or Purchaser, as applicable, shall promptly
notify Lender and the Collateral Agent in writing of such occurrence.
 
Section 7.2.  Consequences of a Servicer Termination Event. If a Servicer
Termination Event shall occur and be continuing, the Lender by notice given in
writing to Servicer may terminate all of the rights and obligations of Servicer
under this Agreement. On or after the receipt by Servicer of such written
notice, all authority, power, obligations and responsibilities of Servicer under
this Agreement, whether with respect to the Receivables and Other Conveyed
Property or otherwise, automatically shall pass to, be vested in and become
obligations and responsibilities of the successor Servicer appointed by Lender
under Section 7.3; provided, however, that the successor Servicer shall have no
liability with respect to any obligation which was required to be performed by
the outgoing Servicer prior to the date that the successor Servicer becomes
Servicer or any claim of a third party based on any alleged action or inaction
of the outgoing Servicer. The successor Servicer is authorized and empowered by
this Agreement to execute and deliver, on behalf of the outgoing Servicer, as
attorney-in-fact or otherwise, any and all documents and other instruments and
to do or accomplish all other acts or things necessary or appropriate to effect
the purposes of such notice of termination, whether to complete the transfer and
endorsement of the Receivables and the Other Conveyed Property and related
documents to show the Purchaser as lienholder or secured party on the related
Auto Title, or otherwise. The outgoing Servicer agrees to cooperate with the
successor Servicer in effecting the termination of the responsibilities and
rights of the outgoing Servicer under this Agreement, including, without
limitation, the transfer to the successor Servicer for administration by it of
all cash amounts that shall at the time be held by the outgoing Servicer for
deposit, or have been deposited by the outgoing Servicer, in the Deposit Account
or thereafter received with respect to the Receivables and the delivery to the
successor Servicer of all Custodial Documents that shall at the time be held by
the outgoing Servicer and a computer tape in readable form as of the most recent
Business Day containing all information necessary to enable the successor
Servicer to service the Receivables and the Other Conveyed Property. All
reasonable costs and expenses (including reasonable attorneys’ fees) incurred in
connection with transferring any Custodial Documents to the successor Servicer
and amending this Agreement to reflect such succession as Servicer pursuant to
this Section 7.2 shall be paid by the predecessor Servicer upon presentation of
reasonable documentation of such costs and expenses. In addition, any successor
Servicer shall be entitled to payment from the immediate predecessor Servicer
for reasonable transition expenses incurred in connection with acting as
successor Servicer, and to the extent not so paid. The outgoing Servicer shall
grant the successor Servicer, Lender and the Collateral Agent reasonable access
to the outgoing Servicer’s premises at the outgoing Servicer’s expense.
 
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Section 7.3.  Appointment of Successor.
(a)  On and after the time Servicer receives a notice of termination pursuant to
Section 7.2, the outgoing Servicer shall continue to perform its functions as
Servicer under this Agreement, in the case of termination, only until the date
specified in such termination notice or, if no such date is specified in a
notice of termination, until receipt of such notice and, in the case of
expiration and non-renewal of the term of Servicer upon the expiration of such
term, and, in the case of resignation, until (i) the later of (x) the date 45
days from the delivery to Lender of written notice of such resignation (or
written confirmation of such notice) in accordance with the terms of this
Agreement and (y) the date upon which the predecessor Servicer shall become
unable to act as Servicer, as specified in the notice of resignation and
accompanying Opinion of Counsel or (ii) such time as a successor Servicer shall
assume all of the rights and obligations of the predecessor Servicer hereunder
and under any other Loan Document; provided, however, that the outgoing Servicer
shall not be relieved of its duties, obligations and liabilities as Servicer
until a successor Servicer has assumed such duties, obligations and liabilities.
Notwithstanding the preceding sentence, if a successor Servicer shall not have
assumed the duties, obligations and liabilities of Servicer within 45 days of
the termination or resignation described in this Section 7.3, the outgoing
Servicer may petition a court of competent jurisdiction to appoint a successor
to the outgoing Servicer.
 
