exv4wxfyx109y






EXECUTION COPY




      




U.S. $50,000,000




LOAN AND SECURITY AGREEMENT




Dated as of May 23, 2008




Among




CAC WAREHOUSE FUNDING III, LLC




as the Borrower




CREDIT ACCEPTANCE CORPORATION

as the Servicer and Custodian




FIFTH THIRD BANK

as an Investor, the Deal Agent, the Collateral Agent, and as the Liquidity Agent for the

FIFTH THIRD PURCHASER GROUP




RELATIONSHIP FUNDING COMPANY, LLC

as a CP Entity and a Lender




and




SYSTEMS & SERVICES TECHNOLOGIES, INC.

as the Backup Servicer




 





 









 








TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page	 
	ARTICLE I DEFINITIONS
	 	 	1	 
	 
	 	 	 	 
	Section 1.1. Certain Defined Terms
	 	 	1	 
	 
	 	 	 	 
	Section 1.2. Other Terms
	 	 	28	 
	 
	 	 	 	 
	Section 1.3. Computation of Time Periods
	 	 	28	 
	 
	 	 	 	 
	Section 1.4. Interpretation
	 	 	28	 
	 
	 	 	 	 
	ARTICLE II THE LOAN FACILITY
	 	 	29	 
	 
	 	 	 	 
	Section 2.1. Funding of the Advance
	 	 	29	 
	 
	 	 	 	 
	Section 2.2. Grant of Security Interest; Acceptance by Collateral Agent
	 	 	30	 
	 
	 	 	 	 
	Section 2.3. Procedures for Funding of Advances
	 	 	32	 
	 
	 	 	 	 
	Section 2.4. Determination of Yield
	 	 	33	 
	 
	 	 	 	 
	Section 2.5. Reduction of the Facility Limit and a Purchaser Group Facility Limit;
Repurchase
	 	 	33	 
	 
	 	 	 	 
	Section 2.6. Actions with Respect to Advance
	 	 	34	 
	 
	 	 	 	 
	Section 2.7. Settlement Procedures
	 	 	34	 
	 
	 	 	 	 
	Section 2.8. [Reserved.]
	 	 	37	 
	 
	 	 	 	 
	Section 2.9. Collections and Allocations
	 	 	37	 
	 
	 	 	 	 
	Section 2.10. Payments, Computations, Etc
	 	 	37	 
	 
	 	 	 	 
	Section 2.11. [Reserved.]
	 	 	38	 
	 
	 	 	 	 
	Section 2.12. Fees
	 	 	38	 
	 
	 	 	 	 
	Section 2.13. Increased Costs; Capital Adequacy; Illegality
	 	 	38	 
	 
	 	 	 	 
	Section 2.14. Taxes
	 	 	40	 
	 
	 	 	 	 
	Section 2.15. Assignment of the Contribution Agreement
	 	 	41	 
	 
	 	 	 	 
	Section 2.16. Servicer Clean-up Call
	 	 	41	 
	 
	 	 	 	 
	ARTICLE III CONDITIONS TO THE CLOSING AND EACH FUNDING
	 	 	42	 
	 
	 	 	 	 
	Section 3.1. Conditions to the Closing and the Initial Funding
	 	 	42	 
	 
	 	 	 	 
	Section 3.2. Conditions Precedent To All Fundings
	 	 	43	 
	 
	 	 	 	 
	Section 3.3. Conditions to Effectiveness of this Loan and Security Agreement
	 	 	45	 
	 
	 	 	 	 
	ARTICLE IV REPRESENTATIONS AND WARRANTIES
	 	 	45	 
	 
	 	 	 	 
	Section 4.1. Representations and Warranties of the Borrower
	 	 	45	 






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TABLE OF CONTENTS

(continued)




	 	 	 	 	 
	 	 	Page	 
	Section 4.2. Representations and Warranties of the Borrower Relating to the Loans
and the Related Contracts
	 	 	50	 
	 
	 	 	 	 
	Section 4.3. Representations and Warranties of the Servicer
	 	 	51	 
	 
	 	 	 	 
	Section 4.4. Representations and Warranties of the Backup Servicer
	 	 	52	 
	 
	 	 	 	 
	Section 4.5. Breach of Representations and Warranties
	 	 	53	 
	 
	 	 	 	 
	ARTICLE V GENERAL COVENANTS
	 	 	54	 
	 
	 	 	 	 
	Section 5.1. Affirmative Covenants of the Borrower
	 	 	54	 
	 
	 	 	 	 
	Section 5.2. Negative Covenants of the Borrower
	 	 	59	 
	 
	 	 	 	 
	Section 5.3. Covenant of the Borrower Relating to the Hedging Agreement
	 	 	63	 
	 
	 	 	 	 
	Section 5.4. Affirmative Covenants of the Servicer
	 	 	63	 
	 
	 	 	 	 
	Section 5.5. Negative Covenants of the Servicer
	 	 	66	 
	 
	 	 	 	 
	Section 5.6. Negative Covenants of the Backup Servicer
	 	 	67	 
	 
	 	 	 	 
	ARTICLE VI ADMINISTRATION AND SERVICING OF CONTRACTS
	 	 	67	 
	 
	 	 	 	 
	Section 6.1. Servicing
	 	 	67	 
	 
	 	 	 	 
	Section 6.2. Duties of the Servicer and Custodian
	 	 	68	 
	 
	 	 	 	 
	Section 6.3. Rights After Designation of Successor Servicer
	 	 	71	 
	 
	 	 	 	 
	Section 6.4. Responsibilities of the Borrower
	 	 	71	 
	 
	 	 	 	 
	Section 6.5. Reports
	 	 	72	 
	 
	 	 	 	 
	Section 6.6. Additional Representations and Warranties of Credit Acceptance as
Servicer
	 	 	73	 
	 
	 	 	 	 
	Section 6.7. Establishment of the Accounts
	 	 	73	 
	 
	 	 	 	 
	Section 6.8. Payment of Certain Expenses by Servicer
	 	 	74	 
	 
	 	 	 	 
	Section 6.9. Annual Independent Public Accountant’s Servicing Reports
	 	 	74	 
	 
	 	 	 	 
	Section 6.10. The Servicer Not to Resign
	 	 	75	 
	 
	 	 	 	 
	Section 6.11. Servicer Termination Events
	 	 	75	 
	 
	 	 	 	 
	Section 6.12. Appointment of Successor Servicer
	 	 	76	 
	 
	 	 	 	 
	Section 6.13. Responsibilities of the Borrower
	 	 	77	 
	 
	 	 	 	 
	Section 6.14. Segregated Payment Account
	 	 	77	 
	 
	 	 	 	 
	ARTICLE VII BACKUP SERVICER
	 	 	77	 
	 
	 	 	 	 
	Section 7.1. Designation of the Backup Servicer
	 	 	78	 
	 
	 	 	 	 
	Section 7.2. Duties of the Backup Servicer
	 	 	78	 






-ii-









 






TABLE OF CONTENTS

(continued)




	 	 	 	 	 
	 	 	Page	 
	Section 7.3. Backup Servicing Compensation
	 	 	78	 
	 
	 	 	 	 
	ARTICLE VIII [Reserved]
	 	 	78	 
	 
	 	 	 	 
	ARTICLE IX SECURITY INTEREST
	 	 	78	 
	 
	 	 	 	 
	Section 9.1. Security Agreement
	 	 	78	 
	 
	 	 	 	 
	Section 9.2. Release of Lien
	 	 	78	 
	 
	 	 	 	 
	Section 9.3. Further Assurances
	 	 	79	 
	 
	 	 	 	 
	Section 9.4. Remedies
	 	 	79	 
	 
	 	 	 	 
	Section 9.5. Waiver of Certain Laws
	 	 	79	 
	 
	 	 	 	 
	Section 9.6. Power of Attorney
	 	 	79	 
	 
	 	 	 	 
	ARTICLE X TERMINATION EVENTS
	 	 	79	 
	 
	 	 	 	 
	Section 10.1. Termination Events
	 	 	79	 
	 
	 	 	 	 
	Section 10.2. Remedies
	 	 	82	 
	 
	 	 	 	 
	ARTICLE XI INDEMNIFICATION
	 	 	82	 
	 
	 	 	 	 
	Section 11.1. Indemnities by the Borrower
	 	 	82	 
	 
	 	 	 	 
	Section 11.2. Indemnities by the Servicer
	 	 	84	 
	 
	 	 	 	 
	Section 11.3. After-Tax Basis
	 	 	85	 
	 
	 	 	 	 
	ARTICLE XII THE DEAL AGENT AND THE LIQUIDITY AGENTS
	 	 	85	 
	 
	 	 	 	 
	Section 12.1. Authorization and Action
	 	 	85	 
	 
	 	 	 	 
	Section 12.2. Delegation of Duties
	 	 	86	 
	 
	 	 	 	 
	Section 12.3. Exculpatory Provisions
	 	 	87	 
	 
	 	 	 	 
	Section 12.4. Reliance
	 	 	88	 
	 
	 	 	 	 
	Section 12.5. Non-Reliance on Deal Agent, Liquidity Agents, Collateral Agent and
Other Lenders
	 	 	89	 
	 
	 	 	 	 
	Section 12.6. Reimbursement and Indemnification
	 	 	89	 
	 
	 	 	 	 
	Section 12.7. Deal Agent, Liquidity Agents and Collateral Agent in their Individual
Capacities
	 	 	89	 
	 
