EXHIBIT 10.39

 

Portions of this Exhibit 10.39 have been omitted based upon a request for
confidential treatment. This Exhibit 10.39, including the non-public
information, has been filed separately with the Securities and Exchange
Commission. “[*]” designates portions of this document that have been redacted
pursuant to the request for confidential treatment filed with the Securities and
Exchange Commission.

 

THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT

 

 

dated as of April 20, 2007

 

 

among

 

 

AFC FUNDING CORPORATION,

 

 

as Seller,

 

 

AUTOMOTIVE FINANCE CORPORATION,

 

 

as Servicer,

 

 

FAIRWAY FINANCE COMPANY, LLC,
MONTEREY FUNDING LLC
and such other entities from time to time
as may become Purchasers hereunder

 

DEUTSCHE BANK AG, NEW YORK BRANCH,
as Purchaser Agent for Monterey Funding LLC,

 

and

 

 

BMO CAPITAL MARKETS CORP.,

 

 

as the initial Agent
and as Purchaser Agent for Fairway Finance Company, LLC

 

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TABLE OF CONTENTS

 

 

 

Page

 

 

 

ARTICLE I.          AMOUNTS AND TERMS OF THE PURCHASES

1

Section 1.1.

Purchase Facility

1

Section 1.2.

Making Purchases

2

Section 1.3.

Participation Computation

3

Section 1.4.

Settlement Procedures

3

Section 1.5.

Fees

7

Section 1.6.

Payments and Computations, Etc.

7

Section 1.7.

Dividing or Combining Portions of the Investment of any Participation

8

Section 1.8.

Increased Costs

8

Section 1.9.

Dilutions; Application of Payments

9

Section 1.10.

Requirements of Law

9

Section 1.11.

Inability to Determine Eurodollar Rate

10

Section 1.12.

Additional and Replacement Purchasers, Increase in Maximum Amount

11

Section 1.13.

Special Allocation Provisions for Non-Revolving Purchasers

12

ARTICLE II.        REPRESENTATIONS AND WARRANTIES; COVENANTS; TERMINATION EVENTS

12

Section 2.1.

Representations and Warranties; Covenants

12

Section 2.2.

Termination Events

12

ARTICLE III.

INDEMNIFICATION

13

Section 3.1.

Indemnities by the Seller

13

Section 3.2.

Indemnities by AFC

15

Section 3.3.

Indemnities by Successor Servicer

16

ARTICLE IV.       ADMINISTRATION AND COLLECTIONS

17

Section 4.1.

Appointment of Servicer

17

Section 4.2.

Duties of Servicer; Relationship to Backup Servicing Agreement

18

Section 4.3.

Deposit Accounts; Establishment and Use of Certain Accounts

20

Section 4.4.

Enforcement Rights

21

Section 4.5.

Responsibilities of the Seller

22

 

 

 

 

Third Amended and Restated
Receivables Purchase Agreement

 

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TABLE OF CONTENTS

(continued)

 

 

 

Page

 

 

 

Section 4.6.

Servicing Fee

22

Section 4.7.

Specified Ineligible Receivables

22

ARTICLE V.        THE AGENTS

23

Section 5.1.

Appointment and Authorization

23

Section 5.2.

Delegation of Duties

24

Section 5.3.

Exculpatory Provisions

24

Section 5.4.

Reliance by Agents

24

Section 5.5.

Notice of Termination Date

25

Section 5.6.

Non-Reliance on Agent, Purchaser Agents and Other Purchasers

25

Section 5.7.

Agent, Purchaser Agents and Purchasers

26

Section 5.8.

Indemnification

26

Section 5.9.

Successor Agent

26

ARTICLE VI.       MISCELLANEOUS

26

Section 6.1.

Amendments, Etc.

26

Section 6.2.

Notices, Etc.

27

Section 6.3.

Assignability

27

Section 6.4.

Costs, Expenses and Taxes

28

Section 6.5.

No Proceedings; Limitation on Payments

29

Section 6.6.

Confidentiality

30

Section 6.7.

GOVERNING LAW AND JURISDICTION

30

Section 6.8.

Execution in Counterparts

30

Section 6.9.

Survival of Termination

30

Section 6.10.

WAIVER OF JURY TRIAL

30

Section 6.11.

Entire Agreement

31

Section 6.12.

Headings

31

Section 6.13.

Liabilities of the Purchasers

31

Section 6.14.

Tax Treatment

31

 

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TABLE OF CONTENTS

 

 

 

Page

 

 

 

EXHIBIT I

DEFINITIONS

I-1

EXHIBIT II

CONDITIONS OF PURCHASES

II-1

EXHIBIT III

REPRESENTATIONS AND WARRANTIES

III-1

EXHIBIT IV

COVENANTS

IV-1

EXHIBIT V

TERMINATION EVENTS

V-1

EXHIBIT VI

PORTFOLIO CERTIFICATE

VI-1

EXHIBIT VII

PERFECTION REPRESENTATIONS, WARRANTIES AND COVENANTS

VII-1

 

 

 

SCHEDULE I

CREDIT AND COLLECTION POLICY

I-1

SCHEDULE II

DEPOSIT BANKS AND DEPOSIT ACCOUNTS

II-1

SCHEDULE III

[RESERVED]

III-1

SCHEDULE IV

ELIGIBLE CONTRACTS

IV-1

SCHEDULE V

TAX MATTERS

V-1

SCHEDULE VI

COMPETITOR FINANCIAL INSTITUTIONS

VI-1

 

 

 

ANNEX A

FORM OF PURCHASE NOTICE

 

ANNEX B

FORM OF SERVICER REPORT

 

ANNEX C

FORMS OF JOINDER AGREEMENTS

 

 

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THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT

 

This THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT, originally dated
as of December 31, 1996, amended and restated as of May 31, 2002, as of June 15,
2004 and as of April 20, 2007 (as further amended, supplemented or otherwise
modified from time to time, the “Agreement”) is entered into among AFC FUNDING
CORPORATION, an Indiana corporation, as seller (the “Seller”), AUTOMOTIVE
FINANCE CORPORATION, an Indiana corporation (“AFC”), as initial servicer (in
such capacity, together with its successors and permitted assigns in such
capacity, the “Servicer”), FAIRWAY FINANCE COMPANY, LLC, a Delaware limited
liability company (“Fairway”), and MONTEREY FUNDING LLC, a Delaware limited
liability company (“Monterey”), as initial purchasers (together with their
successors and permitted assigns and such other entities as may become party
hereto from time to time as purchasers, the “Purchasers”), DEUTSCHE BANK AG, NEW
YORK BRANCH, as Purchaser Agent for Monterey (in such capacity, together with
its successors and assigns and such other financial institutions as may become
party hereto from time to time each as a purchaser agent, a “Purchaser Agent”)
and BMO CAPITAL MARKETS CORP., a Delaware corporation (“BMOCM”), as agent for
the Purchasers (in such capacity, together with its successors and assigns in
such capacity, the “Agent”) and as Purchaser Agent for Fairway (in such
capacity, together with its successors and assigns and such other financial
institutions as may become party hereto from time to time each as a purchaser
agent, a “Purchaser Agent”).

 

PRELIMINARY STATEMENTS.  Certain terms that are capitalized and used throughout
this Agreement are defined in Exhibit I to this Agreement.  References in the
Exhibits hereto to “the Agreement” refer to this Agreement, as amended, modified
or supplemented from time to time.

 

Fairway, the Agent (as successor to Harris Nesbitt Corp.), the Seller and the
Servicer are party to that certain Second Amended and Restated Receivables
Purchase Agreement, dated as of June 15, 2004 (the “Prior Agreement”), pursuant
to which the Seller has sold, transferred and assigned an undivided variable
percentage interest in a pool of receivables to the Purchasers thereunder.

 

The parties hereto wish to amend and restate the Prior Agreement in its entirety
in order to make certain changes set forth herein.

 

In consideration of the mutual agreements, provisions and covenants contained
herein, the parties hereto agree as follows:

 

ARTICLE I.

 

AMOUNTS AND TERMS OF THE PURCHASES

 

Section 1.1.  Purchase Facility.  (a)  On the terms and conditions hereinafter
set forth, each Purchaser hereby agrees to purchase and make reinvestments of
undivided percentage ownership interests with regard to its Participation from
the Seller from time to time prior to the

 

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Termination Date.  Under no circumstances shall any Purchaser make any such
purchase or reinvestment, if, after giving effect to such purchase or
reinvestment, (A) the aggregate Investment of such Purchaser would exceed its
Maximum Commitment; or (B) the aggregate outstanding Investment of all
Purchasers would exceed the Maximum Amount.

 

(b)           The Seller may, upon at least 30 days’ notice to the Agent, the
Purchaser Agents, the Servicer and the Backup Servicer, terminate the purchase
facility provided in Section 1.1(a) in whole or, from time to time, irrevocably
reduce in part the unused portion of the Maximum Amount; provided that each
partial reduction shall be in the amount of at least $1,000,000, or an integral
multiple of $500,000 in excess thereof and shall not reduce the Maximum Amount
below $100,000,000.  Any such reductions shall be applied to the Commitments of
the Purchasers on a pro rata basis (based on unused Commitments) or as otherwise
consented to by the Agent.

 

Section 1.2.  Making Purchases.  (a)  Each purchase (but not reinvestment) of
undivided ownership interests with regard to any Participation of any Purchaser
hereunder shall be made upon the Seller’s irrevocable written notice in the form
of Annex A delivered to the Agent (who will forward such notice to the
applicable Purchaser Agent) in accordance with Section 6.2 (which notice must be
received by such Purchaser Agent prior to 11:00 a.m., Chicago time) on the
Business Day immediately preceding the date of such proposed purchase.  Each
such notice of any such proposed purchase shall specify the desired amount and
date of such purchase and the desired duration of the initial Yield Period for
the related Portion of the Investment of such Participation; provided each
proposed purchase shall be in the amount of at least $1,000,000 or an integral
multiple of $100,000 in excess thereof.  Each Purchaser Agent shall select the
duration of such initial Yield Period with respect to the Portion of the
Investment funded by the Purchaser(s) for which it is acting as Purchaser Agent
and each subsequent Yield Period in connection with such Portion of Investment
in its discretion; provided that it shall use reasonable efforts, taking into
account market conditions, to accommodate Seller’s preferences.

 

(b)           On the date of each purchase (but not reinvestment) of undivided
ownership interests with regard to the Participation of any Purchaser, such
Purchaser shall, subject to Section 1.1(a) and the satisfaction of the
applicable conditions set forth in Exhibit II hereto, make available to its
Purchaser Agent (at its address set forth on the signature pages hereto or of
the applicable Joinder Agreement), in same day funds, an amount equal to its Pro
Rata Share (subject to Section 1.13) of the amount of such purchase.  Upon
receipt of such funds, each such Purchaser Agent shall make such funds
immediately available to the Seller at such address.

 

(c)           The Seller hereby sells and assigns to the Agent, for the benefit
of the Purchasers, an undivided percentage ownership interest equal to the
Aggregate Participation in (i) each Pool Receivable then existing and thereafter
arising, (ii) all Related Security with respect to such Pool Receivables, and
(iii) all Collections with respect to, and other proceeds of, such Pool
Receivables and Related Security.

 

(d)           To secure all of the Seller’s obligations (monetary or otherwise)
under the Transaction Documents to which it is a party, whether now or hereafter
existing or arising, due or to become due, direct or indirect, absolute or
contingent, including to secure the obligation of the Servicer to apply
Collections as provided in this Agreement, the Seller hereby grants to the

 

2

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Agent, for the benefit of the Secured Parties, a security interest in all of the
Seller’s right, title and interest in, to and under all of the following,
whether now or hereafter owned, existing or arising:  (A) all Pool Receivables,
(B) all Related Security with respect to each such Pool Receivable, (C) all
Collections with respect to such Pool Receivables and Related Security , (D) the
Deposit Accounts, the Liquidation Account and the Cash Reserve Account and all
certificates and instruments, if any, from time to time evidencing the Deposit
Accounts, the Liquidation Account and the Cash Reserve Account, all amounts on
deposit therein, all investments (including any investment property) made with
such funds, all claims thereunder or in connection therewith, and all interest,
dividends, moneys, instruments, securities and other property from time to time
received, receivable or otherwise distributed in respect of or in exchange for
any or all of the foregoing, (E) all rights of the Seller under the Purchase and
Sale Agreement, and (F) all proceeds of, and all amounts received or receivable
under any or all of, the foregoing.  The Agent, for the benefit of the Secured
Parties, shall have, with respect to the property described in this
Section 1.2(d), and in addition to all the other rights and remedies available
under this Agreement, all the rights and remedies of a secured party under any
applicable UCC.

 

Section 1.3.  Participation Computation.  Each Participation shall be
automatically recomputed (or deemed to be recomputed) on each Business Day other
than a Termination Day.  Each Participation shall remain constant as computed
(or deemed recomputed) as of the day immediately preceding the Termination Date
until such date that the aggregate Investment and Discount thereon shall have
been paid in full, all the amounts owed by the Seller hereunder and under any
other Transaction Document to the Purchasers, the Purchaser Agents, the Agent,
and any other Indemnified Party or Affected Person are paid in full and the
Servicer shall have received the accrued Servicing Fee.

 

Section 1.4.  Settlement Procedures.  (a)  Collection of the Pool Receivables
shall be administered by the Servicer in accordance with the terms of this
Agreement.  The Seller shall provide to the Servicer on a timely basis all
information needed for such administration, including notice of the occurrence
of any Termination Date or Paydown Day and current computations of the
Participations.  The Servicer shall segregate and hold all Collections in trust
for the benefit of the Seller, the Purchasers and the other Secured Parties and,
within one Business Day of the receipt of Collections of Pool Receivables by the
Seller or Servicer, deposit such Collections into a Deposit Account.  On each
day that is not a Termination Day, the Servicer shall remit to the Liquidation
Account from the Deposit Accounts an amount at least equal to the amount needed
to make the payments set forth in clause (c) below.

 

(b)           Allocation of Seller’s Share of Collections Prior to Termination
Date.  If such day is not a Termination Day, the Servicer shall allocate out of
the Seller’s Share of Collections and pay or otherwise deposit into the Cash
Reserve Account as set forth below the following amounts in the following order:

 

(1)           first, to the Servicer any accrued and unpaid Servicing Fees;

 

(2)           second, deposit into the Cash Reserve Account an amount up to the
excess of the Cash Reserve over the amount on deposit in the Cash Reserve
Account; and

 

3

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(3)           third, to the Seller.

 

(c)           Daily Purchaser Share Allocation.  On each Business Day that is
not a Termination Day, the Servicer shall allocate from the Purchaser’s Share of
Collections and set aside in the Liquidation Account (unless otherwise specified
below) the following amounts in the following order:

 

(1)           first, to the Servicer and the Backup Servicer, the Unaffiliated
Servicing Fees and Backup Servicing Fees and Transition Expenses (but subject to
the Backup Servicing Fee Cap) accrued through such day and not previously set
aside in the Liquidation Account;

 

(2)           second, to each Purchaser, any applicable Discount and Program
Fees accrued through such day and not previously set aside in the Liquidation
Account;

 

(3)           third, to the Cash Reserve Account, an amount, if any, sufficient
to increase the amount on deposit therein to equal the Cash Reserve;

 

(4)           fourth, if a voluntary paydown of Investment is being made, for
application in reduction of the Investment in accordance with Section 1.4(f);

 

(5)           fifth, if the sum of the aggregate Participations exceeds 100% or
if such day is Paydown Day, for application in reduction of the Investment in
accordance with Section 1.4(g);

 

(6)           sixth, to any Indemnified Party, ratably in proportion to the
respective amounts owed to each such Person, any amounts owed to such
Indemnified Party;

 

(7)           seventh, to the Backup Servicer, any accrued and unpaid Backup
Servicing Fees, after giving effect to the distribution in clause (1) above;

 

(8)           eighth, to the Servicer, any accrued and unpaid Servicing Fees,
which in the Servicer’s discretion may be netted monthly from Collections, after
giving effect to the distribution in clause (1) above;

 

(9)           ninth, to the reinvestment in Pool Receivables and Related
Security; and

 

(10)         tenth, to the Seller, but only to the extent no Paydown Day exists
or would result from such distribution.

 

(d)           Distributions from Liquidation Account.  Funds set aside and held
on deposit in the Liquidation Account pursuant to Section 1.4(c) above shall be
distributed by the Agent as follows:

 

(1)           Distribution of Discount, Program Fees and Investment Prior to
Termination Date.  On each Settlement Date that is not a Termination Day,
amounts set aside in the Liquidation Account for a particular Purchaser with
respect to Discount, Program Fees and Investment shall be paid to the applicable
Purchaser’s Account of such

 

4

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Purchaser on the applicable Yield Period End Date or Fee Payment Date for such
amounts;

 

(2)           Distributions of Indemnified Amounts.  On each Settlement Date,
Collections held on deposit in the Liquidation Account for the benefit of an
Indemnified Party shall be paid to the applicable Indemnified Party as directed
by such Indemnified Party;

 

(3)           Distributions of Servicing Fees.  On each Servicer Payment Date,
Collections held on deposit in the Liquidation Account for the benefit of the
Servicer shall be paid as the Servicer shall direct; and

 

(4)           Distribution of Backup Servicing Fees and Transition Expenses.  On
each Backup Servicer Payment Date, Collections held on deposit in the
Liquidation Account for the benefit of the Backup Servicer shall be paid to the
Backup Servicer as the Backup Servicer shall direct.

 

(e)           Settlement Following Termination Date.  On each Draw Date on and
after the Termination Date, all Collections (including the Seller’s Share) in
the Deposit Accounts shall be transferred into the Liquidation Account and
applied as follows:

 

(1)           first, to the Servicer (if not AFC or an Affiliate thereof) and
the Backup Servicer (ratably in proportion to the respective amounts owed to
each) the sum of accrued and unpaid Unaffiliated Servicing Fees and Backup
Servicing Fees and Transition Expenses (but subject to the Backup Servicing Fee
Cap)  for the prior calendar month;

 

(2)           second, to the Agent an amount equal to any accrued and unpaid
Enforcement Costs (provided that the amount payable pursuant to this clause
(2) shall not exceed $200,000);

 

(3)           third, pro rata (based on amounts due)  to each Purchaser’s
Account an amount equal to all accrued and unpaid Discount and Program Fees;

 

(4)           fourth, pro rata (based on Investment outstanding) to each
Purchaser’s Account an amount equal to each Purchaser’s outstanding Investment;

 

(5)           fifth, to the Backup Servicer or any applicable successor
Servicer, an amount equal to the sum of the invoiced but unpaid Transition
Expenses (if any) and any Backup Servicing Fees (if any) for the prior calendar
month to the extent not paid pursuant to clause (1) above;

 

(6)           sixth, (i) first, to the Agent an amount equal to any accrued and
unpaid Enforcement Costs to the extent not paid pursuant to clause (2) above and
(ii) second, to any Indemnified Party, ratably in proportion to the respective
amounts owed to each such Person, any amounts owed to such Indemnified Party;

 

(7)           seventh, to the Servicer an amount equal to such Purchaser’s
Investment Share of any accrued and unpaid Servicing Fees due to the Servicer;
and

 

5

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(8)           eighth, to the Seller.

 

(f)            Voluntary Paydown of Investment.  If at any time the Seller shall
wish to cause the reduction of the aggregate of the Investment of the
Participations of the Purchasers, the Seller shall give each Purchaser Agent,
the Agent, the Servicer and the Backup Servicer at least two Business Days’
prior written notice thereof (including the amount of such proposed reduction
and the proposed date on which such reduction will commence).  Following the
delivery of such notice, on the proposed date of commencement of such reduction
and on each day thereafter, the Servicer shall cause the remainder of the
Purchasers’ Share of Collections (after giving effect to allocations of more
senior priority items under Section 1.4(c) above) to be transferred to the
Liquidation Account and the Agent shall hold therein such amounts for the
benefit of the Purchasers until the aggregate amount thereof not so reinvested
shall equal the desired amount of reduction, at which time such amount shall be
allocated to repay the outstanding Investment of the Purchasers ratably
according to their respective Purchaser Percentages, with such reduction to be
applied first to the Investment of the Revolving Purchasers and then to the
Investment of the Non-Revolving Purchasers (and otherwise subject to
Section 1.13); provided, that upon the occurrence of the Termination Date, all
such Collections set aside shall instead be held for distribution in accordance
with Section 1.4(e); and provided, further, that,

 

(1)           unless otherwise agreed by the Agent, the amount of any such
reduction with respect to each Purchaser shall be not less than $1,000,000 and
shall be an integral multiple of $100,000, and the entire Investment (if any) of
the Participation after giving effect to such reduction shall be not less than
$100,000,000,

 

(2)           the Seller shall use reasonable efforts to choose a reduction
amount, and the date of commencement thereof, so that to the extent practicable
such reduction shall commence and conclude in the same Yield Period, and

 

(3)           if two or more Portions of Investment shall be outstanding with
respect to any Purchaser at the time of any proposed reduction, such proposed
reduction shall be applied, unless the Seller shall otherwise specify in the
notice described above, to the Portion of Investment of such Purchaser with the
shortest remaining Yield Period.

 

(g)           Distributions of Investment Upon Paydown Day.  On each Paydown Day
(including on any day the Aggregate Participations exceed 100%), the remainder
of the Purchasers’ Share of any remaining Collections (after giving effect to
allocations of more senior priority items in Section 1.4(c)), shall be
transferred by the Servicer from the Deposit Accounts to the Liquidation Account
and held therein by the Agent and allocated to repay the outstanding Investment
of the Purchasers ratably according to their respective Purchaser Percentages
(with such reduction to be applied first to the Investment of the Revolving
Purchasers and then to the Investment of the Non-Revolving Purchasers and
otherwise subject to Section 1.13); provided, that on the first day that is not
a Paydown Day or a Termination Day, the Agent shall hold all funds allocated to
repay Investment pursuant to this subsection for distribution in accordance with
the priorities set forth in Section 1.4(c); and, provided, further, that upon
the occurrence of the Termination Date, all Collections allocated to repay
Investment pursuant to this subsection shall instead be held for distribution in
accordance with Section 1.4(e).

 

6

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(h)           Withdrawals from Cash Reserve Account.  If on any Draw Date
(A) insufficient funds are on deposit in the Liquidation Account to make in full
all required distributions of Discount and fees and (B) since the prior Draw
Date funds have been released to the Seller and not used by the Seller to
acquire Receivables, the Seller shall deposit into the Liquidation Account on or
before such Draw Date the lesser of the amounts described in clauses (A) and
(B) above for the benefit of the applicable Purchasers.  If on any Draw Date
insufficient funds are on deposit in the Liquidation Account (after giving
effect to any deposits made by the Seller as described in the preceding
sentence) to make in full all required distributions of Discount and fees for
such Draw Date, the Agent shall distribute funds from the Cash Reserve Account
in payment of such Discount and fees as if such funds were funds on deposit in
the Liquidation Account held for the benefit of the applicable Purchaser.  On
any Termination Day, to the extent directed by the Majority Purchasers, the
Agent shall distribute funds from the Cash Reserve Account pursuant to
Section 1.4(e) as if such funds were funds on deposit in the Liquidation Account
held for the benefit of the applicable Purchaser and, following the payment in
full of all outstanding Investment, any remaining amounts on deposit in the Cash
Reserve Account shall be distributed as Collections pursuant to Section 1.4(e). 
If on any Business Day other than a Termination Day, after giving effect to all
distributions on such day pursuant to Section 1.4, the amount on deposit in the
Cash Reserve Account exceeds the Cash Reserve, such excess shall be released
from the Cash Reserve Account and treated as Collections for purposes of
Section 1.4 for the following Business Day.

 

Section 1.5.  Fees.  (a)  The Seller shall pay to the Purchaser Agents certain
fees in the amounts and on the dates set forth in a letter dated April 20, 2007
between the Seller, AFC  and the Purchaser Agents, as such letter agreement may
be amended,  supplemented or otherwise modified from time to time in accordance
with the terms thereof (the “Fee Letter”).

 

(b)           The Seller shall pay to the Backup Servicer the Backup Servicing
Fees and any Transition Expenses in the amounts and on the dates set forth in
the Backup Servicing Fee Letter, as the same may be amended, supplemented or
otherwise modified from time to time with the prior written consent of the
Agent.

 

Section 1.6.  Payments and Computations, Etc.  (a)  All amounts to be paid or
deposited by the Seller or the Servicer to, or for the benefit of, any Purchaser
Agent, any Purchaser, the Agent or the Backup Servicer hereunder shall be paid
or deposited no later than 12:00 noon (Chicago time) on the day when due in same
day funds to the Liquidation Account.  All amounts received after noon (Chicago
time) will be deemed to have been received on the immediately succeeding
Business Day.

 

(b)           The Seller, AFC or Servicer (as applicable) shall, to the extent
permitted by law, pay interest on any amount not paid by the respective party to
the applicable Person when due hereunder, at an interest rate equal to 2.0% per
annum above the Base Rate, payable on demand.

 

(c)           All computations of interest under subsection (b) above and all
computations of Discount, fees and other amounts hereunder shall be made on the
basis of a year of 360 days for the actual number of days elapsed.  Whenever any
payment or deposit to be made hereunder shall be due on a day other than a
Business Day, such payment or deposit shall be made no later

 

7

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than the next succeeding Business Day and such extension of time shall be
included in the computation of such payment or deposit.

 

Section 1.7.  Dividing or Combining Portions of the Investment of any
Participation.  The Seller may, on any Yield Period End Date, either (i) divide
the Investment of any Purchaser into two or more portions (each, with respect to
the applicable Participation, a “Portion of Investment”) equal, in aggregate, to
the Investment of such Purchaser, provided that after giving effect to such
division the amount of each such Portion of Investment shall be not less than
$1,000,000, or (ii) combine any two or more Portions of Investment outstanding
on such Yield Period End Date and having Yield Periods ending on such Yield
Period End Date into a single Portion of Investment equal to the aggregate of
the Investment of such Portions of Investment.

 

Section 1.8.  Increased Costs.  (a)  If any Purchaser Agent, any Purchaser, the
Agent, any Liquidity Bank, any Related CP Issuer, any other Program Support
Provider or any of their respective Affiliates (each an “Affected Person”)
determines that the existence of or compliance with (i) any law or regulation or
any change therein or in the interpretation or application thereof, in each case
adopted, issued or occurring after the date hereof or (ii) any request,
guideline or directive from any central bank or other Official Body (whether or
not having the force of law) issued, occurring or first applied after the date
of this Agreement affects or would affect the amount of capital required or
expected to be maintained by such Affected Person and such Affected Person
determines that the amount of such capital is increased by or based upon the
existence of any commitment to make purchases of or otherwise to maintain the
investment in Pool Receivables related to this Agreement or any related
liquidity facility or credit enhancement facility and other commitments of the
same type, then, upon written demand by such Affected Person (with a copy to the
Agent and the applicable Purchaser Agent (if any)), the Seller shall immediately
pay to the Agent, for the account of such Affected Person, from time to time as
specified by such Affected Person, additional amounts sufficient to compensate
such Affected Person in the light of such circumstances, to the extent that such
Affected Person reasonably determines such increase in capital to be allocable
to the existence of any of such commitments or maintenance of its investment in
the Pool Receivables; provided that within 30 days of an Affected Person’s
knowledge of any such circumstance such Affected Person shall notify the Seller
in writing of the same and whether such Affected Person will request that the
Seller indemnify it for such circumstance.  A certificate as to such amounts
submitted to the Seller, the Agent and the applicable Purchaser Agent (if any)
by such Affected Person shall be conclusive and binding for all purposes, absent
manifest error.  For the avoidance of doubt, the first application of Accounting
Research Bulletin No. 51 by the Financial Accounting Standards Board (“FASB”)
(including, without limitation, FASB Interpretation No. 46R), shall constitute
an adoption, change, request or directive subject to this Section 1.8(a).

 

(b)           If, due to either (i) the introduction of or any change in or in
the interpretation of any law or regulation or (ii) compliance with any
guideline or request from any central bank or other Governmental Authority
(whether or not having the force of law), there shall be any increase in the
cost to any Affected Person of agreeing to purchase or purchasing, or
maintaining the ownership of the related Participation(s) in respect of which
Discount is computed by reference to the Eurodollar Rate, then, upon written
demand by such Affected Person, the Seller shall immediately pay to the Agent,
for the account of such Affected Person, from time to time as specified,
additional amounts sufficient to compensate such Affected Person for such

 

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increased costs; provided that within 30 days of an Affected Person’s knowledge
of any such circumstance such Affected Person shall notify the Seller in writing
of the same and whether such Affected Person will request that the Seller
indemnify it for such circumstance.  A certificate as to such amounts submitted
to the Seller, the Agent and the applicable Purchaser Agent (if any), by such
Affected Person shall be conclusive and binding for all purposes, absent
manifest error.

 

Section 1.9.  Dilutions; Application of Payments.

 

(a)           if on any day

 

(i)            the Outstanding Balance of any Pool Receivable is reduced or
adjusted as a result of any discount, rebate or other adjustment made by the
Originator, Seller or Servicer, or any setoff or dispute between the Seller,
Originator or the Servicer and an Obligor, the Seller shall be deemed to have
received on such day a Collection of such Pool Receivable in the amount of such
reduction or adjustment; or

 

(ii)           any of the representations or warranties in paragraphs A.(g) or
A.(o) of Exhibit III is not true with respect to any Pool Receivable, the Seller
shall be deemed to have received on such day a Collection of such Pool
Receivable in full.

 

Any such deemed Collections shall be deposited by the Seller into the
Liquidation Account on the first Business Day of the calendar week following
deemed receipt thereof.

 

(b)           Except as otherwise required by applicable law or the relevant
Contract, all Collections received from an Obligor of any Receivable shall be
applied in accordance with the Contract with such Obligor and the Credit and
Collection Policy.

 

(c)           If and to the extent any Secured Party shall be required for any
reason to pay over to an Obligor (or any trustee, receiver, custodian or similar
official in any Insolvency Proceeding) any amount received by it hereunder, such
amount shall be deemed not to have been so received but rather to have been
retained by the Seller and, accordingly, such Secured Party shall have a claim
against the Seller for such amount, payable when and to the extent that any
distribution from or on behalf of such Obligor is made in respect thereof.

 

Section 1.10.  Requirements of Law.  In the event that any Affected Person
determines that the existence of or compliance with (i) any law or regulation or
any change therein or in the interpretation or application thereof, in each case
adopted, issued or occurring after the date hereof or (ii) any request,
guideline or directive from any central bank or other Governmental Authority
(whether or not having the force of law) issued or occurring after the date of
this Agreement:

 

(i)            does or shall subject such Affected Person to any tax of any kind
whatsoever with respect to this Agreement, any increase in the applicable
Participation(s) or in the amount of Investment relating thereto, or does or
shall change the basis of taxation of payments to such Affected Person on
account of Collections, Discount or any other amounts payable hereunder
(excluding taxes imposed on the overall net income of such Affected Person, and
franchise taxes imposed on such Affected Person, by the

 

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jurisdiction under the laws of which such Affected Person is organized or a
political subdivision thereof);

 

(ii)           does or shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets held by,
or deposits or other liabilities in or for the account of, purchases, advances
or loans by, or other credit extended by, or any other acquisition of funds by,
any office of such Affected Person which are not otherwise included in the
determination of the Eurodollar Rate or the Base Rate hereunder; or

 

(iii)          does or shall impose on such Affected Person any other condition;

 

and the result of any of the foregoing is (x) to increase the cost to such
Affected Person of acting as a Purchaser Agent or Agent or of agreeing to
purchase or purchasing or maintaining the ownership of undivided ownership
interests with regard to the applicable Participation or any Portion of
Investment (or interests therein) in respect of which Discount is computed by
reference to the Eurodollar Rate or the Base Rate or (y) to reduce any amount
receivable hereunder (whether directly or indirectly) funded or maintained by
reference to the Eurodollar Rate or the Base Rate, then, in any such case, upon
written demand by such Affected Person the Seller shall pay the Agent, for the
account of such Affected Person, any additional amounts necessary to compensate
such Affected Person for such additional cost or reduced amount receivable.  All
such amounts shall be payable as incurred.  A certificate from such Affected
Person to the Seller certifying, in reasonably specific detail, the basis for,
calculation of, and amount of such additional costs or reduced amount receivable
shall be conclusive in the absence of manifest error; provided, however, that no
Affected Person shall be required to disclose any confidential or tax planning
information in any such certificate.

 

Section 1.11.  Inability to Determine Eurodollar Rate.  In the event that any
Purchaser Agent shall have determined prior to the first day of any Yield Period
for the Participation of its Purchaser (which determination shall be conclusive
and binding upon the parties hereto) by reason of circumstances affecting the
interbank Eurodollar market, either (a) dollar deposits in the relevant amounts
and for the relevant Yield Period are not available, (b) adequate and reasonable
means do not exist for ascertaining the Eurodollar Rate for such Yield Period or
(c) the Eurodollar Rate determined pursuant hereto does not accurately reflect
the cost (as conclusively determined by such Purchaser Agent) to any Purchaser
for which such Purchaser Agent acts as agent of maintaining each such Portion of
Investment of such Purchaser during such Yield Period, such Purchaser Agent
shall promptly give telephonic notice of such determination, confirmed in
writing, to the Seller prior to the first day of such Yield Period.  Upon
delivery of such notice (a) no Portion of Investment of such Purchaser shall be
funded thereafter at the Bank Rate determined by reference to the Eurodollar
Rate, unless and until the applicable Purchaser Agent shall have given notice to
the Seller that the circumstances giving rise to such determination no longer
exist, and (b) with respect to any outstanding Portions of Investment then
funded at the Bank Rate determined by reference to the Eurodollar Rate, such
Bank Rate shall automatically be converted to the Bank Rate determined by
reference to the Base Rate at the respective Yield Period End Dates relating to
such Portions of Investment.

 

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Section 1.12.  Additional and Replacement Purchasers, Increase in Maximum
Amount.  (a)  The Seller shall have the right, at any time and from time to
time, with the prior written consent of the Agent to add any entity as a
Purchaser hereunder (which addition may increase the Maximum Amount if a
Purchaser is added) or increase the Maximum Commitment of any existing
Purchaser.  No increase in the Maximum Commitment of a Purchaser hereunder shall
be effective unless, if the increasing Purchaser is a Note Issuer, such Note
Issuer shall have received written confirmation by the Rating Agencies that such
action shall not cause the rating on the then outstanding Notes of such Note
Issuer to be downgraded or withdrawn.  Each such addition of a new Purchaser
hereunder shall be effected by delivery to the Seller, the Servicer, the Agent
and each Purchaser Agent, of a Joinder Agreement executed by the Seller, the
Servicer, the Agent, such new Purchaser and its Purchaser Agent (if different
from the Purchaser) in substantially the form of Annex C hereto.  Upon receipt
of a Joinder Agreement, if such Joinder Agreement has been fully executed and
completed and is substantially in the form of Annex C, the Servicer shall, not
less than five (5) Business Days prior to the effectiveness of such Joinder
Agreement give prompt written notice to all Purchaser Agents, the Agent and
Purchasers as to (i) the name, identity and address for receiving notices of the
new Purchaser(s) and Purchaser Agent(s) becoming party hereto, (ii) the Maximum
Commitment of such new Purchaser, (iii) the change in the Maximum Amount and
(iv) the effective date of such Joinder Agreement.  Immediately upon the
effectiveness of such Joinder Agreement, such additional Purchaser shall
purchase, by wire transfer of immediately available funds its Participation. 
Effective with the payment of such amounts, such new Purchaser and its Purchaser
Agent designated in the applicable Joinder Agreement shall each become parties
hereto.

 

(b)           By executing and delivering a Joinder Agreement, each new
Purchaser and Purchaser Agent confirms to and agrees with the Agent and each
other Purchaser and Purchaser Agent party hereto as follows: (A) such new
Purchaser has received a copy of this Agreement, and the Purchase and Sale
Agreement, together with copies of such financial statements and other documents
and information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Joinder Agreement; (B) such new Purchaser has made
and will continue to make, independently and without reliance upon the Agent,
any Purchaser Agent or any other Purchaser and based on such documents and
information as it shall deem appropriate at the time, its own credit decisions
in taking or not taking action under this Agreement; (C) such new Purchaser
appoints and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers under this Agreement as are delegated to the Agent by
the terms hereof, together with such powers as are reasonably incidental
thereto; and (D) such new Purchaser and its Purchaser Agent agrees that it will
perform in accordance with their terms all of the obligations which by the terms
of this Agreement are required to be performed by it as a Purchaser or Purchaser
Agent.