(b)  Any successor Servicer shall be entitled to such compensation as the
outgoing Servicer would have been entitled to under this Agreement if the
outgoing Servicer had not resigned or been terminated hereunder or had been
renewed for an additional servicing term hereunder, as may be modified with the
consent of the Lender.
 
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Section 7.4.  Waiver of Past Defaults. Lender may waive in writing any default
by Servicer in the performance of its obligations under this Agreement and the
consequences thereof. Upon any such waiver of a past default, such default shall
cease to exist, and any Servicer Termination Event arising therefrom shall be
deemed to have been remedied for every purpose of this Agreement. No such waiver
shall extend to any subsequent or other default or impair any right consequent
thereto.
 
ARTICLE VIII

 
MISCELLANEOUS
 
Section 8.1.  Notices. Except when telephonic notice is expressly authorized by
this Agreement, any notice or other communication to any party in connection
with this Agreement shall be in writing and shall be sent by manual delivery,
telegram, facsimile transmission, overnight courier or United States mail
(postage prepaid) addressed to such party at the address specified on Schedule A
to the Loan Agreement, or at such other address as such party shall have
specified to the other party hereto in writing. All periods of notice shall be
measured from the date of delivery thereof if manually delivered, from the date
of sending thereof if sent by telegram, or facsimile transmission, from the
first Business Day after the date of sending if sent by overnight courier, or
from four days after the date of mailing if mailed.
 
Section 8.2.  Notices. Except when telephonic notice is expressly authorized by
this Agreement, any notice or other communication to any party in connection
with this Agreement shall be in writing and shall be sent by manual delivery,
telegram, facsimile transmission, overnight courier or United States mail
(postage prepaid) addressed to such party at the address specified on Schedule A
of the Loan Agreement, or at such other address as such party shall have
specified to the other party hereto in writing. All periods of notice shall be
measured from the date of delivery thereof if manually delivered, from the date
of sending thereof if sent by telegram, or facsimile transmission, from the
first Business Day after the date of sending if sent by overnight courier, or
from four days after the date of mailing if mailed.
 
Section 8.3.  Prior Agreements Superseded. This Agreement, together with the
other Loan Documents, constitute the sole and only agreement of the parties
hereto and supersede any prior understandings or written or oral agreements
between the parties respecting the subject matter of this Agreement and the
other Loan Documents. No provision of this Agreement or other Loan Document may
be modified, waived or terminated except by instrument in writing executed by
Lender and the party against whom a modification, waiver or termination is
sought to be enforced.
 
Section 8.4.  Parties Bound. This Agreement shall be binding upon the parties
hereto and their respective successors and assigns, and shall inure to the
benefit of such parties hereto and their respective successors and permitted
assigns. No party hereto shall assign its rights or duties hereunder without the
consent of Lender.
 
Section 8.5.  Execution in Counterparts. This Agreement may be executed in any
number of counterparts and by the parties hereto in separate counterparts, each
of which when so executed and delivered shall be deemed to be an original, and
all of which taken together shall constitute but one and the same instrument.
 
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Section 8.6.  Severability of Provisions. Any provision which is determined to
be unconscionable, against public policy or any provision of this Agreement
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
 
Section 8.7.  Further Instruments. Each party hereto shall from time to time
execute and deliver, and shall cause each of its subsidiaries to execute and
deliver, all such amendments, supplements and other modifications hereto and to
the other Loan Documents and all such financing statements or continuation
statements, instruments of further assurance and any other instruments, and
shall take such other actions, as Lender reasonably requests and deems necessary
or advisable in furtherance of the agreements contained herein.
 