	 	 	 	 
	Section 12.8. Successor Deal Agent, Liquidity Agents or Collateral Agent
	 	 	90	 
	 
	 	 	 	 
	ARTICLE XIII ASSIGNMENTS; PARTICIPATIONS
	 	 	91	 
	 
	 	 	 	 
	Section 13.1. Assignments and Participations
	 	 	91	 
	 
	 	 	 	 
	ARTICLE XIV MISCELLANEOUS
	 	 	94	 
	 
	 	 	 	 
	Section 14.1. Amendments and Waivers
	 	 	94	 






-iii-









 






TABLE OF CONTENTS

(continued)




	 	 	 	 	 
	 	 	Page	 
	Section 14.2. Notices, Etc
	 	 	95	 
	 
	 	 	 	 
	Section 14.3. Ratable Payments
	 	 	95	 
	 
	 	 	 	 
	Section 14.4. No Waiver; Remedies
	 	 	95	 
	 
	 	 	 	 
	Section 14.5. Binding Effect; Benefit of Agreement
	 	 	95	 
	 
	 	 	 	 
	Section 14.6. Term of this Agreement
	 	 	95	 
	 
	 	 	 	 
	Section 14.7. Governing Law; Consent to Jurisdiction; Waiver of Objection to Venue

	 	 	96	 
	 
	 	 	 	 
	Section 14.8. Waiver of Jury Trial
	 	 	96	 
	 
	 	 	 	 
	Section 14.9. Costs, Expenses and Taxes
	 	 	96	 
	 
	 	 	 	 
	Section 14.10. No Proceedings
	 	 	97	 
	 
	 	 	 	 
	Section 14.11. Recourse Against Certain Parties
	 	 	97	 
	 
	 	 	 	 
	Section 14.12. Protection of Right, Title and Interest in Assets; Further Action
Evidencing the Funding
	 	 	98	 
	 
	 	 	 	 
	Section 14.13. Confidentiality; Tax Treatment Disclosure
	 	 	99	 
	 
	 	 	 	 
	Section 14.14. Execution in Counterparts; Severability; Integration
	 	 	100	 
	 
	 	 	 	 
	Section 14.15. Waiver of Setoff
	 	 	101	 







-iv-









 








EXHIBITS




	 	 	 
	EXHIBIT A

	 	Form of Funding Notice
	EXHIBIT B

	 	Form of Assignment and Acceptance
	EXHIBIT C

	 	Form of Monthly Report
	EXHIBIT D

	 	Form of Joinder
	EXHIBIT E

	 	Form of Hedging Agreement (including Schedule and Confirmation)
	EXHIBIT F

	 	Form of Officer’s Certificate
	EXHIBIT G

	 	Form of Release
	EXHIBIT H

	 	Form of Contribution Agreement
	EXHIBIT I

	 	Form of Variable Funding Note
	EXHIBIT J-1

	 	Form 1 of Dealer Agreement
	EXHIBIT J-2

	 	Form 2 of Dealer Agreement
	EXHIBIT J-3

	 	Form 3 of Dealer Agreement
	EXHIBIT J-4

	 	Form 4 of Dealer Agreement
	EXHIBIT J-5

	 	Form 5 of Dealer Agreement
	EXHIBIT J-6

	 	Form 6 of Dealer Agreement
	EXHIBIT K

	 	[Reserved]
	EXHIBIT L

	 	Forms of Contracts
	EXHIBIT M

	 	[Reserved]
	EXHIBIT N

	 	[Reserved]
	EXHIBIT O

	 	Form of Backup Servicing Agreement
	EXHIBIT P

	 	Form of Purchase Agreement






SCHEDULES




	 	 	 
	SCHEDULE I

	 	Condition Precedent Documents
	SCHEDULE II

	 	Credit Guidelines
	SCHEDULE III

	 	Tradenames, Fictitious Names and “Doing Business As” Names
	SCHEDULE IV

	 	Location of Records and Contract Files
	SCHEDULE V

	 	Loan and Contract List
	SCHEDULE VI

	 	Collection Guidelines
	SCHEDULE VII

	 	Forecasted Collections
	SCHEDULE VIII

	 	Commitment Amount of Each Investor
	SCHEDULE IX

	 	List of Dealer Agreements and Pools
	SCHEDULE X

	 	Bank Holidays






 









 





     THIS LOAN AND SECURITY AGREEMENT (the “Agreement”) is made as of May 23, 2008, among:



     (1) CAC WAREHOUSE FUNDING III, LLC, a Delaware limited liability company (the
“Borrower”);



     (2) CREDIT ACCEPTANCE CORPORATION, a Michigan corporation (“Credit Acceptance”, the
“Originator”, the “Servicer” or the “Custodian”);



     (3) FIFTH THIRD BANK, an Ohio banking corporation (“Fifth Third”), as an investor for
the Fifth Third Purchaser Group (an “Investor”), as deal agent (“Deal Agent”), as
collateral agent (the “Collateral Agent”), and as the liquidity agent for the Fifth Third
Purchaser Group (a “Liquidity Agent”);



     (4) RELATIONSHIP FUNDING COMPANY, LLC, a Delaware limited liability company (together with its
successors and assigns “RFC”, a “CP Entity” or a “Lender”); and



     (5) SYSTEMS & SERVICES TECHNOLOGIES, INC., a Delaware corporation (the “Backup
Servicer”).



     IT IS AGREED as follows:



ARTICLE I

DEFINITIONS




     Section 1.1. Certain Defined Terms.



          (a) Certain capitalized terms used throughout this Agreement are defined above or in this
Section 1.1.




          (b) As used in this Agreement and its schedules, exhibits and other attachments, unless the
context requires a different meaning, the following terms shall have the following meanings:




     Accrual Period: The period commencing on (and including) the Funding Date for the
Initial Funding and ending on (but excluding) the initial Payment Date (May 27, 2008), and each
succeeding period thereafter commencing on (and including) the immediately preceding Payment Date
and ending on (but excluding) the next succeeding Payment Date (or in the case of the final such
period, commencing on (and including) the immediately preceding Payment Date and ending on (but
excluding) the Collection Date).



     Addition Date: (a) With respect to any open Pool, the date on which any additional
Dealer Loans are added to such Pool and (b) with respect to any Purchased Loan, the date on which
such Purchased Loan is contributed by Credit Acceptance to the Borrower pursuant to the
Contribution Agreement.



     Additional Amount: Defined in Section 2.14(a).



1









 





     Additional Cut-Off Date: Each date on and after which Collections on an Additional
Loan are to be transferred to the Collateral.



     Additional Entity: Each commercial paper funded entity which satisfies the conditions
set forth in the definition of “Eligible Assignee” and, except in the case of any RFC Affiliate,
with the prior written consent of the Deal Agent (in its sole discretion), becomes party hereto by
execution of a Joinder.



     Additional Loans: All Loans that become part of the Collateral after the Initial
Funding.



     Adjusted Eurodollar Rate: For any Accrual Period, an interest rate per annum equal to
the sum of 1.0% and a fraction, expressed as a percentage and rounded upwards (if necessary), to
the nearest 1/100 of 1%, (i) the numerator of which is equal to the LIBOR Rate for such Accrual
Period and (ii) the denominator of which is equal to 100% minus the Eurodollar Reserve Percentage
for such Accrual Period.



     Additional Principal Payment Amount: With respect to any Payment Date during the
Amortization Period, the lesser of: (i) Capital as of the immediately preceding Payment Date
(after giving effect to all payments in reduction of principal on such Payment Date); and (ii)
Collections remaining after distribution of amounts described in Section 2.7 (a)(i) through
(vii).



     Advance: As defined in Section 2.1.



     Affected Party: Each of the Lenders, each Investor, each Liquidity Bank, any assignee
or participant of any Lender, Investor or Liquidity Bank, Fifth Third, any successor to Fifth Third
as Deal Agent, any sub-agent of the Deal Agent, and any successor to any Liquidity Agent.



     Affiliate: With respect to a Person, means any other Person that, directly or
indirectly, controls, is controlled by or under common control with such Person, or is a director
or officer of such Person. For purposes of this definition, “control” (including the terms
“controlling,” “controlled by” and “under common control with”) when used with respect to any
specified Person means the possession, direct or indirect, of the power to vote 5% or more of the
voting securities of such Person or to direct or cause the direction of the management or policies
of such Person, whether through the ownership of voting securities, by contract or otherwise.



     Agent’s Account: An account at Fifth Third in the name of the Deal Agent or at such
other account as may be designated by the Deal Agent from time to time.



     Aggregate Outstanding Eligible Loan Balance: On any date of determination, the sum of
the Outstanding Balances of all Eligible Loans on such day.



     Aggregate Outstanding Eligible Loan Net Balance: On any date of determination the
Aggregate Outstanding Eligible Loan Balance less the related Loan Loss Reserves at the end of the
most recent Collection Period.



     Aggregate Unpaids: At any time, an amount, equal to the sum of all accrued and unpaid
Capital, Yield, Breakage Costs, Hedge Breakage Costs, fees, indemnities and all other amounts owed
by the Borrower hereunder, under any Hedging Agreement (including, without limitation,



-2-









 







payments in respect of the termination of any such Hedging Agreement) or under any other
Transaction Document or by the Borrower or any other Person under any fee letter (including,
without limitation, the Fee Letter) delivered in connection with the transactions contemplated by
this Agreement (whether due or accrued) and any unpaid fees due to the Backup Servicer, both before
and after the Assumption Date.