 

(c)           In addition to the foregoing, in the event that any Purchaser or
Purchaser Agent (i) does not consent to an amendment of clause (ii) of the
definition of Termination Date to which the Seller and the Servicer have
otherwise consented; or (ii) does not consent to any amendment or modification
of this Agreement agreed to by the Seller, the Servicer and the Majority
Purchasers but which requires the consent of such Purchaser, then, in any such
event, the Seller shall have the right, with the prior written consent of the
Agent, to require such Purchaser to assign its interests in its Participation
and the Pool Receivables and all of its rights and obligations under this
Agreement to a replacement Purchaser acceptable to the Agent and the

 

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Seller.  Any such assignment shall be without recourse, representation or
warranty of any kind on the part of the assigning Purchaser, except that such
assignment is free and clear of any Adverse Claims created by such Purchaser,
and shall be consummated pursuant to documentation reasonably satisfactory to
the assignor and assignee on not less than ten days’ prior written notice, at a
purchase price equal to the sum of (w) the aggregate outstanding Investment of
the Purchaser being so replaced; (x) all accrued and unpaid Discount on such
Investment; (y) all accrued and unpaid Program Fees owed to or on behalf of such
Purchaser; and (z) all other accrued and unpaid expenses, indemnities and other
amounts owing under this Agreement to such Purchaser, including any Termination
Fees caused by the above-described assignment.  Concurrently with any such
assignment, the Seller, the Servicer, such replacement Purchaser and its
Purchaser Agent (if different from the Purchaser) shall execute a Joinder
Agreement to evidence the terms and conditions under which such replacement
Purchaser has agreed to become a Purchaser hereunder.

 

Section 1.13.  Special Allocation Provisions for Non-Revolving Purchasers. 
Notwithstanding the definitions of “Pro Rata Share” or “Purchaser Percentage”
and the provisions of Section 1.2(b), 1.4(f) and 1.4(g), such definitions and
provisions shall be adjusted such that the Investment of each such Non-Revolving
Purchaser shall remain (i) constant prior to the occurrence of the Termination
Date or (ii) subject to such other limitations specified in the applicable
Joinder Agreement of such Non-Revolving Purchaser.

 

ARTICLE II.

 

REPRESENTATIONS AND WARRANTIES; COVENANTS;
TERMINATION EVENTS

 

Section 2.1.  Representations and Warranties; Covenants.  Each of the Seller and
the Servicer hereby makes the representations and warranties, and hereby agrees
to perform and observe the covenants of such Person, set forth in
Exhibits III, IV and VII, respectively hereto.

 

Section 2.2.  Termination Events.  If any of the Termination Events set forth in
Exhibit V hereto shall occur, the Majority Purchasers may, by notice to the
Seller, each Purchaser Agent, the Agent and the Backup Servicer, declare the
Termination Date to have occurred (in which case the Termination Date shall be
deemed to have occurred); provided that, automatically upon the occurrence of
any event (without any requirement for the passage of time or the giving of
notice) described in subsection (g), (h), (k) or (m) of Exhibit V, the
Termination Date shall occur.  Upon any such declaration, the occurrence or the
deemed occurrence of the Termination Date, the Agent (at the direction of the
Majority Purchasers) shall have, in addition to the rights and remedies which
they may have under this Agreement, all other rights and remedies provided after
default under the UCC and under other applicable law, which rights and remedies
shall be cumulative.  The Agent shall obtain confirmation of the then-current
rating of the Notes from the Rating Agencies prior to waiving the occurrence of
any Termination Event of the type described in clause (j) of Exhibit V hereto.

 

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ARTICLE III.

 

INDEMNIFICATION

 

Section 3.1.  Indemnities by the Seller.  Without limiting any other rights that
the Agent, the Purchaser Agents, the Purchasers, the Related CP Issuers, the
Backup Servicer or any of their respective Affiliates, employees, agents,
successors, transferees or assigns (each, an “Indemnified Party”) may have
hereunder or under applicable law, the Seller hereby agrees to indemnify each
Indemnified Party from and against any and all claims, damages, expenses, losses
and liabilities (including Attorney Costs) (all of the foregoing being
collectively referred to as “Indemnified Amounts”) arising out of or resulting
from this Agreement or other Transaction Documents (whether directly or
indirectly) or the use of proceeds of purchases or reinvestments or the
ownership of any Participation, or any interest therein, or in respect of any
Receivable or any Contract regardless of whether any such Indemnified Amounts
result from an Indemnified Party’s negligence or strict liability or other acts
or omissions of an Indemnified Party, excluding, however, (a) Indemnified
Amounts to the extent resulting from gross negligence or willful misconduct on
the part of such Indemnified Party, (b) recourse (except as otherwise
specifically provided in this Agreement) for uncollectible Receivables to be
written off consistent with the Credit and Collection Policy or (c) any overall
net income taxes or franchise taxes imposed on such Indemnified Party by the
jurisdiction under the laws of which such Indemnified Party is organized or any
political subdivision thereof.  Without limiting or being limited by the
foregoing, and subject to the exclusions set forth in the preceding sentence,
the Seller shall pay on demand to each Indemnified Party any and all amounts
necessary to indemnify such Indemnified Party from and against any and all
Indemnified Amounts relating to or resulting from any of the following:

 

(i)            the failure of any Receivable included in the calculation of the
Net Receivables Pool Balance as an Eligible Receivable to be an Eligible
Receivable, the failure of any information contained in a Servicer Report or a
Portfolio Certificate to be true and correct, or the failure of any other
information provided to any Purchaser, any Purchaser Agent or the Agent with
respect to Receivables or this Agreement to be true and correct;

 

(ii)           the failure of any representation or warranty or statement made
or deemed made by the Seller (or any of its officers) under or in connection
with this Agreement to have been true and correct in all respects when made;

 

(iii)          the failure by the Seller to comply with any applicable law,
rule or regulation with respect to any Pool Receivable or the related Contract;
or the failure of any Pool Receivable or the related Contract to conform to any
such applicable law, rule or regulation;

 

(iv)          the failure (A) to vest in the Agent (for the benefit of the
Secured Parties) a valid and enforceable perfected undivided percentage
ownership interest, to the extent of the Aggregate Participation, in the
Receivables in, or purporting to be in, the Receivables Pool and the Related
Security and Collections with respect thereto and (B) the failure to vest in the
Agent (for the benefit of the Secured Parties) a first priority

 

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perfected security interest in the items described in Section 1.2(d), in each
case, free and clear of any Adverse Claim;

 

(v)           the failure to have filed, or any delay in filing, financing
statements or other similar instruments or documents under the UCC of any
applicable jurisdiction or other applicable laws with respect to any Receivables
in, or purporting to be in, the Receivables Pool and the Related Security and
Collections in respect thereof, whether at the time of any purchase or
reinvestment or at any subsequent time;

 

(vi)          any dispute, claim, offset or defense (other than discharge in
bankruptcy of the Obligor) of the Obligor to the payment of any Receivable in,
or purporting to be in, the Receivables Pool (including, without limitation, a
defense based on such Receivable or the related Contract not being a legal,
valid and binding obligation of such Obligor enforceable against it in
accordance with its terms), or any other claim resulting from or relating to the
transaction giving rise to such Receivable or relating to collection activities
with respect to such Receivable (if such collection activities were performed by
the Seller or any of its Affiliates acting as Servicer or by any agent or
independent contractor retained by the Seller or any of its Affiliates);

 

(vii)         any failure of the Seller to perform its duties or obligations in
accordance with the provisions hereof or to perform its duties or obligations
under the Contracts;

 

(viii)        any products liability or other claim, investigation, litigation
or proceeding arising out of or in connection with goods, insurance or services
that are the subject of or secure any Contract;

 

(ix)          the commingling of Collections of Pool Receivables at any time
with other funds;

 

(x)           any investigation, litigation or proceeding related to this
Agreement or the use of proceeds of purchases or reinvestments or the ownership
of any Participation or in respect of any Receivable, Related Security or
Contract;

 

(xi)          any reduction in Investment as a result of the distribution of
Collections pursuant to Section 1.4, in the event that all or a portion of such
distributions shall thereafter be rescinded or otherwise must be returned for
any reason;

 

(xii)         any tax or governmental fee or charge (other than any tax upon or
measured by net income or gross receipts), all interest and penalties thereon or
with respect thereto, and all reasonable out-of-pocket costs and expenses,
including the reasonable fees and expenses of counsel in defending against the
same, which may arise by reason of the purchase or ownership of any
Participation or other interests in the Receivables Pool or in any Related
Security or Contract;

 

(xiii)        the failure by the Seller or the Servicer to pay when due any
taxes payable by it, including, without limitation, the franchise taxes and
sales, excise or personal property taxes payable in connection with the
Receivables;

 

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(xiv)        the failure by the Seller or the Servicer to be duly qualified to
do business, to be in good standing or to have filed appropriate fictitious or
assumed name registration documents in any jurisdiction; or

 

(xv)         the failure of any Deposit Account Bank to remit any amounts held
in its Deposit Account pursuant to the instructions of the Servicer whether by
reason of the exercise of setoff rights or otherwise.

 

If for any reason the indemnification provided above in this Section 3.1 is
unavailable to an Indemnified Party or is insufficient to hold such Indemnified
Party harmless, then the Seller shall contribute to such Indemnified Party the
amount otherwise payable by such Indemnified Party as a result of such loss,
claim, damage or liability to the maximum extent permitted under applicable law
(but subject to the exclusions set forth in clauses (a) through (c) above).

 

The obligations of the Seller under this Section 3.1 are limited recourse
obligations payable solely from the Collections, the Receivables and Related
Security in accordance with the priority of payments set forth in Section 1.4.

 

Section 3.2.  Indemnities by AFC.  Without limiting any other rights that the
Agent, any Purchaser, any Purchaser Agent or any other Indemnified Party may
have hereunder or under applicable law, AFC hereby agrees to indemnify each
Indemnified Party, forthwith on demand, from and against any and all Indemnified
Amounts, awarded against or incurred by any of them, regardless of whether any
such Indemnified Amounts result from an Indemnified Party’s negligence or strict
liability or other acts or omissions of an Indemnified Party excluding, however,
(a) Indemnified Amounts to the extent resulting from gross negligence or willful
misconduct on the part of such Indemnified Party, (b) recourse (except as
otherwise specifically provided in this Agreement) for uncollectible Receivables
to be written off consistent with the Credit and Collection Policy or (c) any
overall net income taxes or franchise taxes imposed on such Indemnified Party by
the jurisdiction under the laws of which such Indemnified Party is organized or
any political subdivision thereof, arising out of or relating to:

 

(i)            the failure of any Receivable included in the calculation of the
Net Receivables Pool Balance as an Eligible Receivable at any time to be an
Eligible Receivable at such time, the failure of any information contained in a
Servicer Report or a Portfolio Certificate to be true and correct, or the
failure of any other information provided (directly or indirectly) by AFC or the
Seller to the Purchasers, the Agent, the Backup Servicer or any Purchaser Agent
with respect to Receivables or this Agreement to be true and correct;

 

(ii)           any representation or warranty made by AFC under or in connection
with any Transaction Document in its capacity as Servicer or any information or
report delivered by or on behalf of AFC in its capacity as Servicer pursuant
hereto, which shall have been false, incorrect or misleading in any material
respect when made or deemed made;

 

(iii)          the failure by AFC, in its capacity as Servicer, to comply with
any applicable law, rule or regulation (including truth in lending, fair credit
billing, usury, fair

 

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credit reporting, equal credit opportunity, fair debt collection practices and
privacy) with respect to any Pool Receivable or other related contract;

 

(iv)          any failure of AFC to perform its duties, covenants and
obligations in accordance with the applicable provisions of this Agreement;

 

(v)           any dispute, claim, offset or defense (other than discharge in
bankruptcy of the Obligor) of the Obligor to the payment of any Receivable in,
or purporting to be in, the Receivables Pool resulting from or relating to
collection activities with respect to such Receivable (if such collection
activities were performed by the Seller or any of its Affiliates acting as
Servicer or by any agent or independent contractor retained by the Seller or any
of its Affiliates);

 

(vi)          the commingling of Collections of Pool Receivables at any time
with other funds; or

 

(vii)         any investigation, litigation or proceeding related to AFC’s
activities as Servicer under this Agreement.

 

If for any reason the indemnification provided above in this Section 3.2 is
unavailable to an Indemnified Party or is insufficient to hold such Indemnified
Party harmless, then AFC shall contribute to such Indemnified Party the amount
otherwise payable by such Indemnified Party as a result of such loss, claim,
damage or liability to the maximum extent permitted under applicable law (but
subject to the exclusions set forth in clauses (a) through (c) above).

 

Section 3.3.  Indemnities by Successor Servicer.  Without limiting any other
rights that the Agent, any Purchaser, any Purchaser Agent or any other
Indemnified Party may have hereunder under applicable law, each successor
Servicer hereby agrees to indemnify each Indemnified Party, forthwith on demand,
from and against any and all Indemnified Amounts, other than Indemnified Amounts
resulting from gross negligence or willful misconduct on the part of such
Indemnified Party, awarded against or incurred by any of them arising out of or
relating to:

 

(i)            any representation or warranty made by such successor Servicer
under or in connection with any Transaction Document in its capacity as Servicer
or any information or report delivered by such successor Servicer pursuant
hereto, which shall have been false, incorrect or misleading in any material
respect when made or deemed made;

 

(ii)           the failure by such successor Servicer to comply with any
applicable law, rule or regulation (including truth in lending, fair credit
billing, usury, fair credit reporting, equal credit opportunity, fair debt
collection practices and privacy) with respect to any Pool Receivable or other
related contract;

 

(iii)          any failure of such successor Servicer to perform its duties,
covenants and obligations in accordance with the applicable provisions of this
Agreement;

 

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(iv)          any dispute, claim, offset or defense (other than discharge in
bankruptcy of the Obligor) of the Obligor to the payment of any Receivable in,
or purporting to be in, the Receivables Pool resulting from or relating to
collection activities with respect to such Receivable (if such collection
activities were performed by such successor Servicer or by any agent or
independent contractor retained by such successor Servicer); or

 

(v)           any investigation, litigation or proceeding related to such
successor Servicer’s activities as Servicer under this Agreement.

 

If for any reason the indemnification provided above in this Section 3.3 is
unavailable to an Indemnified Party or is insufficient to hold such Indemnified
Party harmless, then such successor Servicer shall contribute to such
Indemnified Party the amount otherwise payable by such Indemnified Party as a
result of such loss, claim, damage or liability to the maximum extent permitted
under applicable law.

 

Notwithstanding anything to the contrary herein, in no event shall any successor
Servicer be liable to any Person for any act or omission of any predecessor
Servicer.

 

ARTICLE IV.

 

ADMINISTRATION AND COLLECTIONS

 

Section 4.1.  Appointment of Servicer.  (a)  The servicing, administering and
collection of the Pool Receivables shall be conducted by the Person so
designated from time to time as Servicer in accordance with this Section 4.1. 
Until the Majority Purchasers give notice to the Seller, the Agent and the
Servicer (in accordance with the following sentence) of the designation of a new
Servicer, AFC is hereby designated as, and hereby agrees to perform the duties
and obligations of, the Servicer pursuant to the terms hereof.  Upon the
occurrence of a Termination Event, the Majority Purchasers may designate the
Backup Servicer or any other Person (including the Agent) to succeed the
Servicer, on the condition that any such Person so designated (other than the
Backup Servicer, except to the extent specified in the Backup Servicing
Agreement) shall agree in writing to perform the duties and obligations of the
Servicer pursuant to the terms hereof unless otherwise consented to by the
Majority Purchasers.

 

(b)           Upon the designation of a successor Servicer as set forth in
Section 4.1(a) hereof, the Servicer agrees that it will terminate its activities
as Servicer hereunder in a manner which the Agent determines will facilitate the
transition of the performance of such activities to the new Servicer, and the
Servicer shall cooperate with and assist such new Servicer.  Such cooperation
shall include (without limitation) access to and transfer of all records and use
by the new Servicer of all licenses, hardware or software necessary or desirable
to collect the Pool Receivables and the Related Security.  Without limiting the
foregoing, the Servicer agrees that, at any time following the occurrence of a
Termination Event, the Servicer shall, at the request of the Agent (i) promptly
identify all branch offices, loan processing offices or other locations at which
the Pool Receivable Documents are then being held, (ii) allow the Agent or its
designee full access to all such locations and all Pool Receivable Documents,
(iii) promptly arrange, at the Servicer’s expense, the transfer of possession of
all such Pool Receivable Documents to the Backup Servicer, any successor
Servicer or other third-party custodian specified by the Agent

 

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and (iv) instruct the Servicer’s agents and any person with whom the Servicer or
its agents have contracted to hold any such Pool Receivable Documents to provide
full access to, and/or transfer possession of, any Pool Receivable Documents
held by such agent or contractor.  The Servicer agrees to take no action which
would impede or impair the ability of the Agent or its designees to gain access
to the Pool Receivable Documents or to obtain possession thereof in accordance
with the provisions hereof.  The parties hereto agree that the covenants
contained in the foregoing sentence are reasonable and necessary for the
protection of the legitimate interests of the Secured Parties in the Pool
Receivables.  Accordingly, in addition to other remedies provided at law or
equity, upon any breach by the Servicer of the covenants contained in the second
preceding sentence, the Agent shall be entitled to seek specific performance and
injunctive relief by and against the Servicer prohibiting any further breach of
such covenants, without the necessity of proving irreparable injury or posting
bond.

 

(c)           The Servicer acknowledges that, in making its decision to execute
and deliver this Agreement, the Purchaser Agents, the Agent and the Purchasers
have relied on the Servicer’s agreement to act as Servicer hereunder. 
Accordingly, the Servicer agrees that it will not voluntarily resign as
Servicer.

 

(d)           The Servicer may delegate its duties and obligations hereunder to
any subservicer (each, a “Sub-Servicer”); provided that, in each such
delegation, (i) such Sub-Servicer shall agree in writing to perform the duties
and obligations of the Servicer pursuant to the terms hereof, (ii) the Servicer
shall remain primarily liable to the Secured Parties for the performance of the
duties and obligations so delegated, (iii) the Secured Parties shall have the
right to look solely to the Servicer for such performance and (iv) the terms of
any agreement with any Sub-Servicer shall provide that the Majority Purchasers
may terminate such agreement upon the termination of the Servicer hereunder in
accordance with Section 4.1(a) above by giving notice of its desire to terminate
such agreement to the Servicer (and the Servicer shall provide appropriate
notice to such Sub-Servicer); provided further, no such delegation shall be
effective without the prior written consent of the Majority Purchasers.

 

Section 4.2.  Duties of Servicer; Relationship to Backup Servicing Agreement. 
(a)  The Servicer shall take or cause to be taken all such action as may be
necessary or advisable to collect each Pool Receivable from time to time, all in
accordance with this Agreement, accepted industry standards and all applicable
laws, rules and regulations, with reasonable care and diligence, and in
accordance with the Credit and Collection Policy.  The Servicer shall set aside
for the accounts of the Seller, the Backup Servicer and the Purchasers the
amount of the Collections to which each is entitled in accordance with
Section 1.4.  The Seller shall deliver to the Servicer and the Servicer shall
hold for the benefit of the Secured Parties in accordance with their respective
interests, all records and documents (including without limitation computer
tapes or disks) with respect to each Pool Receivable and all Pool Receivable
Documents.  The Servicer (if the Servicer is AFC or one of its Affiliates) shall
stamp each page of each Contract related to a Pool Receivable with the following
legend “This Receivable has been sold to AFC Funding Corporation and an interest
therein has been granted to BMO Capital Markets Corp. as Agent”.  During such
period as a Backup Servicer is required to be maintained hereunder, the Servicer
agrees to provide the Backup Servicer with an electronic (scanned) copy of each
Contract related to a Pool Receivable and with monthly updates thereafter upon
receipt of which the Backup Servicer shall perform a conversion and
reconciliation of the Receivables data and recalculate

 

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the Servicer Report.  Notwithstanding anything to the contrary contained herein,
the Agent may direct the Servicer to commence or settle any legal action to
enforce collection of any Pool Receivable or to foreclose upon or repossess any
Related Security; provided, however, that no such direction may be given unless
a Termination Event has occurred.  AFC is hereby appointed the custodian of the
Pool Receivable Documents for the benefit of the Agent on behalf of the Secured
Parties; provided, however, that such appointment may be terminated pursuant to
the terms hereof.  AFC, or an affiliate on its behalf, will maintain fidelity
and forgery insurance and adequate insurance to replace all Pool Receivable
Documents due to casualty loss or theft of such documents.  In performing its
duties as servicer and custodian, AFC shall act with reasonable care, using that
degree of skill and attention that AFC exercises with respect to the files
relating to all comparable contracts that AFC owns or services for itself or
others.  AFC shall (i) maintain the Pool Receivable Documents in such a manner
as shall enable the Agent and the Purchaser Agents to verify the accuracy of
AFC’s recordkeeping; and (ii) promptly report to the Agent and the Purchaser
Agents any failure on its part or the part of its agents to hold the Pool
Receivable Documents and promptly take appropriate action to remedy any such
failure.  Upon termination of AFC’s appointment as custodian hereunder and the
delivery of the Pool Receivable Documents to the successor custodian, the
successor custodian shall review such documents to determine whether it is
missing any documents, and AFC shall cooperate with the successor custodian and
use its best efforts to assist the successor custodian to obtain the missing
documents. AFC shall maintain continuous custody of the Pool Receivable
Documents in secure facilities in accordance with customary standards for such
custody.

 

(b)           In the event the Backup Servicer becomes the successor Servicer
hereunder, any applicable terms and conditions of the Backup Servicing Agreement
relating to its performance as successor Servicer shall be deemed to be
incorporated herein, and the obligations and liabilities of the successor
Servicer (as such obligations and liabilities apply to the Backup Servicer
acting in such capacity) shall be deemed to be modified in accordance with the
provisions thereof.  To the extent that any conflict exists between the terms of
this Agreement and the Backup Servicing Agreement, the terms of the Backup
Servicing Agreement shall control.

 

(c)           The Servicer’s obligations hereunder shall terminate on the Final
Payout Date.  After such termination, the Servicer shall promptly deliver to the
Seller all books, records and related materials that the Seller previously
provided to the Servicer in connection with this Agreement.

 

(d)           During such period as a Backup Servicer is required to be
maintained hereunder, the Servicer shall provide the Backup Servicer and the
Agent and each Purchaser Agent (if requested) on a monthly basis an electronic
download with respect to the Pool Receivables in form and substance acceptable
to the Backup Servicer (and which shall include, but not be limited to, all
records related to each Receivable required by the Backup Servicer to service
and collect such Receivable).

 

(e)           Following the occurrence and during the continuation of a
Termination Event or a Level One Trigger, the Servicer shall provide to the
Backup Servicer and the Agent and each Purchaser Agent (if requested) on a daily
basis an electronic download with respect to the Pool Receivables in form and
substance acceptable to the Backup Servicer (and which shall include,

 

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but not be limited to, all records related to each Receivable required by the
Backup Servicer to service and collect such Receivable) and a Portfolio
Certificate (including information with respect to all Collections received and
all Receivables acquired by the Seller).  Following the occurrence and during
the continuation of a Level One Trigger, the Agent shall have the right to
require the Seller or the Servicer to, and upon such request the Seller or the
Servicer, as applicable, shall, assemble all of the Contracts and make the same
available to the Backup Servicer or other third-party custodian specified by,
and at a place selected by, the Agent within 30 days.

 

Section 4.3.  Deposit Accounts; Establishment and Use of Certain Accounts.

 

(i)            Deposit Accounts.  On or prior to the date hereof, the Servicer
agrees to transfer ownership and control of each Deposit Account to the Seller. 
Seller has granted a valid security interest in each Deposit Account to the
Agent (for the benefit of the Secured Parties) pursuant to Section 1.2(d) and
shall take all actions reasonably requested by the Agent to cause the security
interest to be perfected under the applicable UCC.

 

(ii)           Cash Reserve Account.  The Agent has established and will
maintain in existence the Cash Reserve Account.  The Cash Reserve Account shall
be used to hold the Cash Reserve and for such other purposes described in the
Transaction Documents.

 

(iii)          Liquidation Account.  The Agent has established and will maintain
in existence the Liquidation Account.  The Liquidation Account shall be used to
receive Collections from the Deposit Accounts pursuant to Section 1.4(b) and to
hold amounts set aside for the Purchasers, the Backup Servicer and (if the
Servicer is not AFC or an Affiliate of AFC) the Servicer out of the Collections
of Pool Receivables prior to the applicable Settlement Dates and for such other
purposes described in the Transaction Documents.  No funds other than those
transferred in accordance with Section 1.4 shall be intentionally transferred
into the Liquidation Account.

 

(iv)          Permitted Investments.  Any amounts in the Liquidation Account or
the Cash Reserve Account, as the case may be, may be invested by the Liquidation
Account Bank or the Cash Reserve Account Bank, respectively, prior to the
occurrence of a Termination Event at the Agent’s direction and following the
occurrence of a Termination Event at the Agent’s direction, in Permitted
Investments, so long as the Agent’s interest (for the benefit of the Secured
Parties) in such Permitted Investments is perfected in a manner satisfactory to
the Agent and such Permitted Investments are subject to no Adverse Claims other
than those of the Agent provided hereunder.

 

(v)           Control of Accounts.  The Agent may (with written notice to the
Purchaser Agents) and shall (at the direction of the Majority Purchasers)
following any Termination Event (or an Unmatured Termination Event of the type
described in paragraph (g) of Exhibit V) at any time give notice to any Deposit
Account Bank that the Agent is exercising its rights under the applicable
Deposit Account Agreement to do any or all of the following:  (i) to have the
exclusive ownership and control of such Deposit Account transferred to the Agent
(or such other party designated by the Majority Purchasers) and to exercise
exclusive dominion and control over the funds deposited therein and (ii) to take
any or all other actions permitted under the applicable Deposit Account
Agreement.  The Seller hereby agrees that if the Agent (or such

 

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other party designated by the Majority Purchasers) at any time takes any action
set forth in the preceding sentence, the Agent (or such other party designated
by the Majority Purchasers) shall have exclusive control of the proceeds
(including Collections) of all Pool Receivables and the Seller hereby further
agrees to take any other action that the Majority Purchasers may reasonably
request to transfer such control.  Any proceeds of Pool Receivables received by
the Seller, the Servicer or AFC (as Servicer or otherwise), thereafter shall be
sent immediately to an account designated by the Majority Purchasers and held by
the Agent (or such other party designated by the Majority Purchasers) for the
benefit of the Secured Parties.

 

(vi)          Location of Liquidation Account and Cash Reserve Account.  If at
anytime Harris Trust and Savings Bank is rated below A-1 by S&P or P-1 by
Moody’s, the Agent shall promptly establish a new Liquidation Account and a new
Cash Reserve Account at a financial institution which is rated at least A-1+ by
S&P (or if the financial institution is the Bank of Montreal A-1 by S&P) and P-1
by Moody’s and transfer all amounts on deposit in such accounts at Harris Trust
and Savings Bank to such new accounts at such financial institution, until such
time as Harris Trust and Savings Bank is rated at least A-1 by S&P and P-1 by
Moody’s.

 

Section 4.4.  Enforcement Rights.  (a)  At any time following the occurrence of
a Termination Event:

 

(i)            the Majority Purchasers may (with the consent of the Agent)
direct the Obligors that payment of all amounts payable under any Pool
Receivable be made directly to the Backup Servicer or such other party
designated by the Majority Purchasers, in each case, for the benefit of the
Secured Parties;

 

(ii)           the Majority Purchasers may with the consent of the Agent
instruct the Seller or the Servicer to give notice of the Agent’s interest (for
the benefit of the Secured Parties) in Pool Receivables to each Obligor, which
notice shall direct that payments be made directly to the Backup Servicer or
such other party designated by the Majority Purchasers (for the benefit of the
Secured Parties), and upon such instruction from the Majority Purchasers, the
Seller or the Servicer, as applicable, shall give such notice at the expense of
the Seller; provided, that if the Seller or the Servicer fails to so notify each
Obligor, the Agent or its designee may so notify the Obligors; and

 

(iii)          the Majority Purchasers may with the consent of the Agent request
the Seller or the Servicer to, and upon such request the Seller or the Servicer,
as applicable, shall, (A) assemble all of the records necessary or desirable to
collect the Pool Receivables and the Related Security and all Pool Receivable
Documents, and transfer or license to any new Servicer the use of all software
necessary or desirable to collect the Pool Receivables and the Related Security,
and make the same available to the Backup Servicer or other third-party
custodian specified by, and at a place selected by, the Agent and (B) segregate
all cash, checks and other instruments received by it from time to time
constituting Collections with respect to the Pool Receivables in a manner
acceptable to the Agent and, promptly upon receipt, remit all such cash, checks
and instruments, duly endorsed or with duly executed instruments of transfer, to
the Agent or the Backup Servicer (or such other party designated by the Majority
Purchasers) (for the benefit of the Secured Parties).

 

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(b)           The Seller hereby authorizes the Agent (for the benefit of the
Secured Parties), and irrevocably appoints the Agent (acting on behalf of the
Secured Parties) as its attorney-in-fact with full power of substitution and
with full authority in the place and stead of the Seller, which appointment is
coupled with an interest, to take any and all steps in the name of the Seller
and on behalf of the Seller necessary or desirable, in the determination of the
Agent, to collect any and all amounts or portions thereof due under any and all
Pool Receivables or Related Security, including, without limitation, endorsing
the name of the Seller on checks and other instruments representing Collections
and enforcing such Pool Receivables, Related Security and the related
Contracts.  The Agent shall only exercise the powers conferred by this
subsection (b) after the occurrence of a Termination Event.  Notwithstanding
anything to the contrary contained in this subsection (b), none of the powers
conferred upon such attorney-in-fact pursuant to the immediately preceding
sentence shall subject such attorney-in-fact to any liability if any action
taken by it shall prove to be inadequate or invalid, nor shall they confer any
obligations upon such attorney-in-fact in any manner whatsoever.

 

Section 4.5.  Responsibilities of the Seller.  Anything herein to the contrary
notwithstanding, the Seller shall (i) perform all of its obligations, if any,
under the Contracts related to the Pool Receivables to the same extent as if
interests in such Pool Receivables had not been transferred hereunder, and the
exercise by any Secured Party of its rights hereunder shall not relieve the
Seller from such obligations and (ii) pay when due any taxes, including, without
limitation, any sales taxes payable in connection with the Pool Receivables and
their creation and satisfaction.  The Agent, the Purchaser Agents, the
Purchasers, the Backup Servicer and any successor Servicer shall not have any
obligation or liability with respect to any Pool Receivable, any Related
Security or any related Contract, nor shall any of them be obligated to perform
any of the obligations of the Seller or AFC under any of the foregoing.

 

Section 4.6.  Servicing Fee.  The Servicer shall be paid a monthly fee in
arrears, through distributions contemplated by Section 1.4, equal to (a) at any
time AFC or an Affiliate of AFC is the Servicer, [*], (b) at any time the Backup
Servicer is the Servicer, the fee set forth in the Backup Servicing Agreement or
Backup Servicing Fee Letter, and (c) at any time a Person other than AFC, an
Affiliate of AFC or the Backup Servicer is the Servicer, the Successor Servicer
Fee or such other amount as the Agent and such successor Servicer shall agree. 
The Servicing Fee shall not be payable to the extent funds are not available to
pay the Servicing Fee pursuant to Section 1.4.

 

Section 4.7.  Specified Ineligible Receivables.  To the extent the Originator
has from time to time identified a Receivable as a “Specified Ineligible
Receivable” in accordance with Section 5.20 of the Purchase and Sale Agreement,
(i) such Receivable shall not be included as an Eligible Receivable by the
Seller or the Servicer hereunder, (ii) such Receivable shall not be included in
any calculations of the Delinquency Ratio or the Default Ratio or other
Receivable Pool information (other than a statement of the aggregate outstanding
amount of such Specified Ineligible Receivables) hereunder and (iii) shall not
be considered a Receivable for purposes of clause (o) of Exhibit V hereof.

 

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ARTICLE V.

 

THE AGENTS

 

Section 5.1.  Appointment and Authorization.  Each Purchaser and Purchaser Agent
(including each Purchaser and Purchaser Agent that may from time to time become
a party hereto) hereby irrevocably designates and appoints BMO Capital Markets
Corp. as the “Agent” hereunder and authorizes the Agent to take such actions and
to exercise such powers as are delegated to the Agent hereby and to exercise
such other powers as are reasonably incidental thereto.  The Agent shall hold,
in its name, for the benefit of the Secured Parties, amounts on deposit in the
Liquidation Account and the Cash Reserve Account.  The Agent shall not have any
duties other than those expressly set forth herein or any fiduciary relationship
with any Indemnified Party, and no implied obligations or liabilities shall be
read into this Agreement or any other Transaction Document or otherwise exist
against the Agent.  The Agent does not assume, nor shall it be deemed to have
assumed, any obligation to, or relationship of trust or agency with, the Seller
or Servicer.  Notwithstanding any provision of this Agreement or any other
Transaction Document to the contrary, in no event shall the Agent ever be
required to take any action which exposes the Agent to personal liability
(unless indemnified in advance in a manner determined satisfactory to the Agent
in its sole and absolute discretion) or which is contrary to the provision of
any Transaction Document or applicable law.

 

(a)           Each Purchaser hereby irrevocably designates and appoints the
respective institution identified as the Purchaser Agent for such Purchaser on
the signature pages hereto or in any agreement pursuant to which such Purchaser
becomes a party hereto, and each authorizes such Purchaser Agent to take such
action on its behalf under the provisions of this Agreement and to exercise such
powers and perform such duties as are expressly delegated to such Purchaser
Agent by the terms of this Agreement, if any, together with such other powers as
are reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement, no Purchaser Agent shall have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Purchaser or other Purchaser Agent or the Agent, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities on the part of such Purchaser Agent shall be read into this
Agreement or otherwise exist against such Purchaser Agent.

 

(b)           Except as otherwise specifically provided in this Agreement, the
provisions of this Article V are solely for the benefit of the Purchaser Agents,
the Agent and the Purchasers, and none of the Seller or Servicer shall have any
rights as a third-party beneficiary or otherwise under any of the provisions of
this Article V, except that this Article V shall not affect any obligations
which any Purchaser Agent, the Agent or any Purchaser may have to the Seller or
the Servicer under the other provisions of this Agreement. Furthermore, no
Purchaser shall have any rights as a third-party beneficiary or otherwise under
any of the provisions hereof in respect of a Purchaser Agent which is not the
Purchaser Agent for such Purchaser.

 

(c)           In performing its functions and duties hereunder, the Agent shall
act solely as the agent of the Secured Parties, and the Agent does not assume
nor shall be deemed to have assumed any obligation or relationship of trust or
agency with or for the Seller or Servicer or any of their successors and
assigns. In performing its functions and duties hereunder, each Purchaser

 

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Agent shall act solely as the agent of its respective Purchasers and does not
assume nor shall be deemed to have assumed any obligation or relationship of
trust or agency with or for the Seller, the Servicer, any other Purchaser, any
other Purchaser Agent or the Agent, or any of their respective successors and
assigns.

 

Section 5.2.  Delegation of Duties.  The Agent may, with the prior written
consent of the Majority Purchasers, execute any of its duties through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties.  The Agent shall not be responsible to the
Purchaser Agents or any Purchaser for the negligence or misconduct of any agents
or attorneys-in-fact selected by it with reasonable care.

 

Section 5.3.  Exculpatory Provisions.  None of the Purchaser Agents, the Agent
or any of their directors, officers, agents or employees shall be liable for any
action taken or omitted (i) with the consent or at the direction of the Majority
Purchasers (or in the case of any Purchaser Agent, the Purchaser relating to
such Purchaser Agent) or (ii) in the absence of such Person’s gross negligence
or willful misconduct.  The Agent shall not be responsible to any Purchaser or
Purchaser Agent for (i) any recitals, representations, warranties or other
statements made by the Seller, Servicer, the Originator or any of their
Affiliates, (ii) the value, validity, effectiveness, genuineness, enforceability
or sufficiency of any Transaction Document, (iii) any failure of the Seller, the
Servicer, the Originator or any of their Affiliates to perform any obligation it
may have under any Transaction Document to which it is a party or (iv) the
satisfaction of any condition specified in Exhibit II.  The Agent shall not have
any obligation to any Purchaser or any Purchaser Agent to ascertain or inquire
about the observance or performance of any agreement contained in any
Transaction Document or to inspect the properties, books or records of the
Seller, Servicer, the Originator or any of their Affiliates.