Section 8.8.  Governing Law. THIS AGREEMENT SHALL BE DEEMED A CONTRACT AND
INSTRUMENT MADE UNDER THE LAWS OF THE STATE OF NEW YORK AND SHALL BE CONSTRUED
AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW
YORK AND THE LAWS OF THE UNITED STATES OF AMERICA. EACH PARTY HERETO HEREBY
AGREES THAT ANY LEGAL ACTION OR PROCEEDING AGAINST IT WITH RESPECT TO THIS
AGREEMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED
STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK AS LENDER MAY ELECT,
AND, BY EXECUTION AND DELIVERY HEREOF, EACH PARTY HERETO ACCEPTS AND CONSENTS
FOR ITSELF AND IN RESPECT TO ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE
NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS. EACH PARTY HERETO AGREES THAT
SECTIONS 5-1401 AND 5.1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK SHALL APPLY TO THE LOAN DOCUMENTS AND WAIVES ANY RIGHT TO STAY OR TO
DISMISS ANY ACTION OR PROCEEDING BROUGHT BEFORE SAID COURTS ON THE BASIS OF
FORUM NON CONVENIENS. EACH PARTY HERETO HEREBY WAIVES PERSONAL SERVICE OF ANY
AND ALL PROCESS UPON IT, AND AGREES THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE
BY REGISTERED MAIL DIRECTED TO IT AT THE ADDRESS SET FORTH IN THIS AGREEMENT AND
SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED UPON ACTUAL RECEIPT THEREOF.
 
Section 8.9.  Consent of Jurisdiction. AT THE OPTION OF LENDER, THIS AGREEMENT,
AND THE OTHER LOAN DOCUMENTS MAY BE ENFORCED IN ANY FEDERAL COURT OR NEW YORK
STATE COURT SITTING IN NEW YORK, NEW YORK; AND EACH PARTY HERETO CONSENTS TO THE
JURISDICTION AND VENUE OF ANY SUCH COURT AND WAIVES ANY ARGUMENT THAT VENUE IN
SUCH FORUMS IS NOT CONVENIENT. IN THE EVENT ANY PARTY HERETO COMMENCES ANY
ACTION IN ANOTHER JURISDICTION OR VENUE UNDER ANY TORT OR CONTRACT THEORY
ARISING DIRECTLY OR INDIRECTLY FROM THE RELATIONSHIP CREATED BY THIS AGREEMENT
OR ANY OF THE OTHER LOAN DOCUMENTS, LENDER AT ITS OPTION SHALL BE ENTITLED TO
HAVE THE CASE TRANSFERRED TO ONE OF THE JURISDICTIONS AND VENUES
ABOVE-DESCRIBED, OR IF SUCH TRANSFER CANNOT BE ACCOMPLISHED UNDER APPLICABLE
LAW, TO HAVE SUCH CASE DISMISSED WITHOUT PREJUDICE.
 
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Section 8.10.  Waiver of Jury Trial. EACH PARTY HERETO WAIVES ANY RIGHT TO A
TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER
THIS AGREEMENT OR UNDER ANY OF THE OTHER LOAN DOCUMENTS, AND AGREE THAT ANY SUCH
ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
 
Section 8.11.  Pledge by Purchaser. Seller and Servicer acknowledge that
Purchaser has pledged all of its rights, title and interest in and to this
Agreement to the Collateral Agent for the benefit of the Lender, and that the
Collateral Agent and the Lender may enforce this Agreement as if they were
parties hereto. Each of the Collateral Agent and the Lender are intended third
party beneficiaries of this Agreement.
 
Section 8.12.  Time of Essence. Time is of the essence for the performance of
the obligations set forth in this Agreement and the Loan Documents.

 
 
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered by their respective duly authorized officers as of the
day and the year first above written.
 

       
NICE CARS FUNDING LLC,
as Purchaser
        By: 
Nice Cars Acceptance AcquisitionCo, Inc.,
its Member
 
   
   
      By: /s/ Richard Gaines  

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Name: Richard Gaines  

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Title:   President
 

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NICE CARS ACCEPTANCE ACQUISITIONCO,
INC., as Seller
     
 
By:  
/s/ Richard Gaines  

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Name: Richard Gaines  

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Title:   President
 

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MANCHESTER INC.,
as Servicer
 
   
   
    By:   /s/ Richard Gaines  

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Name: Richard Gaines
 

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Title:   Secretary  

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NICE CARS OPERATIONS ACQUISITIONCO,
INC., as Servicer
 
   
   
    By:   /s/ Richard Gaines  

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Name: Richard Gaines
 

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Title:   President  

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SCHEDULE A

 
SCHEDULE OF RECEIVABLES
 
[Available upon request from Servicer]
 