     Alternative Rate: An interest rate per annum equal to the Adjusted Eurodollar Rate;
provided, however, that the Alternative Rate shall be the Base Rate if a Eurodollar
Disruption Event occurs.



     Amortization Event: The occurrence of any of the following events: (i) the Weighted
Average Original Advance Rate exceeds 50.0%; (ii) a Reserve Advance is made, except if on the date
of such Reserve Advance, the Capital is zero; or (iii) Collections are less than 85.0% of
Forecasted Collections for any two (2) consecutive Collection Periods.



     Amortization Period: The period beginning on the earlier of (i) the occurrence of an
Amortization Event, and (ii) the occurrence of the Termination Date, and ending on the Collection
Date.



     Applicable Law: For any Person, all existing and future applicable laws, rules,
regulations (including proposed, temporary and final income tax regulations), statutes, treaties,
codes, ordinances, permits, certificates, orders and licenses of and interpretations by any
Governmental Authority (including, without limitation, usury laws, the Federal Truth in Lending
Act, and Regulation Z and Regulation B of the Board of Governors of the Federal Reserve System),
and applicable judgments, decrees, injunctions, writs, orders, or action of any Court, arbitrator
or other administrative, judicial, or quasi-judicial tribunal or agency of competent jurisdiction.



     Assignment and Acceptance: An assignment and acceptance entered into by a CP Entity
or an Investor and an Eligible Assignee, and accepted by the Deal Agent and the Liquidity Agent for
the related Purchaser Group, in substantially the form of Exhibit B hereto.



     Assumption Date: Defined in the Backup Servicing Agreement.



     Available Funds: With respect to any Payment Date: (i) all amounts deposited in the
Collection Account during the Collection Period (other than Dealer Collections and Repossession
Expenses) that ended on the last day of the calendar month immediately preceding the calendar month
in which such Payment Date occurs and investment earnings thereon; (ii) all Reserve Advances (which
shall be applied in accordance with Section 2.7(c) hereof); (iii) all amounts paid by the
Borrower pursuant to Section 4.5 hereof during or with respect to the prior Collection
Period in respect of Ineligible Loans; (iv) amounts paid by the Borrower pursuant to Section
2.16 hereof; (v) all amounts paid under any Dealer Agreement; and (vi) any other funds on
deposit in the Collection Account on such date (other than Dealer Collections and Repossession
Expenses).



     Backup Servicer: SST.



-3-









 





     Backup Servicing Fee: The fee payable by the Borrower to the Backup Servicer pursuant
to the Backup Servicing Agreement and Section 7.3 hereof.



     Bankruptcy Code: The United States Bankruptcy Reform Act of 1978 (11 U.S.C. § 101, et
seq.), as amended from time to time.



     Base Rate: On any date, a fluctuating interest rate per annum equal to the higher of
(a) the Prime Rate or (b) the Federal Funds Rate plus 2.0%.



     Benefit Plan: Any employee benefit plan as defined in Section 3(3) of ERISA in
respect of which the Borrower or any ERISA Affiliate of the Borrower is, or at any time during the
immediately preceding six years was, an “employer” as defined in Section 3(5) of ERISA.



     Borrower: CAC Warehouse Funding Corporation III, LLC, a Delaware limited liability
company.



     Borrowing Base: On any date of determination, the product of (i) the Aggregate
Outstanding Eligible Loan Net Balance and (ii) the Net Advance Rate.



     Breakage Costs: Any amount or amounts as shall compensate any Lender for any loss,
cost or expense incurred by such Lender (as determined by such Lender in such Lender’s sole
discretion) as a result of a prepayment by the Borrower of Capital or Yield, the failure by the
Borrower to draw or accept any requested funds on any applicable borrowing date, or the failure of
any Payment Date with respect to any loan or advance hereunder to occur on the maturity date of the
applicable source of funds, the proceeds of which were used to fund or maintain such loan or
advance (or portion thereof).



     Bridge Loan Agreement: The Bridge Loan Agreement, dated as of the Closing Date, among
RFC, Fifth Third, as agent and Bridge Loan Lender.



     Bridge Loan Lender: Fifth Third and its successors and permitted assigns.



     Business Day: Any day other than a Saturday or a Sunday or other day (a) on which
banks are required or authorized to be closed in New York, New York or Delaware, (b) banks are
required or authorized to be closed in Cincinnati, Ohio or Detroit, Michigan (which days are set
forth in Schedule X hereto) and, if the Backup Servicer becomes the Servicer, Missouri (which days
are set forth in Schedule X hereto), (c) that SIFMA recommends as a closed day for the United
States bond market, and (d) if the term “Business Day” is used in connection with the determination
of the LIBOR Rate, on which dealings in United States dollar deposits are carried on in the London
interbank market.



     Capital: The amounts advanced to the Borrower by the Lenders pursuant to Section
2.1(a) and Section 2.3, reduced from time to time by Collections distributed on account
of such Capital pursuant to Section 2.7; provided, however, if such Capital
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 Capital shall be increased by the
amount of such rescinded or returned distribution, as though it had not been made.



-4-









 





     Capped Servicing Fee: With respect to any Collection Period when the Backup Servicer
has become the Servicer, the greater of (x) an amount equal to the product of (i) 10.00% and (ii)
Collections received during such Collection Period (exclusive of amounts received under any Hedging
Agreement) and (y) $5,000.



     Carrying Costs: with respect to any Payment Date, the sum of amounts payable under
Section 2.7(a)(v)(A)-(C).



     Change-in-Control: Any of the following:



     (a) the creation or imposition of any Lien on any shares of membership interest of the
Borrower;



     (b) the failure by Originator to own all of the issued and outstanding membership interest of
the Borrower.



     Closing Date: May 23, 2008.



     Code: The Internal Revenue Code of 1986, as amended from time to time.



     Collateral: Defined in Section 2.2(a).



     Collateral Agent: Fifth Third and its successors and permitted assigns.



     Collection Account: Defined in Section 6.7(a).



     Collection Date: The date following the Termination Date on which the Aggregate
Unpaids have been reduced to zero and indefeasibly paid in full.



     Collection Guidelines: With respect to Credit Acceptance, the policies and procedures
of the Servicer, attached hereto as Schedule VI, relating to the collection of amounts due on
contracts for the sale of automobiles and/or light-duty trucks, as in effect on the Cut-Off Date
and as amended from time to time in accordance herewith and with the other Transaction Documents,
and with respect to the Backup Servicer, as Successor Servicer, the servicing policies and
procedures set forth in the Backup Servicing Agreement.



     Collection Period: Each calendar month, except in the case of the first Collection
Period, the period beginning on the Cut-Off Date to and including the last day of the calendar
month in which the Funding Date occurs.



     Collections: All payments (including Recoveries, credit-related insurance proceeds
and proceeds of Related Security and so long as Credit Acceptance is the Servicer, excluding
certain recovery and repossession expenses, in accordance with the terms of the Dealer Agreements)
received by the Servicer, Credit Acceptance, the Borrower or any Successor Servicer on or after the
Cut-Off Date in respect of the Loans in the form of cash, checks, wire transfers or other form of
payment in accordance with the Loans and the Dealer Agreements and all net amounts received under
any Hedging Agreement.



-5-









 





     Commercial Paper Notes: With respect to any CP Entity, on any day, any short-term
notes issued by or on behalf of such CP Entity in the ordinary course of its financing business or
obligations pursuant to interest rate basis swaps entered into in connection with the issuance of
such short-term notes.



     Commitment: For each Investor, the commitment of such Investor to make Advances to
the Borrower in an amount not to exceed the amount set forth opposite such Investor’s name on
Schedule VIII to this Agreement or as set forth in the Joinder executed by such Investor, as the
case may be.



     Commitment Termination Date: May 23, 2010, or such later date to which the Commitment
Termination Date may be extended in accordance with the terms of Section 2.1(b).



     Contract: Any Dealer Loan Contract or Purchased Loan Contract.



     Contract Files: With respect to each Contract, the fully executed original
counterpart (for UCC purposes) of the Contract, either a copy of the application to the appropriate
state authorities for a certificate of title with respect to the related financed vehicle or a
standard assurance in the form commonly used in the industry relating to the provision of a
certificate of title or other evidence of lien, all original instruments modifying the terms and
conditions of such Contract and the original endorsements or assignments of such Contract.



     Contribution Agreement: The Contribution Agreement, dated as of the Effective Date,
substantially in the form of Exhibit H hereto, between Credit Acceptance and the Borrower, as the
same may be amended, restated, supplemented or otherwise modified from time to time.



     Contractual Obligation: With respect to any Person, means any provision of any
securities issued by such Person or any indenture, mortgage, deed of trust, contract, undertaking,
agreement, instrument or other document to which such Person is a party or by which it or any of
its property is bound or is subject.



     CP Entity: RFC and any Additional Entity.