 

Section 5.4.  Reliance by Agents.  Each Purchaser Agent and the Agent shall in
all cases be entitled to rely, and shall be fully protected in relying, upon any
document or other writing or conversation believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person and upon
advice and statements of legal counsel (including counsel to the Seller or
Servicer), independent accountants and other experts selected by the Agent or
any such Purchaser Agent.  Each Purchaser Agent and the Agent shall in all cases
be fully justified in failing or refusing to take any action under any
Transaction Document unless it shall first receive such advice or concurrence of
the Majority Purchasers (or in the case of any Purchaser Agent, the Purchaser
relating to such Purchaser Agent) and it shall first be indemnified to its
satisfaction against any and all liability and expense which may be incurred by
reason of taking or continuing to take any such action.

 

(a)           With regard to the Purchasers and the Purchaser Agents, the Agent
shall in all cases be fully protected in acting, or in refraining from acting,
under this Agreement in accordance with a request of the Majority Purchasers,
the Purchasers and the Purchaser Agents, and such request and any action taken
or failure to act pursuant thereto shall be binding upon all Purchasers and
Purchaser Agents.

 

(b)           Purchasers that have a common Purchaser Agent and that have a
majority of the Investment of all such related Purchasers shall be entitled to
request or direct the related Purchaser Agent to take action, or refrain from
taking action, under this Agreement on behalf of

 

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such Purchasers. With regard to the Purchasers and the Purchaser Agents, such
Purchaser Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement in accordance with a request of
such Majority Purchasers, and such request and any action taken or failure to
act pursuant thereto shall be binding upon all of such Purchaser Agent’s related
Purchasers.

 

(c)           Unless otherwise advised in writing by a Purchaser Agent or by any
Purchaser on whose behalf such Purchaser Agent is purportedly acting, each party
to this Agreement may assume that (i) such Purchaser Agent is acting for the
benefit of each of the Purchasers for which such Purchaser Agent is identified
herein (or in any Joinder Agreement or assignment agreement) as being the
Purchaser Agent, as well as for the benefit of each assignee or other transferee
from any such Person, and (ii) each action taken by such Purchaser Agent has
been duly authorized and approved by all necessary action on the part of the
Purchasers on whose behalf it is purportedly acting. Each Purchaser Agent and
its Purchaser(s) shall agree amongst themselves as to the circumstances and
procedures for removal, resignation and replacement of such Purchaser Agent.

 

Section 5.5.  Notice of Termination Date.  Neither any Purchaser Agent nor the
Agent shall be deemed to have knowledge or notice of the occurrence of any
Termination Event or Unmatured Termination Event unless such Person has received
notice from any Purchaser, Purchaser Agent, the Servicer or the Seller stating
that a Termination Event or Unmatured Termination Event has occurred hereunder
and describing such Termination Event or Unmatured Termination Event.  If the
Agent receives such a notice, it shall promptly give notice thereof to each
Purchaser Agent whereupon each such Purchaser Agent shall promptly give notice
thereof to its Purchasers.  If a Purchaser Agent receives such a notice (other
than from the Agent), it shall promptly give notice thereof to the Agent.  The
Agent shall take such action concerning a Termination Event or Unmatured
Termination Event as may be directed by the Majority Purchasers (unless such
action is otherwise specified herein as requiring the consent of all
Purchasers), but until the Agent receives such directions, the Agent may (but
shall not be obligated to) take such action, or refrain from taking such action,
as the Agent deems advisable and in the best interests of the Secured Parties.

 

Section 5.6.  Non-Reliance on Agent, Purchaser Agents and Other Purchasers. 
Each Purchaser expressly acknowledges that none of the Agent, the Purchaser
Agents nor any of their respective officers, directors, employees, agents,
attorneys-in-fact or Affiliates has made any representations or warranties to it
and that no act by the Agent or any Purchaser Agent hereafter taken, including
any review of the affairs of the Seller, Servicer or the Originator, shall be
deemed to constitute any representation or warranty by the Agent or such
Purchaser Agent, as applicable.  Each Purchaser represents and warrants to the
Agent and the Purchaser Agents that, independently and without reliance upon the
Agent, Purchaser Agents or any other Purchaser and based on such documents and
information as it has deemed appropriate, it has made and will continue to make
its own appraisal of and investigation into the business, operations, property,
prospects, financial and other conditions and creditworthiness of the Seller,
Servicer and the Originator, and the Receivables and its own decision to enter
into this Agreement and to take, or omit, action under any Transaction
Document.  Except for items specifically required to be delivered hereunder, the
Agent shall not have any duty or responsibility to provide any Purchaser Agent
with any information concerning the Seller, Servicer or the Originator or any of
their

 

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Affiliates or the Receivables that comes into the possession of the Agent or any
of its officers, directors, employees, agents, attorneys-in-fact or Affiliates.

 

Section 5.7.  Agent, Purchaser Agents and Purchasers.  Each of the Purchasers,
the Agent, the Purchaser Agents and their Affiliates may extend credit to,
accept deposits from and generally engage in any kind of banking, trust, debt or
other business with the Seller, ADESA, Servicer or the Originator or any of
their Affiliates. With respect to the acquisition of the Eligible Receivables
pursuant to this Agreement, any of the Purchaser Agents and the Agent shall, to
the extent they become Purchasers hereunder, have the same rights and powers
under this Agreement as any Purchaser and may exercise the same as though it
were not such an agent, and the terms “Purchaser” and “Purchasers” shall, in
such case, include such Purchaser Agent or the Agent in their individual
capacities.

 

Section 5.8.  Indemnification.  Each Purchaser shall indemnify and hold harmless
the Agent (but solely in its capacity as Agent) and its officers, directors,
employees, representatives and agents (to the extent not reimbursed by the
Seller or Servicer and without limiting the obligation of the Seller or Servicer
to do so), ratably in accordance with their respective Investment from and
against any and all liabilities, obligations, losses, damages, penalties,
judgments, settlements, costs, expenses and disbursements of any kind whatsoever
(including in connection with any investigative or threatened proceeding,
whether or not the Agent or such Person shall be designated a party thereto)
that may at any time be imposed on, incurred by or asserted against the Agent or
such Person as a result of, or related to, any of the transactions contemplated
by the Transaction Documents or the execution, delivery or performance of the
Transaction Documents or any other document furnished in connection therewith
(but excluding any such liabilities, obligations, losses, damages, penalties,
judgments, settlements, costs, expenses or disbursements resulting solely from
the gross negligence or willful misconduct of the Agent or such Person as
finally determined by a court of competent jurisdiction).  The obligations of
any Note Issuer under this Section 5.8 shall be subject to the restrictions of
Section 6.5.

 

Section 5.9.  Successor Agent.  The Agent may, upon at least thirty (30) days
notice to the Seller, the Servicer, the Backup Servicer, each Purchaser and
Purchaser Agent, resign as Agent.  Such resignation shall not become effective
until a successor Agent is appointed by the Majority Purchasers and has accepted
such appointment.  Upon such acceptance of its appointment as Agent hereunder by
a successor Agent, such successor Agent shall succeed to and become vested with
all the rights and duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations under the Transaction Documents. 
After any retiring Agent’s resignation hereunder, the provisions of
Sections 3.1, 3.2, 3.3 and this Article V shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was the Agent.

 

ARTICLE VI.

 

MISCELLANEOUS

 

Section 6.1.  Amendments, Etc.  No amendment or waiver of any provision of this
Agreement or consent to any departure by the Seller or Servicer therefrom shall
be effective

 

26

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unless in a writing signed by the Majority Purchasers and, in the case of any
amendment, by the Seller and the Servicer and then such amendment, waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that (i) other than an amendment to
extend the scheduled Termination Date, no amendment shall be effective unless
each Note Issuer that is a Purchaser (or the applicable Purchaser Agent on its
behalf) shall have received written confirmation by the Rating Agencies that
such amendment shall not cause the rating on the then outstanding Notes of such
Note Issuer to be downgraded or withdrawn; (ii) no amendment shall be effective
which would reduce the amount of Investment or Discount, or fees or other
amounts payable to any Purchaser hereunder, or delay any scheduled date for
payment thereof (including any scheduled occurrence of the Termination Date)
absent the prior written consent of such Purchaser; (iii) no increase in a
Purchaser’s Maximum Commitment shall be effective without the prior written
consent of such Purchaser; (iv) no amendments to this Section 6.1 or to the
definition of Majority Purchasers shall be effective without the prior written
consent of all Purchasers and (v) no amendments to Sections 1.1, 1.2, 1.3, 1.4,
1.5, 1.6, 1.8, 1.10, 1.11, 1.12, 3.1, 3.2, Article V, 6.2, 6.3, 6.4, 6.5, 6.6,
6.7, 6.9, 6.10, 6.11 or 6.13 or the definitions of Applicable Margin, Bank Rate,
Base Rate, Carry Costs, CP Rate, Discount, Eurodollar Rate, Federal Funds
Rate, Investment, Investment Share, Level One Trigger, LIBOR Participation, Loss
Percentage, Loss Reserve, Loss Reserve Ratio, Net Receivables Pool Balance,
Normal Concentration Percentage, Program Fee, Special Obligor, Termination Date,
Termination Fee, Yield Period, or any definitions incorporated in such
definitions, shall be effective in each case without the consent of the Majority
Purchasers and the Agent; and provided, further, that no such amendment shall in
any way amend any provisions of this Agreement applicable to the rights or
obligations of the Agent or any Purchaser Agent without the prior written
consent of the Agent or such Purchaser Agent, as applicable.  No failure on the
part of the Agent, any Purchaser, or any Purchaser Agent to exercise, and no
delay in exercising, any right hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any right hereunder preclude any other
or further exercise thereof or the exercise of any other right.

 

Section 6.2.  Notices, Etc.  All notices and other communications hereunder
shall, unless otherwise stated herein, be in writing (which shall include
facsimile and electronic mail communication) and sent or delivered, to each
party hereto, at its address set forth under its name on the signature
pages hereof or, in the case of the Backup Servicer, at its notice address
designated in the Backup Servicing Agreement or, in any case, at such other
address as shall be designated by such party in a written notice to the other
parties hereto.  Notices and communications by facsimile or electronic mail
shall be effective when sent (and shall, unless such delivery is waived by the
recipient by electronic mail or other means, be followed by hard copy sent by
first class mail), and notices and communications sent by other means shall be
effective when received.

 

Section 6.3.  Assignability.  (a)  This Agreement and any Purchaser’s rights and
obligations herein (including ownership of its Participation) shall be
assignable, in whole or in part, by such Purchaser and its successors and
assigns with the prior written consent of the Seller and the Agent; provided,
however, that such consent shall not be unreasonably withheld; and provided,
further, that no such consent shall be required if the assignment is made to
(i) any Affiliate of such Purchaser, (ii) any Liquidity Bank (or any Person who
upon such assignment would be a Liquidity Bank) of such Purchaser or (iii) any
Program Support Provider (or any Person who upon such assignment would be a
Program Support Provider) of such Purchaser.

 

27

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Each assignor may, in connection with the assignment, disclose to the applicable
assignee any information relating to the Seller or the Pool Receivables
furnished to such assignor by or on behalf of the Seller, the Agent, the
Purchasers or the Purchaser Agents.

 

Upon the assignment by a Purchaser in accordance with this Section 6.3, the
assignee receiving such assignment shall have all of the rights of such
Purchaser with respect to the Transaction Documents and the Investment (or such
portion thereof as has been assigned).

 

(b)           Each Purchaser may at any time grant to one or more banks or other
institutions (each a “Liquidity Bank”) party to a Liquidity Agreement or to any
other Program Support Provider participating interests or security interests in
its Participation.  In the event of any such grant by a Purchaser of a
participating interest to a Liquidity Bank or other Program Support Provider,
the Purchaser shall remain responsible for the performance of its obligations
hereunder.  The Seller agrees that each Liquidity Bank or other Program Support
Provider shall be entitled to the benefits of Sections 1.8 and 1.10.

 

(c)           This Agreement and the rights and obligations of any Purchaser
Agent hereunder shall be assignable, in whole or in part, by such Purchaser
Agent and its successors and assigns; provided, however, that if such assignment
is to any Person that is not an Affiliate of the assigning Purchaser Agent, such
Purchaser Agent must receive the prior written consent (which consent in each
case shall not be unreasonably withheld) of the Agent and the Seller.

 

(d)           Except as provided in Section 4.1(d), neither the Seller nor the
Servicer may assign its rights or delegate its obligations hereunder or any
interest herein without the prior written consent of the Majority Purchasers.

 

(e)           Without limiting any other rights that may be available under
applicable law, the rights of any Purchaser may be enforced by it directly or by
its Purchaser Agent or its other agents.

 

(f)            [*].

 

Section 6.4.  Costs, Expenses and Taxes.  (a)  In addition to the rights of
indemnification granted under Section 3.1 hereof, the Seller agrees to pay on
demand all reasonable costs and expenses in connection with the preparation,
execution, delivery and administration (including periodic auditing of Pool
Receivables) of this Agreement, any Liquidity Agreement, the other Transaction
Documents and the other documents and agreements to be delivered hereunder or in
connection herewith, including all reasonable costs and expenses relating to the
amending, amending and restating, modifying or supplementing any such documents
or agreements and the waiving of any provisions thereof, and including in all
cases, without limitation, Rating Agency fees (including in connection with the
execution hereof and any amendments hereto) and Attorney Costs for the Agent,
each Purchaser, each Program Support Provider, each Purchaser Agent, the Backup
Servicer, any successor Servicer and their respective Affiliates and agents with
respect thereto and with respect to advising the Agent, the Purchaser, each
Program Support Provider and their respective Affiliates and agents as to their
rights and remedies under this Agreement and the other Transaction Documents,
and all reasonable costs and expenses, if any (including Attorney Costs), of
each Purchaser Agent, each Purchaser, each Program Support

 

28

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Provider, the Agent, the Backup Servicer, any successor Servicer and their
respective Affiliates and agents in connection with the enforcement of this
Agreement and the other Transaction Documents.

 

(b)           In addition, the Seller shall pay on demand any and all stamp and
other taxes and fees payable in connection with the execution, delivery, filing
and recording of this Agreement or the other documents or agreements to be
delivered hereunder, and agrees to save each Indemnified Party harmless from and
against any liabilities with respect to or resulting from any delay in paying or
omission to pay such taxes and fees.

 

Section 6.5.  No Proceedings; Limitation on Payments.  (a)  Each of the Seller,
the Servicer, the Agent, the Purchaser Agents, the Purchasers, the Backup
Servicer, each assignee of a Participation or any interest therein, and each
Person which enters into a commitment to purchase or does purchase a
Participation or interests therein hereby covenants and agrees that it will not
institute against, or join any other Person in instituting against, any Note
Issuer or Related CP Issuer any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceeding, or other proceeding under any federal or
state bankruptcy or similar law, for one year and one day after the latest
maturing Note issued by any such Note Issuer or Related CP Issuer is paid in
full.

 

(b)           Notwithstanding any provisions contained in this Agreement to the
contrary, no Note Issuer shall, nor shall it be obligated to, pay any amount
pursuant to this Agreement unless such Note Issuer has excess cash flow from
operations or has received funds with respect to such obligation which may be
used to make such payment and which funds or excess cash flow are not required
to repay its Notes when due.  Any amounts which a Note Issuer does not pay
pursuant to the operation of the preceding sentence shall not constitute a claim
against such Note Issuer for any such insufficiency unless and until the
condition described in the preceding sentence is satisfied.  Nothing in this
subsection (b) shall be construed to forgive or cancel any obligations of such
Note Issuer hereunder.

 

(c)           Each of the Servicer, the Agent, the Purchaser Agents, the
Purchasers, the Backup Servicer, each assignee of a Participation or any
interest therein, and each Person which enters into a commitment to purchase or
does purchase a Participation or interests therein hereby covenants and agrees
that it will not institute against, or join any other Person in instituting
against, the Seller any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceeding, or other proceeding under any federal or state
bankruptcy or similar law, for one year and one day after all amounts payable by
the Seller hereunder are paid in full.

 

(d)           Notwithstanding any provisions contained in this Agreement to the
contrary, the Seller shall not be obligated to pay any amount pursuant to this
Agreement unless the Seller has property or other assets which may be used to
make such payment.  Any amounts which the Seller does not pay pursuant to the
operation of the preceding sentence shall not constitute a claim against the
Seller for any such insufficiency unless and until the conditions described in
the preceding sentence are satisfied.  Nothing in this subsection (d) shall be
construed to forgive or cancel any obligations of the Seller hereunder.

 

29

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Section 6.6.  Confidentiality.  Unless otherwise required by applicable law or
already known by the general public or the third party to which it is disclosed,
the Seller agrees to maintain the confidentiality of this Agreement and the
other Transaction Documents (and all drafts thereof) in communications with
third parties and otherwise; provided that this Agreement may be disclosed to
(a) third parties to the extent such disclosure is made pursuant to a written
agreement of confidentiality in form and substance reasonably satisfactory to
the Agent and (b) the Seller’s legal counsel and auditors if they agree to hold
it confidential.

 

Section 6.7.  GOVERNING LAW AND JURISDICTION.  (a)  THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF
INDIANA (WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF),
AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES UNDER THIS AGREEMENT
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS, EXCEPT TO THE EXTENT THAT THE
PERFECTION (OR THE EFFECT OF PERFECTION OR NON-PERFECTION) OF THE INTERESTS OF
THE PURCHASERS IN THE POOL RECEIVABLES AND THE OTHER ITEMS DESCRIBED IN
SECTION 1.2(d) IS GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF
INDIANA.

 

(b)           ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT
MAY BE BROUGHT IN THE COURTS OF THE STATE OF ILLINOIS COOK COUNTY AND CHICAGO OR
NEW YORK NEW YORK COUNTY, NEW YORK CITY OR OF THE UNITED STATES FOR THE NORTHERN
DISTRICT OF ILLINOIS OR THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND
DELIVERY OF THIS AGREEMENT, EACH OF THE PURCHASERS, THE SELLER, THE SERVICER,
THE PURCHASER AGENTS AND THE AGENT CONSENTS, FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS.  EACH OF THE
PURCHASERS, THE SELLER, THE SERVICER, THE PURCHASER AGENTS AND THE AGENT
IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT PERMITTED BY LAW, ANY
OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS
AGREEMENT OR ANY DOCUMENT RELATED HERETO.

 

Section 6.8.  Execution in Counterparts.  This Agreement may be executed in any
number of counterparts, each of which when so executed shall be deemed to be an
original and all of which when taken together shall constitute one and the same
agreement.

 

Section 6.9.  Survival of Termination.  The provisions of Sections 1.8, 1.10,
3.1, 3.2, 6.4, 6.5, 6.6, 6.7, 6.10 and 6.13 shall survive any termination of
this Agreement.

 

Section 6.10.  WAIVER OF JURY TRIAL.  THE PURCHASERS, THE SELLER, THE SERVICER,
THE PURCHASER AGENTS, THE AGENT AND THE BACKUP SERVICER (BY ACCEPTING THE
BENEFIT HEREOF) EACH WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS
AGREEMENT OR THE TRANSACTIONS

 

30

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CONTEMPLATED HEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE
BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR PARTIES, WHETHER WITH
RESPECT TO CONTRACT CLAIMS, TORT CLAIMS OR OTHERWISE.  THE PURCHASERS, THE
SELLER, THE SERVICER, THE PURCHASER AGENTS, THE AGENT AND THE BACKUP SERVICER
EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT
TRIAL WITHOUT A JURY.  WITHOUT LIMITING THE FOREGOING, EACH OF THE PARTIES
HERETO FURTHER AGREES THAT ITS RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY
OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING
WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF
THIS AGREEMENT OR ANY PROVISION HEREOF.  THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.

 

Section 6.11.  Entire Agreement.  This Agreement (together with the other
Transaction Documents) embodies the entire agreement and understanding between
the Purchasers, the Seller, the Servicer, the Purchaser Agents and the Agent,
and supersedes all prior or contemporaneous agreements and understandings of
such Persons, verbal or written, relating to the subject matter hereof and
thereof.

 

Section 6.12.  Headings.  The captions and headings of this Agreement and in any
Exhibit hereto are for convenience of reference only and shall not affect the
interpretation hereof or thereof.

 

Section 6.13.  Liabilities of the Purchasers.  The obligations of each Purchaser
under this Agreement are solely the corporate obligations of such Purchaser.  No
recourse shall be had for any obligation or claim arising out of or based upon
this Agreement against any stockholder, employee, officer, director or
incorporator of any Purchaser; and provided, however, that this Section 6.13
shall not relieve any such Person of any liability it might otherwise have for
its own gross negligence or willful misconduct.  The agreements provided in this
Section 6.13 shall survive termination of this Agreement.

 

Section 6.14.  Tax Treatment.  The Participations shall be treated and reported
as indebtedness of the Seller for all income and franchise tax purposes.  The
Seller, the Servicer, the Agent and Fairway and each Purchaser, by its agreement
to make a purchase (and to make reinvestments, if applicable) with regard to its
Participation, agrees, and shall cause its assignees to agree, to treat and
report the Participations as indebtedness of the Seller for all income and
franchise tax purposes.

 

31

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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their respective officers thereunto duly authorized, as of the date first above
written.

 

 

AFC FUNDING CORPORATION,

 

as Seller

 

 

 

 

 

By:

/S/ CAMERON HITCHCOCK

 

Name: Cameron Hitchcock

 

Title: President

 

 

 

 

 

13085 Hamilton Crossing Blvd., Suite 310

 

Carmel, Indiana 46032

 

Attention: Jim Money

 

Telephone:  317-843-4756

 

Facsimile:  317-815-8687

 

E-mail: jmoney@autofinance.com

 

 

 

 

 

AUTOMOTIVE FINANCE CORPORATION,

 

as Servicer

 

 

 

 

 

By:

/S/ JAMES E. MONEY, II

 

Name: James E. Money, II

 

Title: Vice President of Finance & Treasurer

 

 

 

 

 

13085 Hamilton Crossing Blvd., Suite 300

 

Carmel, Indiana 46032

 

Attention: Jim Money

 

Telephone:  317-843-4756

 

Facsimile:  317-815-8687

 

E-mail: jmoney@autofinance.com

 

S-1

--------------------------------------------------------------------------------

 

 

 

 

 

BMO CAPITAL MARKETS CORP.,

 

as Agent and as Purchaser Agent for Fairway

 

 

 

 

 

By:

/S/ JOHN PAPPANO

 

Name: John Pappano

 

Title: Managing Director

 

 

 

BMO CAPITAL MARKETS CORP.

 

115 S. LaSalle, 13th Floor West

 

Chicago, Illinois 60603

 

Attention: Conduit Administration

 

E-mail: fundingdesk@bmo.com

 

Telephone:  (312) 461-5640

 

Facsimile:  (312) 293-4908

 

 

 

 

FAIRWAY FINANCE COMPANY, LLC,

 

as a Purchaser

 

 

 

 

 

By:

/S/ PHILIP A. MARTONE

 

Name: Philip A. Martone

 

Title: Vice President

 

 

 

 

 

c/o Lord Securities Corp.

 

48 Wall Street, 27th Floor

 

New York, New York 10005

 

Attention: Phillip Martone

 

Email: pmartone@lordspv.com

 

Telephone:  (212) 346-9008

 

Facsimile:  (212) 346-9012

 

 

 

 

 

Maximum Commitment:

 

$[*]

 

S-2

--------------------------------------------------------------------------------

 

 

 

 

 

DEUTSCHE BANK AG, NEW YORK BRANCH,

 

as Purchaser Agent for Monterey

 

 

 

 

 

By:

/S/ DANIEL PIETRZAK

 

Name: Daniel Pietrzak

 

Title: Director

 

 

 

 

 

By:

/S/ DANIEL GERBER

 

Name: Daniel Gerber

 

Title: Vice President

 

 

 

 

 

DEUTSCHE BANK AG, NEW YORK BRANCH

 

60 Wall Street, 18th Floor

 

New York, New York 10005

 

E-mail: abs-conduits@list.db.com

 

Telephone:  (212) 250-0357

 

Facsimile:  (212) 797-5150

 

 

 

 

 

MONTEREY FUNDING LLC,

 

as a Purchaser

 

 

 

 

 

By:

/S/ LORI GEBRON

 

Name: Lori Gebron

 

Title: Vice President

 

 

 

 

 

c/o Lord Securities Corp.

 

48 Wall Street, 27th Floor

 

New York, New York 10005

 

 

 

 

 

Maximum Commitment:

 

$[*]

 

S-3

--------------------------------------------------------------------------------

 

STATE OF INDIANA

)

 

 

)

SS

COUNTY OF HAMILTON

)

 

 

Before me the undersigned, a Notary Public in and for the said County and State,
personally appeared Cameron Hitchcock, an officer of AFC FUNDING CORPORATION,
personally known to me who acknowledged the execution of the foregoing this 19th
day of April, 2007.

 

/S/ FRANCESCA C. YORK

 

My Commission Expires: 12/5/08

Signature

 

 

 

 

 

Francesca C. York

 

My County of Residence: Hamilton

Printed Name

 

 

 

 

STATE OF INDIANA

)

 

 

)

SS

COUNTY OF HAMILTON

)

 

 

Before me the undersigned, a Notary Public in and for the said County and State,
personally appeared James E. Money, II, an officer of AUTOMOTIVE FINANCE
CORPORATION, personally known to me who acknowledged the execution of the
foregoing this 19th day of April, 2007.

 

/S/ FRANCESCA C. YORK

 

My Commission Expires: 12/5/08

Signature

 

 

 

 

 

Francesca C. York

 

My County of Residence: Hamilton

Printed Name

 

 

 

S-4

--------------------------------------------------------------------------------

 

EXHIBIT I

 

DEFINITIONS

 

As used in the Agreement (including its Exhibits), the following terms shall
have the following meanings (such meanings to be equally applicable to both the
singular and plural forms of the terms defined).  Unless otherwise indicated,
all Section, Annex, Exhibit and Schedule references in this Exhibit are to
Sections of and Annexes, Exhibits and Schedules to the Agreement.

 

“ADESA” means ADESA, Inc., a Delaware corporation.

 

“Adverse Claim” means a lien, security interest or other charge or encumbrance,
or any other type of preferential arrangement, it being understood that a lien,
security interest or other charge or encumbrance, or any other type of
preferential arrangement, in favor of the Agent for the benefit of the Secured
Parties contemplated by the Agreement shall not constitute an Adverse Claim.

 

“AFC” has the meaning set forth in the preamble to this Agreement.

 

“Affected Person” has the meaning set forth in Section 1.8.

 

“Affiliate” means, as to any Person, any other Person that, directly or
indirectly, is in control of, is controlled by or is under common control with
such Person or is a director or officer of such Person, except that with respect
to a Purchaser, Affiliate shall mean the holder(s) of its capital stock.

 

“Agent” has the meaning set forth in the preamble to this Agreement.

 

“Aggregate Participation” means, at any time, the sum of the Participations
expressed as a percentage.

 

“Agreement” has the meaning set forth in the preamble to this Agreement.

 

“Applicable Margin” means [*].

 

“Attorney Costs” means and includes all reasonable fees and reasonable
disbursements of any law firm or other external counsel, and all reasonable
disbursements of internal counsel.

 

“Backup Servicer” means the Person appointed to act as backup servicer pursuant
to the Backup Servicing Agreement.

 

“Backup Servicer Payment Date” means each Draw Date.

 

“Backup Servicing Agreement” means (i) the Backup Servicing Agreement, dated as
of August 19, 2004, among the Servicer, Portfolio Financial Servicing Company,
the Agent and the other parties thereto; and (ii) any replacement backup
servicing agreement entered into

 

EX-I-1

--------------------------------------------------------------------------------

 

from time to time with the prior written consent of the Majority Purchasers; in
each case as such agreements may be amended, supplemented or otherwise modified
from time to time in accordance with the terms hereof.

 

“Backup Servicing Fee Cap” has the meaning set forth in the Backup Servicing
Agreement or the Backup Servicing Fee Letter.

 

“Backup Servicing Fee Letter” means the fee letter (if any) approved in writing
by the Majority Purchasers, setting forth the Backup Servicing Fees payable to
the Backup Servicer, as the same may be amended, supplemented or otherwise
modified from time to time with the prior written consent of the Majority
Purchasers.

 

“Backup Servicing Fees” means all fees and reimbursable expenses (excluding
Transition Expenses) payable pursuant to the Backup Servicing Agreement or the
Backup Servicing Fee Letter.

 

“Bank Rate” means, for any Purchaser for any Yield Period for any Portion of
Investment, an interest rate per annum equal to the Applicable Margin above the
Eurodollar Rate for such Purchaser for such Yield Period; provided, that in the
case of

 

(a)           any Yield Period on or after the first day of which the applicable
Purchaser Agent shall have been notified by a Liquidity Bank or the related
Purchaser that the introduction of or any change in or in the interpretation of
any law or regulation makes it unlawful, or any central bank or other
Governmental Authority asserts that it is unlawful, for such Liquidity Bank or
such Purchaser to fund any Portion of Investment based on the Eurodollar Rate
set forth above (and such Liquidity Bank or such Purchaser, as applicable, shall
not have subsequently notified such Purchaser Agent that such circumstances no
longer exist),

 

(b)           any Yield Period of one to (and including) 13 days, or

 

(c)           any Yield Period as to which (i) the applicable Purchaser Agent
does not receive notice, by no later than 12:00 noon (Chicago time) on (w) the
second Business Day preceding the first day of such Yield Period that the Seller
desires that the related Portion of Investment be funded at the CP Rate, or
(x) the third Business Day preceding the first day of such Yield Period that the
Seller desires that the related Portion of Investment be funded at the Bank
Rate, or (ii) the Seller has given the notice contemplated by clause (w) of this
clause (c) and the applicable Purchaser Agent shall have notified the Seller
that funding the related Portion of Investment at the CP Rate is unacceptable to
the applicable Purchaser,

 

the “Bank Rate” for each such Yield Period shall be an interest rate per annum
equal to the Base Rate in effect on each day of such Yield Period. 
Notwithstanding the foregoing, the “Bank Rate” for each day in a Yield Period
occurring during the continuance of a Termination Event shall be an interest
rate equal to 2% per annum above the Base Rate in effect on such day.

 

EX-I-2

--------------------------------------------------------------------------------

 

“Bankruptcy Code” means the United States Bankruptcy Reform Act of 1978
(11U.S.C. § 101, et seq.), as amended and in effect from time to time.

 

“Base Rate” means, for any Purchaser for any day, a fluctuating interest rate
per annum equal to the higher of: (a) the rate of interest most recently
announced by the applicable Reference Bank as its prime commercial rate for
loans made in Dollars in the United States or (b) 0.50% per annum above the
latest Federal Funds Rate. The rate referred to in clause (a) is not necessarily
intended to be the lowest rate of interest determined by the applicable
Reference Bank in connection with extensions of credit.

 

“Business Day” means any day on which (i) (A) the Agent at its branch office in
Chicago, Illinois is open for business and (B) commercial banks in New York City
are not authorized or required to be closed for business, and (ii) if this
definition of “Business Day” is utilized in connection with the Eurodollar Rate,
dealings are carried out in the London interbank market.

 

“Buyer’s Fees”  means the fees paid by an Obligor to the auction in connection
with a purchase of a vehicle by such dealer.

 

“Byrider” means BYRIDER SALES OF INDIANA S, INC. and any subsidiary thereof.

 

“Capped Backup Servicing Fees” means all Backup Servicing Fees accrued in any
calendar month, not to exceed the Backup Servicing Fee Cap.

 

“Carry Costs” means, with respect to any calendar month, the sum of the amounts
of the following items that accrued or were incurred during such calendar month:
(a) all Discount, (b) the Program Fee, (c) the Servicing Fee, (d) the Backup
Servicing Fee and (e) all other expenses and fees of the Seller under the
Agreement.

 

“Cash Reserve” means (i) at any time after the occurrence and during the
continuation of a Level One Trigger, [*] of the aggregate Investment at such
time and (ii) at any other time, an amount equal to 1% of the aggregate
Investment at such time.

 

“Cash Reserve Account” means that certain bank account numbered 181-445-8
maintained at Harris Trust and Savings Bank in the name of “Cash Reserve
Account, BMO Capital Markets Corp. as Agent,” and maintained for the benefit of
the Secured Parties.

 

“Cash Reserve Account Bank” means the bank holding the Cash Reserve Account.

 

“Change in Control” means

 

(a)           AFC shall fail to own, free and clear of all Adverse Claims, 100%
of the outstanding shares of voting stock of the Seller, except as otherwise
provided by the Pledge Agreement; or

 

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(b)           KAR shall fail to own, directly or indirectly, free and clear of
all Adverse Claims (other than the KAR Credit Facility Pledge), at least 80% of
the outstanding shares of voting stock of AFC, on a fully diluted basis.

 

“Collections” means, with respect to any Pool Receivable, (a) all funds which
are received by the Seller, the Originator or the Servicer (including amounts
paid directly to an Originating Lender and subsequently forwarded to the Seller,
the Originator or the Servicer) in payment of any amounts owed in respect of
such Receivable (including, without limitation, principal payments, finance
charges, floorplan fees, curtailment fees, interest and all other charges), or
applied (or to be applied) to amounts owed in respect of such Receivable
(including, without limitation, insurance payments and net proceeds of the sale
or other disposition of vehicles or other collateral or property of the related
Obligor or any other Person directly or indirectly liable for the payment of
such Pool Receivable applied (or to be applied) thereto), (b) all Collections
deemed to have been received pursuant to Section 1.4(f) and (c) all other
proceeds of such Receivable.

 

“Company Note” has the meaning set forth in Section 3.2 of the Purchase and Sale
Agreement.

 

“Contract” means, with respect to any Obligor, collectively, the Dealer Note
issued by such Obligor, or similar agreement between such Obligor and AFC or an
Originating Lender, as applicable, any guaranty issued in connection therewith
and each other agreement or instrument executed by an Obligor pursuant to or in
connection with any of the foregoing, the purpose of which is to evidence,
secure or support such Obligor’s obligations to AFC or each Originating Lender,
as applicable, under such Dealer Note or other similar agreement.

 

“CP Rate” means, for any Purchaser for any Yield Period for any Portion of
Investment, to the extent such Purchaser funds such Portion of Investment for
such Yield Period by the issuance of Notes, (a) a rate per annum equal to the
sum of (i) the rate (or if more than one rate, the weighted average of the
rates) at which Notes of such Purchaser (or its Related CP Issuer) having a term
equal to such Yield Period and to be issued to fund such Portion of Investment
may be sold by any placement agent or commercial paper dealer selected by the
applicable Purchaser Agent on behalf of such Purchaser (or its Related CP
Issuer), as agreed between each such agent or dealer and the applicable
Purchaser Agent and notified by the applicable Purchaser Agent to the Servicer;
provided, that if the rate (or rates) as agreed between any such agent or dealer
and the applicable Purchaser Agent with regard to any Yield Period for such
Portion of Investment is a discount rate (or rates), then such rate shall be the
rate (or if more than one rate, the weighted average of the rates) resulting
from converting such discount rate (or rates) to an interest-bearing equivalent
rate per annum, plus (ii) the commissions and charges charged by such placement
agent or commercial paper dealer with respect to such Notes, expressed as a
percentage of such face amount and converted to an interest-bearing equivalent
rate per annum; or (b) such other rate set forth in the Joinder Agreement
pursuant to which such Purchaser becomes a party to the Agreement. 
Notwithstanding anything to the contrary in this definition, to the extent that
any Portion of the Investment is funded by issuing Notes denominated in a
currency other than United States dollars, the costs of any currency exchange
contracts entered into in connection with such issuance of Notes shall be
included in the rate determined hereunder and the interest rate (or, if any
component of such rate is a discount rate,

 

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the rate resulting from converting such discount rate to an interest rate
bearing equivalent rate per annum for such component) with respect to such Notes
may be calculated with reference to the amounts received and payable by the
Purchaser, or Related CP Issuer, under currency exchange contracts entered into
in connection with the issuance of such Notes; provided, however, that any such
costs shall only be included in the calculation of “CP Rate” to the extent that
the issuance of such Notes in a currency other than U.S. dollars would result
(as reasonably determined by the applicable Purchaser Agent at the time the
applicable Purchaser, or its Related CP Issuer, became obligated under the
related currency exchange contracts) in a lower “CP Rate” than would have been
obtained through the issuance of such Notes in U.S. dollars.