Schedule A — Page 1

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EXHIBIT A
 
FORM OF TRANSFER INSTRUMENT
 
Exhibit A — Page 1

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EXHIBIT B

 
FORM OF ADDITION NOTICE
 
Nice Cars Funding LLC
100 Crescent Court, 7th Floor
Dallas, TX 75201
Attn: Richard D. Gaines, Corporate Secretary

Palm Beach Multi-Strategy Fund, LP
c/o Links Business Capital, LP
P. O. Box 833519
Richardson, TX 75083

Car Financial Services, Inc.
600 Westport Drive
Peachtree City, GA 30269

The Bank of New York, as Collateral Agent
The Bank of New York
600 East Las Colinas Blvd.
Suite 1300
Irving, TX 75039
Attn: Director of Agent Services, Steve Jerard
 
Gentlemen and Ladies:
 
This Addition Notice is delivered to you pursuant to Section 2.1(b) of Sale and
Servicing Agreement dated as of September 28, 2006 among Nice Cars Funding LLC,
as Purchaser (in such capacity, the “Purchaser”) and Nice Cars Acceptance
AcquisitionCo, Inc., as Seller (in such capacity, the “Seller”) and Servicer.
Capitalized terms used but not otherwise defined herein have the meanings
assigned thereto in Annex A to the Sale and Servicing Agreement.
 
Seller hereby intends to transfer to the Purchaser $________ aggregate
outstanding principal amount of Receivables on _____________, 200_ (the “Funding
Date”). The Purchaser hereby represents and warrants to each Secured Party that
all of the statements contained in Section 2.1(b) of the Sale and Servicing
Agreement and Section 4 of the Loan Agreement pertaining to the transfer of the
Receivables shall be true and correct on and as of the proposed Funding Date and
all of the conditions precedent to the funding of an Advance shall then be
satisfied.
 
Attached as Schedule A is a supplement to the Schedule of Receivables reflecting
all Receivables Seller intends to transfer to the Purchaser on the Funding Date.
The Purchaser represents and warrants that the information on Schedule A is true
and correct as of the date hereof.
 

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IN WITNESS WHEREOF, the Purchaser and Seller have caused this notice of addition
to be executed and delivered by its duly authorized officer this ___ day of
___________, 200_.
 

        NICE CARS FUNDING, LLC  
   
   
    By:      

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Name:  

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Title:  

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        NICE CARS ACCEPTANCE ACQUISITIONCO, INC.  
   
   
    By:      

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Name:
 

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Title:  

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ANNEX A - DEFINED TERMS
 
“Account Control Agreement” shall have the meaning given to that term in the
Loan Agreement.
 
“Addition Notice” means, with respect to any transfer of Receivables to the
Purchaser pursuant to Section 2.1 of the Sale and Servicing Agreement, notice of
the Seller’s election to transfer Receivables to the Purchaser, such notice to
designate the related Funding Date and the aggregate principal amount of
Receivables to be transferred on such Funding Date, substantially in the form of
Exhibit B to the Sale and Servicing Agreement.
 
“Advance” means an advance made by Lender to Borrower under the Loan Agreement.
 
“Affiliate” shall have the meaning given to that term in the Loan Agreement.
 
“Ageing Procedures” shall have the meaning given to that term in the Loan
Agreement.
 
“Amount Financed” means, with respect to a Receivable, the aggregate amount
advanced under such Receivable toward the purchase price of the Financed Vehicle
and any related costs, including amounts advanced in respect of accessories,
insurance premiums, service and warranty contracts, other items customarily
financed as part of retail automobile installment sale contracts and related
costs.
 
“Annual Percentage Rate” or “APR” of a Receivable means the annual percentage
rate of finance charges or service charges, as stated in the related Contract.
 
“Auto Title Procedures” shall have the meaning given to that term in the Loan
Agreement.
 
“Availability on Eligible Receivables” shall have the meaning given to that term
in the Loan Agreement.
 
“Availability Report” shall have the meaning given to that term in the Loan
Agreement.
 

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“Bankruptcy Code” means the Bankruptcy Reform Act of 1978, as amended from time
to time, and as codified as 11 U.S.C. Section 101 et seq.
 