     CP Rate: (a) With respect to RFC, for any day during any Accrual Period, the per
annum rate equivalent to the weighted average of the rates determined by RFC based upon a per annum
money market equivalent rate which is payable by large issuers of A-1/P-1 commercial paper selected
by RFC in respect of Commercial Paper Notes issued or outstanding from time to time during such
Accrual Period (or portion thereof), such rate to be determined based on quotes from at least three
nationally recognized dealers of such commercial paper selected by RFC and assumed issuance amounts
and dates selected by RFC; provided, that if any component of such rate is a discount rate,
RFC shall for such component use the rate resulting from converting such discount rate to an
interest bearing equivalent rate per annum; provided, further, that the CP Rate
shall reflect and give effect to the commissions and charges of placement agents and dealers in
respect of the issuance of such Commercial Paper Notes (it being understood that the CP Rate shall
include rates that are a result of payments received after the time they are due), and (b) with
respect to any other CP Entity, the rate identified as the “CP Rate” in the Joinder related to its
Purchaser Group.



-6-









 





     Credit Acceptance: Credit Acceptance Corporation, a Michigan corporation, and its
successors and permitted assigns.



     Credit Acceptance Payment Account: The clearinghouse account number xxxxxx5068
maintained by Credit Acceptance at Comerica Bank, or if the Backup Servicer has become the
Successor Servicer or a Successor Servicer has been appointed hereunder, such other account
specified by the Deal Agent, where payments received in respect of all loans and contracts are
deposited or paid.



     Credit Agreement: The Fourth Amended and Restated Credit Agreement, dated as of
February 7, 2006 among Credit Acceptance, Comerica Bank, as Administrative Agent and Collateral
Agent and the banks signatory thereto, as amended by the First Amendment to Fourth Amended and
Restated Loan Agreement dated September 20, 2006, the Second Amendment to Fourth Amended and
Restated Loan Agreement dated January 19, 2007, and the Third Amendment to Fourth Amended and
Restated Loan Agreement dated June 14, 2007, and the Fourth Amendment to Fourth Amended and
Restated Loan Agreement dated January 25, 2008; provided, however, to the extent
the Credit Agreement is amended or terminated after the Effective Date, references to the Credit
Agreement shall refer to the Credit Agreement on the Effective Date unless otherwise consented to
by the Deal Agent.



     Credit Guidelines: The policies and procedures of Credit Acceptance, relating to the
extension of credit to automobile and light-duty truck dealers and consumers in respect of retail
installment contracts for the sale of automobiles and/or light-duty trucks, including, without
limitation, the policies and procedures for determining the creditworthiness of such dealers and
consumers and, relating to this extension of credit to such dealers and consumers, the maintenance
of installment sale contracts, as in effect on the Cut-Off Date and as amended from time to time in
accordance herewith and with the other Transaction Documents, attached hereto as Schedule II.



     Custodian: Credit Acceptance, or any person appointed as Custodian pursuant to
Section 6.2(d).



     Cut-Off Date: With respect to the Initial Funding, March 31, 2008, and with respect
to each Incremental Funding, the related Additional Cut-Off Date.



     Date of Processing: With respect to any transaction relating to a Loan or a Contract,
the date on which such transaction is first recorded on the Servicer’s master servicing file
(without regard to the effective date of such recordation).



     Deal Agent: Defined in the preamble of the Agreement.



     Dealer: Any new or used automobile and/or light-duty truck dealer who has entered
into a Dealer Agreement or a Purchase Agreement with Credit Acceptance.



     Dealer Agreement: Each agreement between Credit Acceptance and any Dealer, in
substantially the forms attached hereto as Exhibit J-1, Exhibit J-2, Exhibit J-3, Exhibit J-4,
Exhibit J-5 and Exhibit J-6.



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     Dealer Collections: Defined in Section 2.9(d).



     Dealer Concentration Limit: At any time, an amount equal to, in the case of Dealer
Loans made to any Dealer, 4.0% of the aggregate Net Loan Balance of such Dealer Loans, as of the
end of the immediately preceding Collection Period .



     Dealer Loan: All amounts advanced by Credit Acceptance under a Dealer Agreement and
payable from Collections, including servicing charges, insurance charges and service policies and
all related finance charges, late charges, and all other fees and charges; provided, however, that
the term “Dealer Loan” shall, for the purposes of this Agreement, include only those Dealer Loans
identified from time to time on Schedule V hereto, as amended from time to time in accordance
herewith, and/or any Funding Notice.



     Dealer Loan Contract: Each retail installment sales contract, in substantially one of
the forms attached hereto as Exhibit L, relating to the sale of a used automobile or light-duty
truck originated by a Dealer and in which Credit Acceptance shall have been granted a security
interest and shall have acquired certain other rights under a related Dealer Agreement to secure
the related dealer’s obligation to repay one or more related Dealer Loans.



     Defaulted Contract: A Contract shall be deemed a Defaulted Contract no later than the
earlier of (i) the day all or any portion of any scheduled payment thereof becomes 90 days
delinquent, based on the date the last payment thereon was received by the Servicer, (ii) the day
on which an auction check is posted to the relevant account, (iii) the day that such Contract has
been identified by the Servicer or the applicable Originator as uncollectible, and (iv) the day
that such Contract, consistent with the Credit Guidelines and/or the Collection Guidelines, should
be written off as uncollectible.



     Derivatives: Any exchange-traded or over-the-counter (i) forward, future, option,
swap, cap, collar, floor or foreign exchange contract or any combination thereof, whether for
physical delivery or cash settlement, relating to any interest rate, interest rate index, currency,
currency exchange rate, currency exchange rate index, debt instrument, debt price, debt index,
depository instrument, depository price, depository index, equity instrument, equity price, equity
index, commodity, commodity price or commodity index, (ii) any similar transaction, contract,
instrument, undertaking or security, or (iii) any transaction, contract, instrument, undertaking or
security containing any of the foregoing.



     Determination Date: The fourth (4th) Business Day prior to the related
Payment Date.



     Effective Date: The date this Loan and Security Agreement becomes effective, which
shall be May 23, 2008.



     Eligible Assignee: With respect to any CP Entity: (i) with the prior written consent
of the Deal Agent (in its sole discretion) (a) a Person whose Commercial Paper Notes have a
short-term debt rating by two of the Rating Agencies of at least A-1 from S&P, P-1 from Moody’s and
F1 from Fitch, or whose obligations under this Agreement are guaranteed by a Person whose
short-term debt rating by two of the Rating Agencies is at least A-1 from S&P, P-1 from Moody’s and
F1 from Fitch, or (b) such other Person satisfactory to such CP Entity, the Deal Agent and, if
applicable, each of the Rating Agencies rating the Commercial Paper Notes of such CP Entity,



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(ii) any Liquidity Bank or any Affiliate of a Liquidity Bank and (iii) any Affiliate of such
CP Entity.




     Eligible Contract: Each Eligible Dealer Loan Contract and each Eligible Purchased
Loan Contract.



     Eligible Dealer Agreement: Each Dealer Agreement:



     (a) which was originated by the Originator in compliance with all applicable requirements of
law and which complies with all applicable requirements of law;



     (b) with respect to which all material consents, licenses, approvals or authorizations of, or
registrations or declarations with, any Governmental Authority required to be obtained, effected or
given by the Borrower, Credit Acceptance or by the Servicer in connection with the origination of
such Dealer Agreement or the execution, delivery and performance by the Borrower, Credit Acceptance
or by the Servicer of such Dealer Agreement have been duly obtained, effected or given and are in
full force and effect;



     (c) (i) as to which at the time of the transfer of rights thereunder to the Collateral Agent
and the Secured Parties, the Borrower will have good and marketable title thereto, free and clear
of all Liens, and (ii) which does not contain any terms which would (or purport to) limit or
restrict any of the transfers or assignments contemplated by the Transaction Documents (including,
without limitation, transfer by the Originator to the Borrower and the collateral assignment by the
Borrower to the Collateral Agent);



     (d) the Borrower’s rights under which have been the subject of a valid grant by the Borrower
of a first priority perfected security interest in such rights and in the proceeds thereof in favor
of the Collateral Agent;



     (e) which will at all times be the legal, valid and binding obligation of the Dealer party
thereto (it being understood that recourse for such payment obligation shall be limited to the
extent set forth in the Dealer Agreement), enforceable against such Dealer in accordance with its
terms, except as such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws, now or hereafter in effect, affecting the
enforcement of creditors’ rights in general and except as such enforceability may be limited by
general principles of equity (whether considered in a suit at law or in equity);



     (f) which constitutes either a “general intangible” or “tangible chattel paper” under and as
defined in Article 9 of the UCC;



     (g) which, at the time of the pledge of the rights thereunder to the Collateral Agent and the
Secured Parties, no right thereunder has been waived or modified;



     (h) which is not subject to any right of rescission, setoff, counterclaim or other defense
(including the defense of usury), other than defenses arising out of applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the enforcement of
creditors’ rights in general;



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     (i) as to which Credit Acceptance and the Borrower have satisfied all obligations to be
fulfilled at the time the rights thereunder are pledged to the Collateral Agent and the Secured
Parties;



     (j) as to which the related Dealer has not asserted that such agreement is void or
unenforceable;



     (k) as to which the related Dealer is not bankrupt or insolvent;



     (l) as to which the related Dealer is not an Affiliate of or an executive of Credit Acceptance
or an Affiliate of Credit Acceptance;



     (m) as to which the related Dealer is located in the United States; and



     (n) as to which none of Credit Acceptance, the Servicer nor the Borrower has done anything to
impair the rights of the Collateral Agent and Secured Parties therein.