 

“Credit and Collection Policy” means those receivables credit and collection
policies and practices of the Servicer in effect on the date of the Agreement
and described in Schedule I hereto, as modified in compliance with the
Agreement.

 

“Curtailment Date” means, with respect to any Receivable, the date defined as
such in the Contract for such Receivable.

 

“Dealer Note” means a Demand Promissory Note and Security Agreement and any
other promissory note issued by an Obligor in favor of AFC or the applicable
Originating Lender.

 

“Debt” means (i) indebtedness for borrowed money (which shall not include, in
the case of the Seller or AFC, accounts payable to any Affiliate in the ordinary
course of business arising from the provision of goods and services by such
Affiliate), (ii) obligations evidenced by bonds, debentures, notes or other
similar instruments, (iii) obligations to pay the deferred purchase price of
property or services, (iv) obligations as lessee under leases which shall have
been or should be, in accordance with generally accepted accounting principles,
recorded as capital leases, (v) obligations under direct or indirect guaranties
in respect of, and obligations (contingent or otherwise) to purchase or
otherwise acquire, or otherwise to assure a creditor against loss in respect of,
indebtedness or obligations of others of kinds referred to in clauses
(i) through (iv) above, and (vi) liabilities in respect of unfunded vested
benefits under plans covered by Title IV of ERISA.

 

“Default Ratio” means the ratio (expressed as a percentage and rounded upward to
the nearest 1/100th of 1%) computed as of the last day of each calendar month by
dividing (i) the aggregate Outstanding Balance of all Pool Receivables that
became Defaulted Receivables during such month plus the aggregate amount of
non-cash adjustments that reduced the Outstanding Balance of any Pool Receivable
during such month (other than a Pool Receivable that became a Defaulted
Receivable during such month) by (ii) the aggregate amount of Pool Receivables
that were generated by the Originator (including those acquired by the
Originator from any Originating Lender) during the calendar month that occurred
five calendar months prior to the calendar month ending on such day.

 

“Defaulted Receivable” means a Receivable:

 

(i)            as to which any payment, or part thereof, remains unpaid for more
than 90 days after the due date for such payment;

 

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(ii)           which, consistent with the Credit and Collection Policy, would be
written off the Seller’s books as uncollectible; or

 

(iii)          which is converted to a long term payment plan in the form of a
note or other similar document.

 

“Delinquency Ratio” means the ratio (expressed as a percentage and rounded
upward to the nearest 1/100 of 1%) computed as of the last day of each calendar
month by dividing (i) the aggregate Outstanding Balance of all Pool Receivables
(net of all miscellaneous credits) that were Delinquent Receivables on such day
by (ii) the aggregate Outstanding Balance of all Pool Receivables on such day.

 

“Delinquent Receivable”  means a Receivable which is not a Defaulted Receivable
(i) as to which any payment, or part thereof, remains unpaid for more than 30
days after the due date for such payment or (ii) which, consistent with the
Credit and Collection Policy, would be classified as delinquent by the Seller.

 

“Deposit Account” means an account listed on Schedule II hereto and maintained
at a bank or other financial institution for the purpose of receiving
Collections.

 

“Deposit Account Agreement” means a letter agreement, in form and substance
acceptable to the Agent, among the Seller, the Agent and the applicable Deposit
Account Bank, as the same may be amended, supplemented, amended and restated, or
otherwise modified from time to time in accordance with the Agreement.

 

“Deposit Bank” means any of the banks or other financial institutions at which
one or more Deposit Accounts are maintained.

 

“Discount” means, with respect to each Purchaser:

 

(i)            for the Portion of Investment of its Participation for any Yield
Period to the extent such Purchaser will be funding such Portion of the
Investment on the first day of such Yield Period through the issuance of Notes,

 

 

CPR x I x ED + TF

 

 

360

 

 

(ii)           for the Portion of Investment of its Participation for any Yield
Period to the extent such Purchaser will not be funding such Portion of the
Investment on the first day of such Yield Period through the issuance of Notes,

 

 

ED

 

 

BR x I x 360 + TF

 

 

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where:

 

BR

=

the Bank Rate for the applicable Portion of the Investment for such Yield Period

 

 

 

I

=

the applicable Portion of Investment during such Yield Period

 

 

 

CPR

=

the CP Rate of such Purchaser (or its Related CP Issuer) for the applicable
Portion of the Investment for such Yield Period

 

 

 

ED

=

the actual number of days during such Yield Period

 

 

 

TF

=

the Termination Fee, if any, for such Portion of Investment of the Participation
for such Yield Period;

 

provided, that no provision of the Agreement shall require the payment or permit
the collection of Discount in excess of the maximum permitted by applicable law;
and provided, further, that Discount for any Portion of Investment of any
Participation shall not be considered paid by any distribution to the extent
that at any time all or a portion of such distribution is rescinded or must
otherwise be returned for any reason.

 

“Dividends” means any dividend or distribution (in cash or obligations) on any
shares of any class of Seller’s capital stock or any warrants, options or other
rights with respect to shares of any class of Seller’s capital stock.

 

“Draw Date” means the 20th day of each calendar month or, if such day is not a
Business Day, the following Business Day.

 

“Eligible Contract” means a Contract in one of the forms set forth in Schedule
IV with such variations as AFC shall approve in its reasonable business judgment
that shall not materially adversely affect the rights of the Originator or the
Originating Lender, the Seller or the Purchasers.

 

“Eligible Receivable” means, at any time, any Receivable:

 

(a)           which is denominated and payable only in U.S. Dollars, was
originated by an Originating Lender and acquired by the Originator pursuant to
an Originating Lender Sale Agreement or originated by the Originator in the
ordinary course of business, was sold to the Seller pursuant to the Purchase and
Sale Agreement and is either a general intangible, a payment intangible, an
account or chattel paper;

 

(b)           in which the Agent (for the benefit of the Secured Parties) has a
first priority, perfected security interest free from any Adverse Claim, and
with respect to which the Agent has (i) a first priority perfected security
interest in the vehicles financed thereby (except to the extent of any Permitted
Liens [*], and (ii) a perfected security interest in all other Related Security
with respect to such Receivable (to the extent that a security interest in such
other Related Security can be perfected by the filing of a financing statement);

 

EX-I-7

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(c)           in which Seller has a first priority, perfected security interest,
free from any Adverse Claim, and with respect to which the Seller has (i) a
first priority perfected security interest in the vehicles financed thereby
(except to the extent of any Permitted Liens [*], and (ii) a perfected security
interest in all other Related Security with respect to such Receivable (to the
extent that a security interest in such other Related Security can be perfected
by the filing of a financing statement);

 

(d)           the Obligor of which is a resident of the United States or Canada
and is not a government or a governmental subdivision or agency; [*];

 

(e)           (i) which is not a Defaulted Receivable and (ii) which is not a
Delinquent Receivable;

 

(f)            with regard to which the warranty of Seller in paragraph A.(g) of
Exhibit III is true and correct;

 

(g)           the sale of which pursuant to the Purchase and Sale Agreement, and
the transfer of an undivided interest in which pursuant to this Agreement, do
not contravene or conflict with any law, or require the consent of the Obligor
or any other Person;

 

(h)           which arises under an Eligible Contract [*] that has been duly
authorized by the parties thereto and that, together with such Receivable, is in
full force and effect and constitutes the legal, valid and binding obligation of
the Obligor of such Receivable enforceable against such Obligor in accordance
with its terms except as enforceability may be limited by bankruptcy,
insolvency, reorganization, or other similar laws affecting the enforcement of
creditors’ rights generally and by general principles of equity, regardless of
whether such enforceability is considered in a proceeding in equity or at law;

 

(i)            which, together with the Contracts related thereto, does not
contravene in any material respect any laws, rules or regulations applicable
thereto (including, without limitation, laws, rules and regulations relating to
usury, truth in lending, fair credit billing, fair credit reporting, equal
credit opportunity, fair debt collection practices and privacy);

 

(j)            other than with respect to any Rental Receivables, (i) which
satisfies all applicable requirements of the Credit and Collection Policy,
(ii) whose terms require a minimum principal payment of not less than [*] plus
accrued interest and, if applicable, by paying the applicable floorplan fee or
curtailment fee, on each Curtailment Date and upon each extension of a
Curtailment Date, [*] (iv) for which all payments required to be made pursuant
to the related Contract in connection with any Curtailment Date extension have
not been waived and have been made within [*] days of each such extension,
(v) whose terms (including the due date thereof) have not otherwise been amended
or modified in any material respect and [*];

 

(k)           [*], which is payable on demand and which the related Contract
requires to be repaid on the earlier of (i) [*] hours following the sale of the
vehicle such receivable financed, and (ii) the Curtailment Date for such
Receivable;

 

EX-I-8

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(l)            [*], which arises from the making of a loan to finance the
purchase of (i) an automobile or light duty truck, the ownership of which is
evidenced by a certificate of title, driven or drawn by mechanical power,
manufactured primarily for use on the public streets, roads or highways with two
axles, [*].

 

(m)          from an Obligor not more than [*] of whose aggregate Outstanding
Balance of all Receivables of such Obligor and its Affiliates are Defaulted
Receivables;

 

(n)           that is guaranteed by the related dealer’s parent, general partner
or owner;

 

(o)           with respect to which the Majority Purchasers have not given
Seller at least five (5) Business Days’ notice that such Receivable will not be
an Eligible Receivable hereunder, provided that such designation is in good
faith and based on a reasonable business judgment by the Majority Purchasers
that such Receivable should not be considered an Eligible Receivable;

 

(p)           the Obligor of which is not an Affiliate of AFC, an Excluded
Obligor or a father, mother, son or daughter (or any Affiliate thereof) of any
officer or director of AFC or its Affiliates;

 

(q)           for which AFC has taken (or caused to be taken) all commercially
reasonable action to ensure that the Obligor of such Receivable does not hold
physical possession of the certificate of title or certificate of origin with
respect to such Receivable (except for any Receivable (i) originated in the
State of Michigan or [*]; and

 

(r)            which is not an Excluded Receivable or a Specified Ineligible
Receivable.

 

“Enforcement Costs” means, at any time, all unpaid costs and expenses incurred
by the Agent in enforcing its rights and the rights of the other Indemnified
Parties hereunder.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and any successor statute of similar import, together with
the regulations thereunder, in each case as in effect from time to time. 
References to sections of ERISA also refer to any successor sections.

 

“ERISA Affiliate” shall mean, with respect to any Person, at any time, each
trade or business (whether or not incorporated) that would, at the time, be
treated together with such Person as a single employer under Section 4001 of
ERISA or Sections 414(b), (c), (m) or (o) of the Internal Revenue Code.

 

“Eurodollar Rate” means, for any Portion of the Investment for any Yield Period,
an interest rate per annum (rounded upward to the nearest 1/16th of 1%)
determined pursuant to the following formula:

 

Eurodollar Rate =

LIBOR

 

 

1.00 - Eurodollar Reserve Percentage

 

 

Where,

 

EX-I-9

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“Eurodollar Reserve Percentage” means, for any Yield Period, the maximum reserve
percentage (expressed as a decimal, rounded upward to the nearest 1/100th of 1%)
in effect on the date LIBOR for such Yield Period is determined under
regulations issued from time to time by the Federal Reserve Board for
determining the maximum reserve requirement (including any emergency,
supplemental or other marginal reserve requirement) with respect to
“Eurocurrency” funding (currently referred to as “Eurocurrency liabilities”)
having a term comparable to such Yield Period.

 

“Excluded Obligor” means an Obligor so designated in writing as such by the
Agent or the Majority Purchasers in a notice to the Seller in good faith and in
the Agent’s or the Majority Purchasers’ reasonable judgment relating to credit
considerations from time to time, it being understood that from time to time
such designation may be revoked by written notice to the Seller.

 

“Excluded Receivables” means any Receivable identified on Schedule 1.1(b) of the
Purchase and Sale Agreement from time to time and any right to payment under:

 

(a)           [*];

 

(b)           [*];

 

(c)           [*];

 

(d)           [*];

 

(e)           [*];

 

(f)            [*];

 

(g)           [*];

 

(h)           [*];

 

(i)            [*];

 

(j)            [*]; and

 

(k)           [*].

 

“Fairway” has the meaning set forth in the preamble to this Agreement.

 

“Federal Funds Rate” means, for any period, a fluctuating interest rate per
annum equal (for each day during such period) to: (a) the weighted average of
the rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the preceding Business Day) by the
Federal Reserve Bank of New York, or (b) if such rate is not so published for
any Business Day, the average of the quotations for such day on such
transactions received by the Agent from three federal funds brokers of
recognized standing selected by it.

 

EX-I-10

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“Federal Reserve Board” means the Board of Governors of the Federal Reserve
System, or any entity succeeding to any of its principal functions.

 

“Fee Letter” means, as to any Purchaser, the fee letter entered into by such
Purchaser’s Purchaser Agent and the Seller as described more particularly in
Section 1.5.

 

“Fee Payment Date” means each Draw Date.

 

“Final Payout Date” means the date following the Termination Date on which no
Investment or Discount in respect of any Participation under the Agreement shall
be outstanding and all other amounts payable by the Originator, the Seller or
the Servicer to the Purchasers, the Purchaser Agents, the Agent, the Backup
Servicer, any successor Servicer or any other Affected Person under the
Transaction Documents shall have been paid in full.

 

“Finance Charge and Floorplan Fee Collections” means, with respect to any
calendar month, any Collections applied by the Servicer in such calendar month
to the payment of interest and finance charges and all other amounts (other than
principal) owed under a Contract.

 

“First Bank” means First Bank of White, a federally insured commercial bank
organized under the laws of the State of South Dakota, used herein solely in
connection with the First Bank Sale Agreement.

 

“First Bank Sale Agreement” means that Commercial Floor Plan Loan Marketing,
Originator and Sale Agreement dated January 18, 2007 between the Originator and
First Bank.

 

“GAAP” means generally accepted accounting principles and practices in the
United States, consistently applied.

 

“Governmental Authority” means any nation or government, any state or other
political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any body or entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, including without limitation any court, and any Person owned or
controlled, through stock or capital ownership or otherwise, by any of the
foregoing.

 

“Holdings” means KAR Holdings II, LLC, a Delaware limited liability company.

 

“Indemnified Amounts” has the meaning set forth in Section 3.1.

 

“Indemnified Party” has the meaning set forth in Section 3.1.

 

“Insolvent” or “Insolvency” means, with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section 4245 of
ERISA.

 

“Insolvency Proceeding” means (a) any case, action or proceeding before any
court or other Governmental Authority relating to bankruptcy, reorganization,
insolvency, liquidation, receivership, dissolution, winding-up or relief of
debtors, or (b) any general assignment for the benefit of creditors,
composition, marshalling of assets for creditors, or other,

 

EX-I-11

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similar arrangement in respect of its creditors generally or any substantial
portion of its creditors; in each case (a) and (b) undertaken under U.S.
Federal, state or foreign law, including the Bankruptcy Code.

 

“Investment” means, with respect to any Purchaser, the aggregate of the amounts
paid to the Seller in respect of the Participation of such Purchaser pursuant to
the Agreement, or such amount divided or combined in accordance with
Section 1.7, in each case reduced from time to time by amounts actually
distributed and applied on account of such Investment pursuant to Section 1.4;
provided, that if such Investment shall have been reduced by any distribution
and thereafter all or a portion of such distribution is rescinded or must
otherwise be returned for any reason, such Investment shall be increased by the
amount of such rescinded or returned distribution, as though it had not been
made.

 

“Investment Share” means, with respect to any Purchaser at any time, the
percentage equivalent of a fraction, the numerator of which is the Investment of
such Purchaser and the denominator of which is the aggregate of the Investment
of all Purchasers.

 

“Joinder Agreement” means a Joinder Agreement substantially in the form of Annex
C and executed pursuant to Section 1.12.

 

“KAR” means KAR Holdings, Inc., a Delaware corporation.

 

“KAR Credit Facility” means that certain Credit Agreement, dated as of April 20,
2007 among KAR Holdings II, LLC, KAR Holdings, Inc., as Borrower, the secured
lenders from time to time party thereto, Bear Stearns Corporate Lending Inc., as
Administrative Agent, UBS Securities LLC, as Syndication Agent and the other
parties thereto, as the same may be amended, supplemented or otherwise modified
from time to time.

 

“KAR Credit Facility Pledge” means the pledge of AFC stock to secure the
obligations under the KAR Credit Facility.

 

“KAR Financial Covenant” means the financial covenant regarding KAR’s maximum
consolidated senior secured leverage ratio as set forth in Section 8.1(a) of the
KAR Credit Facility on the date of execution thereof.  Such covenant (including
all defined terms incorporated therein) will survive the termination of the KAR
Credit Facility and can only be amended, modified, added or terminated from time
to time with the prior written consent of the Majority Purchasers; provided,
however, that as long as KAR’s senior secured debt shall be rated at least “BBB-
(stable)” by S&P and at least “Baa3 (stable)” by Moody’s, the financial covenant
will conform with the financial covenants required by KAR’s Credit Facility or
any replacement facility without the consent of the Majority Purchasers.

 

“KAR Financial Covenant Event” means any breach of the KAR Financial Covenant
that is not cured pursuant to the cure right as set forth in Section 8.1 (b) of
the KAR Credit Facility.

 

“KAR Financial Covenant Termination Event” means, following the occurrence of a
KAR Financial Covenant Event, the earliest to occur of (i) if a Majority
Purchaser Notice Event has occurred, 120 days following the occurrence of such
Majority Purchaser Notice Event,

 

EX-I-12

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(ii) any KAR Restricted Amendment and (iii) the occurrence of a Majority
Purchaser Notice Event resulting in the KAR Credit Facility being accelerated.

 

“KAR Restricted Amendment” means any action under or amendment to the KAR Credit
Facility which, in the sole and absolute discretion of the Majority Purchasers,
results in or may result in (i) an acceleration (in whole or in part) of
principal or interest or the amount of principal or interest due under the KAR
Credit Facility, (ii) the pledge of any additional collateral by AFC under the
KAR Credit Facility, (iii) any amendment to any provisions or the addition of
any provision to the KAR Credit Facility regarding the Seller or its assets or
AFC as Originator or Servicer hereunder, (iv) any change, amendment or
modification to AFC’s guaranty under the KAR Credit Facility or (v) any action
by any party to the KAR Credit Facility against AFC’s guaranty under the KAR
Credit Facility or the assets of AFC.

 

“Legal Final Maturity Date” means the first Settlement Date on or after the date
that is two years after the Termination Date.

 

“Level One Trigger” means either (i) as of the last day of any calendar month,
the arithmetic average of the Net Spread for [*] or (ii) the Delinquency Ratio
is greater than [*]; provided, however, that following each occurrence of a
Level One Trigger, such trigger shall remain in effect until [*].

 

“LIBOR” means, with respect to each Purchaser’s Portion(s) of Investment, the
rate of interest per annum (rounded to the nearest 1/100th of 1%, with 0.005%
being rounded upwards) equal to the rate of interest per annum: (i) for deposits
in Dollars (in the approximate amount of the Investment to be funded) for a
period equal to the applicable Yield Period that appears on Telerate Page 3750
or (ii) if such rate does not appear on Telerate Page 3750, determined by the
Agent to be the arithmetic mean (rounded to the nearest 1/100th of 1%, with
0.005% being rounded upwards) of the rates of interest per annum notified to the
Agent as the rate of interest at which Dollar deposits in the approximate amount
of the Investment to be funded, and for a period equal to the applicable Yield
Period, would be offered to major banks in the London interbank market at their
request, in each case at or about 11:00 a.m. (London time) on the second
Business Day before such funding.  For the purposes of calculating LIBOR for any
(a) Yield Period of 30 days or less shall be equal to LIBOR for 30 days as of
the first day of such Yield Period and (b) Yield Period greater than 30 days
shall be equal to an interpolated rate as determined by the Agent based on LIBOR
for 30 to 90 days, as applicable, as of the first day of such Yield Period.

 

“Liquidation Account” means that certain bank account numbered 181-446-6
maintained at Harris Trust and Savings Bank in Chicago, Illinois or such other
account at such other bank approved by the Agent, with the Purchasers and their
respective Purchaser Agents receiving notice that such account is maintained at
such bank, in either case, which is in the name of “Liquidation Account, BMO
Capital Markets Corp as Agent,” and pledged, on a first-priority basis, by the
Seller to the Agent pursuant to Section 1.2(d).

 

“Liquidation Account Bank” means the bank holding the Liquidation Account.

 

EX-I-13

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“Liquidity Agent” means any financial institution in its capacity as a Liquidity
Agent pursuant to a Liquidity Agreement.

 

“Liquidity Agreement” means any loan or asset purchase agreement or similar
agreement whereby a Note Issuer party hereto as a Purchaser obtains commitments
from financial institutions to support its funding obligations hereunder and/or
to refinance any Notes issued to fund the Note Issuer’s Investment hereunder.

 

“Liquidity Bank” has the meaning set forth in Section 6.3(b).

 

“Loss Percentage” means, on any date, the greatest of [*].

 

“Loss Reserve” means, for any date and any Participation, an amount equal to the
product of [*].

 

“Loss Reserve Ratio” means [*].

 

“Lot Check” means, with respect to any Obligor, a physical inspection of such
Obligor’s financed vehicles and which may include a review of such Obligor’s
books and records related thereto.

 

“Majority Purchasers” means Purchasers having a share of the Aggregate
Participation equal to or greater than [*].

 

“Majority Purchasers Notice Event” means, following the occurrence of a KAR
Financial Covenant Event, the Majority Purchasers have provided the Agent and
Seller with written notice of the Majority Purchasers’ declaration of a KAR
Financial Covenant Termination Event.

 

“Material Adverse Effect” means, with respect to any event or circumstance, a
material adverse effect on:

 

(a)           the business, operations, property or financial condition of the
Seller or the Servicer;

 

(b)           the ability of the Seller or the Servicer to perform its
obligations under this Agreement or any other Transaction Document to which it
is a party or the performance of any such obligations;

 

(c)           the validity or enforceability of this Agreement or any other
Transaction Document;

 

(d)           the status, existence, perfection, priority or enforceability of
the Agent’s interest (for the benefit of the Secured Parties) in the Receivables
or Related Security; or

 

(e)           the collectibility of the Receivables.

 

EX-I-14

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“Maximum Amount” means the lesser of (i) $750,000,000 or (ii) the sum of the
Maximum Commitments of all Purchasers.

 

“Maximum Commitment” means, with respect to a Purchaser, the maximum dollar
amount of Investment that such Purchaser is willing to fund, as set forth on the
signature pages of this Agreement, any Joinder Agreement or any assignment
entered into pursuant to Section 6.3, as applicable, which amount may, following
the written request of the Seller, be increased at any time with the written
consent of such Purchaser.

 

“Moody’s” means Moody’s Investor Services, Inc.

 

“Multiemployer Plan” means a Plan that is a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.

 

“Net Receivables Pool Balance” means, at any time, an amount equal to the result
of (a) 100% of the aggregate Outstanding Balances of Eligible Receivables (other
than Specified Curtailment Receivables) then in the Receivables Pool ([*]) plus
(b) [*] of the aggregate Outstanding Balances of all Eligible Receivables
constituting Specified Curtailment Receivables then in the Receivables Pool
([*]) minus (c) the amount by which the result obtained in clause (b) above
exceeds the product of (X) the amount obtained in clause (a) above multiplied by
(Y) [*] minus (d) the aggregate amount by which the aggregate Outstanding
Balance of the Eligible Receivables ([*]) of each Obligor then in the
Receivables Pool exceeds the product of (A) the Normal Concentration Percentage
for such Obligor (or, in the case of a Special Obligor, the Special
Concentration Percentage for such Obligor) multiplied by (B) the aggregate
Outstanding Balance of the Eligible Receivables ([*]) then in the Receivables
Pool ([*]).

 

“Net Spread” means the annualized percentage equivalent of a fraction (computed
as of the last day of each calendar month), the numerator of which is the excess
of (x) all Finance Charge and Floorplan Fee Collections received and applied
during such calendar month (including recoveries) over (y) the sum of, without
duplication, (i) the Carry Costs for such calendar month, (ii) the aggregate
amount of Receivables that became Defaulted Receivables during such calendar
month, and (iii) the aggregate amount of non-cash adjustments that reduced the
Outstanding Balance of any Pool Receivable during such calendar month (but
excluding any Receivable that was included in the calculation of Net Spread
pursuant to clause (ii) above in any previous calendar month); and the
denominator of which is the average aggregate Outstanding Balances of the Pool
Receivables during such calendar month.

 

“Non-Revolving Purchaser” means each Purchaser designated as a “Non-Revolving
Purchaser” in the Joinder Agreement or amendment pursuant to which such
Purchaser becomes a party hereto.

 

“Normal Concentration Percentage” for any Obligor (other than a Special Obligor)
means at any time [*].

 

“Note Issuer” means Fairway and any other Purchaser which funds its Investment
and other investments by issuing short or medium term promissory notes either
directly or by means of a Related CP Issuer.

 

EX-I-15

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“Notes” means (a) in the case of Fairway or other Purchaser, the short-term
promissory notes issued or to be issued by Fairway or such Purchaser to fund its
investments in accounts receivable or other financial assets, (b) in the case of
any Purchaser with a Related CP Issuer, the short-term promissory notes issued
by its Related CP Issuer to indirectly fund the investments of such Purchaser,
and (c) in the case of any other Purchaser, as set forth in the applicable
Joinder Agreement.

 

“Obligor” means, with respect to any Receivable, a Person obligated to make
payments pursuant to the Contract relating to such Receivable; provided that
Receivables generated by Affiliates of any Obligor shall be treated as if
generated by such Obligor.

 

“Official Body” means any government or political subdivision or any agency,
authority, bureau, central bank, commission, department or instrumentality of
any such government or political subdivision, or any court, tribunal, grand jury
or arbitrator, or any accounting board or authority (whether or not a part of
government) which is responsible for the establishment or interpretation of
national or international accounting principles, in each case whether foreign or
domestic.

 

“Originating Lender” means each of First Bank, AFC Cal, LLC, a California
limited liability company, AFC of Minnesota Corporation, a Minnesota
corporation, and AFC of TN, LLC, a Tennessee limited liability company.

 

“Originating Lender Sale Agreement” means each transfer agreement between an
Originating Lender and the Originator; prior to the Receivables of any
Originating Lender (other than First Bank) being treated as Eligible Receivables
hereunder, the Majority Purchasers shall have consented to the form of
Originating Lender Sale Agreement and each Rating Agency shall have received a
copy thereof at least 5 Business Days prior to such Receivables receiving such
treatment.

 

“Originator” has the meaning set forth in the Purchase and Sale Agreement.

 

“Outstanding Balance” means, with respect to any Receivable, the then unpaid
principal amount of all advances or loans made to the related Obligor pursuant
to the related Contract by AFC or the Originating Lender, as applicable, to the
extent that (i) for auction purchases, such amount does not exceed 100% of the
auction costs, including buyers’ fees, inspection fees and transportation fees,
or (ii) for non-auction purchases, such amount does not exceed the wholesale
cost, as set forth on the related bill of sale, for the related vehicles.

 

“Participation” means, with respect to any Purchaser at any time, the undivided
percentage ownership interest of such Purchaser in (i) each and every Pool
Receivable now existing or hereafter arising, other than any Pool Receivable
that arises on or after the Termination Date, (ii) all Related Security with
respect to such Pool Receivables, and (iii) all Collections with respect to, and
other proceeds of, such Pool Receivables and Related Security.  Such undivided
percentage interest shall be computed as

 

I + LR

 

NRB + LA

 

 

EX-I-16

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where:

 

I                                           =              the Investment of
such Participation at the time of computation as reduced by the amount of cash
in the Deposit Account at [*] at the end of business on either (i) with respect
to any Servicer Report, the last Business Day of the prior calendar month, or
(ii) with respect to any Portfolio Certificate, the last Business Day of the
prior calendar week, in each case that was wired to the respective Purchaser on
the immediately following Business Day to pay down that Purchaser’s Investment.

 

LR                               =              the Loss Reserve of such
Participation at the time of computation (calculated after reducing the
Purchaser’s Investment by the amount of cash in the Deposit Account at [*] at
the end of business on either (i) with respect to any Servicer Report, the last
Business Day of the prior calendar month, or (ii) with respect to any Portfolio
Certificate, the last Business Day of the prior calendar week, in each case that
was wired to the respective Purchaser on the immediately following Business Day
to pay down that Purchaser’s Investment).

 

NRB                     =              the Net Receivables Pool Balance at the
time of computation.

 

LA                               =              the amount on deposit in the
Liquidation Account (other than amounts transferred thereto from the Deposit
Accounts to pay Discount, the Servicing Fee, Unaffiliated Servicing Fees, Backup
Servicing Fees, Transition Expenses and Program Fees and Indemnified Amounts to
the Indemnified Parties).

 

Each Participation shall be determined from time to time pursuant to the
provisions of Section 1.3.

 

“Paydown Day” means any day that is not a Termination Day on which the
conditions set forth in Section 3 of Exhibit II are not either satisfied or
waived.

 

“Perfection Representation” means the representations, warranties and covenants
set forth in Exhibit VII attached hereto.

 

“Performance Guaranty” means the Performance Guaranty, dated as of April 20,
2007, made by KAR in favor of the Agent for the benefit of the Secured Parties,
as the same may be amended, supplemented or otherwise modified from time to time
with the prior written consent of the Majority Purchasers.

 

“Permitted Investments” means (i) overnight obligations of the United States of
America, (ii) time deposits or AAAm or AAAm-G rated money market accounts
maintained at Harris Trust and Savings Bank or the Bank of Montreal or if Harris
Trust and Savings Bank or the Bank of Montreal is rated below A-1 by S&P or P-1
by Moody’s such other financial institutions rated at the time of investment not
less than A-1+ by S&P and P-1 by Moody’s, (iii)

 

EX-I-17

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certificates of deposit that are not represented by instruments, have a maturity
of one week or less and are issued by financial institutions rated at the time
of investment not less than A-1 by S&P and P-1 by Moody’s if such certificates
of deposit are issued by Harris Trust and Savings Bank or the Bank of Montreal
or A-1+ by S&P and P-1 by Moody’s if such certificates of deposit are issued by
financial institutions other than Harris Trust and Savings Bank and the Bank of
Montreal and (iv) commercial paper rated at the time of investment not less than
A-1 by S&P and P-1 by Moody’s if such commercial paper is issued by Fairway or
A-1+ by S&P and P-1 by Moody’s if such commercial paper is issued by an entity
other than Fairway and, in the cases of clauses (ii), (iii) and (iv), having a
maturity date not later than (A) with respect to amounts on deposit in the Cash
Reserve Account, the immediately succeeding Draw Date and (B) with respect to
amounts on deposit in the Liquidation Account, the earlier of (x) the next
Settlement Date and (y) one week from the date of investment; provided, however,
that the Majority Purchasers may, from time to time, upon three Business Days’
prior written notice to Servicer, remove from the scope of “Permitted
Investments” any such obligations, certificates of deposit or commercial paper
and specify to be within such scope, other investments.

 

“Permitted Lien” means (i) any mechanic’s lien, supplier’s lien, materialman’s
lien, landlord’s lien or similar lien arising by operation of law with respect
to the Related Security and (ii) and liens for taxes, assessments or similar
governmental charges or levies incurred in the ordinary course of business that
are not yet due and payable or as to which any applicable grace period shall not
have expired, or that are being contested in good faith by proper proceedings
and for which adequate reserves have been established, but only so long as
foreclosure with respect to such a lien is not imminent and the use and value of
the property to which the Adverse Claim attaches is not impaired during the
pendency of such proceeding.

 

“Person” means an individual, partnership, corporation (including a business
trust), joint stock company, trust, unincorporated association, joint venture,
limited liability company or other entity, or a government or any political
subdivision or agency thereof.

 

“Plan” means, at a particular time, any employee benefit plan or other plan
established, maintained or contributed to by the Seller or any ERISA Affiliate
thereof that is covered by Title IV of ERISA.

 

“Pledge Agreement” means the Pledge Agreement dated May 31, 2002 between AFC and
the Agent, as the same may be amended or modified with the prior written consent
of the Majority Purchasers.

 

“Pool Receivable” means a Receivable in the Receivables Pool.

 

“Pool Receivable Documents” has the meaning set forth in paragraph (l)(iii) of
Exhibit IV to the Agreement.

 

“Portfolio Certificate” means a certificate substantially in the form of
Exhibit VI to the Agreement.

 

“Portion of Investment” has the meaning set forth in Section 1.7.  In addition,
at any time when the Investment of a Participation is not divided into two or
more portions, “Portion of Investment” means 100% of the Investment of such
Participation.  For any Yield

 

EX-I-18

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Period, the “related” Portion of Investment means the Portion of Investment of
any Purchaser accruing Discount during such Yield Period at a particular
Discount rate.  For any Yield Period End Date, the “related” Portion of
Investment means the Portion of Investment of any Purchaser which has a Yield
Period ending on such Yield Period End Date.

 

“Prior Agreement” has the meaning set forth in the Preliminary Statements.

 

“Program Fee” means, as to any Purchaser, the periodic fees set forth in the
applicable Fee Letter.

 

“Program Support Agreement” means, as to any applicable Note Issuer party hereto
as a Purchaser, the Liquidity Agreement and any other agreement (if any) entered
into by any Program Support Provider providing for the issuance of one or more
letters of credit for the account of the Purchaser, the issuance of one or more
surety bonds for which the Purchaser is obligated to reimburse the applicable
Program Support Provider for any drawings thereunder, the sale by the Purchaser
to any Program Support Provider of the Participation (or portions thereof)
and/or the making of loans and/or other extensions of credit to the Purchaser in
connection with the Purchaser’s securitization program, together with any letter
of credit, surety bond or other instrument issued thereunder.

 

“Program Support Provider” as to any Note Issuer (and/or Related CP Issuers)
means and includes any Liquidity Bank and any other or additional Person (other
than any customer of a Purchaser (and/or Related CP Issuers)) now or hereafter
extending credit or having a commitment to extend credit to or for the account
of, or to make purchases from, a Purchaser (and/or Related CP Issuers) or
issuing a letter of credit, surety bond or other instrument to support any
obligations arising under or in connection with any Note Issuer’s (and/or
Related CP Issuer’s) securitization program.

 

“Pro Rata Share” means, with respect to any Purchaser at any time, a fraction,
the numerator of which is the sum of the unused portion of such Purchaser’s
Maximum Commitment at such time and the denominator of which is the unused
portion of the Maximum Amount at such time.

 

“Purchase and Sale Agreement” means the Amended and Restated Purchase and Sale
Agreement, dated as of May 31, 2002, among the Originator and the Seller, as the
same has been and may be modified, supplemented, amended and amended and
restated from time to time in accordance with the Transaction Documents and with
prior written consent of the Majority Purchasers.

 

“Purchaser” means Fairway and each other Person which becomes a “Purchaser”
hereunder in accordance with the provisions of Section 1.12 or Section 6.3(a).

 

“Purchaser Agent” means, as to any Purchaser, the financial institution
designated by such Purchaser as responsible for administering this Agreement on
behalf of such Purchaser, together with any successors or permitted assigns
acting in such capacity; if any Purchaser does not so designate another
institution as its Purchaser Agent, such Purchaser shall be deemed to have
designated itself as its Purchaser Agent and all references herein to such
Purchaser’s Purchaser Agent shall mean and be references to such Purchaser.

 

EX-I-19

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“Purchaser Percentage” means, with respect to any Purchaser at any time, a
fraction (expressed as a percentage), the numerator of which is such Purchaser’s
outstanding Investment at such time, and the denominator of which is the
aggregate Investment of all Purchasers at such time.

 

“Purchaser’s Account” means (i) as to Fairway, the special account (account
number [*]) maintained at the office of Harris Trust and Savings Bank, or such
other account as may be so designated in writing by its Purchaser Agent to the
Seller and (ii) as to any other Purchaser, such account as may be so designated
in writing by the applicable Purchaser Agent to the Seller and the Servicer.

 

“Purchasers’ Share” means the share of Collections deposited into the Deposit
Accounts represented by the Aggregate Participation.

 

“Rating Agencies” means Moody’s and S&P.