“Blocked Account” shall have the meaning given to that term in the Loan
Agreement.
 
“Business Day” shall have the meaning given to that term in the Loan Agreement.
 
“Closing Date” means September 28, 2006.
 
“Code” means the Internal Revenue Code of 1986, as amended from time to time,
and Treasury Regulations promulgated thereunder.
 
“Collateral” shall have the meaning given to that term in the Loan Agreement.
 
“Collection Account” shall have the meaning given to that term in the Loan
Agreement.
 
“Collection Period” means each calendar month.
 
“Commonly Controlled Entity” shall have the meaning given to that term in the
Loan Agreement.
 
“Consumer Laws” means federal and State usury laws, the Federal Truth-in-Lending
Act, the Equal Credit Opportunity Act, the Fair Credit Reporting Act, the Fair
Debt Collection Practices Act, the Federal Trade Commission Act, the
Magnuson-Moss Warranty Act, the Federal Reserve Board’s Regulations B and Z, the
Servicemembers Civil Relief Act, the California Military Reservist Relief Act,
the Texas Consumer Credit Code, the California Automobile Sales Finance Act,
State adaptations of the National Consumer Act and of the Uniform Consumer
Credit Code and all other federal, State and local consumer credit laws and
equal credit opportunity and disclosure laws and regulations thereunder.
 
“Contract” means a motor vehicle retail installment sale contract or security
agreement relating to the sale of used automobiles, light trucks, vans or
minivans, and other writings related thereto from time to time.
 
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“Cram Down Loss” means, with respect to a Receivable, if a court of appropriate
jurisdiction in an insolvency proceeding shall have issued an order reducing the
amount owed on a Receivable or otherwise modifying or restructuring Scheduled
Receivable Payments to be made on a Receivable, an amount equal to such
reduction in the Principal Balance of such Receivable or the reduction in the
net present value (using as the discount rate the lower of the contract rate or
the rate of interest specified by the court in such order) of the Scheduled
Receivable Payments as so modified or restructured. A “Cram Down Loss” shall be
deemed to have occurred on the date such order is entered.
 
“Credit and Collection Policy” shall mean the Credit and Collection Policy of
the Servicer, a copy of which has been provided to Lender, as amended from time
to time with the prior written consent of the Lender.
 
“Custodial Agreement” shall have the meaning given to that term in the Loan
Agreement, a copy of which has been provided to Lender.
 
“Custodial Certification” shall have the meaning given to that term in the
Custodial Agreement.
 
“Custodial Documents” means the documents specified in Section 2.2(a) of the
Custodial Agreement.
 
“Custodian” shall have the meaning given to that term in the Custodial
Agreement.
 
“Cutoff Date” means, with respect to a Receivable or Receivables, the date
specified as such for such Receivable or Receivables in the Schedule of
Receivables attached to the Sale and Servicing Agreement or to the applicable
Transfer Instrument.
 
“Data Tape Fields” has the meaning given such term in Section 2.1(b)(i) of the
Sale and Servicing Agreement.
 
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“Default” shall have the meaning given to that term in the Loan Agreement.
 
“Defective Receivable” means a Receivable that is subject to repurchase pursuant
to Section 3.2 or Section 4.7 of the Sale and Servicing Agreement.
 
“Delinquency” shall have the meaning given to that term in the Loan Agreement.
 
“Determination Date” means, with respect to any Settlement Date, the fourth
Business Day preceding such Settlement Date.
 
“Dollar” means lawful money of the United States.
 
“Eligible Receivables” shall have the meaning given to that term in the Loan
Agreement.
 
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.
 
“Event of Default” shall have the meaning given to that term in the Loan
Agreement.
 
“Facility Termination Date” means the earliest of (a) the Maturity Date (b) the
Termination Date and (c) the acceleration of the obligations of the Purchaser
pursuant to Section 7.2 of the Loan Agreement.
 
“FDIC” means the Federal Deposit Insurance Corporation.
 
“Fee Letter” shall have the meaning given to that term in the Loan Agreement.
 
“Financed Vehicle” means a new or used automobile, light truck, van or minivan,
together with all accessions thereto, securing an Obligor’s indebtedness under a
Receivable.
 