     Eligible Dealer Loan Contract: Each Dealer Loan Contract which at the time of its
pledge by the applicable Dealer to the Originator, satisfied the requirements for “Qualifying
Receivable” set forth in the related Dealer Agreement.



     Eligible Dealer Loans: Each Dealer Loan, at the time of its transfer to the Borrower
under the Contribution Agreement (or such other times as specifically provided for below):



     (a) which has arisen under a Dealer Agreement that, on the day the Dealer Loan was created,
qualified as an Eligible Dealer Agreement;



     (b) which was created in compliance with all applicable requirements of law and pursuant to an
Eligible Dealer Agreement which complies with all applicable requirements of law;



     (c) with respect to which all material consents, licenses, approvals or authorizations of, or
registrations or declarations with, any Governmental Authority required to be obtained, effected or
given by the Borrower or Originator, in connection with the creation of such Dealer Loan or the
execution, delivery and performance by the Borrower or Originator, of the related Eligible Dealer
Agreement have been duly obtained, effected or given and are in full force and effect;



     (d) as to which at the time of the pledge of such Dealer Loan to the Collateral Agent and the
Secured Parties, the Borrower will have good and marketable title thereto, free and clear of all
Liens;



     (e) as to which a valid first priority perfected ownership interest in such Dealer Loan,
related security and in the Proceeds thereof has been sold or contributed by the Originator to the
Borrower and a valid first priority perfected security interest in such Dealer Loan has been
granted by the Borrower in favor of the Collateral Agent;



-10-









 





     (f) which will at all times be the legal, valid and binding payment obligation of the Obligor
thereof (it being understood that recourse for such payment obligation shall be limited to the
extent set forth in the Dealer Agreement), enforceable against such Obligor in accordance with its
terms, except as such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws, now or hereafter in effect, affecting the
enforcement of creditors’ rights in general and except as such enforceability may be limited by
general principles of equity (whether considered in a suit at law or in equity);



     (g) which constitutes a “general intangible” under and as defined in Article 9 of the UCC as
in effect in the Relevant UCC State;



     (h) the financing of which with the proceeds of commercial paper would constitute a “current
transaction” within the meaning of Section 3(a)(3) of the Securities Act;



     (i) which is denominated and payable in United States dollars;



     (j) which, at the time of its pledge to the Collateral Agent and the Secured Parties, has not
been waived or modified;



     (k) which is not subject to any right of rescission (subject to the rights of the related
Dealer to repay the outstanding balance of the Dealer Loan and terminate the related Dealer
Agreement), setoff, counterclaim or other defense (including the defense of usury), other than
defenses arising out of applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors’ rights in general;



     (l) as to which Credit Acceptance and the Borrower have satisfied all obligations to be
fulfilled at the time it is pledged to the Collateral Agent and the Secured Parties;



     (m) as to which the related Dealer has not asserted that the related Dealer Agreement is void
or unenforceable;



     (n) as to which the related Dealer is not bankrupt or insolvent;



     (o) as to which, at any time, none of Credit Acceptance, the Servicer nor the Borrower has
done anything, other than actions permitted under the Collection Guidelines, to impair the rights
of the Collateral Agent and the Secured Parties;



     (p) which, as of the end of the Collection Period immediately preceeding the applicable date
of determination, was not an Overconcentration Loan; and



     (q) the proceeds of which were used to finance the purchases of new or used automobiles and/or
light-duty trucks and related products.



     Eligible Loans: The Eligible Dealer Loans and Eligible Purchased Loans.



     Eligible Purchased Loan Contract: Each Purchased Loan Contract which at the time of
its purchase from the applicable Dealer by the Originator, evidenced an Eligible Purchased Loan.



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     Eligible Purchased Loans: Each Purchased Loan at the time of its transfer to the
Borrower under the Contribution Agreement:



     (a) which has been originated in the United States by a Dealer or the Originator for the
retail sale of a Financed Vehicle in the ordinary course of such Dealer’s business and is evidenced
by a fully and properly executed Purchased Loan Contract of which there is only one original
executed copy;



     (b) which creates a valid, subsisting, and enforceable first priority security interest for
the benefit of the Originator in the Financed Vehicle, which security interest has been, in turn,
assigned by the Originator to the Borrower, and by the Borrower to the Collateral Agent;



     (c) which contains customary and enforceable provisions such that the rights and remedies of
the holder thereof shall be adequate for realization against the collateral of the benefits of the
security;



     (d) which provides for, in the event that such Purchased Loan is prepaid in full, a prepayment
that fully pays the Outstanding Balance of such Purchased Loan (net of all rebates for the unused
portion of any ancillary products and net of all unearned finance charges);



     (e) which was created in material compliance with all applicable requirements of law;



     (f) which will at all times be the legal, valid and binding payment obligation of the Obligor
thereof, enforceable against such Obligor in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws, now or hereafter in effect, affecting the enforcement of creditors’ rights in
general and except as such enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity);



     (g) which is not subject to any right of rescission, setoff, counterclaim or other defense
(including the defense of usury), other than defenses arising out of applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the enforcement of
creditors’ rights in general;



     (h) the Obligor thereon is not the United States, any State or any agency, department, or
instrumentality of the United States or any State;



     (i) the Obligor thereon is a natural person;



     (j) with respect to which, to the best of the Originator’s knowledge, no liens or claims have
been filed for work, labor, materials, taxes or liens that arise out of operation of law relating
to the applicable Financed Vehicle that are prior to, or equal with, the security interest in the
Financed Vehicle granted by the related Purchased Loan Contract;



     (k) with respect to which, to the best of the Originator’s knowledge, there was no material
misrepresentation by the Obligor thereon on such Obligor’s credit application;



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     (l) which has not been originated in, and is not subject to the laws of, any jurisdiction
under which the sale, transfer and assignment of such Purchased Loan under this Agreement or
pursuant to the transfer of the related Purchased Loan Contract shall be unlawful, void or
voidable;



     (m) which (i) constitutes either “tangible chattel paper” or a “payment intangible,” each as
defined in the UCC in the Relevant UCC State and (ii) if “tangible chattel paper,” shall be
maintained in its original “tangible” form, unless the Collateral Agent has consented in writing to
such chattel paper being maintained in another form or medium;



     (n) the financing of which with the proceeds of commercial paper would constitute a “current
transaction” within the meaning of Section 3(a)(3) of the Securities Act;



     (o) which is payable in U.S. Dollars and the Obligor thereon is an individual who is a United
States resident;



     (p) which satisfies in all material respects the requirements under the Credit Guidelines;



     (q) with respect to which the collection practices used with respect thereto have complied in
all material respects with the Collection Guidelines;



     (r) with respect to which there are no proceedings pending, or to the best of the Originator’s
knowledge, threatened, wherein the Obligor thereon or any governmental agency has alleged that such
Purchased Loan is illegal or unenforceable;



     (s) with respect to which the Originator has duly fulfilled all obligations to be fulfilled on
the lender’s part under or in connection with the origination, acquisition and assignment of such
Purchased Loan, including, without limitation, giving any notices or consents necessary to effect
the acquisition of such Purchased Loan by the Borrower, and has done nothing to impair the rights
of the Borrower, or the Secured Parties in payments with respect thereto;



     (t) which was originated by the Originator or purchased by the Originator from a Dealer
pursuant to a Purchase Agreement;



     (u) with respect to which the Dealer from whom the Originator purchased such Purchased Loan
has not engaged in any conduct constituting fraud or misrepresentation with respect to such
Purchased Loan;



     (v) with respect to which, at the time such Purchased Loan was originated the proceeds thereof
were fully disbursed and there is no requirement for future advances thereunder, and all fees and
expenses in connection with the origination of such Purchased Loan have been paid;



     (w) with respect to which Credit Acceptance holds the certificate of title or the application
for a certificate of title for the related Financed Vehicles as of the date on which the related
Purchased Loan Contract is transferred to the Borrower and will obtain within 180 days



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of such date certificate of title with respect to such Financed Vehicle as to which Credit
Acceptance holds only such application; and



     (x) with respect to which the related Purchased Loan Contract has not been extended or
rewritten and is not subject to any forbearance, or any other modified payment plan other than in
accordance with the Credit Guidelines.



     ERISA: The United States Employee Retirement Income Security Act of 1974, as amended
from time to time, and the regulations promulgated and rulings issued thereunder.



     ERISA Affiliate: (a) Any corporation that is a member of the same controlled group of
corporations (within the meaning of Section 414(b) of the Code) as the Borrower, (b) a trade or
business (whether or not incorporated) under common control (within the meaning of Section 414(c)
of the Code) with the Borrower, or (c) a member of the same affiliated service group (within the
meaning of Section 414(m) of the Code) as the Borrower, any corporation described in clause (a)
above or any trade or business described in clause (b) above.



     Eurocurrency Liabilities: Defined in Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time.



     Eurodollar Disruption Event: The occurrence of any of the following: (a) a
determination by a Lender that it would be contrary to law or to the directive of any central bank
or other governmental authority (whether or not having the force of law) to obtain United States
dollars in the London interbank market to make, fund or maintain the Funding, (b) the failure of
one or more of the Reference Banks to furnish timely information for purposes of determining the
Adjusted Eurodollar Rate, (c) a determination by a Lender that the rate at which deposits of United
States dollars are being offered to such Lender in the London interbank market does not accurately
reflect the cost to such Lender of making, funding or maintaining the Funding or (d) the inability
of a Lender to obtain United States dollars in the London interbank market to make, fund or
maintain the Advance.