 

“Receivable” means any right to payment from any Person, whether constituting an
account, chattel paper, instrument, payment intangible or a general intangible,
arising from the providing of financing and other services by the Originator or
the applicable Originating Lender to new, used and wholesale automobile or other
motor vehicle dealers, and includes the right to payment of any interest or
finance charges and other obligations of such Person with respect thereto.

 

“Receivables Pool” means at any time all of the then outstanding Receivables
conveyed to the Seller pursuant to the Purchase and Sale Agreement and not
reconveyed to the Originator in accordance with the terms of the Purchase and
Sale Agreement.

 

“Recreational Vehicle” means [*].

 

“Recreational Vehicle Receivable” means those Receivables generated as a result
of the making of loans to finance the purchase of Recreational Vehicles.

 

“Reference Bank” means Bank of Montreal, provided that if so agreed by the
Seller, the Servicer and the Agent, each Purchaser which becomes a party hereto
by virtue of Section 1.12 may designate a different Reference Bank for purposes
of calculating the Base Rate applicable to such Purchaser’s Investment.

 

“Related CP Issuer” shall mean, with respect to any Purchaser, any commercial
paper conduit approved by the Servicer which advances funds to such Purchaser
for the purpose of funding or maintaining its interest in the Investment,
together with their successors and permitted assigns.

 

“Related Security” means, with respect to any Receivable:

 

(a)           all right, title and interest in and to all Contracts and other
Pool Receivable Documents that relate to such Receivable;

 

EX-I-20

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(b)           all security interests or liens and rights in property subject
thereto from time to time purporting to secure payment of such Receivable,
whether pursuant to the Contract related to such Receivable or otherwise,
including all rights in vehicles securing or purporting to secure such payment
and any insurance or other proceeds arising therefrom;

 

(c)           all UCC financing statements covering any collateral securing
payment of such Receivable;

 

(d)           all guarantees and other agreements or arrangements of whatever
character from time to time supporting or securing payment of such Receivable
whether pursuant to the Contract related to such Receivable or otherwise;

 

(e)           all rights in any power of attorney delivered by the related
Obligor; and

 

(f)            all rights and claims of the Seller with respect to such
Receivable pursuant to the Purchase and Sale Agreement.

 

“Rental Receivable” means a Receivable which satisfies all of the requirements
of the definition of Eligible Receivable except clause [*], provided (i) any
such Receivable must have a maturity of [*], (ii) the applicable terms thereof
must require [*], (iii) the Obligor thereof must be otherwise current on its
obligations under the related Contract, and (iv) if applicable, [*]. 
Notwithstanding any other provision hereof, Rental Receivables shall not be
eligible to be treated as “Eligible Receivables” hereunder until the date
following the Closing Date when (i) each of the Rating Agencies has provided
confirmation that such inclusion will not result in the downgrade or withdrawal
of the ratings of the commercial paper of any Purchaser, (ii) each of the
Program Support Providers has consented thereto and (iii) the Majority
Purchasers have consented thereto.

 

“Reorganization” means, with respect to any Multiemployer Plan, the condition
that such plan is in reorganization within the meaning of Section 4241 of ERISA.

 

“Reportable Event” means any of the events set forth in Section 4043(c) of
ERISA, other than those events as to which the thirty day notice period is
waived under subsections .22, .27 or .28 of PBGC Reg. §4043.

 

“Restricted Payments” has the meaning set forth in paragraph (o)(i) of
Exhibit IV of the Agreement.

 

“Revolving Purchaser” means Fairway and each other Purchaser designated as a
“Revolving Purchaser” in the Joinder Agreement or amendment pursuant to which
such Purchaser becomes a party hereto.

 

“S&P” means Standard and Poor’s Ratings Services.

 

“Secured Parties” means, collectively, the Purchasers, the Purchaser Agents, the
Agent and the Program Support Providers.

 

EX-I-21

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“Seller” has the meaning set forth in the preamble to this Agreement.

 

“Seller’s Share” means the Seller’s share of Collections deposited into the
Deposit Accounts, calculated as 100% minus the Aggregate Participation.

 

“Servicer” has the meaning set forth in the preamble to this Agreement.

 

“Servicer Payment Date” shall mean each Draw Date.

 

“Servicer Report” means a report, in substantially the form of Annex B hereto.

 

“Servicer Report Date” means the 15th day of each month, or if such day is not a
Business Day, the next Business Day.

 

“Servicing Fee” shall mean the fee referred to in Section 4.6.

 

“Settlement Date” means each of (a) each Yield Period End Date, (b) any Servicer
Payment Date or Backup Servicer Payment Date and (c) any Fee Payment Date.

 

“Single Employer Plan” means any Plan which is covered by Title IV of ERISA, but
which is not a Multiemployer Plan.

 

“Special Concentration Percentage” means, (i) [*] and (ii) for any other Special
Obligor at any time, [*].

 

“Special Obligor” means [*] and any other Obligor approved in writing by the
Agent.

 

“Specified Ineligible Receivables” means such Pool Receivables collected through
the Deposit Accounts that the Originator has identified as “Specified Ineligible
Receivables” pursuant to the Purchase and Sale Agreement and are therefore
ineligible under this Agreement.

 

“Specified Curtailment Receivable” means an Eligible Receivable which satisfies
all of the requirements of the definition of Eligible Receivable except [*].

 

“Successor Servicer Fee” means, for any calendar month, [*]

 

“Tangible Net Worth” means, with respect to any Person, the net worth of such
Person calculated in accordance with GAAP after subtracting therefrom the
aggregate amount of such Person’s intangible assets, including, without
limitation, goodwill, franchises, licenses, patents, trademarks, tradenames,
copyrights, service marks and brand names and capitalized software.

 

“Termination Date” means the earliest of (i) the Business Day which the Seller
so designates by notice to the Agent at least 30 days in advance pursuant to
Section 1.1(b), (ii) April 20, 2012 (the “Scheduled Termination Date”), and
(iii) the date determined pursuant to Section 2.2.

 

EX-I-22

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“Termination Day” means each day which occurs on or after the Termination Date,
unless the occurrence of the Termination Date (if declared by the Majority
Purchasers pursuant to Section 2.2) is waived in accordance with Section 6.1.

 

“Termination Event” has the meaning specified in Exhibit V.

 

“Termination Fee” means, with respect to any Portion of the Investment of any
Purchaser and any Yield Period during which any reduction of such Portion of the
Investment occurs on a date other than the Yield Period End Date therefor
(without giving effect to any shortened duration of such Yield Period pursuant
to clause (b)(iv) of the definition thereof), the amount, if any, by which
(i) the additional Discount (calculated without taking into account any
Termination Fee) which would have accrued during the remainder of such Yield
Period on the reductions of Investment had such reductions remained as
Investment, exceeds (ii) the income, if any, received by the applicable
Purchaser from investing the proceeds of such reductions of Investment, as
determined by the related Purchaser Agent, which determination shall be binding
and conclusive for all purposes, absent manifest error.

 

“Title Attached Receivable” means a Receivable which satisfies all of the
requirements of the definition of Eligible Receivable and for which AFC has
recorded an account payable subject to the receipt of the certificate of title
for the vehicle securing or purporting to secure such Receivable, but has not
authorized the release of funds for such vehicle.

 

“Tractor Receivable” means those Receivables generated as a result of the making
of loans to finance the purchase of Tractors.

 

“Tractors” means [*].

 

“Transaction Documents” means the Agreement, the Deposit Account Agreements, the
Purchase and Sale Agreement, each Originating Lender Sale Agreement, the
Performance Guaranty, the Pledge Agreement, the Company Note, each Joinder
Agreement, the Backup Servicing Agreement, the Backup Servicing Fee Letter and
all other certificates, instruments, UCC financing statements, reports, notices,
agreements and documents executed or delivered under or in connection with any
of the foregoing, in each case as the same may be amended, supplemented or
otherwise modified from time to time in accordance with the Agreement.

 

“Transition Expenses” means all reasonable cost and expenses (including Attorney
Costs) incurred by the Backup Servicer in connection with transferring servicing
obligations under this Agreement, which shall not exceed the cap established in
the Backup Servicing Agreement or the Backup Servicing Fee Letter.

 

“UCC” means the Uniform Commercial Code as from time to time in effect in the
applicable jurisdiction.

 

“Unaffiliated Servicing Fees” means all Servicing Fees payable to the Servicer
(if AFC or any Affiliate thereof is not the Servicer).

 

EX-I-23

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“Unmatured Termination Event” means an event which, with the giving of notice or
lapse of time, or both, would constitute a Termination Event.

 

“Yield Period” means, with respect to each Portion of Investment of any
Purchaser:

 

(a)           initially the period commencing on the date of a purchase pursuant
to Section 1.2 and ending such number of days thereafter as the Seller shall
select, subject to the approval of the applicable Purchaser Agent pursuant to
Section 1.2, up to 90 days after such date; provided that the weighted average
length of all Yield Periods may not exceed 45 days; and

 

(b)           thereafter each period commencing on the Yield Period End Date of
the immediately preceding Yield Period and ending such number of days (not to
exceed 90 and the weighted average length of all Yield Periods not to exceed 45
days) as the Seller shall select, subject to the approval of the applicable
Purchaser Agent pursuant to Section 1.2, on notice by the Seller received by the
applicable Purchaser Agent (including notice by telephone, confirmed in writing)
not later than 11:00 a.m. (Chicago time) on such Yield Period End Date or the
second Business Day prior to such Yield Period End Date if Discount is computed
by reference to the Eurodollar Rate, except that if the applicable Purchaser
Agent shall not have received such notice or approved such period on or before
11:00 a.m. (Chicago time) on such Yield Period End Date, such period shall be
one day; provided, that

 

(i)            any Yield Period in respect of which Discount is computed by
reference to the Bank Rate shall be a period from one to and including 90 days;

 

(ii)           any Yield Period (other than of one day) which would otherwise
end on a day which is not a Business Day shall be extended to the next
succeeding Business Day; provided, however, if Discount in respect of such Yield
Period is computed by reference to the Eurodollar Rate, and such Yield Period
would otherwise end on a day which is not a Business Day, and there is no
subsequent Business Day in the same calendar month as such day, such Yield
Period shall end on the next preceding Business Day;

 

(iii)          in the case of any Yield Period of one day, (A) if such Yield
Period is the initial Yield Period for a purchase pursuant to Section 1.2, such
Yield Period shall be the day of purchase of the Participation; (B) any
subsequently occurring Yield Period which is one day shall, if the immediately
preceding Yield Period is more than one day, be the Yield Period End Date of
such immediately preceding Yield Period, and, if the immediately preceding Yield
Period is one day, be the day next following such immediately preceding Yield
Period; and (C) if such Yield Period occurs on a day immediately preceding a day
which is not a Business Day, such Yield Period shall be extended to the next
succeeding Business Day;

 

EX-I-24

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(iv)          in the case of any Yield Period for any Portion of Investment
which commences before the Termination Date and would otherwise end on a date
occurring after the Termination Date, such Yield Period shall end on such
Termination Date and the duration of the initial Yield Period which commences
after the Termination Date shall commence on the Termination Date and end on the
next Draw Date and thereafter such Yield Period shall commence on the day after
such previous Draw Date and end on the next Draw Date;

 

(v)           no Yield Period may exceed 90 days in length and the weighted
average length of all Yield Periods may not exceed 45 days; and

 

(vi)          each Yield Period of the Portion of Investment funded by a
Non-Revolving Purchaser shall be one calendar month in duration prior to the
occurrence of the Termination Date (or as otherwise specified in the Joinder
Agreement or amendment pursuant to which such Purchaser becomes a party hereto).

 

“Yield Period End Date” means the last day of each Yield Period.

 

Other Terms.  All accounting terms not specifically defined herein shall be
construed in accordance with generally accepted accounting principles.  All
terms used in Article 9 of the UCC in the State of Indiana, and not specifically
defined herein, are used herein as defined in such Article 9.  Unless the
context otherwise requires, “or” means “and/or,” and “including” (and with
correlative meaning “include” and “includes”) means including without limiting
the generality of any description preceding such term.

 

EX-I-25

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EXHIBIT II

 

CONDITIONS OF PURCHASES

 

1.             Conditions Precedent to Initial Purchase and the Effectiveness of
the Prior Agreement.  The effectiveness of the Prior Agreement was subject to
the conditions precedent (which have been satisfied or waived as of the date
hereof) that the Agent receive on or before the date thereof the following:

 

(a)           A counterpart of the Prior Agreement and the other Transaction
Documents duly executed by the parties thereto.

 

(b)           Certified copies of (i) the resolutions of the board of directors
of each of the Seller and AFC authorizing the execution, delivery, and
performance by the Seller and AFC of the Prior Agreement and the other
Transaction Documents, (ii) all documents evidencing other necessary corporate
action and governmental approvals, if any, with respect to the Prior Agreement
and the other Transaction Documents and (iii) the articles of incorporation and
by-laws of the Seller and AFC.

 

(c)           A certificate of the secretary or assistant secretary of the
Seller and AFC certifying the names and true signatures of the officers of the
Seller and AFC authorized to sign the Prior Agreement and the other Transaction
Documents.  Until the Agent receives a subsequent incumbency certificate from
the Seller and AFC in form and substance satisfactory to the Agent, the Agent
shall be entitled to rely on the last such certificate delivered to them by the
Seller and AFC, as applicable.

 

(d)           Financing statements, in proper form for filing under the UCC of
all jurisdictions that the Agent may deem necessary or desirable in order to
perfect the interests of the Agent (for the benefit of the Secured Parties)
contemplated by the Prior Agreement and other Transaction Documents.

 

(e)           Financing statements, in proper form for filing under the
applicable UCC, if any, necessary to release all security interests and other
rights of any Person in the Receivables, Contracts or Related Security
previously granted by the Seller or AFC.

 

(f)            Completed UCC requests for information, dated on or before the
date of the Prior Agreement, listing the financing statements referred to in
subsection (e) above and all other effective financing statements filed in the
jurisdictions referred to in subsection (e) above that named the Seller or AFC
as debtor, together with copies of such other financing statements (none of
which shall cover any Receivables, Contracts or Related Security), and similar
search reports with respect to federal tax liens, judgments and liens of the
Pension Benefit Guaranty Corporation in such jurisdictions as the Agent
requested, showing no such liens on any of the Receivables, Contracts or Related
Security.

 

(g)           Executed copies of a Deposit Account Agreement with each Deposit
Account Bank.

 

EX-II-1

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(h)           Favorable opinions of in-house counsel for the Seller and AFC, as
to corporate and such other matters as the Agent reasonably requested.

 

(i)            Favorable opinions of Ice Miller, special counsel for the Seller,
ADESA and AFC, as to enforceability and such other matters as the Agent
reasonably requested.

 

(j)            Favorable opinions of Ice Miller, special counsel for the Seller
and AFC, as to bankruptcy matters.

 

(k)           Certificates of Existence with respect to the Seller and AFC
issued by the Indiana Secretary of State and articles of incorporation of the
Seller certified by the Indiana Secretary of State.

 

(l)            Evidence (i) of the execution and delivery by each of the parties
thereto of the Purchase and Sale Agreement and all documents, agreements and
instruments contemplated thereby (which evidence included copies, either
original or facsimile, of each of such documents, instruments and agreements),
(ii) that each of the conditions precedent to the execution and delivery of the
Purchase and Sale Agreement was satisfied to the Agent’s satisfaction, and
(iii) that the initial purchases under the Purchase and Sale Agreement were
consummated.

 

(m)          Evidence of payment by the Seller of all accrued and unpaid fees
(including those contemplated by the Fee Letter), costs and expenses to the
extent then due and payable on the date thereof, together with Attorney Costs of
the Agent to the extent invoiced prior to or on such date, plus such additional
amounts of Attorney Costs as constituted the Agent’s reasonable estimate of
Attorney Costs incurred or to be incurred by it through the closing proceedings;
including any such costs, fees and expenses arising under or referenced in
Section 6.4 as provided in the Fee Letter.

 

(n)           The Fee Letter between the Seller and the Agent contemplated by
and delivered pursuant to Section 1.5.

 

(o)           A Servicer Report representing the performance of the portfolio
purchased through the Purchase and Sale Agreement and the Prior Agreement for
the month prior to closing.

 

(p)           Such confirmations from the rating agencies as were required by
any Purchaser in its respective sole discretion.

 

(q)           a listing of all Obligors of all Receivables as of the date of the
Prior Agreement.

 

2.             Conditions Precedent to the Effectiveness of this Agreement.  The
effectiveness of the Agreement is subject to the condition precedent that the
Agent shall have received on or before the date hereof the following, each in
form and substance satisfactory to the Agent:

 

(a)           A counterpart of the Agreement and the other Transaction Documents
duly executed by the parties thereto.

 

EX-II-2

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(b)           Certified copies of (i) the resolutions of the board of directors
of each of the Seller and AFC authorizing the execution, delivery, and
performance by the Seller and AFC of the Agreement and the other Transaction
Documents, (ii) all documents evidencing other necessary corporate action and
governmental approvals, if any, with respect to the Agreement and (iii) the
articles of incorporation and by-laws of the Seller and AFC (to the extent such
documents have been modified since they were last delivered to the Agent).

 

(c)           A certificate of the secretary or assistant secretary of the
Seller and AFC certifying the names and true signatures of the officers of the
Seller and AFC authorized to sign the Agreement and the other Transaction
Documents.

 

(d)           Favorable opinions of in-house counsel for the Seller and AFC, as
to corporate and such other matters as the Agent may reasonably request.

 

(e)           Favorable opinions of Ice Miller, special counsel for the Seller
and AFC, as to enforceability and such other matters as the Agent may reasonably
request.

 

(f)            Evidence of payment by the Seller of all fees, costs and expenses
then due and payable to the Purchasers or the Agent (including, without
limitation, any such fees payable under the Fee Letter), together with Attorney
Costs of the Agent to the extent invoiced prior to or on such date, plus such
additional amounts of Attorney Costs as shall constitute the Agent’s reasonable
estimate of Attorney Costs incurred or to be incurred by it through the closing
proceedings.

 

(g)           A Portfolio Certificate dated as of the last Friday immediately
prior to the date hereof, together with a floorplan receivables summary dated as
of the date hereof.

 

(h)           Such confirmations from the rating agencies as shall be required
by any Purchaser in its sole discretion.

 

(i)            A current list of all branch offices, loan processing offices or
other locations at which the Pool Receivable Documents are being held.

 

(j)            An executed copy of an amended and restated Fee Letter for
Fairway in form and substance acceptable to the Purchaser Agent for Fairway.

 

(k)           Evidence of the filing of appropriate UCC-3 amendments to reflect
the revisions to the collateral description.

 

(l)            Such other approvals, opinions or documents as the Agent may
reasonably request.

 

3.             Conditions Precedent to All Purchases and Reinvestments.  Each
purchase (including the initial purchase) and each reinvestment shall be subject
to the further conditions precedent that:

 

(a)           in the case of each purchase, the Servicer shall have delivered to
the Agent on or prior to such purchase, in form and substance satisfactory to
the Agent, (i) a completed

 

EX-II-3

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Servicer Report with respect to the immediately preceding calendar month, dated
within 30 days prior to the date of such purchase (or a completed Portfolio
Certificate, dated as of the last Business Day of the immediately preceding
calendar week) and (ii) a completed Portfolio Certificate to the extent a daily
Portfolio Certificate is required in accordance with Section 4.2(e) of the
Agreement, and shall have delivered to the Agent such additional information as
may reasonably be requested by the Agent.

 

(b)           on the date of such purchase or reinvestment the following
statements shall be true (and acceptance of the proceeds of such purchase or
reinvestment shall be deemed a representation and warranty by the Seller that
such statements are then true):

 

(i)   the representations and warranties contained in Exhibit III are true and
correct on and as of the date of such purchase or reinvestment as though made on
and as of such date; and

 

(ii)  no event has occurred and is continuing, or would result from such
purchase or reinvestment, that constitutes a Termination Event or an Unmatured
Termination Event; and

 

(iii) the sum of the aggregate of the Participations does not exceed 100%; and

 

(iv)  the amount on deposit in the Cash Reserve Account is equal to or greater
than the Cash Reserve; and

 

(c)           the Agent shall have received such other approvals, opinions or
documents it may reasonably request.

 

EX-II-4

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EXHIBIT III

 

REPRESENTATIONS AND WARRANTIES

 

A.            Representations and Warranties of the Seller.  The Seller
represents and warrants as follows:

 

(a)           The Seller is a corporation duly incorporated and in existence
under the laws of the State of Indiana, and is duly qualified to do business,
and is in good standing, as a foreign corporation in every jurisdiction where
the nature of its business requires it to be so qualified except where the
failure to so qualify has not had and could not reasonably be expected to have a
Material Adverse Effect.

 

(b)           The execution, delivery and performance by the Seller of the
Agreement and the other Transaction Documents to which it is a party, including
the Seller’s use of the proceeds of purchases and reinvestments, (i) are within
the Seller’s corporate powers, (ii) have been duly authorized by all necessary
corporate action of the Seller, (iii) do not contravene or result in a default
under or conflict with (1) the Seller’s charter or by-laws, (2) any law, rule or
regulation applicable to the Seller, (3) any contractual restriction binding on
or affecting the Seller or its property or (4) any order, writ, judgment, award,
injunction or decree binding on or affecting the Seller or its property, and
(iv) do not result in or require the creation of any Adverse Claim upon or with
respect to any of the Seller’s properties, where, in the cases of items (2),
(3) and (4), such contravention, default or conflict has had or could reasonably
be expected to have a Material Adverse Effect.  The Agreement and the other
Transaction Documents to which it is a party have been duly executed and
delivered by the Seller.

 

(c)           No authorization or approval or other action by, and no notice to
or filing with, any Governmental Authority or other Person is required for the
due execution, delivery and performance by the Seller of the Agreement or any
other Transaction Document to which it is a party other than those previously
obtained or UCC filings.

 

(d)           Each of the Agreement and the other Transaction Documents to which
it is a party constitutes the legal, valid and binding obligation of the Seller
enforceable against the Seller in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization or other
similar laws affecting the enforcement of creditors’ rights generally and by
general principles of equity, regardless of whether enforceability is considered
in a proceeding in equity or at law.

 

(e)           Since December 31, 2006 there has been no material adverse change
in the business, operations, property or financial condition of the Seller or
AFC, the ability of the Seller or AFC to perform its obligations under the
Agreement or the other Transaction Documents to which it is a party or the
collectibility of the Receivables, or which affects the legality, validity or
enforceability of the Agreement or the other Transaction Documents.

 

(f)            (i) There is no action, suit, proceeding or investigation pending
or, to the knowledge of the Seller, threatened against the Seller before any
Government Authority or arbitrator and (ii) the Seller is not subject to any
order, judgment, decree, injunction, stipulation

 

EX-III-1

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or consent order of or with any Government Authority or arbitrator, that, in the
case of each of foregoing clauses (i) and (ii), could reasonably be expected to
have a Material Adverse Effect.

 

(g)           The Seller is the legal and beneficial owner of the Pool
Receivables free and clear of any Adverse Claim, excepting only Permitted Liens;
and has acquired all of the Originator’s right, title and interest in, to and
under the Related Security; upon each purchase or reinvestment, the Agent (for
the benefit of the Secured Parties) shall acquire a valid and enforceable
perfected undivided percentage ownership interest, to the extent of the
Participation, in each Pool Receivable then existing or thereafter arising, free
and clear of any Adverse Claim, excepting only Permitted Liens; in the
Collections with respect thereto and in the Seller’s right, title and interest
in, to and under the Related Security and proceeds thereof, the Agreement
creates a security interest in favor of the Agent (for the benefit of the
Secured Parties) in the items described in Section 1.2(d), and the Agent (for
the benefit of the Secured Parties) has a first priority perfected security
interest in such items.  No effective financing statement or other instrument
similar in effect naming AFC or the Seller as debtor or seller and covering any
Contract or any Pool Receivable or the Related Security or Collections with
respect thereto or any Deposit Account is on file in any recording office,
except those filed in favor of the Agent (for the benefit of the Secured
Parties) relating to the Agreement.

 

(h)           [Reserved].

 

(i)            Each Servicer Report, Portfolio Certificate, information,
exhibit, financial statement, document, book, record or report furnished or to
be furnished at any time by or on behalf of the Seller to the Agent or any
Purchaser Agent in connection with the Agreement is or will be accurate in all
material respects as of its date or (except as otherwise disclosed to the Agent
and any such Purchaser Agent at such time) as of the date so furnished, and no
such item contains or will contain any untrue statement of a material fact or
omits or will omit to state a material fact necessary in order to make the
statements contained therein, in the light of the circumstances under which they
were made, not misleading.

 

(j)            The principal place of business and chief executive office (as
such terms are used in the UCC) of the Seller and the office(s) where the Seller
keeps its records concerning the Receivables are located at the address set
forth under its signature to this Agreement.

 

(k)           The names and addresses of all the Deposit Banks, together with
the account numbers of the Deposit Accounts of the Seller at such Deposit Banks,
are specified in Schedule II to the Agreement.

 

(l)            The Seller is not in violation of any order of any court,
arbitrator or Governmental Authority.

 

(m)          Neither the Seller nor any Affiliate of the Seller has any direct
or indirect ownership or other financial interest in any Purchaser, the Agent or
any Purchaser Agent.

 

(n)           No proceeds of any purchase or reinvestment will be used for any
purpose that violates any applicable law, rule or regulation, including, without
limitation, Regulations T, U and X of the Federal Reserve Board.

 

EX-III-2

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(o)           Each Pool Receivable included as an Eligible Receivable in the
calculation of the Net Receivables Pool Balance is an Eligible Receivable as of
the date of such calculation.

 

(p)           No event has occurred and is continuing, or would result from a
purchase in respect of, or reinvestment in respect of, any Participation or from
the application of the proceeds therefrom, which constitutes a Termination
Event.

 

(q)           The Seller and the Servicer have complied in all material respects
with the Credit and Collection Policy with regard to each Receivable.

 

(r)            The Seller has complied with all of the terms, covenants and
agreements contained in the Agreement and the other Transaction Documents and
applicable to it.

 

(s)            The Seller’s complete corporate name is set forth in the preamble
to the Agreement, and the Seller does not use and has not during the last six
years used any other corporate name, trade name, doing-business name or
fictitious name, and except for names first used after the date of the Agreement
and set forth in a notice delivered to the Agent pursuant to
paragraph (l)(vi) of Exhibit IV.

 

(t)            The authorized capital stock of Seller consists of 1,000 shares
of common stock, no par value, 100 shares of which are currently issued and
outstanding.  All of such outstanding shares are validly issued, fully paid and
nonassessable and are owned (beneficially and of record) by AFC.

 

(u)           The Seller has filed all federal and other tax returns and reports
required by law to have been filed by it and has paid all taxes and governmental
charges thereby shown to be owing.

 

(v)           The Seller is not an “investment company” within the meaning of
the Investment Company Act of 1940, as amended.

 

(w)          No “accumulated funding deficiency” (within the meaning of
Section 412 of the Internal Revenue Code or Section 302 of ERISA) exists with
respect to any Single Employer Plan, and each Single Employer Plan has complied
in all material respects with the applicable provisions of ERISA and the
Internal Revenue Code.  The present value of all accrued benefits under each
Single Employer Plan (based on those assumptions used to fund such Plans) did
not, as of the last annual valuation date prior to the date on which this
representation is made or deemed made, exceed the value of the assets of such
Plan allocable to such accrued benefits.  Neither the Seller nor any ERISA
Affiliate has had a complete or partial withdrawal from any Multiemployer Plan,
and neither the Seller nor any ERISA Affiliate would become subject to any
liability under ERISA if the Seller or any such ERISA Affiliate were to withdraw
completely from all Multiemployer Plans as of the valuation date most closely
preceding the date on which this representation is made or deemed made.  No such
Multiemployer Plan is in Reorganization or Insolvent.

 

EX-III-3

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B.            Representations and Warranties of the Servicer.  The Servicer
represents and warrants as follows:

 

(a)           The Servicer is a corporation duly organized and in existence
under the laws of the State of Indiana, and is duly qualified to do business,
and is in good standing, as a foreign corporation in every jurisdiction where
the nature of its business requires it to be so qualified except where the
failure to so qualify has not had and could not reasonably be expected to have a
Material Adverse Effect.

 

(b)           The execution, delivery and performance by the Servicer of the
Agreement and the other Transaction Documents to which it is a party, (i) are
within the Servicer’s corporate powers, (ii) have been duly authorized by all
necessary corporate action on the part of the Servicer, (iii) do not contravene
or result in a default under or conflict with (1) the Servicer’s charter or
by-laws, (2) any law, rule or regulation applicable to the Servicer, (3) any
contractual restriction binding on or affecting the Servicer or its property or
(4) any order, writ, judgment, award, injunction or decree binding on or
affecting the Servicer or its property, and (iv) do not result in or require the
creation of any Adverse Claim upon or with respect to any of its properties,
where, in the cases of items (2), (3) and (4), such contravention, default or
conflict has had or could reasonably be expected to have a Material Adverse
Effect.  The Agreement and the other Transaction Documents to which it is a
party have been duly executed and delivered by the Servicer.

 

(c)           No authorization or approval or other action by, and no notice to
or filing with, any Governmental Authority or other Person is required for the
due execution, delivery and performance by the Servicer of the Agreement or any
other Transaction Document to which it is a party.

 

(d)           Each of the Agreement and the other Transaction Documents to which
it is a party constitutes the legal, valid and binding obligation of the
Servicer enforceable against the Servicer in accordance with its terms, except
as enforceability may be limited by bankruptcy, insolvency, reorganization or
other similar laws affecting the enforcement of creditors’ rights generally and
by general principles of equity, regardless of whether enforceability is
considered in a proceeding in equity or at law.

 

(e)           There is no pending or threatened action or proceeding affecting
the Servicer before any Governmental Authority or arbitrator which could have a
Material Adverse Effect.

 

(f)            The Servicer has complied in all material respects with the
Credit and Collection Policy with regard to each Receivable.

 

(g)           the Servicer is not subject to any order, judgment, decree,
injunction, stipulation or consent order of or with any Governmental Authority
or arbitrator, that, could reasonably be expected to have a Material Adverse
Effect.

 

(h)           Each Servicer Report, Portfolio Certificate, information, exhibit,
financial statement, document, book, record or report furnished or to be
furnished at any time by or on behalf of the Seller to the Agent or any
Purchaser Agent in connection with the Agreement is or

 

EX-III-4

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will be accurate in all material respects as of its date or (except as otherwise
disclosed to the Agent and any such Purchaser Agent at such time) as of the date
so furnished, and no such item contains or will contain any untrue statement of
a material fact or omits or will omit to state a material fact necessary in
order to make the statements contained therein, in the light of the
circumstances under which they were made, not misleading.

 

(i)            The principal place of business and chief executive office (as
such terms are used in the UCC) of the Servicer and the office(s) where the
Servicer keeps its records concerning the Receivables are located at the address
set forth under its signature to this Agreement or the Backup Servicing
Agreement, as applicable.

 

(j)            The Servicer is not in violation of any order of any court,
arbitrator or Governmental Authority.

 

(k)           Neither the Servicer nor any Affiliate of the Servicer has any
direct or indirect ownership or other financial interest in any Purchaser, the
Agent or any Purchaser Agent.

 

(l)            The Servicer is not an “investment company” within the meaning of
the Investment Company Act of 1940, as amended.

 

EX-III-5

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EXHIBIT IV

 

COVENANTS

 

Covenants of the Seller and the Servicer.  Until the latest of the Termination
Date, the date on which no Investment of or Discount in respect of any
Participation shall be outstanding or the date all other amounts owed by the
Seller under the Agreement to the Purchasers, the Purchaser Agents, the Agent
and any other Indemnified Party or Affected Person shall be paid in full:

 

(a)           Compliance with Laws, Etc.  Each of the Seller and the Servicer
shall comply in all material respects with all applicable laws, rules,
regulations and orders, and preserve and maintain its corporate existence,
rights, franchises, qualifications, and privileges except to the extent that the
failure so to comply with such laws, rules and regulations or the failure so to
preserve and maintain such existence, rights, franchises, qualifications, and
privileges would not materially adversely affect the collectibility of the
Receivables or the enforceability of any related Contract or the ability of the
Seller or the Servicer to perform its obligations under any related Contract or
under the Agreement.

 

(b)           Offices, Records and Books of Account, Etc.  The Seller shall
provide the Agent with at least 60 days’ written notice prior to making any
change in the Seller’s name or jurisdiction of organization or making any other
change in the Seller’s identity or corporate structure (including a merger)
which could impair or otherwise render any UCC financing statement filed in
connection with this Agreement “seriously misleading” as such term is used in
the applicable UCC; each notice to the Agent pursuant to this sentence shall set
forth the applicable change and the proposed effective date thereof.  The Seller
and Servicer will also maintain and implement administrative and operating
procedures (including, without limitation, an ability to recreate records
evidencing Receivables and related Contracts in the event of the destruction of
the originals thereof), and keep and maintain all documents, books, records,
computer tapes and disks and other information reasonably necessary or advisable
for the collection of all Receivables (including, without limitation, records
adequate to permit the daily identification of each Receivable and all
Collections of and adjustments to each existing Receivable).

 

(c)           Performance and Compliance with Contracts and Credit and
Collection Policy.  Each of the Seller and the Servicer shall, at its expense,
timely and fully perform and comply with all material provisions, covenants and
other promises required to be observed by it under the Contracts related to the
Receivables, and timely and fully comply in all material respects with the
Credit and Collection Policy with regard to each Receivable and the related
Contract.

 

(d)           Ownership Interest, Etc.  The Seller shall, at its expense, take
all action necessary or desirable to establish and maintain a valid and
enforceable undivided ownership interest, to the extent of the Aggregate
Participation, in the Pool Receivables (free and clear of any Adverse Claim
excepting only Permitted Liens) and the Collections, with respect thereto and
the Seller’s right, title and interest in, to and under the Related Security and
the proceeds thereof, and a first priority perfected security interest in the
items described in Section 1.2(d), in favor of

 

EX-IV-1

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the Agent (for the benefit of the Secured Parties), including, without
limitation, taking such action to perfect, protect or more fully evidence the
interest of the Agent (for the benefit of the Secured Parties) under the
Agreement as the Agent may request.

 

(e)           Sales, Liens, Etc.  The Seller shall not sell, assign (by
operation of law or otherwise) or otherwise dispose of, or create or suffer to
exist any Adverse Claim (excepting only Permitted Liens) upon or with respect
to, any or all of its right, title or interest in, to or under, any item
described in Section 1.2(d) (including without limitation the Seller’s undivided
interest in any Receivable, Related Security, or Collections, or upon or with
respect to any account to which any Collections of any Receivables are sent), or
assign any right to receive income in respect of any items contemplated by this
paragraph (e).

 

(f)            Extension or Amendment of Receivables.  After the occurrence and
during the continuance of a Termination Event or an Unmatured Termination Event
or after the Termination Date (or if a Termination Event or Unmatured
Termination Event would result therefrom), neither the Seller nor the Servicer
shall extend the maturity or adjust the Outstanding Balance or otherwise modify
the terms of any Pool Receivable in any material respect, or amend, modify or
waive any term or condition of any related Contract in any material respect.

 

(g)           Change in Business or Credit and Collection Policy.  Without the
prior written consent of the Majority Purchasers, neither the Seller nor the
Servicer shall make any material change in the character of its business or in
the Credit and Collection Policy, or any change in the Credit and Collection
Policy that would adversely affect the collectibility of the Receivables Pool or
the enforceability of any related Contract or the ability of the Seller or
Servicer to perform its obligations under any related Contract or under the
Agreement.  Neither the Seller nor the Servicer shall make any material change
to its standard operating practices or procedures with respect to the
Receivables Pool (including, by way of example, its practice of granting waivers
relative to the Credit and Collection Policy) without providing each Rating
Agency and the Agent prior written notice thereof to the extent such change
would impact a material portion of the Receivables Pool ([*]).