“Funding Date” means each Business Day on which an Advance occurs.
 
“GAAP” means U.S. generally accepted accounting principles occasioned by the
promulgation of rules, regulations, pronouncements or opinions by the Financial
Accounting Standards Board, the American Institute of Certified Public
Accountants or the Securities and Exchange Commission (or successors thereto or
agencies with similar functions) from time to time.
 
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“Governmental Authority” means the United States of America, any state, local or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory, or administrative functions thereof
pertaining thereto.
 
“Guaranty Agreements” shall have the meaning given to that term in the Loan
Agreement.
 
“Guaranty Security Agreements” shall have the meaning given to that term in the
Loan Agreement.
 
“Law” shall have the meaning given to that term in the Loan Agreement.
 
“Lender” shall have the meaning given to that term in the Loan Agreement.
 
“Lien” shall have the meaning given to that term in the Loan Agreement.
 
“Liquidated Receivable” means any Receivable (i) which has been liquidated by
the Servicer through the sale of the Financed Vehicle or (ii) for which the
related Financed Vehicle has been repossessed and 90 days have elapsed since the
date of such repossession or (iii) as to which an Obligor has failed to make
more than 90% of a Scheduled Receivable Payment of more than ten dollars for 120
(or, if the related Financed Vehicle has been repossessed, 210) or more days as
of the end of a Collection Period or (iv) with respect to which proceeds have
been received which, in the Servicer’s judgment, constitute the final amounts
recoverable in respect of such Receivable. For purposes of this definition, a
Receivable shall be deemed a “Liquidated Receivable” upon the first to occur of
the events specified in items (i) through (iv) of the previous sentence.
 
“LLC Agreement” means the Limited Liability Company Agreement of the Purchaser
dated as of September 28, 2006, entered into by NCAC, as such agreement may be
amended, supplemented or otherwise modified from time to time in accordance with
the terms thereof.
 
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“Loan” shall have the meaning given to that term in the Loan Agreement.
 
“Loan Agreement” means the Loan and Security Agreement dated the date hereof
between the Lender, the Purchaser and the Collateral Agent.
 
“Loan Documents” shall have the meaning given to that term in the Loan
Agreement.
 
“Lockbox” means any lockbox account set up pursuant to Section 3.9 of the Loan
Agreement into which all Obligors are directed to mail all payments in
connection with all Receivables, and from which all cash receipts shall be
deposited into the Blocked Account.
 
“Manchester” means Manchester Inc., a Nevada corporation, and its successors and
permitted assigns.
 
“Material Adverse Effect” shall have the meaning given to that term in the Loan
Agreement.
 
“Maturity Date” shall have the meaning given to that term in the Loan Agreement.
 
“Multiemployer Plan” means a Plan which is a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
 
“NCAC” shall have the meaning given to that term in the Loan Agreement.
 
“Net Liquidation Proceeds” means, with respect to a Liquidated Receivable, all
amounts realized with respect to such Receivable net of (i) reasonable expenses
incurred by the Servicer in connection with the collection of such Receivable
and the repossession and disposition of the Financed Vehicle and the reasonable
cost of legal counsel with the enforcement of a Liquidated Receivable and (ii)
amounts that are required to be refunded to the Obligor on such Receivable;
provided, however, that the Net Liquidation Proceeds with respect to any
Receivable shall in no event be less than zero.
 
“Note” shall have the meaning given to that term in the Loan Agreement.
 
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“Obligor” means any Person or Persons that are an obligor (including without
limitation any co-signor) in respect of any Receivable.
 
“Officer’s Certificate” means a certificate signed by the chairman of the board,
the president, any vice chairman of the board, any vice president, the
treasurer, the controller or assistant treasurer or any assistant controller,
secretary or assistant secretary of the Seller, the Purchaser or the Servicer,
as appropriate.
 
“Opinion of Counsel” means a written opinion of counsel who may be but need not
be counsel to the Purchaser, the Seller or the Servicer, which counsel shall be
reasonably acceptable to the Lender and which opinion shall be acceptable in
form and substance to the Lender.
 