     Eurodollar Reserve Percentage: Of any Reference Bank for any period, for Capital
means the percentage applicable during such period (or, if more than one such percentage shall be
so applicable, the daily average of such percentages for those days in such period during which any
such percentage shall be so applicable) under regulations issued from time to time by the Board of
Governors of the Federal Reserve System (or any successor) for determining the maximum reserve
requirement (including, without limitation, any emergency, supplemental or other marginal reserve
requirement) for such Reference Bank with respect to liabilities or assets consisting of or
including Eurocurrency Liabilities having a term of one month.



     Excess Reserve Amount: With respect to any Payment Date, the excess, if any, of the
amount on deposit in the Reserve Account over the Required Reserve Account Amount.



     Excluded Dealer Agreement Rights: With respect to any Dealer Agreement, the rights of
Credit Acceptance thereunder related to loans made to the related Dealer which are not Dealer Loans
pledged by the Borrower to the Collateral Agent hereunder, including rights of set-off and rights
of indemnification, related to such loans.



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     Facility Fee: With respect to each Purchaser Group, defined in the Fee Letter related
to such Purchaser Group.



     Facility Limit: $50,000,000; or as such amount may vary from time to time upon the
written agreement of the Borrower, Credit Acceptance, the Deal Agent, the Liquidity Agents and the
Lenders; provided, however, that on any date on or after the end of the Revolving
Period with respect to all Purchaser Groups, the Facility Limit shall mean the aggregate
outstanding Capital on such date.



     Federal Funds Rate: For any period, a fluctuating interest rate per annum equal for
each day during such period to the weighted average of the federal funds rates as quoted by Fifth
Third and confirmed in Federal Reserve Board Statistical Release H.15(519) or any successor or
substitute publication selected by Fifth Third (or, if such day is not a Business Day, for the next
preceding Business Day), or, if, for any reason, such rate is not available on any day, the rate
determined, in the sole opinion of Fifth Third, to be the rate at which federal funds are being
offered for sale in the national federal funds market at 9:00 a.m. Cincinnati, Ohio time.



     Fee Letter: In the case of the Fifth Third Purchaser Group, the Fee Letter, dated as
of the date hereof, between Fifth Third and the Borrower, or in the case of any other Purchaser
Group, the date of the Joinder related to such Purchaser Group, among the Borrower, Credit
Acceptance, the Deal Agent the related Liquidity Agent, as any such letter may be amended,
modified, supplemented, restated or replaced from time to time.



     Fifth Third: As defined in the Preamble hereto.



     Fifth Third Purchaser Group: RFC and Fifth Third as Investor and Liquidity Agent.



     Final Score: Means the final output from the Originator’s proprietary credit scoring
process, which, when divided by 1,000, represents the Originator’s expectations of the ultimate
collection rate on a contract at inception.



     Financed Vehicle: With respect to a Contract, any new or used automobile, light-duty
truck, minivan or sport utility vehicle, together with all accessories thereto, securing the
related Obligor’s indebtedness thereunder.



     Fitch: Fitch, Inc., and any successor thereto.



     Forecasted Collections: The expected amount of Collections to be received with
respect to the Aggregate Outstanding Eligible Loan Balance each month as determined by Credit
Acceptance in accordance with its forecasting model, which amount shall be submitted to the Deal
Agent with each Funding Notice related to a proposed Advance when new Pools are pledged to the
Collateral Agent.



     Funding: An Advance by a Lender pursuant to Section 2.1 and Section
2.3 hereof.



     Funding Date: In the case of the Initial Funding, May 27, 2008 and as to any
Incremental Funding, the date determined in accordance with Section 2.3.



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     Funding Notice: The notice, in the form of Exhibit A hereto, delivered in accordance
with Section 2.3 hereof.



     GAAP: Generally accepted accounting principles as in effect from time to time in the
United States.



     Governmental Authority: 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 and any court or arbitrator having jurisdiction over such Person,
and 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.



     H.15: Federal Reserve Statistical Release H.15.



     Hedge Breakage Costs: For any Hedging Agreement, any amount payable by the Borrower
for the early termination of such Hedging Agreement or any portion thereof.



     Hedge Costs: For any Hedging Agreement, any amount payable by the Borrower with
respect thereto, including any swap payments, any breakage payments, any termination payments, any
notional reduction payments and any other amounts due to the Hedge Counterparty.



     Hedge Counterparty: Any entity that (a) on the date of entering into any Hedge
Transaction (i) is an interest rate swap dealer that is either a Lender or an Affiliate of a
Lender, or has been approved in writing by the Deal Agent (which approval shall be in the sole
discretion of the Deal Agent), and (ii) unless otherwise agreed to by the Deal Agent, has a
long-term unsecured debt rating of not less than “A” by S&P and not less than “A2” by Moody’s
(“Long-term Rating Requirement”) and a short-term unsecured debt rating of not less than
“A-1” by S&P and not less than “P-1” by Moody’s (“Short-term Rating Requirement”), and (b)
in a Hedging Agreement (i) consents to the assignment of the Borrower’s rights under the Hedging
Agreement to the Deal Agent pursuant to Section 2.2(a) and (ii) agrees that in the event
that Moody’s or S&P reduces its long-term unsecured debt rating below the Long-term Rating
Requirement, or reduces its short-term unsecured debt rating below the Short-term Rating
Requirement, it shall transfer its rights and obligations under each Hedging Agreement to another
entity that meets the requirements of clause (a) and (b) hereof and has entered into a Hedging
Agreement with the Borrower on or prior to the date of such transfer.



     Hedge Transaction: Each interest rate swap or other interest rate protection
transaction between the Borrower and a Hedge Counterparty that is entered into pursuant to
Section 5.3 hereof and is governed by a Hedging Agreement.



     Hedging Agreement: Each agreement between the Borrower and a Hedge Counterparty that
governs one or more Hedge Transactions entered into pursuant to Section 5.3 hereof,
substantially in the form of Exhibit E hereto or such other form as shall be approved in
writing by the Liquidity Agent for the Fifth Third Purchaser Group, and each “Confirmation”
thereunder confirming the specific terms of each such Hedge Transaction.



-16-









 





     Increased Costs: Any amounts required to be paid by the Borrower to an Affected Party
pursuant to Section 2.13.



     Incremental Funding: Any Advance made after the Initial Funding.



     Independent Director: Defined in Section 5.2(o)(xxvii).



     Ineligible Loan: Each Loan other than an Eligible Loan.



     Indebtedness: With respect to any Person at any date, (a) all indebtedness of such
Person for borrowed money or for the deferred purchase price of property or services (other than
current liabilities incurred in the ordinary course of business and payable in accordance with
customary trade practices) or that is evidenced by a note, bond, debenture or similar instrument,
(b) all obligations of such Person under leases that shall have been or should be, in accordance
with generally accepted accounting principles, recorded as capital leases, (c) all obligations of
such Person in respect of acceptances issued or created for the account of such Person, (d) all
liabilities secured by any Lien on any property owned by such Person even though such Person has
not assumed or otherwise become liable for the payment thereof, (e) all indebtedness, obligations
or liabilities of that Person in respect of Derivatives, and (f) obligations under direct or
indirect guaranties in respect of obligations (contingent or otherwise) to purchase or otherwise
acquire, or to otherwise assure a creditor against loss in respect of, indebtedness or obligations
of others of the kind referred to in clauses (a) through (e) above.



     Indemnified Amounts: Defined in Section 11.1(a).



     Indemnified Parties: Defined in Section 11.1(a).



     Initial Facility Limit: $50,000,000.



     Initial Funding: Defined in Section 2.3(a).



     Insolvency Event: With respect to a specified Person, (a) the filing of a decree or
order for relief by a court having jurisdiction in the premises in respect of such Person or any
substantial part of its property in an involuntary case under any applicable Insolvency Law now or
hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official for such Person or for any substantial part of its property, or
ordering the winding-up or liquidation of such Person’s affairs, and such decree or order shall
remain unstayed and in effect for a period of 60 consecutive days; or (b) the commencement by such
Person of a voluntary case under any applicable Insolvency Law now or hereafter in effect, or the
consent by such Person to the entry of an order for relief in an involuntary case under any such
law, or the consent by such Person to the appointment of or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official for such Person or for
any substantial part of its property, or the making by such Person of any general assignment for
the benefit of creditors, or the failure by such Person generally to pay its debts as such debts
become due, or the taking of action by such Person in furtherance of any of the foregoing.



     Insolvency Laws: The Bankruptcy Code and all other applicable liquidation,
conservatorship, bankruptcy, moratorium, rearrangement, receivership, insolvency,



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reorganization, suspension of payments, or similar debtor relief laws from time to time in
effect affecting the rights of creditors generally.



     Insolvency Proceeding: Any case, action or proceeding before any court or other
Governmental Authority relating to any Insolvency Event.



     Instrument: Any “instrument” (as defined in Article 9 of the UCC), other than an
instrument that constitutes part of chattel paper.



     Investors: With respect to the Fifth Third Purchaser Group, Fifth Third Bank, and
with respect to each other Purchaser Group, the financial institutions identified as “Investors” on
the Joinder related to such Purchaser Group and with respect to any Purchaser Group, any other
Person who becomes an Investor as provided in Section 13.1(a).