 

(h)           Audits.  Each of the Seller and the Servicer shall, from time to
time during regular business hours, upon reasonable prior notice as requested by
the Agent, permit the Agent or its agents or representatives, (i) to examine and
make copies of and abstracts from all books, records and documents (including,
without limitation, computer tapes and disks) in the possession or under the
control of the Seller or the Servicer relating to Receivables and the Related
Security, including, without limitation, the related Contracts, and (ii) to
visit the offices and properties of the Seller and the Servicer for the purpose
of examining such materials described in clause (i) above, and to discuss
matters relating to Receivables and the Related Security or the Seller’s or
Servicer’s performance hereunder or under the Contracts with any of the
officers, employees, agents or contractors of the Seller having knowledge of
such matters; provided, however, that the Agent shall not be reimbursed for more
than two such examinations in any year (including any examinations conducted
pursuant to any other Transaction Document but excluding any audit conducted
pursuant to Section 4.2(a)) unless (x) a Level One Trigger has occurred and is
continuing, in which case the Agent shall be reimbursed for four such
examinations per year in addition to any audits conducted pursuant to
Section 4.2(a) or (y) a

 

EX-IV-2

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Termination Event or Unmatured Termination Event has occurred, in which case the
Agent shall be reimbursed for all such examinations.

 

(i)            Change in Deposit Banks, Deposit Accounts and Payment
Instructions to Obligors.  Neither the Seller nor the Servicer shall add or
terminate any bank as a Deposit Bank or any account as a Deposit Account from
those listed in Schedule II to the Agreement without (i) the prior written
consent of the Agent and (ii) in the case of a new Deposit Account and/or
Deposit Bank, the applicable Deposit Bank has executed, and the applicable
Deposit Account is subject to, a Deposit Account Agreement consented to in
writing by the Agent.

 

(j)            Deposit Accounts.  Each Deposit Account shall at all times be
subject to a Deposit Account Agreement.  Neither the Seller nor the Servicer
will deposit or otherwise credit, or cause or permit to be so deposited or
credited, to any Deposit Account, the Liquidation Account or the Cash Reserve
Account cash or cash proceeds other than Collections of Pool Receivables.

 

(k)           Marking of Records.  At its expense, the Seller (or the Servicer
on its behalf) shall mark its master data processing records relating to Pool
Receivables and related Contracts, including with a legend evidencing that the
undivided percentage ownership interests with regard to the Aggregate
Participation related to such Receivables and related Contracts have been sold
in accordance with the Agreement.

 

(l)            Reporting Requirements.  The Seller will provide to the Agent and
each Purchaser Agent (in multiple copies, if requested by the Agent) (except
that with respect to paragraphs (i), (ii), (iii) and (iv), the Seller will cause
AFC (or, with respect to paragraph (iv), the Servicer), to provide to the Agent,
each Purchaser Agent, the Backup Servicer (in the case of paragraph (iii)) and
(in the case of items (iii)(a) and (xiii)) each Rating Agency, the following:

 

(i)            (I)  as soon as available and in any event within 45 days after
the end of the first three quarters of each fiscal year of AFC in a format
acceptable to the Agent the consolidating balance sheet of AFC and its
consolidated subsidiaries as of the end of such quarter and statements of income
of AFC and its consolidated subsidiaries for the period commencing at the end of
the previous fiscal year and ending with the end of such quarter, certified by
the chief financial officer of such Person and (II) as soon as available, but in
any event not later than 45 days after the end of each of the first three
quarterly periods of each fiscal year of KAR (or, in the case of the first
fiscal quarter ending after April 20, 2007, 60 days after the end of such fiscal
quarter), the unaudited consolidated balance sheet of KAR and its consolidated
Subsidiaries as at the end of such quarter and the related unaudited
consolidated statements of income and of cash flows for such quarter and the
portion of the fiscal year through the end of such quarter, setting forth in
each case in comparative form the figures for the previous year and the current
year budget;

 

(ii)           (I) as soon as available and in any event within 90 days after
the end of each fiscal year of AFC, (A) a copy of the annual report for AFC and
its consolidated subsidiaries, containing financial statements for such year
audited by

 

EX-IV-3

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KPMG LLP or other independent certified public accountants acceptable to the
Agent and (B) the consolidating balance sheet of AFC and the income statement of
the Seller for such year certified by the chief financial officer of the Seller,
and (II) as soon as available and in any event within 90 days after the end of
each fiscal year of KAR, a copy of the audited consolidated balance sheet of KAR
and its consolidated Subsidiaries as at the end of such year and the related
audited consolidated statements of income and of cash flows for such year,
setting forth in each case in comparative form the figures for the previous year
and the current year budget, reported on by KPMG LLP or other independent
certified public accountants of nationally recognized standing;

 

(iii) (a) as soon as available and in any event not later than the Servicer
Report Date, a Servicer Report as of the calendar month ended immediately prior
to such Servicer Report Date and (b) unless the Agent has otherwise agreed in
writing, a Portfolio Certificate as of each Friday, delivered on the third
Business Day of the next calendar week (or as of each Business Day to the extent
required by Section 4.2(e)).  Each Servicer Report shall contain a current list
of all branch offices, loan processing offices or other locations at which
records and documents relating to the Pool Receivables (including, without
limitation, any related Contracts and vehicle certificates of title)
(collectively, the “Pool Receivable Documents”) are held by the Servicer.  The
Servicer shall provide each Rating Agency with prior notice of any material
change to the form of Servicer Report and get their consent thereto prior to
implementing any such change.

 

(iv)          as soon as possible and in any event within three days after the
occurrence of each Termination Event and Unmatured Termination Event, a
statement of the chief financial officer of the Seller setting forth details of
such Termination Event or event and the action that the Seller has taken and
proposes to take with respect thereto;

 

(v)           promptly after the filing or receiving thereof, copies of all
reports and notices that the Seller or any ERISA Affiliate files with respect to
a Plan under ERISA or the Internal Revenue Code with the Internal Revenue
Service or the Pension Benefit Guaranty Corporation or the U.S. Department of
Labor or that the Seller or any ERISA Affiliate receives from any of the
foregoing or from any Multiemployer Plan to which the Seller or any ERISA
Affiliate is or was, within the preceding five years, a contributing employer,
in each case in respect of the assessment of withdrawal liability or an event or
condition which could, in the aggregate, result in the imposition of liability
on the Seller and/or any such ERISA Affiliate in excess of $250,000;

 

(vi)          at least 60 days prior to any change in the Seller’s name or any
other change requiring the amendment of UCC financing statements, a notice
setting forth such changes and the effective date thereof;

 

(vii)         such other information respecting the Receivables, the Related
Security (including inventory reports by branch, Obligor, vehicle identification
number,

 

EX-IV-4

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and other descriptions sufficient to identify the Related Security) or the
condition of operations, financial or otherwise, of the Seller or AFC as the
Agent or any Purchaser Agent may from time to time reasonably request;

 

(viii)        promptly after the Seller obtains knowledge thereof, notice of any
litigation, regulatory ruling, default under any Originating Lender Sale
Agreement or other event which could reasonably be expected to prevent any
Originating Lender from originating Receivables or transferring Receivables to
the Originator following origination;

 

(ix)  promptly after the Seller obtains knowledge thereof, notice of the
commencement of any proceedings instituted by or against any of the Seller, the
Servicer or the Originator, as applicable, in any federal, state or local court
or before any governmental body or agency, or before any arbitration board, in
which the amount involved, in the case of the Servicer or Originator, is
$500,000 or more and not covered by insurance or in which injunctive or similar
relief is sought or any litigation or proceeding relating to any Transaction
Document;

 

(x)           promptly after the occurrence thereof, notice of any event or
circumstance that could reasonably be expected to have a Material Adverse
Effect;

 

(xi)          notice of any material change to the Credit and Collection Policy
or any amendment, waiver, extension, termination or replacement of the KAR
Credit Facility (with a copy thereof) and an execution copy of the underlying
credit agreement with respect to the KAR Credit Facility, in each case, upon
execution thereof;

 

(xii)         as soon as possible and in any event within 30 days after the
Seller knows or has reason to know of: (i) the occurrence or expected occurrence
of any Reportable Event with respect to any Plan that is a Single Employer Plan,
a failure to make any required contribution to a Plan, the creation of any lien
in favor of the Pension Benefit Guaranty Corporation or a Plan or any withdrawal
from, or the termination, Reorganization or Insolvency of, any Multiemployer
Plan or (ii) the institution of proceedings or the taking of any other action by
the Pension Benefit Guaranty Corporation or the Seller or any ERISA Affiliate or
any Multiemployer Plan with respect to the withdrawal from, or the terminating,
Reorganization or Insolvency of any Plan; and

 

(xiii)        as soon as available and in any event upon the earlier to occur of
(x) 45 days following the end of a fiscal quarter (90 days, in the case of the
fourth fiscal quarter in any fiscal year, and 60 days in the case of the first
fiscal quarter ending after April 20, 2007) and (y) the day a compliance
certificate is delivered pursuant to the KAR Credit Facility, a compliance
certificate setting forth computations in reasonable detail satisfactory to the
Majority Purchasers demonstrating compliance with the financial covenants of KAR
thereunder.

 

EX-IV-5

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(m)          Separate Corporate Existence. Each of the Seller and AFC hereby
acknowledges that the Purchasers, the Agent and the Purchaser Agents are
entering into the transactions contemplated by the Agreement and the Transaction
Documents in reliance upon the Seller’s identity as a legal entity separate from
AFC.  Therefore, from and after the date hereof, the Seller and AFC shall take
all reasonable steps to continue the Seller’s identity as a separate legal
entity and to make it apparent to third Persons that the Seller is an entity
with assets and liabilities distinct from those of AFC, the Originator and any
other Person, and is not a division of AFC or any other Person.  Without
limiting the generality of the foregoing and in addition to and consistent with
the covenant set forth in paragraph (a) of this Exhibit IV, the Seller and AFC
shall take such actions as shall be required in order that:

 

(i)  The Seller will be a limited purpose corporation whose primary activities
are restricted in its articles of incorporation to purchasing Receivables from
the Originator, entering into agreements for the servicing of such Receivables,
selling undivided interests in such Receivables and conducting such other
activities as it deems necessary or appropriate to carry out its primary
activities;

 

(ii)  Not less than one member of Seller’s Board of Directors (the “Independent
Directors”) shall be individuals who are not direct, indirect or beneficial
stockholders, officers, directors, employees, affiliates, associates, customers
or suppliers of the Originator or any of its Affiliates.  The Seller’s Board of
Directors shall not approve, or take any other action to cause the commencement
of a voluntary case or other proceeding with respect to the Seller under any
applicable bankruptcy, insolvency, reorganization, debt arrangement, dissolution
or other similar law, or the appointment of or taking possession by, a receiver,
liquidator, assignee, trustee, custodian, or other similar official for the
Seller unless in each case the Independent Directors shall approve the taking of
such action in writing prior to the taking of such action.  The Independent
Directors’ fiduciary duty shall be to the Seller (and creditors) and not to the
Seller’s shareholders in respect of any decision of the type described in the
preceding sentence.  In the event an Independent Director resigns or otherwise
ceases to be a director of the Seller, there shall be selected a replacement
Independent Director who shall not be an individual within the proscriptions of
the first sentence of this clause (ii) or any individual who has any other type
of professional relationship with the Originator or any of its Affiliates or any
management personnel of any such Person or Affiliate and who shall be (x) a
tenured professor at a business or law school, (y) a retired judge or (z) an
established independent member of the business community, having a sound
reputation and experience relative to the duties to be performed by such
individual as an Independent Director;

 

(iii)  No Independent Director shall at any time serve as a trustee in
bankruptcy for Originator or any Affiliate thereof;

 

(iv)  Any employee, consultant or agent of the Seller will be compensated from
the Seller’s own bank accounts for services provided to the Seller except as
provided herein in respect of the Servicing Fee.  The Seller will engage no
agents other than a Servicer for the Receivables, which Servicer will be fully
compensated for its services to the Seller by payment of the Servicing Fee;

 

EX-IV-6

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(v)  The Seller will contract with the Servicer to perform for the Seller all
operations required on a daily basis to service its Receivables.  The Seller
will pay the Servicer a monthly fee based on the level of Receivables being
managed by the Servicer.  The Seller will not incur any material indirect or
overhead expenses for items shared between the Seller and the Originator or any
Affiliate thereof which are not reflected in the Servicing Fee.  To the extent,
if any, that the Seller and the Originator or any Affiliate thereof share items
of expenses not reflected in the Servicing Fee, such as legal, auditing and
other professional services, such expenses will be allocated to the extent
practical on the basis of actual use or the value of services rendered, and
otherwise on a basis reasonably related to the actual use or the value of
services rendered, it being understood that Originator shall pay all expenses
relating to the preparation, negotiation, execution and delivery of the
Transaction Documents, including, without limitation, legal and other fees;

 

(vi)  The Seller’s operating expenses will not be paid by Originator or any
Affiliate thereof unless the Seller shall have agreed in writing with such
Person to reimburse such Person for any such payments;

 

(vii)  The Seller will have its own separate mailing address and stationery;

 

(viii)  The Seller’s books and records will be maintained separately from those
of the Originator or any Affiliate thereof;

 

(ix)    Any financial statements of the Originator or KAR which are consolidated
to include the Seller will contain detailed notes clearly stating that the
Seller is a separate corporate entity and has sold ownership interests in the
Seller’s accounts receivable;

 

(x)  The Seller’s assets will be maintained in a manner that facilitates their
identification and segregation from those of the Originator and any Affiliate
thereof;

 

(xi)  The Seller will strictly observe corporate formalities in its dealings
with the Originator and any Affiliate thereof, and funds or other assets of the
Seller will not be commingled with those of the Originator or any Affiliate
thereof.  The Seller shall not maintain joint bank accounts or other depository
accounts to which the Originator or any Affiliate thereof (other than AFC in its
capacity as Servicer) has independent access and shall not pool any of the
Seller’s funds at any time with any funds of the Originator or any Affiliate
thereof;

 

(xii)  The Seller shall pay to the Originator the marginal increase (or, in the
absence of such increase, the market amount of its portion) of the premium
payable with respect to any insurance policy that covers the Seller and any
Affiliate thereof, but the Seller shall not, directly or indirectly, be named or
enter into an agreement to be named, as a direct or contingent beneficiary or
loss payee, under any such insurance policy, with respect to any amounts payable
due to occurrences or events related to the Originator or any Affiliate thereof
(other than the Seller); and

 

EX-IV-7

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(xiii)  The Seller will maintain arm’s length relationships with the Originator
and any Affiliate thereof.  The Originator or any Affiliate thereof that renders
or otherwise furnishes services to the Seller will be compensated by the Seller
at market rates for such services.  Neither the Seller nor the Originator or any
Affiliate thereof will be or will hold itself out to be responsible for the
debts of the other or the decisions or actions respecting the daily business and
affairs of the other.

 

(n)           Mergers, Acquisitions, Sales, etc.

 

(i)  The Seller shall not:

 

(A)  be a party to any merger or consolidation, or directly or indirectly
purchase or otherwise acquire, whether in one or a series of transactions, all
or substantially all of the assets or any stock of any class of, or any
partnership or joint venture interest in, any other Person, or sell, transfer,
assign, convey or lease any of its property and assets (including, without
limitation, any Pool Receivable or any interest therein) other than pursuant to
this Agreement;

 

(B)  make, incur or suffer to exist an investment in, equity contribution to,
loan, credit or advance to, or payment obligation in respect of the deferred
purchase price of property from, any other Person, except for obligations
incurred pursuant to the Transaction Documents; or

 

(C)  create any direct or indirect Subsidiary or otherwise acquire direct or
indirect ownership of any equity interests in any other Person.

 

(o)           Restricted Payments.

 

(i)  General Restriction.  Except in accordance with subparagraph (ii), the
Seller shall not (A) purchase or redeem any shares of its capital stock,
(B) declare or pay any Dividend or set aside any funds for any such purpose,
(C) prepay, purchase or redeem any subordinated indebtedness of the Seller,
(D) lend or advance any funds or (E) repay any loans or advances to, for or from
the Originator.  Actions of the type described in this clause (i) are herein
collectively called “Restricted Payments”.

 

(ii)  Types of Permitted Payments.  Subject to the limitations set forth in
clause (iii) below, the Seller may make Restricted Payments so long as such
Restricted Payments are made only to the Originator and only in one or more of
the following ways:

 

(A)  Seller may make cash payments (including prepayments) on the Company Note
in accordance with its terms; and

 

(B)  if no amounts are then outstanding under the Company Note, the Seller may
declare and pay Dividends.

 

(iii)  Specific Restrictions.  The Seller may make Restricted Payments only out
of Collections paid or released to the Seller pursuant to Section 1.4(b). 
Furthermore, the Seller shall not pay, make or declare:

 

EX-IV-8

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(A)  any Dividend if, after giving effect thereto, Seller’s Tangible Net Worth
would be less than $[*]; or

 

(B)  [*].

 

(p)           Use of Seller’s Share of Collections.  Subject to clause
(o) above, the Seller shall apply its share of Collections to make payments in
the following order of priority:  first, the payment of its expenses (including,
without limitation, the obligations payable to Purchasers, the Affected Persons,
the Agent, the Purchaser Agents and the Agent under the Transaction Documents),
second, the payment of accrued and unpaid interest on the Company Note, third,
the payment of the outstanding principal amount of the Company Note, and fourth,
other legal and valid corporate purposes permitted by the Agreement.

 

(q)           Amendments to Certain Documents.

 

(i)  The Seller shall not amend, supplement, amend and restate, or otherwise
modify the Purchase and Sale Agreement, the Company Note, any other document
executed under the Purchase and Sale Agreement, the Deposit Account Agreements,
the Backup Servicing Agreement, the Backup Servicing Fee Letter or the Seller’s
articles of incorporation or by-laws, except (A) in accordance with the terms of
such document, instrument or agreement and (B) with the prior written consent of
the Agent.  The Seller shall obtain confirmation of the then—current rating of
the Notes from S&P prior to amending the Seller’s articles of incorporation.

 

(ii)  The Originator shall not enter into, or otherwise become bound by, any
agreement, instrument, document or other arrangement that restricts its right to
amend, supplement, amend and restate or otherwise modify, or to extend or renew,
or to waive any right under, this Agreement or any other Transaction Document.

 

(r)            Incurrence of Indebtedness.  The Seller shall not (i) create,
incur or permit to exist any Debt or liability or (ii) cause or permit to be
issued for its account any letters of credit or bankers’ acceptances, except for
Debt incurred pursuant to the Company Note and liabilities incurred pursuant to
or in connection with the Transaction Documents or otherwise permitted therein.

 

(s)            Lot Checks.  The Seller shall, or shall cause the Originator to,
conduct Lot Checks of the Obligors according to the Originator’s customary
practices or such more frequent intervals as may reasonably be requested by the
Agent.

 

(t)            [*].

 

EX-IV-9

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EXHIBIT V

 

TERMINATION EVENTS

 

Each of the following shall be a “Termination Event”:

 

(a)           Any Person which is the Servicer shall fail to (1) make when due
any payment or deposit to be made by it under the Agreement or any other
Transaction Document or (2) set aside or allocate all accrued and unpaid Program
Fee, Discount or Servicing Fee in accordance with Section 1.4(b) and in each
case, such failure shall remain unremedied for two Business Days after the
earlier of (i) the Servicer’s knowledge of such failure and (ii) notice to the
Servicer of such failure; or

 

(b)           The Seller shall fail (i) to transfer to any successor Servicer
when required any rights, pursuant to the Agreement, which the Seller then has
with respect to the servicing of the Pool Receivables, or (ii) to make any
payment required under the Agreement or any other Transaction Document, and in
either case such failure shall remain unremedied for two Business Days after
notice or discovery thereof; or

 

(c)           Any representation or warranty made or deemed made by the Seller
or the Servicer (or any of their respective officers) under or in connection
with the Agreement or any other Transaction Document or any information or
report delivered by the Seller or the Servicer pursuant to the Agreement or any
other Transaction Document shall prove to have been incorrect, incomplete (with
respect to such information or report delivered) or untrue in any material
respect when made or deemed made or delivered; provided, however, if the
violation of this paragraph (c) by the Seller or the Servicer may be cured
without any potential or actual detriment to any Purchaser, the Agent, any
Purchaser Agent, the Backup Servicer or any Program Support Provider, the Seller
or the Servicer, as applicable, shall have 30 days from the earlier of (i) such
Person’s knowledge of such failure and (ii) notice to such Person of such
failure to so cure any such violation before a Termination Event shall occur so
long as such Person is diligently attempting to effect such cure; or

 

(d)           The Seller or the Servicer shall fail to perform or observe any
other material term, covenant or agreement contained in the Agreement or any
other Transaction Document on its part to be performed or observed and any such
failure shall remain unremedied for 30 days after the earlier of (i) such
Person’s knowledge of such failure and (ii) notice to such Person of such
failure (or, with respect to a failure to deliver the Servicer Report or the
Portfolio Certificate pursuant to the Agreement, such failure shall remain
unremedied for five days); or

 

(e)           (i) A default shall occur in the payment when due (subject to any
applicable grace period), whether by acceleration or otherwise, of any Debt of
the Seller, AFC or KAR or (ii) a default shall occur in the performance or
observance of any obligation or condition with respect to such Debt if the
effect of such default is to accelerate the maturity of any such Debt, and, in
the case of either clause (i) or clause (ii), the Debt with respect to which
non-payment and/or non-performance shall have occurred exceeds, at any point in
time, with respect to the Seller or AFC, $1,000,000 in the aggregate for all
such occurrences or, with respect to KAR, $35,000,000, in the aggregate for all
such occurrences; or

 

EX-V-1

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(f)            The Agreement or any purchase or any reinvestment pursuant to the
Agreement shall for any reason (other than pursuant to the terms hereof)
(i) cease to create, or the Aggregate Participation shall for any reason cease
to be, a valid and enforceable perfected undivided percentage ownership interest
to the extent of the Aggregate Participation in each Pool Receivable free and
clear of any Adverse Claim, excepting only Permitted Liens and the Collections
with respect thereto and the Seller’s right, title and interest in, to and under
the Related Security and the proceeds thereof, or (ii) cease to create with
respect to the items described in Section 1.2(d), or the interest of the Agent
(for the benefit of the Secured Parties) with respect to such items shall cease
to be, a valid and enforceable first priority perfected security interest, and
in the case of the Pool Receivables, free and clear of any Adverse Claim,
excepting only Permitted Liens; or

 

(g)           The Originator, KAR or Seller shall generally not pay its debts as
such debts become due, or shall admit in writing its inability to pay its debts
generally, or shall make a general assignment for the benefit of creditors; or
any proceeding shall be instituted by or against the Originator, KAR or Seller
seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation,
winding up, reorganization, arrangement, adjustment, protection, relief, or
composition of it or its debts under any law relating to bankruptcy, insolvency
or reorganization or relief of debtors, or seeking the entry of an order for
relief or the appointment of a receiver, trustee, custodian or other similar
official for it or for any substantial part of its property and, in the case of
any such proceeding instituted against it (but not instituted by it), either
such proceeding shall remain undismissed or unstayed for a period of 45 days, or
any of the actions sought in such proceeding (including, without limitation, the
entry of an order for relief against, or the appointment of a receiver, trustee,
custodian or other similar official for, it or for any substantial part of its
property) shall occur; or the Originator, KAR or Seller shall take any corporate
action to authorize any of the actions set forth above in this paragraph (g); or

 

(h)           As of the last day of any calendar month, the arithmetic average
of the Default Ratios for the most recent [*] shall exceed [*] or the Default
Ratio as of the last day of any calendar month shall exceed [*]; or

 

(i)            As of the last day of any calendar month, the arithmetic average
of the Delinquency Ratios for the most recent [*] shall exceed [*] or the
Delinquency Ratio as of the last day of any calendar month shall exceed [*]; or

 

(j)            The Net Spread shall be [*]; or

 

(k)           At any time the aggregate of all Participations exceeds 100% and
such condition shall continue unremedied for five days after any date any
Servicer Report or Portfolio Certificate is required to be delivered; or

 

(l)            A Change in Control shall occur; or

 

(m)          (i) Any “accumulated funding deficiency” (within the meaning of
Section 412 of the Internal Revenue Code or Section 302 of ERISA), whether or
not waived, shall exist with respect to any Plan, (ii) a Reportable Event shall
occur with respect to, or proceedings shall commence to have a trustee
appointed, or a trustee shall be appointed, to administer or to

 

EX-V-2

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terminate, any Single Employer Plan, which Reportable Event or commencement of
proceedings or appointment of a trustee is, in the reasonable opinion of the
Majority Purchasers, likely to result in the termination of such Plan for
purposes of Title IV of ERISA, (iii) the Seller or any ERISA Affiliate shall, or
in the reasonable opinion of the Majority Purchasers, is likely to, incur any
liability in connection with a withdrawal from, or the Insolvency or
Reorganization of, a Multiemployer Plan, (iv) the Internal Revenue Service shall
file notice of a lien pursuant to Section 6323 of the Internal Revenue Code with
regard to any assets of the Seller or any ERISA Affiliate and such lien shall
not have been released within ten Business Days, or the Pension Benefit Guaranty
Corporation shall, or shall indicate its intention to, file notice of a lien
pursuant to Section 4068 of ERISA or perfect a lien under Section 302(f) of
ERISA with regard to any of the assets of Seller or any ERISA Affiliate, or
(v) any other adverse event or condition shall occur or exist with respect to a
Plan; and in each case in clauses (i), (ii), (iii), (iv) and (v) above, such
event or condition, together with all other such events or conditions, if any,
could reasonably be expected to involve an aggregate amount of liability to the
Seller or an ERISA Affiliate in excess of $10,000,000; or

 

(n)           The Tangible Net Worth of the Seller shall be less than $[*] or
the Tangible Net Worth of the Originator shall be less than $[*]; or

 

(o)           Any material adverse change shall occur in the reasonable business
judgment of the Agent or the Majority Purchasers in the collectibility of the
Receivables or the business, operations, property or financial condition of the
Originator or the Seller; or

 

(p)           Any Purchase and Sale Termination Event (as defined in the
Purchase and Sale Agreement) shall occur (whether or not waived by the Seller);
or

 

(q)           The Performance Guaranty shall cease to be in full force and
effect with respect to KAR, KAR shall fail to comply with or perform any
provision of the Performance Guaranty, or KAR (or any Person by, through or on
behalf of KAR) shall contest in any manner the validity, binding nature or
enforceability of the Performance Guaranty with respect to KAR; or

 

(r)            the sum of all of AFC’s Debt (including intercompany loans
between AFC and KAR but excluding any guarantee of KAR’s Debt under the KAR
Credit Facility), plus the Investment of the Aggregate Participation, plus the
outstanding balance of any other recourse or non-recourse transactions exceeds
$[*]; or

 

(s)            AFC’s debt (excluding guarantees) to equity ratio is greater than
[*]; or

 

(t)            The aggregate Outstanding Balances of Eligible Receivables then
in the Receivables Pool shall be less than $100,000,000; or

 

(u)           The amount on deposit in the Cash Reserve Account shall at any
time fail to equal or exceed the Cash Reserve for a period of [*]; or

 

(v)           (i) any of the Originator, the Seller or the Servicer shall have
asserted that any of the Transaction Documents to which it is a party is not
valid and binding on the parties thereto; or (ii) any court, governmental
authority or agency having jurisdiction over any of the

 

EX-V-3

--------------------------------------------------------------------------------

 

parties to any of the Transaction Documents or any property thereof shall find
or rule that any material provisions of any of the Transaction Documents is not
valid and binding on the parties thereto and all appeals therefrom have been
decided or the time to appeal has run; or

 

(w)          the Backup Servicer shall resign or be terminated and no successor
Backup Servicer reasonably acceptable to the Agent shall have been appointed
pursuant to a replacement Backup Servicing Agreement within 90 days of such
resignation or termination; unless on or prior to the first day in which a
Backup Servicer is required to be appointed pursuant to this paragraph
(x) ADESA’s senior unsecured debt shall be rated at least “BBB-” by S&P and
“Baa3” by Moody’s; provided, that a Termination Event shall be deemed to occur
if no Backup Servicer reasonably acceptable to the Agent shall have been
appointed within 90 days following any subsequent withdrawal, suspension or
downgrade of such senior unsecured debt ratings of ADESA below “BBB-” by S&P or
below “Baa3” by Moody’s or, if the applicable rating is “BBB-” by S&P or “Baa3”
by Moody’s, the placement of such ratings on credit watch or similar notation;
or

 

(x)           the occurrence of a KAR Financial Covenant Termination Event.

 

EX-V-4

--------------------------------------------------------------------------------

 

EXHIBIT VI

 

PORTFOLIO CERTIFICATE

 

AFC FUNDING CORPORATION
PORTFOLIO CERTIFICATE
AS OF:                                            

 

To:          BMO Capital Markets, as Agent

Deutsche Bank AG, as Agent

 

Reference is made to the Third Amended and Restated Receivables Purchase
Agreement, dated as of April 20, 2007 (herein, as amended or otherwise modified
from time to time, called the “Receivables Purchase Agreement”), among AFC
Funding Corporation (the “Seller”), Automotive Finance Corporation (the
“Servicer”), Fairway Finance Company, LLC, and Monterey Funding LLC as
Purchasers, and such other entities from time to time as may become purchasers
thereunder, BMO Capital Markets as Agent and Purchaser Agent for Fairway Finance
Company, LLC and Deutsche Bank AG as Agent and Purchaser Agent for Monterey
Funding LLC.  Capitalized terms used but not otherwise defined herein are used
as defined in the Receivables Purchase Agreement.

 

The Seller hereby certifies and warrants to you that the following is a true and
correct computation as of                                             .

 

 

 

 

 

Amount

 

1.

NET RECEIVABLES POOL BALANCE

 

 

 

 

 

 

 

 

 

 

A.

Total of all Receivables in the Receivables Pool

 

$

 

 

 

 

 

 

 

 

B.

Specified Ineligible Receivables

 

$

 

 

 

 

 

 

 

 

C.

Sum of Outstanding Balances of all Receivables in the Receivables Pool that are
excluded from the Net Receivables Pool Balance

 

$

 

 

 

 

 

 

 

 

D.

Amount by which the Outstanding Balances of all Eligible Receivables of each
Obligor exceeds the product of the Normal Concentration Percentage for such
Obligor (or, in the case of a Special Obligor, the Special Concentration
Percentage) multiplied by the Outstanding Balance of all Eligible Receivables

 

$

 

 

 

 

 

 

 

 

E.

Net Receivables Pool Balance (1A-1B-1C-1D)

 

$

 

 

EX-VI-1

--------------------------------------------------------------------------------

 

2.

LIQUIDATION ACCOUNT BALANCE EXCESS/(DEFICIT)

 

 

 

 

 

 

 

 

 

Amount of Collections on deposit in the Liquidation Account (other than amounts
transferred thereto from the Deposit Accounts to pay Discount, Utilization Fee,
Facility Fee, Unused Fee, Note Placement Fees, Backup Servicing Fees,
Unaffiliated Servicer Fees and Transition Expenses pursuant to
Section 1.4(b)(i) and 1.4(b)(ii) of the Receivables Purchase Agreement and
Indemnified Amounts to the Indemnified Parties)

 

$

 

 

 

 

 

 

3.

PARTICIPATION OUTSTANDING

 

 

 

 

 

 

 

 

 

The sum of the Aggregate Investment of the Participation and the Loss Reserve
minus the amount of cash in the Deposit Account at [*] at the end of business on
either (i) with respect to any Servicer Report, the last Business Day of the
prior calendar month, or (ii) with respect to any Portfolio Certificate, Friday
of the prior calendar week and that was wired to the respective Revolving
Purchaser on the immediately following Business Day to paydown that Revolving
Purchaser’s Investment.

 

$

 

 

 

 

 

 

 

 

A.

Aggregate Investment

$

 

 

 

 

 

 

 

 

 

 

 

B.

Loss Reserve ([*]) after application of cash sent from [*]

$

 

 

 

 

 

 

 

 

 

 

 

C.

Cash Sent from [*]

$

 

 

 

 

 

 

 

 

 

 

TEST: (1E PLUS 2 MUST BE GREATER THAN OR EQUAL TO 3)

YES/NO

 

 

 

 

 

 

 

 

 

 

4.

CASH RESERVE ([*])

 

 

 

 

 

 

 

 

 

 

 

 

A.

Actual Balance

 

 

$

 

 

 

 

 

 

 

 

 

B.

Minimum Required Balance

 

 

$

 

 

 

 

 

 

 

 

TEST: (4A MUST BE GREATER THAN 4B)

YES/NO

 

 

 

 

EX-VI-2

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the Seller has caused this Certificate to be executed and
delivered by its duly authorized officer this          day of
                            , 200    .

 

 

AFC FUNDING CORPORATION,

 

 

 

 

 

By

 

 

 

 

Name:

Jim Money

 

 

 

 

Title:

VP of Finance

 

EX-VI-3

--------------------------------------------------------------------------------

 

EXHIBIT VII

 

PERFECTION REPRESENTATIONS, WARRANTIES AND COVENANTS

 

In addition to the representations, warranties and covenants contained in the
Agreement, to induce Purchasers and Agent to enter into the Agreement and, in
the case of Purchasers, to purchase the Participation hereunder, the Seller
hereby represents, warrants and covenants to Agent and the Purchasers as to
itself as follows on the Closing Date and on the date of each purchase and
reinvestment in the Participation thereafter:

 

General

 

1.             The Agreement creates a valid and continuing security interest
(as defined in the Indiana UCC) in the Receivables in favor of the Agent, for
the benefit of the Secured Parties, which security interest is prior to all
other Adverse Claims, and is enforceable as such as against creditors of and
purchasers from the Seller.

 

2.             The Receivables constitute “accounts,” “payment intangibles,”
“general intangibles,” “instruments” or “tangible chattel paper,” within the
meaning of the Indiana UCC.

 

3.             The Cash Reserve Account, the Deposit Account and the Liquidation
Account and all subaccounts of such accounts, constitute either a “deposit
account” or a “securities account”  within the meaning of the Indiana UCC.

 

4.             The Originator or the Originating Lender, as applicable, thereof
has perfected its security interest against the Obligors in the property
securing the Receivables (to the extent that a security interest in such
property can be perfected by the filing of a financing statement).

 

Creation

 

5.             The Seller owns and has good and marketable title to the
Receivables free and clear of any Adverse Claim, claim or encumbrance of any
Person, excepting only Permitted Liens.

 

6.             Originator has received all consents and approvals to the sale of
the Receivables to the Seller required by the terms of the Receivables that
constitute instruments or payment intangibles.

 

Perfection

 

7.             Each of the Originator and the Seller has caused or will have
caused, within ten days after the effective date of the Agreement, the filing of
all appropriate financing statements in the proper filing office in the
appropriate jurisdictions under applicable law in order to perfect the sale of
the Receivables from Originator to the Seller pursuant to the Purchase and Sale
Agreement and the security interest therein granted by the Seller to the Agent,
for the benefit of the Secured Parties, hereunder; and Originator has in its
possession the original copies of such instruments or tangible chattel paper
that constitute or evidence the Receivables, and all

 

EX-VII-1

--------------------------------------------------------------------------------

 

financing statements referred to in this paragraph contain a statement to the
effect that:  A purchase of or security interest in any collateral described in
this financing statement will violate the rights of the Agent, for the benefit
of the Secured Parties.

 

8.             With respect to Receivables that constitute an instrument or
tangible chattel paper:

 

Such instruments or tangible chattel paper is in the possession of the Servicer
and the Agent has received a written acknowledgment from the Servicer that the
Servicer is holding such instruments or tangible chattel paper solely on behalf
and for the benefit of the Agent, on behalf of the Secured Parties, and each of
the Originator and the Seller has caused or will have caused, within ten days
after the effective date of the Agreement, the filing of all appropriate
financing statements in the proper filing office in the appropriate
jurisdictions under applicable law, and all financing statements referred to in
this paragraph contain a statement to the effect that:  A purchase of or
security interest in any collateral described in this financing statement will
violate the rights of the Agent, for the benefit of the Secured Parties.

 

9.             With respect to the Cash Reserve Account, the Deposit Account and
the Liquidation Account and all subaccounts of such accounts that constitute
deposit accounts, either:

 

(i) The Seller has delivered to the Agent, for the benefit of the Secured
Parties, a fully executed agreement pursuant to which the bank maintaining the
deposit accounts has agreed to comply with all instructions originated by the
Agent, for the benefit of the Secured Parties, directing disposition of the
funds in such accounts without further consent by the Seller; or

 

(ii) The Seller has taken all steps necessary to cause the Agent, on behalf of
the Secured Parties, to become the account holder of such accounts.