“Other Conveyed Property” means all property conveyed by the Seller to the
Purchaser pursuant to Sections 2.1 (a)(ii) through (xi) of the Sale and
Servicing Agreement and Section 2 of each Transfer Instrument.
 
“Person” shall have the meaning given to that term in the Loan Agreement.
 
“Plan” means any Person that is (i) an “employee benefit plan” (as defined in
Section 3(3) of ERISA) that is subject to the provisions of Title I of ERISA,
(ii) a “plan” (as defined in Section 4975(e)(1) of the Code) that is subject to
Section 4975 of the Code or (ii) any entity whose underlying assets include
assets of a plan described in (i) or (ii) above by reason of such plan’s
investment in the entity.
 
“Principal Balance” of a Receivable means the Amount Financed minus the sum of
the following amounts without duplication: (i) that portion of all Scheduled
Receivable Payments actually received on or prior to such day allocable to
principal using the Simple Interest Method; (ii) any Cram Down Loss in respect
of such Receivable; and (iii) any prepayment in full or any partial prepayment
applied to reduce the principal balance of the Receivable, all measured as of
the close of business on such day.
 
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“Proceeding” means any suit in equity, action at law or other judicial or
administrative proceeding.
 
“Purchase Amount” means, on any date with respect to a Defective Receivable, the
sum of (a) the Principal Balance of such Receivable as of the date of purchase
of such Receivable, and (b) all accrued and unpaid interest on the Receivable.
 
“Purchase Price” means, with respect to each Receivable and related Other
Conveyed Property transferred to the Purchaser on any Funding Date, an amount
equal to the Principal Balance of such Receivable as of such Funding Date.
 
“Purchased Receivable” means a Receivable purchased by the Servicer pursuant to
Section 4.7 of the Sale and Servicing Agreement or repurchased by the Seller
pursuant to Section 3.2 of the Sale and Servicing Agreement.
 
“Purchaser” means Nice Cars Funding LLC, a Delaware limited liability company.
 
“Receivables” means all retail installment sale contracts for Financed Vehicles
made the subject of a Transfer Instrument, except for receivables that shall
have become Purchased Receivables, and, for the avoidance of doubt, shall
include all Related Receivables (other than Related Receivables that shall have
become Purchased Receivables).
 
“Receivables Insurance Policy” shall have the meaning given to that term in
Section 4.4 of the Sale and Servicing Agreement.
 
“Related Party” shall have the meaning given to that term in the Loan Agreement.
 
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“Related Receivables” means, with respect to a Funding Date, the Receivables
listed on Schedule A to the applicable Transfer Instrument executed and
delivered by the Seller with respect to such Funding Date.
 
“Responsible Officer” means, with respect to any Person, the chairman or
vice-chairman of the board of directors, the chairman or vice-chairman of the
executive committee of the board of directors, the president, vice-president,
assistant vice-president or managing director, the secretary, and assistant
secretary or any other officer of such Person customarily performing functions
similar to those performed by any of the above designated officers and also
means, with respect to a particular matter, any other officer to whom such
matter is referred because of such officer’s knowledge of and familiarity with
the particular subject.
 
“Sale and Servicing Agreement” means the Sale and Servicing Agreement dated as
of September 28, 2006, among Nice Cars Funding LLC, as Purchaser, NCAC, as
Seller, and Manchester Inc., as Servicer, as the same may be amended or
supplemented from time to time in accordance with the terms thereof.
 
“Scheduled Receivable Payment” means, with respect to any Collection Period for
any Receivable, the amount set forth in such Receivable as required to be paid
by the Obligor in such Collection Period. If after the Closing Date, the
Obligor’s obligation under a Receivable with respect to an Collection Period has
been modified so as to differ from the amount specified in such Receivable (i)
as a result of the order of a court in an insolvency proceeding involving the
Obligor, (ii) pursuant to the Servicemembers Civil Relief Act, or (iii) as a
result of modifications or extensions of the Receivable permitted by Section 4.2
of the Sale and Servicing Agreement, the Scheduled Receivable Payment with
respect to such Collection Period shall refer to the Obligor’s payment
obligation with respect to such Collection Period as so modified.
 