     Investment: With respect to any Person, any direct or indirect loan, advance or
investment by such Person in any other Person, whether by means of share purchase, capital
contribution, loan or otherwise, excluding the acquisition of Assets pursuant to the Contribution
Agreement and excluding commission, travel and similar advances to officers, employees and
directors made in the ordinary course of business.



     Joinder: With respect to each Purchaser Group, other than the Fifth Third Purchaser
Group, the agreement among a CP Entity, its related Investors, its related Liquidity Agent, the
Borrower, Credit Acceptance and the Deal Agent, substantially in the form of Exhibit D hereto.



     Late Fees: If the Backup Servicer has become the Successor Servicer, any late fees
collected with respect to any Contract in accordance with the Collection Guidelines.



     Lenders: Collectively, RFC and its related Investors, each other CP Entity and its
related Investors and any other Person that agrees, pursuant to the pertinent Assignment and
Acceptance, to make or maintain Fundings pursuant to this Agreement.



     LIBOR Rate: For any portion of Capital on any day during any Accrual Period, a rate
per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to the rate of interest
which is identified and normally published by Bloomberg Professional Service Page BBAM 1 as the
offered rate for loans in United States Dollars for the applicable Accrual Period under the caption
British Bankers Association LIBOR Rates as of 11:00 a.m. (London time) two Business Days before the
first day of such Accrual Period. If Bloomberg Professional Service no longer reports the LIBOR
Rate or if such index no longer exists or if Page BBAM 1 no longer exists, the Deal Agent may
select a replacement index or replacement page, as the case may be, consistent with market
practices at the time. The LIBOR Rate shall be adjusted for each Accrual Period after the initial
Accrual Period, as of the first day of each such Accrual Period, and as of the effective day of any
change in the maximum reserve requirement.



     Lien: With respect to any Loan, Dealer Agreement or Contract or any other property or
collateral, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind (other
than any Permitted Lien).



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     Liquidity Agent: With respect to the Fifth Third Purchaser Group, Fifth Third and
with respect to each other Purchaser Group, the financial institution identified as the “Liquidity
Agent” on the Joinder related to such Purchaser Group.



     Liquidity Agreement: (a) With respect to RFC, the Liquidity Agreement, dated as of
the Closing Date among RFC, Fifth Third, as liquidity agent and the liquidity providers from time
to time party thereto, as the same may be amended, supplemented or otherwise modified from time to
time, and (b) with respect to each other CP Entity, the liquidity and/or credit support agreement
identified as the “Liquidity Agreement” on the Joinder related to such Purchaser Group, which shall
include any agreement to purchase an assignment of or participation in a CP Entity’s portion of the
Capital.



     Liquidity Bank: (i) With respect to RFC, each liquidity institution that is a party
to the Liquidity Agreement and (ii) with respect to each other CP Entity any bank, insurance
company or other financial institution extending or having a commitment to extend funds to or for
the account of such CP Entity (including by an agreement to purchase an assignment of or
participation in such CP Entity’s portion of the Capital) under a Liquidity Agreement. Upon the
execution and delivery of a corresponding Liquidity Agreement, each Investor shall be deemed to be
a Liquidity Bank for its related CP Entity.



     Loan: Any Dealer Loan or Purchased Loan.



     Loan Loss Reserve: The loan loss reserve, calculated in accordance with Credit
Acceptance’s accounting policies set forth in its periodic reports filed with the Securities and
Exchange Commission.



     Material Adverse Effect: With respect to any event or circumstance, means a material
adverse effect on (a) the business, condition (financial or otherwise), operations, performance,
properties or prospects of the Originator, the Servicer or the Borrower, (b) the validity,
enforceability or collectibility of this Agreement or any other Transaction Document or the
validity, enforceability or collectibility of the Loans, (c) the rights and remedies of the Deal
Agent, the Collateral Agent or Secured Parties, (d) the ability of the Borrower, the Originator or
the Servicer to perform its obligations under this Agreement or any Transaction Document, or (e)
the status, existence, perfection, priority or enforceability of the Collateral Agent’s or any
Secured Party’s interest in the Collateral.



     Material Debt: Defined in Section 6.11(i).



     Maturity Date: Defined in Section 2.1(c)(i).



     Monthly Principal Payment Amount: With respect to any Payment Date, the amount, if
any, necessary to reduce the Capital as of the prior Payment Date to the Borrowing Base as of the
last day of the related Collection Period.



     Monthly Report: Defined in Section 6.5(a).



     Moody’s: Moody’s Investors Service, Inc., and any successor thereto.




-19-











 





     Multiemployer Plan: A “multiemployer plan” as defined in Section 4001(a)(3) of ERISA
that is or was at any time during the current year or the immediately preceding five years
contributed to by the Borrower or any ERISA Affiliate on behalf of its employees.



     Net Advance Rate: 80%.



     Net Loan Balance: With respect to any Loan, the excess of the related Outstanding
Balance over the related Loan Loss Reserve.



     Nonconforming Contract: Defined in Section 6.2(c)(ii).



     Nonconforming Contract Payment Amount: With respect to a Nonconforming Contract, an
amount equal to the sum of (i): (x) the product of the Outstanding Balance of such Contract as of
the last day of the related Collection Period and a fraction, the numerator of which is Capital as
of the Funding Date and the denominator of which is the Outstanding Balance of Eligible Contracts
as of the Funding Date; (ii) accrued and unpaid Carrying Costs, Increased Costs, Indemnified
Amounts and Additional Amounts related to such Contract through the date of such deposit; (iii) any
related Servicer Advances; and (iv) and all Hedge Costs due to the relevant Hedge Counterparties
for any termination in whole or in part of one or more transactions related to the relevant Hedging
Agreement, as required by the terms of any Hedging Agreement.



     Notes: The Variable Funding Notes of the Borrower, issued to (i) the Liquidity Agent,
in the case of the Fifth Third Purchaser Group, and (ii) with respect to each other Purchaser
Group, its Liquidity Agent, in each case, for the benefit of the related Lenders pursuant to
Section 2.1(c) hereof substantially in the form of Exhibit I hereto.



     Obligor: With respect to any Loan, Dealer Agreement or Contract, the Person or
Persons obligated to make payments with respect to such Dealer Agreement, Loan or Contract,
respectively, including any guarantor thereof.



     Officer’s Certificate: A certificate signed by any officer of the Borrower, the
Originator or the Servicer, as the case may be, and delivered to the Collateral Agent.



     Opinion of Counsel: A written opinion of counsel, which opinion and counsel are
reasonably acceptable to the Deal Agent.



     Original Advance Rate: Means, with respect to any Dealer, the ratio, expressed as a
percentage, where the numerator is equal to the sum of the Outstanding Balance of all Eligible
Loans of such Dealer on the dates such Eligible Loans were originated and the denominator is equal
to the sum of payments due under all Eligible Contracts related to such Dealer on their dates of
origination.



     Originator: Defined in the Preamble of this Agreement.



     Outstanding Balance:



     (i) With respect to any Contract on any date of determination, all amounts owing under such
Contract (whether considered principal or as finance charges) on such date of



-20-









 




determination. The Outstanding Balance with respect to a Contract shall be deemed to have
been created at the end of the day on the Date of Processing of such Contract; which shall be
greater than or equal to zero (except in the case of a Contract as to which the final payment on
such Contract is in excess of the amount owed on such Contract on the date of such final payment);




     (ii) with respect to any Dealer Loan on any date of determination, the aggregate amount
advanced under such Dealer Loan plus revenue accrued with respect to such Dealer Loan in accordance
with Credit Acceptance’s accounting policies set forth in its periodic reports filed with the
Securities and Exchange Commission and the payment of monies to a Dealer under the related Dealer
Agreement, less collections on the related Dealer Loan Contracts applied through such date of
determination in accordance with the related Dealer Agreement to the reduction of the balance of
such Loan and write offs of such Dealer Loan; and



     (iii) with respect to any Purchased Loan on any date of determination, the aggregate amount
advanced under such Purchased Loan plus revenue accrued with respect to such Purchased Loan in
accordance with Credit Acceptance’s accounting policies set forth in its periodic reports filed
with the Securities and Exchange Commission, less Collections on the related Purchased Loan
Contract applied through the date of determination to the reduction of the balance of such Purchase
Loan and write offs of such Purchased Loan.



     Overconcentration Loan: With respect to any Dealer, the amount by which the aggregate
Net Loan Balance of Dealer Loans made to such Dealer, calculated on a Funding Date as of the end of
the immediately preceding Collection Period, exceeds the Dealer Concentration Limit.



     Payment Date: The nineteenth (19th) day of each calendar month or, if such
day is not a Business Day, the next succeeding Business Day.



     Permitted Investments: Any one or more of the following types of investments:



     (a) marketable obligations of the United States, the full and timely payment of which are
backed by the full faith and credit of the United States of America and that have a maturity of not
more than 270 days from the date of acquisition;



     (b) marketable obligations, the full and timely payment of which are directly and fully
guaranteed by the full faith and credit of the United States and that have a maturity of not more
than 270 days from the date of acquisition;



     (c) bankers’ acceptances and certificates of deposit and other interest-bearing obligations
(in each case having a maturity of not more than 270 days from the date of acquisition) denominated
in dollars and issued by any bank with capital, surplus and undivided profits aggregating at least
$100,000,000, the short-term obligations of which are rated at least A-1 by S&P and P-1 by Moody’s;



     (d) repurchase obligations with a term of not more than ten days for underlying securities of
the types described in clauses (a), (b) and (c) above entered into with any bank of the type
described in clause (c) above;



     (e) commercial paper rated at least A-1 by S&P and P-1 by Moody’s; and



-21-









 





     (f) demand deposits, time deposits or certificates of deposit (having original maturities of
no more than 365 days) of depository institutions or trust companies incorporated under the laws of
the United States of America or any state thereof (or domestic branches of any foreign bank) and
subject to supervision and examination by federal or state banking or depository institution
authorities; provided, however that at the time such investment, or the commitment
to make such investment, is entered into, the short-term debt rating of such depository institution
or trust company shall be at least A-1 by S&P and P-1 by Moody’s.