 

10.          With respect to the Cash Reserve Account, the Deposit Account and
the Liquidation Account or subaccounts of such accounts that constitute
“securities accounts” or “securities entitlements” within the meaning of the
Indiana UCC:

 

(i) The Seller has delivered to the Agent, for the benefit of the Secured
Parties, a fully executed agreement pursuant to which the securities
intermediary has agreed to comply with all instructions originated by the Agent,
for the benefit of the Secured Parties, relating to such account without further
consent by the Seller; or

 

(ii) The Seller has taken all steps necessary to cause the securities
intermediary to identify in its records the Agent, for the benefit of the
Secured Parties, as the person having a security entitlement against the
securities intermediary in each of such accounts.

 

EX-VII-2

--------------------------------------------------------------------------------

 

Priority

 

11.          Other than the transfer of the Receivables to the Seller under the
Purchase and Sale Agreement and the security interest granted to the Agent, for
the benefit of the Secured Parties, pursuant to this Agreement, neither the
Seller nor the Originator has pledged, assigned, sold, granted a security
interest in, or otherwise conveyed any of the Receivables or the Cash Reserve
Account, the Deposit Account, the Liquidation Account or any subaccount of such
accounts.  Neither the Seller nor the Originator has authorized the filing of,
or is aware of any financing statements against the Seller or the Originator
that include a description of collateral covering the Receivables or the Cash
Reserve Account, the Deposit Account, the Liquidation Account or any subaccount
of such accounts other than any financing statement relating to the security
interest granted to the Agent, for the benefit of the Secured Parties, hereunder
or that has been terminated.

 

12.          Neither the Seller nor the Originator is aware of any judgment,
ERISA or tax lien filings against either the Seller or the Originator.

 

13.          None of the instruments or tangible chattel paper that constitute
or evidence the Receivables has any marks or notations indicating that they have
been pledged, assigned or otherwise conveyed to any Person other than the Seller
or the Agent, for the benefit of the Secured Parties.

 

14.          Neither the Cash Reserve Account, the Deposit Account, the
Liquidation Account nor any subaccount of such accounts are in the name of any
person other than the Seller or the Agent, on behalf of the Secured Parties. 
The Seller has not consented to the securities intermediary of any such account
to comply with entitlement orders of any person other than the Agent, on behalf
of the Secured Parties.

 

15.          Survival of Perfection Representations.  Notwithstanding any other
provision of the Agreement or any other Transaction Document, the Perfection
Representations contained in this Exhibit VII shall be continuing, and remain in
full force and effect (notwithstanding any termination of the commitments or any
replacement of the Servicer or termination of Servicer’s rights to act as such)
until such time as Investments and all other obligations under the Agreement
have been finally and fully paid and performed.

 

16.          No Waiver.  The parties to the Agreement: (i) shall not, without
obtaining a confirmation of the then-current rating of the Notes, waive any of
the Perfection Representations; and (ii) shall provide the Ratings Agencies with
prompt written notice of any breach of the Perfection Representations, and shall
not, without obtaining a confirmation of the then-current rating of the Notes
(as determined after any adjustment or withdrawal of the ratings following
notice of such breach), waive a breach of any of the Perfection Representations.

 

17.          Servicer to Maintain Perfection and Priority.  The Servicer
covenants that, in order to evidence the interests of the Agent, on behalf of
the Secured Parties, under this Agreement, Servicer shall take such action, or
execute and deliver such instruments (other than effecting a Filing (as defined
below), unless such Filing is effected in accordance with this paragraph) as may
be necessary or advisable including, without limitation, such actions as are

 

EX-VII-3

--------------------------------------------------------------------------------

 

requested by the Agent, on behalf of the Secured Parties, to maintain and
perfect, as a first priority interest (subject only to Permitted Liens), the
Agent’s, on behalf of the Secured Parties’, security interest in the Receivables
and Collections with respect thereto and the Seller’s right, title and interest
in, to and under the Related Security and the proceeds thereof.  Servicer shall,
from time to time and within the time limits established by law, prepare and
present to the Agent, on behalf of the Secured Parties, for the Agent, on behalf
of the Secured Parties, to authorize (based in reliance on the opinion of
counsel hereinafter provided for) the Servicer to file, all financing
statements, amendments, continuations, initial financing statements in lieu of a
continuation statement, terminations, partial terminations, releases or partial
releases, or any other filings necessary or advisable to continue, maintain and
perfect the Agent’s, on behalf of the Secured Parties’, security interest in the
Receivables and Collections with respect thereto and the Seller’s right, title
and interest in, to and under the Related Security and the proceeds thereof as a
first-priority interest (subject only to Permitted Liens) (each a “Filing”). 
Servicer shall present each such Filing to the Agent, on behalf of the Secured
Parties, together with (x) an opinion of counsel as to perfection and such other
matters as the Agent may reasonably request with respect to such Filing, and
(y) a form of authorization for the Agent’s, on behalf of the Secured Parties’
signature.  Upon receipt of such opinion of counsel and form of authorization,
the Agent, on behalf of the Secured Parties, shall promptly authorize in writing
Servicer to, and Servicer shall, effect such Filing under the Uniform Commercial
Code without the signature of Originator, the Seller, or the Agent, on behalf of
the Secured Parties where allowed by applicable law.  Notwithstanding anything
else in the Agreement to the contrary, the Servicer shall not have any authority
to effect a Filing without obtaining written authorization from the Agent, on
behalf of the Secured Parties, in accordance with this paragraph (17).

 

EX-VII-4

--------------------------------------------------------------------------------

 

SCHEDULE I

 

CREDIT AND COLLECTION POLICY

 

SCH I

--------------------------------------------------------------------------------

 

AFC - Credit Policy

 

AFC Credit Policy

 

Rev. 04/07

 

 

SCH I - i

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS

 

INTRODUCTION

1-1

 

 

RESPONSIBILITY AND AUTHORITY

2-1

 

 

GOLD ACCOUNTS: Line requests up to $200K US/$250K Canadian (New applications and
line increases)

3-1

 

 

PLATINUM ACCOUNTS: Line requests over $200K US/$250K Canadian (New applications
and line increases)

4-1

 

 

CREDIT APPROVAL POLICY

5-1

 

 

ADDITIONAL CURTAILMENT POLICY

6-1

 

 

AUCTION PURCHASES

7-1

 

 

NON-AUCTION PURCHASES

8-1

 

 

DEALER QUICK APPS POLICY

9-1

 

 

CREDIT FILES & MAINTENANCE

10-1

 

 

ANNUAL REVIEW POLICY

11-1

 

 

SPECIAL PROGRAMS

12-1

 

 

LOAN SUPERVISION

13-1

 

 

APPENDIX A

14-1

 

SCH I - ii

--------------------------------------------------------------------------------

 

1.0          INTRODUCTION

 

The AFC Board of Directors* has adopted these policies for the purpose of
establishing its general credit philosophy, guidelines and limitations.

 

These credit policies are intended to provide a framework for management to
direct credit activities for the company.  While they are intended to be a
general guide, it is recognized that specific situations may arise that would
require exceptions to the policies stated herein.  Exceptions will be allowed
subject to the approval by a majority of the Credit Committee in accordance with
sound business practice.

 

--------------------------------------------------------------------------------

*See Appendix A

 

2.0          RESPONSIBILITY AND AUTHORITY

 

2.1          Board of Directors

 

The AFC Board of Directors has ultimate authority for these credit policies.  In
addition to approving this policy, the Board is responsible for reviewing credit
standards, procedures and for monitoring the loan portfolio and its
performance.  The Board requires sound credit standards, internal and accounting
controls, and periodic audits of loan approvals and transactions.

 

2.2          Credit Committee

 

The Credit Committee shall consist of the President and at least four other
members. The President may appoint additional members to the Credit Committee at
their discretion. The current Credit Committee members are:

 

President, AFC

 

Chief Operating Officer, AFC

 

VP of Finance, AFC

 

Director of Credit Services, AFC

 

Vice President of Operations, AFC

 

Vice President of Legal, Collections, & Special Operations, AFC

 

Specific functions and duties of the Credit Committee:

 

·                  Approve loans in excess of $250K US/$300K Canadian

·                  Monitor compliance with this policy and related procedures

 

SCH I -1

--------------------------------------------------------------------------------

 

·                  Recommend changes to this policy as necessary

 

2.3          Credit Department

 

AFC shall have the following objectives in its Credit Department:

 

·                  To set the level of funds and monitor performance to make
sure AFC is achieving rates of return adequate to meet budgeted profit
objectives

·                  To consider all risks involved with a loan and to evaluate
and analyze risk factors during the period that the loan is available

·                  To maintain a moderately aggressive lending posture that
achieves reasonable growth objectives

·                  To avoid undue concentrations of exposure to any one credit
loan

 

The primary functions of the Credit Department shall be to:

 

·                  Process loan applications and prepare recommendations for
approval by the Credit Department and Credit Committee

·                  Obtain all required loan documentation

·                  Manage force-placed insurance

·                  Establish and update the credit file for each loan

·                  In addition to these primary duties, other functions may be
assigned to the department by the President

 

The President shall be responsible for the general administration and
supervision of the loan portfolio.  He shall monitor compliance with this policy
and shall see that reports of loans approved and other lending activities are
made to the Credit Committee.  The President or his designee has authority to
approve loans up to and including [*].

 

The Chief Operating Officer shall have primary responsibility for compliance
with the policies stated herein and shall see that proper and complete reports
are made to the Credit Committee.

 

The Director of Credit Services (DCS) shall be responsible for the day-to-day
operation of the Credit Department.  The DCS shall see that loan forms and
procedures are updated from time to time, that all Credit personnel are properly
trained and that all lending operations are carried out in a prudent and proper
manner.  The DCS will ensure proper review of procedures and controls over the
credit approval process.  The DCS will establish and maintain approved credit
limits.  It is the DCS and/or the Credit Committee’s prerogative to restrict
temporary increases in conjunction with line increases or new lines for [*].

 

The Credit Analyst has authority to approve new loans and existing loan
increases up to and including $250K US and $300K Canadian in accordance with the
AFC Credit Scorecard.  The Credit Analyst will use reasonable business judgment
in addition to the scorecard when approving or declining loan applications. 
Loan approvals, which exceed the scorecard limit, require approval by the Credit
Manager.

 

SCH I -2

--------------------------------------------------------------------------------

 

2.4          Credit Standards

 

Credit shall be extended to qualified dealers according to the following
criteria:

 

·                  [*]

·                  [*]

·                  [*]

·                  [*]

·                  [*]

·                  [*]

·                  [*]

·                  [*]

 

Other considerations:

 

·                  [*]

·                  Financial condition of the borrower and availability of
additional collateral

·                  [*]

 

2.5          Citizenship

 

It is AFC’s policy to lend only to U.S. Citizens, Canadian Citizens, and/or
Non-U.S. Citizens who are legal permanent residents of the Unites States (“Legal
Permanent Resident”). When considering whether to extend credit to a Legal
Permanent Resident, AFC will do so without regard to the applicant’s specific
race, nationality, or ethnic origin; rather it will consider the application
under the totality of the circumstances.

 

The Credit Department will maintain the current legal requirements to be
considered a Legal Permanent Resident. All discrepancies must be discussed with
the Legal Department or outside Counsel.

 

AFC reserves the right, through the Freedom of Information Act (FOIA)/Privacy
Act (PA), to require a Legal Permanent Resident to obtain verification of the
validity of their documentation via a formal request through the FOIA/PA.

 

2.6                               Credit Limits and Advances

 

Since credit limits may be set or altered by a State from time to time, the
Credit Department and Legal Department will monitor this on an ongoing basis.
Additionally, it might be a requirement of a State to have a minimum advance on
the dealer’s line. These regulations will also be monitored and adjusted
accordingly.

 

SCH I -3

--------------------------------------------------------------------------------

 

Currently the States of CA and VA have an INITIAL minimum advance requirement of
$5,000.

 

The Credit Department reserves the right to alter a dealer’s credit limit based
on the above factors as well as performance concerns.

 

3.0          Gold Accounts: LINE REQUESTS UP TO $250K US/$300K CANADIAN

 

(NEW APPLICATIONS AND LINE INCREASES)

 

3.1          New Applications

 

Application Process:

 

The credit process is initiated when the branch receives a completed and signed
application from a dealer.  The branch must enter the application and reference
information into the COSMOS computer system and send to the Corporate Credit
Department.  A Credit Analyst within the Credit Department will complete a
credit analysis which includes a credit bureau, UCC/lien search, KO Book check,
credit summary, and credit scorecard.  [*].

 

3.2          Existing Credit Lines

 

Credit Line Increase Requests:

 

Minimum Requirements:

 

·                  [*]

 

·                  [*]

 

The branch should submit the documents above via the computer system, to the
Credit Department.

 

SCH I -4

--------------------------------------------------------------------------------

 

3.3 Contract Documents Required:

 

Required Documents:

 

1. Sole Proprietorship and Partnerships

 

A. [*]

 

B. [*]

 

C. [*]

 

2. Corporations

 

A. [*]

 

B. [*]

 

C. [*]

 

3. LLCs

 

A. [*]

 

B. [*]

 

C. [*]

 

4.0          Platinum Account: LINE REQUESTS OVER $250K US/$300K CANADIAN

 

(NEW APPLICATIONS AND LINE INCREASES)

 

When a request for a platinum package is received at the corporate Credit
Department the following steps will be taken:

 

The package will be reviewed [*] for completeness.

 

4.1                               Platinum Package Review

 

4.1.1       Complete Packages

 

·                  If the package is complete, the Branch Manager will be
e-mailed that the package has been received complete.

 

SCH I -5

--------------------------------------------------------------------------------

 

·                  The Credit Department will send a final e-mail with the
decision from Credit Committee when received.

 

4.1.2                     Incomplete Packages

 

·                  If the package is incomplete, the branch will be e-mailed a
list of missing documents.

 

·                  The Platinum Department will follow-up with the dealer via a
phone call and/or letter to assist the branch in gathering missing documents.

 

·                  If the missing documents are not received within [*], the
request will be stale dated. The package will be scanned into EDMS and originals
will be shredded.

 

·                  The package can be resubmitted when complete with updated
documents.

 

4.2          Contents of a Complete Platinum Package

 

4.2.1                     [*]

 

4.2.2                     [*]

 

4.2.3                     [*]

 

4.2.4                     [*]

 

4.2.5                     [*]

 

4.2.6                     A new applicant requires a completed, signed AFC
application; a completed signed checklist, [*].

 

A review requires an AFC Review Worksheet, a completed Dealer Modification Form,
[*].

 

4.2.7                     It is necessary to obtain other floorplan sources,
current balances and all information related to all auction references listed. 
(There is space for this information on the over $250K US/$300K Canadian
Checklist).

 

4.2.8                     LLC (If Applicable)- Because of the way that Limited
Liability Companies are structured, it is necessary to obtain and send Articles
of Organization, and the Operating Agreement (where applicable) to the Credit
Department. Where there is no Operating Agreement required by the state, we will
need to see the corporate tax returns. If there are neither, then AFC will draft
a document that must be signed by certain

 

SCH I -6

--------------------------------------------------------------------------------

 

members and/or manager of the Borrower.  We need to identify all Members and
Managers. [*].

 

There are two common structures of an LLC:

·                  Member managed —[*].

·                  Manager managed — [*].

 

In the event of a discrepancy the Legal Department will be involved in making
the appropriate course of action.

 

4.2.9                     If a Corporation, please obtain a copy of dealership’s
Articles of Incorporation.

 

4.2.10              Completed $250K US/$300K Canadian checklist signed by Branch
Manager verifying that package is complete (can be located on MyAFC.net).

 

4.2.11              Security or collateral- It may be necessary to obtain
security or collateral in the form of a mortgage . This possibility should be
discussed with the dealer.

 

If security is needed, the dealer needs to be advised that the average cost of
document preparation may exceed $[*].  These costs include:

·                  a property appraisal

·                  a title search

·                  the cost for having a Deed of Trust or a Mortgage prepared.

 

If the property being used as collateral is a commercial property, please be
aware that these costs could be considerably higher due to [*].

 

[*].

 

If the increase is subject to security or collateral, the Credit Department will
put the branch in touch with in-house counsel.  When contacted, counsel will
know what is required and in most cases can handle internally.

 

Security or collateral could also be in the form of a certificate of deposit or
cash.  Any other type of security or collateral should be discussed with a
Regional Manager.

 

5.0          CREDIT APPROVAL POLICY

 

5.1          Gold Accounts:  Credit Lines Up To $250K US and $300K Canadian

 

The Credit Analyst has the authority to credit decision the following:

 

·                  New applications

 

SCH I -7

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·                  Requests for increases

·                  Annual reviews

·                  Standard term changes ([*]). Non-standard term change
requests must be approved by the Credit Manager or the Director of Credit
Services.

·                  Once an Application is approved the account can be
automatically increased to the new credit line via a [*] temporary increase by
the Credit /Contract Departments. This gives the branch ample time to get the
contract executed to make the line permanent.

 

5.2                               Platinum Accounts:  — Credit lines Over $250K
US and $300K Canadian

 

Credit lines over $250K US and $300K Canadian are handled in the following
manner:

 

5.2.1                     The Sr. Credit Analyst will prepare the credit package
and route to the Credit Manager. At the same time the analyst emails their
recommendation to the RM and BM. The RM has the ability to recommend revising or
terminating the request. The Sr. Credit Analyst may also order a criminal
background check at this time with the appropriate authorization.

 

5.2.2                     The Credit Manager will review, make recommendation
and route the package to the DCS for their recommendation if available.

 

5.2.3                     The DCS will review the file, make a recommendation
and then forward it to the remaining credit committee members.

 

The following are the dollar amounts and the corresponding credit committee
members required to approve the request (in addition to the DCS):

 

Loan requests up to [*]

 

·                  COO, VP of Finance, or another representative as directed by
the President

 

Loan requests between [*] up to [*]

 

·                  One independent VP (other than the VP of the area the dealer
is located in)

·                  President, COO, VP of Finance, or another representative as
directed by the President (Two of the three).

 

Loan requests in excess of [*]

 

·                  One independent VP (other than the VP of the area the dealer
is located in)

·                  COO & VP of Finance

·                  And President

 

SCH I -8

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·                  It is not necessary for the President to sign on loan
packages under [*]; however, the President may sign in place of any of the
individuals listed above.

 

5.2.4                     The file will be returned to the Credit Manager who
will prepare a summary term sheet. The package will be routed back to the DCS
for review of all recommendations.  It is the DCS’ responsibility to interpret
all recommendations and ensure that a majority of signing members agree on a
final decision.

 

5.2.5                     The final decision will be forwarded to the Branch
Manager via email and also entered into COSMOS. The Credit Analyst will detail
why the decision was made, if other than requested, in an email to the Branch
Manger.

 

5.2.6                     Once an Application is approved the account can be
automatically increased to the new credit line via a [*] temporary increase by
the Credit Department. This gives the branch ample time to get the contract
executed to make the line permanent (refer to 5.1).

 

5.2.7                     Term change requests require the approval of the
following (after RM and Division VP approval):

·                  DCS

·                  COO, VP of Finance, or another respresentative as directed by
the President.

·                  An independent VP or the President can substitute for the
above individuals if they are not available.

 

If a dealer is not contracted within [*] of approval, the dealer must reapply
unless an exception is made by the Credit Manager.

 

6.0          ADDITIONAL EXTENSION OF CURTAILMENT DATE

 

6.1          Policy Statement

 

An additional extension of curtailment date, beyond contract terms for a
vehicle, may be approved with the following qualifiers (unless approved by the
Division VP):

 

6.1.1       Dealer must have a [*] history with AFC of reasonable activity.

 

SCH I -9

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6.1.2                     No failed lot checks in the last [*].

 

6.1.3                     No NSF’s in the last [*].

 

6.1.4                     Contract floorplan fee applies.

 

6.1.5                     Any additional extension of curtailment is for at
least [*] the contracted curtailment amount of the remaining principal, plus
fees, plus interest and unit must be visually verified within [*] of the
transaction.

 

6.1.6                     The unit must be visually verified within [*] of the
transaction. If the unit was not visually verified by an AutoVin Field Manager
within [*] of the transaction, then the branch must visually verify the unit.
Branches may use pictures in place of visual inspections when visual inspections
are not possible. The pictures must include images of all four sides of the
vehicle with at least one of the pictures showing the valid AFC P.O. number for
the current week. The branch will receive a weekly email in their branch inbox
with their Corporate assigned AFC P.O. number for that week. The branch must
retain the photos used for the inspection in the respective dealer’s
Miscellaneous file at the branch.

 

6.2          Approvals

 

6.2.1                     1st extension of curtailment beyond contracted terms
must be approved by [*].

 

6.2.2                     2nd extension of curtailment beyond contracted terms
must be approved by the [*].

 

6.2.3                     3rd extension of curtailment or greater must be
approved by the [*] who will then forward to the [*] if recommended for their
approval.

 

·                  Approvals must be documented via e-mail and retained in the
title file

 

7.0          AUCTION PURCHASES

 

7.1                               Policy Statement

 

This is a purchase in which the vehicle is purchased through the auction lane of
an AFC-approved auction. The dealer must present the auction ticket as the
loan’s source documentation. Branch employees must verify the integrity of the
transaction by

 

SCH I -10

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inspecting the related documentation. The table below explains the parameters
for advances made for an AFC Approved Auction Purchases.

 

Approved Auction Purchase

 

[*]

 

Maximum AFC
Advance

 

COSMOS Floorplan
Date

 

Additional AFC Fee

 

 

 

 

 

 

 

 

 

[*]

 

Up to [*].

 

[*]

 

None

 

 

 

 

 

 

 

 

 

[*]

 

Up to [*].

 

[*]

 

[*]

 

 

· Required documentation: Negotiable title and auction ticket. If inspection is
required, attach the Advance Checklist Form.

 

Floorplanning dates when Paying Auction

 

Floorplanning dates when Paying Dealer

 

 

 

 

 

[*]

 

 

 

 

 

 

 

[*]

 

 

 

 

 

 

 

[*]

 

 

 

--------------------------------------------------------------------------------

** Note: [*] must be entered manually into COSMOS unless this was from an
AFC-sponsored float program.

 

Vehicles over [*]

 

The total floorplan fee for this privilege is .[*]. These transactions require
[*] approval. Dealers may have distinct terms identified within their respective
contract.

 

Refloorplanning

 

[*] approval is required if dollar amount of refloor is greater than or equal to
previous floorplanned amount. Refloor is the same unit floored by the same
dealer within the [*].

 

SCH I -11

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8.0          NON-AUCTION PURCHASES

 

Policy Statement

 

This is a purchase in which the vehicle is not purchased through the auction
lane of an AFC approved auction, or an approved auction purchase [*]. The dealer
must provide appropriate source documentation showing how they acquired the
vehicle and the cost they incurred in doing so.

 

Non-Auction Purchases

 

There are many ways a dealer can acquire inventory. The three that occur most
often are:

 

1) Dealer takes vehicle on trade from a retail customer.

 

2) Dealer trades inventory with another dealer (new or used).

 

3) Dealer directly purchases from another dealer (new or used), fleet
organization or other automotive entity.

 

 

 

Maximum AFC Advance

 

Additional Administrative Fee
charged to dealer.

 

 

 

 

 

 

 

If inspected prior to flooring

 

*Up to [*] (whichever is less)

 

Yes—$[*]

 

 

 

 

 

 

 

If NOT inspected prior to flooring

 

*Up to [*] (whichever is less)

 

Yes—$[*]

 

 

· Required documentation: Negotiable title, APPROVED value guide valuation,
Advance Checklist Form and an original executed BOS or copy of BOS or auction
ticket.

 

· Approved Value Guides (the selected Value Guide must be geographically
specific to the flooring branch’s location where applicable) :

 

· Blackbook — Average Wholesale

· Classic Car Blackbook — Average Wholesale

· Heavy Duty Blackbook — Average Wholesale

· NADA — Trade-In

· NADA — Low Retail (use only when NADA Trade-In value is not available for same
unit)

· NADA Classic Guide — Low Retail

· NADA Recreational Vehicle Guides — Low Retail (boats, RVs, trailers, etc.)

· ADESA Market Guide — Average

· Manheim Market Report — Average

 

· Branches may use pictures in place of visual inspections when visual
inspections are

 

SCH I -12

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not possible. The pictures must include images of all four sides of the vehicle
with at least one of the pictures showing the valid AFC P.O. number for the
current week..  The branch will receive a weekly email in their branch inbox
with their Corporately assigned AFC P.O. number. Each number will be valid for
seven calendar days.  Branch must attach all inspection photos to the respective
paid source document.

 

Any exception to the above outline can be made by written request from the
Branch Manager to the Regional Manager.

 

Non-Auction Purchase Privileges

 

· [*] = All account begin with [*] of the credit line available for non-auction
purchases.

· [*] = Any account with at least [*] paid off.

 

Any exception to the above outline may be made by written request from the
Branch Manager to the Regional Manager prior to submission to the Credit Admin
Department for approval by the Director of Credit Services.

 

Reminders for Approved Auction and Non-Auction Purchases

 

· Branches do not have to advance the full percentage in the Maximum AFC Advance
column and it is recommended to inspect.

 

· Branches must aggressively follow-up for all outstanding titles from
“indirect” advances. Outstanding titles should never age over [*] from the date
on which AFC funds were mailed.

 

· Branches must conduct complete inspections of the collateral in accordance
with the advance checklist form.

 

· Branches must have original title prior to all direct funding.

 

Vehicles over [*]

 

The total floorplan fee for this privilege is [*] for the first contracted term.
These transactions require Regional Manager Approval. Dealers may have distinct
terms identified within their respective contract.

 

Refloorplanning

[*] approval is required if dollar amount of refloor is greater than or equal to
previous floorplanned amount. Refloor is the same unit floored by the same
dealer within the last [*]

 

SCH I -13

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9.0          DEALER QUICK APPS POLICY

 

Purpose

 

Quick Apps were designed to allow the branches to take greater advantage of
sales opportunities.  A Quick App will allow a dealer to begin flooring on the
day of sale and gather full, supporting documentation after the sale. The dealer
must leave one check per car with the branch on sale day.

 

Quick Apps are to be used for special situations which must be pre-approved by
the Division VP and the Credit Department prior to the event.The branch will [*]
floor vehicles, after which the account will be placed on a no flooring
restriction.  The account will remain restricted until a complete application
package has been received and reviewed at Corporate.

 

NOTE:  The credit limit established on quick applications will be determined
with limited information.  The account can be re-evaluated for a higher credit
limit if more information is provided in the completed application package.

 

In no case will a Quick App line exceed [*] at the discretion of the Credit
Manager.

 

10.0        CREDIT FILES AND MAINTENANCE

 

As a matter of policy, all credit files shall be maintained on all loans at the
corporate office in electronic format.  Each credit file shall contain:

 

·                  Borrower application for credit (signed and obtained from ALL
signers on the account, including Guarantors)

·                  Credit reports on each Borrower and Guarantor

·                  Credit applications review worksheet prepared by the Credit
Department

·                  Credit review write-up for loans in excess of $250K US/$300K
Canadian

·                  Copies of [*] for loans in excess of $250K US/$300K Canadian

·                  UCC or applicable search

·                  Evidence of loan approval

·                  Evidence of PMSI filings with other creditors, as necessary
(green card or equivalient)

·                  Properly executed documents:

·                  Promissory Note and Security Agreement

·                  Term Sheet

·                  Power of Attorney

·                  Unconditional Guaranty

·                  Other documents necessary to secure AFC’s interest in the
loan

·                  Any other information deemed necessary by the Credit
Department

 

Dealer lot check documentation shall be maintained by lot check provider and can
be retrieved via the web.

 

10.1        Manufacturer Agreements

 

Following is the policy regarding Manufacturer Agreements, and the procedures
which must be completed prior to executing such agreements. It is the intention
of AFC to fully review each manufacturer for financial stability, quality of
product and commitment to

 

SCH I -14

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integrity at a level equal to which AFC is held. In order to accomplish this,
the following documents are necessary.

 

Financial Statements:

·              Income statement and balance sheet within the last 90 days.

·              Income and balance sheet for prior year-end.

 

Tax Returns:

·              Last two years corporate tax returns.

 

Miscellaneous:

·              Credit references (minimum of two).

·              Most recent annual report or current business plan

 

The documents above must be submitted to the Credit Manager. The Credit Manager
will prepare a complete credit package for Credit Committee review. The package
will include a financial analysis, Lexis/Nexis search or equivalent, reference
check, business summary and credit recommendation. Every package requires the
approval of at least the Director of Credit Services, Treasurer of ADESA, Inc.,
COO, or Controller.

 

11.0        ANNUAL REVIEW POLICY

 

The purpose of this policy is to ensure that the customer’s credit and account
performance has been maintained to AFC standards. All AFC dealer files are
reviewed annually by the corporate office.  The branch must update all
documentation required for initial approval and submit with recommendation for
renewal. Current financial data should be no more than three months old
(exceptions must be approved by the Credit Department).  Platinum account annual
reviews require the approval of the Credit Manager, platinum accounts and DCS,
and one of the following (an independent VP, COO, Controller, Treasurer,
ADESA, Inc., or the President).

 

Required Documents

 

Gold Accounts:

 

Platinum Accounts:

 

·

[*]

 

·

[*]

 

·

[*]

 

·

[*]

 

·

[*]

 

·

[*]

 

·

[*]

 

·

[*]

 

·

[*]

 

·

[*]

 

·

[*]

 

·

[*]

 

 

SCH I -15

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12.0        SPECIAL PROGRAMS

 

The Operations Department has created several special programs to help
facilitate our borrowers and branches.  These programs allow the branches to
better serve their dealers while still upholding the desired credit standards of
AFC.

 

The following explains each special program in depth:

 

·                  Temporary Increase and Overlines

 

·                  It is the DCS and/or the Credit Committee’s prerogative to
restrict temporary increases in conjunction with line increase or new lines for
up to six months.

 

·                  Float Sales

·                  Rental

 

12.1        Dealer Temporary Increase and Overline Policies

 

The purpose of these policies is to prevent losses due to over-extended,
unmonitored dealers, as well as identify those dealers who may need an increased
credit line.  It is designed to document and monitor those dealers who exceed
their credit limits.

 

12.1.1     Temporary Increase Policy

 

The purpose of the temporary increase is to accommodate a dealers sporadic
buying needs and to allow for increased buying power while a credit line
increase is being processed. Dealers are permitted to go over their credit line
by an approved amount for a given period of time.  The dealer’s account may
fluctuate up and down within that time frame as long as the account balance
remains under the temporary approved credit line.  The credit line must be under
the standard credit limit by the end of the temporary increase period or the
account will be restricted from flooring.

 

Approval Levels for Temporary Increase*:

·

Branch Manager or SAM

 

 

 

 

(Special Assignment Manager)

 

up to [*]**

 

·

Regional Manager or Credit Manager

 

up to [*]

 

·

Vice President

 

up to [*]

 

·

COO or DCS

 

up to [*]

 

·

COO & DCS

 

over  [*]

 

·

President can substitute for all of the above.

 

 

 

 

--------------------------------------------------------------------------------

*   Based on performance review of a dealer the Credit Department has the
authority to decline any request made.

** Requests made by someone other than the Branch Manger must copy the Branch
Manager in the email request.

 

SCH I -16

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The above listed differences between US and Canadian are based on an average
exchange rate of [*]. The actual exchange rate is changed daily in COSMOS. As a
result the Overline/Temporary Increase amounts will differ from the maximums
listed above.

 

Maximum term for a temporary increase is [*].

 

The maximum limit for a temporary increase must not exceed the dealers
contracted credit limit unless approved by the VP, COO, VP of Finance, DCS, or
President.

 

On accounts where the Temporary request is [*], the Dealer must submit a current
Balance Sheet and Income Statement (not older than 90 days) for review by the
DCS and COO, or their replacements.

 

There can be no more than [*] temporary increases within any [*] month period
unless approved by the COO, Controller, or President (in the event that neither
are available, the DCS can approve). If none of the above are available, then
the Credit manager may approve exceptions. Additionally, there can be no more
than \[*] consecutive temporary increases after our Seasonal Temp Program (STP).

 

For example if a dealer [*].

 

12.1.2     Overline Policy

 

This should be used when a dealer needs to exceed their credit line for a
special, one-day event or situation (such as a special sale). The account may
not fluctuate up and down; once the dealer is approved for the overage, no more
vehicles may be floored until the line is paid back to the normal credit limit. 
All Overlines that exceed a temporary increase by [*] must be approved by the
COO, VP of Finance, or President (in the event that they are not available, the
DCS can approve). If none of the above is available, then the Credit Manager may
approve the exceptions.

 

Approval levels for Overline (Where no Temporary Increases are in place)*;

 

·

All Branch Employees

 

up to [*]**

 

·

Regional Manager or Credit Manager

 

up to [*]

 

·

Vice President

 

up to [*]

 

·

COO or DCS

 

up to [*]

 

·

COO & DCS

 

over  [*]

 

·

President can substitute for all of the above.

 

 

 

 

SCH I -17

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--------------------------------------------------------------------------------

*   Based on performance review of a dealer the Credit Department has the
authority to decline any request made.

**Approvals at the Branch level do not need to be e-mailed to the Overline
Administrator.

 

The above listed differences are based on an average exchange rate of [*]. The
actual exchange rate is changed daily in COSMOS. As a result the
Overline/Temporary Increase amounts will differ from the maximums listed above.

 

12.2        Rate & Term Adjustment Procedure

 

The need for rate and term adjustments comes up from time to time. In order to
process these requests quickly, please forward the following to the Credit
Department:

 

·                  Summary write-up

·                  Complete a ROGI form

·                  Obtain the [*] and [*] written approval for the request

·                  Complete request in Cosmos computer system.

·                  Submit all of the above for approval to the Credit Department
at Corporate.

 

Gold account standard term changes ([*]) can be approved by the credit analyst. 
Non-standard term changes must be approved by the [*] or the [*].

 

Platinum account non-standard term changes must be approved by the [*] ([*] can
substitute if the [*] is not available), and the [*].

 

12.3        Float Sales — Auction Guaranteed

 

(100% Guaranteed or Partially Guaranteed)

 

Purpose

 

Float sales are special sales held by an auction to increase sales by allowing
dealers to purchase vehicles and not pay for them until sold or within a
specified term, whichever comes first. AFC participates in order to support the
auction.

 

SCH I -18

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Auction Approval

 

Prior to a float sale the host auction must be approved by the Credit Committee.
 Initial float sale requests must be submitted 2 weeks prior to the sale and
should have the following documents submitted with the request.

·                  [*].

·                  [*]

·                  [*]

·                  [*].

·                  [*].

 

Once the host auction is approved by the Credit Committee the auction will be
allowed to have float sales for 1 year.  In order to continue having float
sales, the auction must be reviewed annually.

 

NOTE:   The limit established by the Credit Committee is the maximum amount that
the auction can extend to the dealers purchasing at the float sale.  This dollar
amount will be treated as a “credit line” — that is, AFC will only floor cars up
to the set dollar amount.  The auction can apply for temporary increases if
necessary.

 

Terms & Conditions

·      The term will be stated on the float sale request form (i.e. 30 to 60
days).

·                  [*], in accordance with their standard floorplan contract.

·                  [*].

 

12.4        Float Sales — [*] AFC Liability

 

Purpose

 

Float sales are special sales held by an auction to increase sales by allowing
dealers to purchase vehicles and not pay for them until sold or within a
specified term, whichever comes first. AFC participates in order to support the
auction.

 

All non AFC dealers who participate must have a credit limit assigned by the
Credit Department and execute a float sale agreement prior to floor planning.

 

Terms & Conditions

 

·                  The term will be stated on the float sale request form (i.e.
30 to 60 days).

·                  [*] float in accordance with their standard floorplan
contract.

·                  [*].

 

SCH I -19

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12.5        Rental

 

Rental Floorplans

 

Rental floorplans operate in much the same way as do retail floorplans with a
few marked exceptions.  In general, rental floorplans are geared toward the
segment of the automotive market in the car rental business.  Their fee,
interest and term structure is designed to reflect the nature of the rental
industry.  Application procedures for rental accounts mirror those of the retail
floorplan.

 

Although rental accounts differ in term and rate, they are maintained to the
same standard as a retail account.  Dealers must be reviewed on an annual basis;
credit line reviews for increases are completed as well as periodic lot audits.

 

13.0        LOAN SUPERVISION

 

Each Regional and Branch Manager has the duty to review the performance of the
loans he or she services and to actively follow up if substantial deviations or
problems are detected.  It is the Regional and Branch Mangers’ responsibility to
notify the appropriate individuals, via a potential loss notice, and to develop
a plan to correct the problem.