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“Schedule of Receivables” means the schedule of all Receivables purchased by the
Purchaser pursuant to the Sale and Servicing Agreement and each Transfer
Instrument, which is attached as Schedule A to the Sale and Servicing Agreement,
as amended or supplemented from time to time upon each Transfer Instrument of
Receivables or in accordance with the terms of the Sale and Servicing Agreement.
 
“Secured Obligations” shall have the meaning given to that term in the Loan
Agreement.
 
“Secured Parties” means Lender and the Collateral Agent.
 
“Securities Act” means the Securities Act of 1933, as amended.
 
“Seller” means Manchester and its successors in interest to the extent permitted
hereunder.
 
“Seller Default” means (i) any failure by the Seller to deliver or cause to be
delivered any payment required to be so delivered under any Basic Document
within one (1) Business Day of the date when the same becomes due; (ii) failure
by the Seller to perform or observe in any material respect any other term,
covenant, or agreement under any Basic Document which is not cured within 10
calendar days after written notice is received by the Seller from the Lender or
the Collateral Agent or after discovery of such failure by a Responsible Officer
of the Seller; (iii) any representation, warranty or statement of the Seller
made in any Basic Document to which it is a party or any certificate, report or
other writing delivered pursuant hereto or thereto shall prove to be incorrect
in any material respect as of the time when the same shall have been made, and
such incorrectness is not cured within 10 calendar days after written notice is
received by the Seller from any Lender Party or after discovery of such failure
by a Responsible Officer of the Seller; (iv) an application is made by the
Seller for the appointment of a receiver, trustee or custodian for any of its
assets; a petition under any section or chapter of the Bankruptcy Code or
federal or State law or regulation shall be filed by the Seller, or the Seller
shall make an assignment for the benefit of its creditors, or any case or
proceeding shall be filed by the Seller for its dissolution, liquidation, or
termination; or the Seller ceases to conduct its business; (v) the Seller is
enjoined, restrained or prevented by court order from conducting all or any
material part of its business affairs, or a petition under any section or
chapter of the Bankruptcy Code or any similar federal or State law or regulation
is filed against the Seller, or any case or proceeding is filed against the
Seller, for its dissolution or liquidation, and such injunction, restraint,
petition, case or proceeding is not dismissed within sixty (60) days after the
entry of filing thereof; or (vi) the occurrence of any event which, with the
passage of time or the giving of notice, or both, would result in any of the
matters referred to in (i) through (v) above.
 
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“Servicer” means, initially, Manchester, as the servicer of the Receivables, and
each successor Servicer pursuant to Section 10.3 of the Sale and Servicing
Agreement.
 
“Servicer Termination Event” means an event specified in Section 7.1 the Sale
and Servicing Agreement.
 
“Servicing Fee” has the meaning specified in Section 4.8 of the Sale and
Servicing Agreement.
 
“Servicing Guidelines” means the servicing guidelines of the Servicer, a copy of
which has been given to the Lender, as amended from time to time with the prior
written consent of the Lender.
 
“Settlement Date” shall have the meaning given to that term in the Loan
Agreement.
 
“Simple Interest Method” means the method of allocating a fixed level payment
between principal and interest, pursuant to which the portion of such payment
that is allocated to interest is equal to the product of the APR multiplied by
the unpaid balance multiplied by the period of time (expressed as a fraction of
a year, based on the actual number of days in the calendar month and the actual
number of days in the calendar year) elapsed since the preceding payment of
interest was made and the remainder of such payment is allocable to principal.
 
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“Termination Date” shall have the meaning given to that term in the Loan
Agreement.
 
“Transfer Instrument” means a Transfer Instrument from the Seller to the
Purchaser with respect to the Receivables and Other Conveyed Property to be
conveyed by the Seller to the Purchaser on any Funding Date, in substantially
the form of Exhibit A to the Sale and Servicing Agreement.
 
“UCC” means the Uniform Commercial Code as in effect in the relevant
jurisdiction, as amended from time to time.
 
“Underwriting Guidelines” shall mean the underwriting guidelines of the Seller,
a copy of which has been provided to the Lender, as amended from time to time
with the prior written consent of the Lender.
 
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