 

AFC shall provide ADESA Inc. a monthly operating report as defined by ADESA Inc.

 

The policies listed below are the policies that the AFC Credit Department is
responsible to oversee regarding problem loans:

 

·                  NSF Policy

·                  Contract Execution Policy

·                  Direct Dealer Contact

·                  Credit References

·                  AFC Reinstatement Policy

·                  Forced Placed Insurance

·                  Cashier’s Check

 

13.1        NSF Policy

 

The corporate Administrative Services Department receives notification daily of
all NSFs. The Administration Department posts the checks in the Cosmos computer
system and notifies the branch. Cosmos automatically restricts the account from
any further flooring until the following types of funds are deposited upon which
it automatically removes the flooring restriction:

 

·                  Cashier’s check

·                  Certified check

·                  Traveller’s check

·                  Money order

·                  Cash

 

SCH I -20

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·                  Wire transfer

·                  Credit card

·                  ACH

 

13.2        Contract Execution Policy

 

The purpose of this memorandum is to establish AFC’s policy regarding the
signing, witnessing, and notarizing of AFC contracts, exhibits, and Amendments.

 

US branches/Alberta Dealers:  All contracts, exhibits and amendments must be
signed by the dealer in the presence of an AFC employee.  Each branch must have
at least one employee who is a notary, and have access to at least one other
notary who is known by an AFC employee. (I.e. an auction employee)

 

These notaries and no others will be used to notarize applicable exhibits and
amendments, including all guaranties.

 

Canadian branches/except Alberta Dealers:  All Contracts, exhibits and
amendments must be signed by the dealer in the presence of two witnesses, at
least one of which must be an AFC employee.  If an amendment or exhibit that
requires the signature of two witnesses is not signed by both witnesses, it will
be returned as incorrect.

 

All branches: The Notary/Witnesses must be present at the time of signing. A
notarized/witnessed copy of the contract must be given to all signors. Each
branch will verify the identity of the parties and compare signatures on the
contract with a signature on a signor’s picture identification in a form of
either a driver’s license or passport. Each branch will also be required to
write down the photo ID number of the contract signers at the bottom of the
dealer contract application page.

 

13.3        AFC Reinstatement Policy

 

Purpose

 

Should an active dealer be designated as a potential loss necessitating a PLN
Notice, and subsequently considered for reinstatement of a credit line, the
following procedures are required.

 

The following procedures are also required if the dealership files for
bankruptcy protection under chapter 7, 11, or 13. This would result in a
BANKRUPTCY LOCKOUT.

 

Requirements

 

Branch Manager: Recommends reinstatement procedures are activated via an e-mail
to the respective Regional Manager describing in detail the reason for the
request. The cause of the potential loss, how the potential loss was resolved
(i.e.; PIF or PN), the current status of the

 

SCH I -21

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account, and what the dealer has done to prevent reoccurrence of a potential
loss must be a part of this recommendation. The recommended dollar amount of the
reinstatement credit line must be less than the previous credit line.
Additionally, if this is a bankruptcy, we need the date of filing, the type
filed, and the date of discharge or dismissal.

 

Regional Manager:  Reviews the Branch Manager recommendation. Either concurs or
rejects the recommendation. If rejected- the issue is closed.  If concurs-
forwards recommendation e-mail to the Collection Manager with appropriate
comments.

 

Collection Manager: Reviews the recommendation and either concurs or rejects
with appropriate comments. Forwards recommendation e-mail to Credit Manager.

 

Credit Manager: Reviews the recommendation and completes the Review Process
Matrix. Upon completion, routes to DCS for review.  The DCS then forwards
recommendation with appropriate comments to the respective Area Vice President
for final concurrence or rejection.

 

Division Vice President: Reviews the recommendation and determines final
concurrence or rejection. Upon completion, forwards file with appropriate
comments to the Collection Manager.

 

Collection Manager: If recommendation is rejected, dealer file is re-filed with
the collection accounts.  If concurrence, the lockout is removed, the Branch
Manager is notified, and the dealer file is re-filed in the Credit Department as
an active dealer.

 

Required Documents:

 

·                  AFC Review Worksheet

·                  Dealer Request Form

·                  Lot Audit Summary

·                  If a term or rate change, submit a ROGI and approval by
Regional Manager.

 

File will be reviewed for the following:

 

·                  [*]

·                  [*]

·                  [*]

·                  [*]

·                  [*].

 

As a general rule the standard reinstatement process must be performed when a
PLN has been previously entered. If a dealer cures the default prior to any
vehicle being 30 days delinquent or written off, the Collection Manager and the
Regional Manager have the authority to waive the reinstatement process.
Thereafter, only the President, COO or any two of the following VP of
Collections, Corporate Counsel, and any of the divisional VP’s have the
authority to waive the reinstatement process. If the reinstatement process has
been waived the Collections Department will immediately inform the Credit
Department of such waiver. In the case of a bankruptcy the entity or person
which AFC has contracted with (i.e. not a guarantor) must go through a
reinstatement process and there will be no waivers allowed.

 

SCH I -22

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13.4        Credit References

 

From time to time AFC is asked to provide credit references for dealers that we
have done business with.  In order to protect AFC and its dealers, please
forward all inquiries to the corporate Credit Department.

 

13.5        Forced Placed Insurance

 

To establish a line of credit with AFC the dealer is required to insure all
collateral against risks. The dealer shall provide AFC with copies of its
current policies of insurance yearly that include; Comprehensive and Collision
coverage and physical damage coverage for a limit of not less than 50% of their
approved credit line. AFC must also be named as the Loss Payee on all policies
(unless a lesser amount is agreed to by the Credit Department or Credit
Committee).

 

If a dealer does not provide AFC with the required insurance documentation
within a specified timeframe the dealer will automatically be enrolled in AFC’s
Vehicle Inventory Protection (VIP) Program. The dealer also has the opportunity
to voluntarily sign-up for the VIP insurance program.

 

SCH I -23

--------------------------------------------------------------------------------

 

SCHEDULE II

 

DEPOSIT BANKS AND DEPOSIT ACCOUNTS

 

Deposit Bank

 

Deposit Account

 

 

 

 

 

[*]

 

[*]

 

 

 

 

 

[*]

 

[*]

 

 

 

 

 

[*]

 

[*]

 

 

 

 

 

[*]

 

[*]

 

 

SCH II-1

--------------------------------------------------------------------------------

 

SCHEDULE III

 

[RESERVED]

 

SCH III-1

--------------------------------------------------------------------------------

 

SCHEDULE IV

 

ELIGIBLE CONTRACTS

 

SCH IV-1

--------------------------------------------------------------------------------

 

SCHEDULE V

 

TAX MATTERS

 

None.

 

SCH V-1

--------------------------------------------------------------------------------

 

SCHEDULE VI

 

COMPETITOR FINANCIAL INSTITUTIONS

 

[*]

 

[*]

 

[*]

 

[*]

 

[*]

 

SCH VI-1

--------------------------------------------------------------------------------

 

ANNEX A

 

FORM OF PURCHASE NOTICE

 

--------------------------------------------------------------------------------

 

ANNEX B

 

FORM OF SERVICER REPORT

 

 

Date

 

# of Days in Month:

 

Third Amended and Restated Receivables Purchase Agreement dated as of
                         , 200   among AFC FUNDING CORPORATION as Seller,
AUTOMOTIVE FINANCE CORPORATION, as Servicer,  FAIRWAY FINANCE COMPANY, LLC and
MONTEREY FUNDING as Purchasers, and BMO Capital Markets and Deutsche Bank as
Initial Agents

 

Part I. Purchase Limit, Investment Amount, and Participation as of

 

Fairway

 

Monterey

 

 

A.

Purchase Limit

 

Purchase Limit %

B.

Aggregate Investment Amount (Excludes Cash Wired from [*])

C.

Aggregate Loss Reserve Calculation

D.

Collateral Balance = (Net Receivables Pool Balance + Excess in Liq. Acct )

E

Participation = [(B+C /D)]

 

 

Part II. Receivables Rollforward and Aging Report

 

 

 

See Section I details on Receivables Pool Balance calculated as of the Month End
Date.

 

 

Part III. Concentration Limits and Net Portfolio Balance

 

 

 

See Section II details on Receivables Pool Balance calculated as of the Month
End Date.

 

 

Part IV. Required Reserves (Section III)

 

 

 

 

$

 

%

 

A.

Loss Reserve (incl Cash Res)

Loss Reserves and Percentage

 

 

 

 

 

 

 

Minimum Level (Min% * Investment)

 

 

 

 

 

 

 

 

 

 

 

 

 

B.

Cash Reserve (part of LR)

Minimum Level (Min% * Investment)

 

 

 

 

 

 

 

 

 

 

 

 

 

Part V. Performance Triggers (Section IV)

 

 

 

 

 

 

 

Actual

 

Trigger Level

 

A.

[*]

 

 

 

 

 

 

[*]

 

 

 

 

 

B.

[*]

 

 

 

 

 

C.

[*]

 

 

 

 

 

D.

[*]

 

 

 

 

 

E.

[*]

 

 

 

 

 

 

 

Annex B-1

--------------------------------------------------------------------------------

 

F.

[*]

G.

Net Spread Test

 

Part VI. Financial Triggers & Covenants (Section V)

 

 

 

Actual

 

Trigger Level

 

A.

Bankruptcy

 

 

 

 

 

B.

Material Adverse Change

 

 

 

 

 

C.

IRS section 6323 Lien

 

 

 

 

 

D.

Change in Control

 

 

 

 

 

E.

Level One Trigger Event

 

 

 

 

 

F.

KAR Financial Covenant Violation

 

 

 

 

 

G.

Cross Acceleration of Corporate Debt

 

 

 

 

 

H.

Servicer’s Debt + Investment Limitation

 

 

 

 

 

I.

Tangible Net Worth Test (AFC)

 

 

 

 

 

J.

Tangible Net Worth Test (Seller)

 

 

 

 

 

K

Leverage Ratio (Debt / Equity) of AFC - Quarterly

 

 

 

 

 

 

 

 

 

 

 

 

Part VII. Reporting Requirements

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Timing

 

 

 

A.

Reporting Period

 

 

 

 

 

B.

Report Dates

 

 

 

 

 

C.

Quarterly Financial Statements - Seller & Servicer

 

 

 

 

 

D.

Annual Financial Statements - Seller & Servicer

 

 

 

 

 

E.

KAR Compliance Certificate

 

 

 

 

 

F.

Material Changes to Servicer Report

 

 

 

 

 

 

Part VIII. Representations & Warranties

 

The Servicer certifies the figures on the Servicer Report to be true and
complete, no Termination Events as forth in Exhibit V have occurred, and the
representations and warranties set forth in Exhibit III of the Receivables
Purchase Agreement are true and correct as of the date hereof.

 

 

AFC FUNDING CORPORATION

 

 

 

By:

 

 

 

 

 

Name Printed:

 

 

 

 

 

Title:

 

 

 

 

 

Date:

 

 

 

Annex B-2

--------------------------------------------------------------------------------

 

SECTION I - Receivables Information

 

I.     Receivables Rollforward

 

 

 

Current

 

 

 

 

 

Month

 

 

 

 

 

 

 

A)

Beginning Principal Balance

 

 

 

B)

Receivables Floorplanned

 

 

 

C)

Principal Receipts

 

 

 

D)

Write-Offs

 

 

 

E)

A/R Converted to Notes

 

 

 

F)

Ending Principal Balance [A + B - C - D - E]

 

 

 

 

 

 

 

 

 

Finance Charge Collections

 

 

 

G)

Interest

 

 

 

H)

Floorplan Fee

 

 

 

I)

Other Fees

 

 

 

J)

Finance Charge Collections

 

 

 

 

 

 

 

 

 

Write-Offs

 

 

 

K)

Total Write-Offs

 

 

 

L)

Write-Offs > [*]

 

 

 

M)

Total Converted to Notes

 

 

 

N)

Converted to Notes > [*]

 

 

 

 

 

 

 

 

II.

Receivables Aging Report

 

 

 

A)

Current

 

 

 

B)

[*] Days Past Due

 

 

 

C)

[*] Days Past Due

 

 

 

D)

[*] Days Past Due

 

 

 

E)

[*] Days Past Due

 

 

 

F)

[*] Days Past Due

 

 

 

 

Total Receivables [A + B + C + D + E + F]

 

 

 

 

Average Maturity (ref purposes only)

 

 

 

 

 

Difference

 

 

 

 

 

 

 

 

III.

Payment Rate / Implied Turnover

 

 

 

A)

Principal Receipts (from rollforward)

 

 

 

B)

Beginning Principal Balance (from rollforward)

 

 

 

 

Implied Turnover [B / A * 30]

 

 

 

 

 

 

 

 

V.

Delinquent Receivables

 

 

 

 

Receivables [*] days past due

 

 

 

VI.

Defaulted Receivables

 

 

 

 

Receivables [*] days past due

 

 

 

 

Annex B-3

--------------------------------------------------------------------------------

 

SECTION II - Concentrations & NRPB

 

VII.

Obligor Information

 

 

 

 

Number of Active Dealers

 

 

 

 

Average Dealer Size

 

 

 

 

 

 

 

 

VIII.

Net Receivables Pool Balance Calculation

 

 

 

 

 

 

 

 

 

Total Receivables

 

 

 

 

Less: Specified Inelgibile Receivables

 

 

 

 

Total Receivables excluding Specified Ineligible Receivables

 

 

 

 

Receivables excluded from NRPB (includes exclusion for Specified Curtailment
Recv.)*

 

 

 

 

TA Exclusions

 

 

 

 

Delinquent Receivables

 

 

 

 

Defaulted Receivables

 

 

 

 

Non-Eligible Vehicles

 

 

 

 

Tractor Receivables > [*]

 

 

 

 

Recreational Vehicle Receivables > [*]

 

 

 

 

Used Motorcycles > [*]

 

 

 

 

Obligors with > [*] defaulted (not previously excluded)

 

 

 

 

Ineligible Term Exclusions

 

 

 

 

Floorplanned > [*]

 

 

 

 

[*] Day Terms > [*]

 

 

 

 

Terms > [*] payoff

 

 

 

 

Short Pays (P Exclusions)

 

 

 

 

NSF

 

 

 

 

Total Specified Curtailment Exclusion

 

 

 

 

 

 

 

 

 

Outstanding Balance of Eligible Receivables

 

 

 

 

(before Specified Curtailment Recv. Add-back)

 

 

 

 

Specified Curtailment Receivables

 

 

 

 

Add: [*]

 

 

 

 

Add: [*])

 

 

 

 

Less Specified Curtailment Receivables Advance in excess of [*]

 

 

 

 

O/s Bal.of Eligible Recv. (incl. Specified Curtailment Recv.)

 

 

 

 

 

 

 

 

 

Concentration Limits (including Specified Curtailment Receivables)

 

 

 

 

Normal Concentrations (List all obligors in excess of [*] - US$ Equivalent)

 

 

 

 

 

 

 

 

 

 

Largest Obligors

 

O/S Eligible
Balance -

 

Elig Rec
Limit

 

Excess

 

 

 

 

Dealer Number

 

NPE

 

[*]

 

Concentrations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2

 

 

 

 

0

 

—

 

 

 

3

 

 

 

 

0

 

—

 

 

 

4

 

 

 

 

0

 

—

 

 

 

5

 

 

 

 

0

 

—

 

 

 

6

 

 

 

 

0

 

—

 

 

 

 

Annex B-4

--------------------------------------------------------------------------------

 

7

 

 

 

 

0

 

—

 

 

 

8

 

 

 

 

 

 

—

 

 

 

9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Excess Concentrations - Normal

 

 

 

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

Excluded Obligors

 

 

 

 

 

 

 

N/A

 

 

 

Special Concentrations (List all obligors in excess of [*] - US $ Equivalent
that has been approved as a special obligor)

 

Per Third Amended Restated Agmt new dealers added to this list

 

 

 

 

 

O/S Eligible

 

 

 

 

 

 

 

 

Dealer Number

 

Balance -
NPE

 

Elig Rec
Limit

 

Excess
Concentrations

 

 

 

1

 

 

 

 

 

 

—

 

 

 

2

 

 

 

 

 

 

—

 

 

 

3

 

 

 

 

 

 

—

 

 

 

 

 

 

Total Excess Concentrations - Special [*]

 

 

 

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

Special Concentrations (List all obligors in excess of [*] - US $ Equivalent
that has been approved as a special obligor)

 

 

1

 

 

 

 

0

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Excess Concentrations - Special [*]

 

 

 

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

Special Concentrations (List all obligors in excess of [*] - US $ Equivalent
that has been approved as a special obligor)

 

 

 

 

 

 

 

 

 

 

 

 

1

 

 

 

 

0

 

—

 

 

 

2

 

 

 

 

0

 

—

 

 

 

3

 

 

 

 

0

 

—

 

 

 

4

 

 

 

 

0

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Excess Concentrations - Special [*]

 

 

 

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Receivables Pool Balance

 

 

 

 

 

 

 

0

 

 

Annex B-5

--------------------------------------------------------------------------------

 

SECTION III - Required Reserves

 

IX.

Investment & Discount (Discount Tab)

 

 

 

Fairway

 

Monterey

 

Total

 

A)

Aggregate Investments

 

 

 

 

 

 

 

0

 

B)

Total Discount

 

 

 

 

 

 

 

0

 

C)

Accrued & Unpaid Discount

 

 

 

 

 

 

 

0

 

D)

Average Investment (from Billing)

 

 

 

 

 

 

 

0

 

 

 

 

 

 

 

 

 

 

 

 

X.

Loss Percentage (Calculated Monthly)

 

 

 

 

 

 

 

 

 

A)

[*]

 

 

 

 

 

 

 

 

 

B)

[*]

 

 

 

 

 

 

 

 

 

C)

Loss Reserve Ratio (Calculated Below)

 

 

 

 

 

 

 

 

 

D)

Minimum Loss Percentage

 

 

 

 

 

 

 

 

 

E)

 

Loss Percentage [[*]]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss Percentage (1-Loss Percentage)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

XI.

Loss Reserve Calculation

 

 

 

Fairway

 

Monterey

 

Total

 

A)

Total Investment

 

 

 

 

 

 

 

 

 

B)

Cash wired in from collection account

 

 

 

 

 

 

 

 

 

C)

Loss Percentage/(1-Loss Percentage)

 

 

 

 

 

 

 

 

 

 

 

Loss Reserve [A - B * C]

 

 

 

 

 

 

 

 

 

 

Loss Reserve Ratio:

 

 

 

 

 

 

 

 

 

F)

[*]

 

 

 

 

 

 

 

 

 

G)

[*]

 

 

 

 

 

 

 

 

 

H)

[*]

 

 

 

 

 

 

 

 

 

I)

Outstanding Balance of Eligible Receivables

 

 

 

 

 

 

 

 

 

 

 

Loss Reserve Ratios  [G * H/I]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

XII.

Cash Reserve Account

 

 

 

 

 

 

 

 

 

A)

Excess Spread [*]

 

 

 

 

 

 

 

 

 

B)

Excess Spread [*]

 

 

 

 

 

 

 

 

 

C)

[*]

 

 

 

 

 

 

 

 

 

 

[*]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

D)

[*]

 

 

 

 

 

 

 

 

 

 

Maximum Delinquency Ratio

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

E)

Level One Trigger Event (C less than [*] or D greater than [*]]

 

If ‘YES’, then such trigger shall remain in effect until three consecutive
calendar months have elapsed during which such trigger has not been breached.

 

 

 

 

 

 

 

 

 

 

 

F)

Cash Reserve Percentage

 

 

 

 

 

 

 

 

 

G)

Aggregate Investments (Fairway + Monterey)

 

 

 

 

 

 

 

 

 

H)

Required Cash Reserve Amount [F * G]

 

 

 

 

 

 

 

 

 

 

Annex B-6

--------------------------------------------------------------------------------

 

I)

Actual Cash Reserve Balance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

XIII.

Total Reserves

 

 

 

 

 

 

 

 

 

A)

Loss Reserve

 

 

 

 

 

 

 

 

 

B)

Cash Reserve [from XII. H)]

 

 

 

 

 

 

 

 

 

 

Total Reserve $ [A + B]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Reserve % [A + B]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

C)

Investment + Loss Reserve [A + F]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

XIV.

Liquidation Account Balance

 

 

 

Fairway

 

Monterey

 

Total

 

A)

Liquidation Account Balance

 

 

 

 

 

 

 

 

 

B)

Last Billing Paid

 

 

 

 

 

 

 

 

 

C)

Discount

 

 

 

 

 

 

 

 

 

D)

Utilization Fee (From Billing)

 

 

 

 

 

 

 

 

 

E)

Facility Fee (From Billing)

 

 

 

 

 

 

 

 

 

F)

Note Placement Fees

 

 

 

 

 

 

 

 

 

G)

Backup Serv. Fees & Unaffiliated Serv. Fees

 

 

 

 

 

 

 

 

 

H)

Transition Expenses (if Any)

 

 

 

 

 

 

 

 

 

 

 

 

Minimum Balance

 

 

 

 

 

 

 

 

Excess Cash/(Deficit)

 

 

 

 

 

 

 

 

Compliance?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Note: Items D, E and F are limited to Libor + [*]

 

 

 

 

 

 

 

 

 

 

 

 

 

XV.

Allocation to Purchaser’s Share and Seller’s Share (Based on or
                     Participation)

 

 

Prior to a Termination Event

 

 

 

 

 

 

 

 

 

 

 

 

Purchasers’
Share

 

A)

Principal Receipts

 

 

 

 

 

 

 

 

 

B)

Finance Receipts

 

 

 

 

 

 

 

 

 

C)

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1

Unaffiliated Servicing Fee and Back-up Servicing Fee

 

 

2

Interest and Program Fees (not previously set aside in Liquidation Acct)

 

 

3

Cash Reserve Acct (any amt required to equal Cash Reserve Requirement)

 

 

4

Voluntary Paydown of Investment

 

 

5

Paydown Investment of the Purchasers

 

 

6

Liquidation Account (to any Indemnified Party excl. any Interest/Program Fees &
Investment)

 

 

7

Back-up Servicer (any accrued & unpaid Back-up Servicing Fees)

 

 

8

Servicing Fees (not paid above) to the Servicer

 

 

9

Reinvested in Receivables

 

 

10

Seller, any remaining amounts

 

 

 

 

Annex B-7

--------------------------------------------------------------------------------

 

SECTION IV - Performance Triggers

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

XVI.

Termination Events  -  Month End Only

 

 

 

 

 

A)

Participation Test

 

 

 

 

 

 

1)

Aggregate Investments

 

 

 

 

 

 

2)

Loss Reserve Calculation

 

 

 

 

 

 

3)

Cash wired from collection account

 

 

 

 

 

 

4)

Excess Cash in Liquidation Account

 

 

 

 

 

 

5)

Investment + Loss Reserve - Cash wired

 

 

 

 

 

 

6)

Net Receivable Pool Balance minus + Excess in Liq. Acct

 

 

 

 

 

 

7)

Participation % [5) / 6)]

 

 

 

 

 

 

8)

Participation % Limit

 

In Compliance

 

 

 

 

 

 

 

 

 

 

 

B)

Default Ratio Test

 

 

 

 

 

 

1)

Receivables [*] days past due + Write-offs and Notes < [*] past due

 

 

 

Jan-00

 

 

 

+ A/R conv to Notes <[*] past due (Ref Tab 1 for details)

 

 

 

 

 

 

2)

Receivables Originated [*] months prior (Cash Disbur.)

 

 

 

 

 

 

3)

Default Ratio [1/2]

 

 

 

 

 

 

 

Maximum [*] Default Ratio

 

In Compliance

 

 

 

 

 

 

 

 

 

 

 

 

4)

[*] Avg Default Ratio

 

 

 

 

 

 

 

Maximum [*] Avg Default Ratio

 

In Compliance

 

 

 

 

 

 

 

 

 

 

 

C)

Delinquency Ratio Test

 

 

 

Jan-00

 

 

1)

Total Delinquent Receivables

 

 

 

 

 

 

2)

Outstanding Balance of Pool Receivables

 

 

 

 

 

 

3)

Delinquency Ratio [1/2]

 

In Compliance

 

 

 

 

 

Maximum [*] Delinquency Ratio

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4)

[*] Avg Delinquency Ratio

 

In Compliance

 

 

 

 

 

Maximum [*] Avg Delinquency Ratio

 

 

 

 

 

 

 

 

 

 

 

 

 

D)

Net Spread Test

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1)

Finance Charge Collections

 

 

 

 

 

 

2)

Discount Expensed During Month (actual)

 

 

 

 

 

 

3)

Monthly Facility Fees (includes pgm fee & insur premium)

 

 

 

 

 

 

4)

Monthly Utilization Fee (includes Use & NonUse fees)

 

 

 

 

 

 

5)

Backup Servicing Fees and Unaffiliated Servicer Fees

 

 

 

 

 

 

6)

Transition Expenses (if any)

 

 

 

 

 

 

7)

Servicer Fee

 

 

 

 

 

 

8)

Other Fees > $100

 

 

 

 

 

 

9)

Receivables [*] Days Past Due

 

 

 

 

 

 

10)

Write-offs/Non-Cash AJE’s

 

 

 

 

 

 

11)

A/R Converted to Notes

 

 

 

 

 

 

 

           Subtotal

 

 

 

 

 

 

12)

Add Back 10) & 11) greater than [*] days old

 

 

 

 

 

 

13)

Recoveries

 

 

 

 

 

 

14)

Excess Finance Collections

 

 

 

 

 

 

Annex B-8

--------------------------------------------------------------------------------

 

 

15)

Average Aggregate Balance Pool Receivables

 

 

 

 

 

 

16)

Net Spread   [*]

 

 

 

 

 

 

17)

Minimum Net Spread

 

 

 

 

 

 

 

Compliance [[*]]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

18)

[*] Avg Net Spread

 

 

 

 

 

 

 

 

 

 

 

 

 

E)

Minimum Eligible Receivables

 

 

 

 

 

 

1)

Eligible Receivables

 

 

 

 

 

 

2)

Minimum Eligible Receivables

 

 

 

 

 

 

 

Compliance [1 > 2]

 

 

 

 

 

 

 

 

 

 

 

 

 

F)

Minimum Cash Reserve

 

 

 

 

 

 

1)

Amount on Deposit in Cash Reserve

 

 

 

 

 

 

2)

Minimum Cash Reserve Amount

 

 

 

 

 

 

 

Compliance [1 > 2]

 

 

 

 

 

 

 

 

 

 

 

 

 

SECTION V - Financial Triggers & Covenants

 

 

 

 

 

 

 

 

 

 

 

 

 

A)

Tangible Net Worth Test

 

 

 

 

 

1.

Servicer - Automotive Finance Corporation

 

 

 

 

 

 

A)

AFC’s Shareholder’s Equity

 

 

 

 

 

 

B)

AFC’s Intangible Assets

 

 

 

 

 

 

C)

Tangible Net Worth [A-B]

 

 

 

 

 

 

D)

Minimum Tangible Net Worth

 

 

 

 

 

 

 

Compliance [C > D]

 

 

 

 

 

 

 

 

 

 

 

 

 

2.

Seller - AFC Funding Corporation

 

 

 

 

 

 

A)

Funding Shareholder’s Equity

 

 

 

 

 

 

B)

Funding Corp’s Intangible Assets

 

 

 

 

 

 

C)

Tangible Net Worth [A-B]

 

 

 

 

 

 

D)

Minimum Tangible Net Worth

 

 

 

 

 

 

 

Compliance [C > D]

 

 

 

 

 

 

 

 

 

 

 

 

 

B)

Servicer’s Debt + Investment Limitation

 

 

 

 

 

 

A)

Maximum Debt

 

 

 

 

 

 

B)

All Debt (including Intercompany) & Receivables Sold

 

 

 

 

 

 

C)

Compliance (A > B)

 

 

 

 

 

 

 

 

 

 

 

 

 

C)

[*]

 

 

 

 

 

 

 

A)

[*]

 

 

 

 

 

 

 

Month/Year of most recent search

 

 

 

 

 

 

 

 

 

 

 

 

 

 

B)

[*]:

 

 

 

 

 

 

 

i). [*]

 

 

 

 

 

 

 

      [*];

 

 

 

 

 

 

 

ii). [*]

 

 

 

 

 

 

 

      [*]

 

 

 

 

 

 

Annex B-9

--------------------------------------------------------------------------------

 

 

 

iii). [*]

 

 

 

 

 

 

 

     [*]:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

C)

i). [*]

 

 

 

 

 

 

 

ii) . [*]

 

 

 

 

 

 

 

iii). [*]:

 

 

 

 

 

 

 

 

 

 

 

 

 

D)

 

Contract Images Sent

 

 

 

 

 

 

Annex B-10

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ANNEX C

 

FORM OF JOINDER AGREEMENT

 

THIS JOINDER AGREEMENT (this “Agreement”), dated as of [              ],
20[    ], is entered into among AFC Funding Corporation (the “Seller”),
Automotive Finance Corporation, as servicer (the “Servicer”),
[                          ], a [                          ], as a Purchaser
(the “[                ] Purchaser”), [              ], as Purchaser Agent for
the [          ] Purchaser (the “[                    ] Purchaser Agent”),
Fairway Finance Company, LLC, as a Purchaser (“Fairway”), and BMO Capital
Markets Corp. (formerly known as Harris Nesbitt Corp.), as Purchaser Agent for
Fairway and as agent for the Purchasers (the “Agent”).

 

BACKGROUND

 

The Seller, the Servicer, Fairway and the Agent are parties to a certain Third
Amended and Restated Receivables Purchase Agreement, dated as of April 20, 2007
(as amended through the date hereof, the “Receivables Purchase Agreement”). 
Capitalized terms used but not defined herein have the meanings assigned to them
in the Receivables Purchase Agreement.

 

NOW, THEREFORE, the parties hereto hereby agree as follows:

 

5.             Addition of [            ] and [                  ] Purchaser. 
(a)  This letter constitutes a Joinder Agreement pursuant to Section 1.12 of the
Receivables Purchase Agreement.  The Seller desires the [                  ]
Purchaser to become a Purchaser and the [                  ] Purchaser Agent to
become a Purchaser Agent under the Receivables Purchase Agreement, and the
[                  ] Purchaser agrees to become a Purchaser and the
[                  ] Purchaser Agent agrees to become a Purchaser Agent
thereunder.

 

(b)           Seller hereby represents and warrants to each of the
[                  ] Purchaser, the [                  ] Purchaser Agent, the
Agent and Fairway as of the date hereof, as follows:

 

(i)  the representations and warranties contained in Exhibit III and Exhibit VII
to the Receivables Purchase Agreement are true and correct on and as of the date
hereof as though made on and as of such date;

 

(ii)  no event has occurred and is continuing, or would result from the
execution of this Agreement, that constitutes a Termination Event or Unmatured
Termination Event;

 

(iii) the sum of the aggregate of the Participations does not exceed 100%;

 

(iv) the aggregate Investment for all Term Purchasers does not exceed 40% of the
aggregate Investment; and

 

(v) the amount on deposit in the Cash Reserve Account is equal to or greater
than the Cash Reserve.

 

Annex C -1

--------------------------------------------------------------------------------

 

6.             Effective Date of Addition.  Upon execution and delivery of this
Agreement by the Seller, the Servicer, each of the [                  ]
Purchaser, the [                  ] Purchaser Agent, Fairway and the Agent and
receipt by the Agent of counterparts of this Agreement (whether by facsimile or
otherwise) executed by each of the parties hereto, on [                      ],
20[_] (the “Effective Date”) each of the [                  ] Purchaser and the
[                  ] Purchaser Agent shall become a party to, and have the
rights and obligations of a Purchaser and Purchaser Agent, respectively, under,
the Receivables Purchase Agreement and Fairway shall, to the extent of the
interest assigned by Fairway hereunder, relinquish its rights and interest
(other than the right to receive payments which accrued in favor of Fairway
prior to but not including the date hereof) and be released from its obligations
under the Receivables Purchase Agreement.

 

7.             Assignment by Fairway.  On the Effective Date, Fairway (the
“Assignor”) hereby sells and assigns to the [                  ] Purchaser (the
“Assignee”) without recourse and without representation or warranty (except that
the portion of the Participation being assigned hereunder is outstanding and
owing and Assignor is the sole owner of its right, title and interest in and to
the portion of Participation being transferred hereunder free of any Adverse
Claim), and the Assignee hereby purchases and assumes from the Assignor, that
portion of the Assignor’s interest in and to the Participation and that portion
of the Assignor’s other rights and obligations under the Receivables Purchase
Agreement as of the date hereof equal to the following:

 

Maximum Commitment assigned:

Assignor’s remaining Maximum Commitment:

Investment to be assigned on the Effective Date:

$[                      ]

$[                      ]

$[                      ]

 

The Agent shall confirm the aggregate Investment of each Purchaser to each
Purchaser Agent by email on the Effective Date after the transfers to occur on
the Effective Date.

 

The Maximum Commitment of the Assignor and the Assignee shall be as set forth on
the signature page hereto.

 

A.            The Assignor hereby instructs the Agent to make all payments from
and after the Effective Date in respect of the portion of the Participation
assigned hereby directly to the Assignee.  The Assignor and the Assignee agree
that all Discount and fees accrued up to, but not including, the Effective Date
are the property of the Assignor, and not the Assignee.  The Assignee agrees
that, upon receipt of any such Discount or fees, the Assignee will promptly
remit the same to the Assignor.

 

B.            On the Effective Date, the Assignee shall pay to the Assignor, in
immediately available funds, an amount equal to the purchase price of the
portion of the Participation assigned hereunder in accordance with the following
payment instructions:

 

ABA No.:

 

 

Account Name:

 

 

Account No.:

 

 

Ref:

AFC Funding Corporation

 

 

Annex C -2

--------------------------------------------------------------------------------

 

All notices and other communications hereunder or under the Receivables Purchase
Agreement to the [                  ] Purchaser and the [                  ]
Purchaser Agent shall be sent or delivered to [                  ] Purchaser and
[                  ] Purchaser Agent at the address set forth under their names
on the signature pages hereof.

 

8.             No Proceedings.  Each party hereto hereby covenants and agrees
that it will not institute against, or join any other Person in instituting
against, any Purchaser, any Note Issuer or any Related CP Issuer any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceeding, or other
proceeding under any federal or state bankruptcy or similar law, for one year
and one day after the latest maturing Note issued by such Purchaser, Note Issuer
or Related CP Issuer is paid in full. The provisions of Section 6.5(b) of the
Receivables Purchase Agreement shall apply to this Agreement mutatis mutandis as
if set forth herein.  The covenants contained in this paragraph shall survive
any termination of the Receivables Purchase Agreement.

 

9.             Miscellaneous.  THIS AGREEMENT SHALL BE GOVERNED BY THE INTERNAL
LAWS OF THE STATE OF INDIANA.  This Agreement may not be amended, supplemented
or waived except pursuant to a writing signed by the party to be charged.  This
Agreement may be executed in counterparts, and by the different parties on
different counterparts, each of which shall constitute an original, but all
together shall constitute one and the same agreement.

 

Annex C -3

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement by their
duly authorized officers as of the date first above written.

 

 

[                                                              ]

 

 

 

 

 

By:

 

 

Name Printed:

 

 

Title:

 

 

 

 

 

Maximum Commitment: $[                  -]

 

 

 

 

 

 

 

Address:

 

 

 

 

 

 

 

 

[                          ], as Purchaser Agent for [                  ]

 

 

 

 

 

 

 

By:

 

 

Name Printed:

 

 

Title:

 

 

 

 

 

 

 

 

Address:

 

 

--------------------------------------------------------------------------------

 

 

FAIRWAY FINANCE COMPANY, LLC,

 

 

 

 

 

as a Purchaser

 

 

 

 

 

By:

 

 

Name Printed:

 

 

Title:

 

 

 

 

 

Maximum Commitment: $[                      ]

 

 

 

 

 

 

 

BMO CAPITAL MARKETS CORP.,

 

as Purchaser Agent for Fairway and as Agent

 

 

 

 

 

 

 

By:

 

 

Name Printed:

 

 

Title:

 

 

--------------------------------------------------------------------------------

 

 

AFC FUNDING CORPORATION, as Seller

 

 

 

 

 

 

 

By:

 

 

Name Printed:

 

 

Title:

 

 

 

 

 

 

 

 

AUTOMOTIVE FINANCE CORPORATION, as Servicer

 

 

 

 

By:

 

 

Name Printed:

 

 

Title:

 

 

--------------------------------------------------------------------------------