     Permitted Liens: Liens for state, municipal or other local taxes if such taxes shall
not at the time be due and payable and Liens granted pursuant to the Transaction Documents and
with respect to the Dealer Loan Contracts, the second priority lien of the related Dealer therein
as set forth in the related Dealer Agreement.



     Person: An individual, partnership, corporation (including a business trust), limited
liability company, joint stock company, trust, unincorporated association, sole proprietorship,
joint venture, government (or any agency or political subdivision thereof) or other entity.



     Pool: An identifiable group of Dealer Loans related to a particular Dealer Agreement
identified on Schedule V hereto. Dealer Loans are added to a Pool until a fixed number (as
established for the relevant Dealer) of related Dealer Loan contracts have been allocated to such
Pool. An “open” or “uncapped” Pool is one to which Dealer Loans are still being added.



     Potential Servicer Termination Event: Means any event which, with the giving of
notice or passage of time or both, would become a Servicer Termination Event.



     Prime Rate: The rate announced by Fifth Third from time to time as its prime rate in
the United States, such rate to change as and when such designated rate changes. The Prime Rate is
not intended to be the lowest rate of interest charged by Fifth Third in connection with extensions
of credit to debtors.



     Proceeds: With respect to any portion of the Collateral, all “proceeds” as such term
is defined in Article 9 of the UCC, including, whatever is receivable or received when such portion
of Collateral is sold, liquidated, foreclosed, exchanged, or otherwise disposed of, whether such
disposition is voluntary or involuntary, and includes all rights to payment with respect to any
insurance relating thereto.



     Program Fee: With respect to each Purchaser Group, as defined in the applicable Fee
Letter related to such Purchaser Group.



     Program Fee Rate: With respect to each Purchaser Group, on any day, the rate set
forth in the Fee Letter related to such Purchaser Group as the “Program Fee Rate.”



     Purchase Agreement: Each agreement between Credit Acceptance and any Dealer in
substantially the form attached hereto as Exhibit P.



     Purchased Loan: A motor vehicle retail installment loan relating to the sale of a used
automobile or light-duty truck originated by a Dealer, purchased by the Originator from such Dealer
and evidenced by a Purchased Loan Contract; provided, however, that the term



-22-









 




“Purchased Loan” shall, for purposes of this Agreement, include only those Purchased Loans
identified from time to time on Schedule V hereto, and/or any Funding Notice.




     Purchased Loan Contract: Each motor vehicle retail installment sales contract, in
substantially one of the forms attached hereto as Exhibit L, relating to a Purchased Loan.



     Purchaser Group: Each CP Entity, its related Liquidity Agent and the related
Investors, all as identified on the Joinder related to such Purchaser Group.



     Purchaser Group Facility Limit: With respect to each Purchaser Group, the amount so
identified on the Joinder related to such Purchaser Group, and with respect to the Fifth Third
Purchaser Group, $50,000,000.



     Qualified Institution: Defined in Section 6.7(a).



     Rating Agency: Each of S&P, Moody’s, Fitch and any other rating agency that has been
requested to issue a rating with respect to the Commercial Paper Notes issued by the Issuer (or its
applicable funding sources).



     Records: The Dealer Agreements, Contracts, Contract Files, certificates of title (and
applications therefor) and all other documents, books, records and other information (including,
without limitation, computer programs, tapes, discs, punch cards, data processing software and
related contracts, records and other media for storage of information) maintained with respect to
the Loans and the Contracts and the related Obligors.



     Reference Bank: Any bank that furnishes information for purposes of determining the
Adjusted Eurodollar Rate.



     Recoveries: All amounts, if any, received in respect of the Collateral by the
Servicer or Credit Acceptance with respect to Defaulted Contracts.



     Register: Defined in Section 13.1(c).



     Related Security: With respect to any Loan all of Credit Acceptance’s and the
Borrower’s right, title and interest in:




     (i) the Dealer Agreements (other than Excluded Dealer Agreement Rights, but including,
without limitation, Credit Acceptance’s rights to service the Loans and the related
Contracts and receive the related collection fee and receive reimbursement of certain
repossession and recovery expenses, in accordance with the terms of the Dealer Agreements)
and Contracts securing payment of such Loan;




     (ii) all security interests or liens purporting to secure payment of such Loan, whether
pursuant to such Loan, the related Dealer Agreement or otherwise, together with all
financing statements signed by the related Obligor describing any collateral securing such
Loan and all other property obtained upon foreclosure of any security interest securing
payment of such Loan or any related Contract;



-23-









 






     (iii) all guarantees, insurance (including insurance insuring the priority or
perfection of any lien) or other agreements or arrangements of any kind from time to time
supporting or securing payment of each Contract whether pursuant to such Contract or
otherwise, including any of the foregoing relating to any Contract securing payment of such
Loan;




     (iv) all of the Borrower’s interest in all Records, documents and writing evidencing or
related to such Loan;




     (v) all rights of recovery of the Borrower against the Originator;




     (vi) all Collections (other than Dealer Collections), the Collection Account, the
Reserve Account, and all amounts on deposit therein and investments thereof;




     (vii) all of the Borrower’s right, title and interest in and to (but not its
obligations under) any Hedging Agreement and any payment from time to time due thereunder;




     (viii) all of the Borrower’s right, title and interest in and to the Contribution
Agreement and the assignment to the Deal Agent of all UCC financing statements filed by the
Borrower against the Originator under or in connection with the Contribution Agreement; and




     (ix) the Proceeds of each of the foregoing.




For the avoidance of doubt, the term “Related Security” with respect to any Loan includes
all rights arising after the end of the Revolving Period under such Loan which rights are
attributable to advances made under such Loan as the result of Contracts being added after
the last date of the last full Collection Period during the Revolving Period to the
identifiable group of Contracts to which such Loan relates.




Release Date: As defined in Section 4.5(b).




Release Price: As defined in Section 4.5(a).




Reliening Expenses: Defined in Section 6.2(d)(ii).



     Repossession Expenses: For any Collection Period, any expenses payable pursuant to
the terms of this Agreement, incurred by the Backup Servicer, if it has become the Successor
Servicer, in connection with the liquidation or repossession of any Financed Vehicle, in an
aggregate amount not to exceed the cash proceeds received by the Backup Servicer, if it has become
the Successor Servicer, from the disposition of the Financed Vehicles.



     Required Investors: At a particular time, Investors with Commitments in excess of 50%
of the Facility Limit.



     Required Reserve Account Amount: With respect to any date of determination, an amount
equal to the sum of (a) the product of (i) 1.0% and (ii) the Capital on such date (after the



-24-









 







application of funds pursuant to Section 2.7 on the related Payment Date) plus (b) all
amounts required to be maintained by the Borrower pursuant to Section 6.2(c)(ii) hereof);
provided, however, the Required Reserve Account Amount shall at no time be less
than $150,000 (unless the Capital is zero, in which case the Required Reserve Account Amount shall
be $100,000).



     Reserve Account: The segregated trust account established at the Collateral Agent for
the benefit of the Secured parties, established pursuant to Section 6.7(a).



     Reserve Advance: Defined in Section 2.7(c)(i).



     Responsible Officer: As to any Person any officer of such Person with direct
responsibility for the administration of this Agreement and also, with respect to a particular
matter, any other officer to whom such matter is referred because of such officer’s knowledge of
and familiarity with the particular subject.



     Retransfer Amount: Defined in Section 4.5(b).



     Revolving Period: The period commencing on the Closing Date and ending on the day
immediately preceding the first day of the Amortization Period.



     RFC: As defined in the Preamble hereto.



     S&P: Standard & Poor’s, a division of The McGraw-Hill Companies, Inc., and any
successor thereto.



     Secured Party: (i) The Deal Agent, each Liquidity Agent, the Bridge Loan Lender and
each Lender and (ii) each Hedge Counterparty that is either a Lender or an Affiliate of a Lender if
that Affiliate is a Hedge Counterparty executes a counterpart of this Agreement agreeing to be
bound by the terms of this Agreement applicable to a Secured Party.



     Servicer: Credit Acceptance, the Backup Servicer, if it has become the Successor
Servicer, or any other Successor Servicer, appointed in accordance with the terms hereof as the
Servicer of the Loans and Contracts.



     Servicer Advance: An advance made by the Servicer pursuant to Section
2.7(c)(ii).



     Servicer Termination Event: Defined in Section 6.11.



     Servicer Termination Notice: Defined in Section 6.11.



     Servicer Expenses: Any expenses incurred by the Backup Servicer, if it has become the
Successor Servicer hereunder, other than Repossession Expenses, Reliening Expenses or Transition
Expenses.



     Servicing Fee: For each Payment Date, a fee payable to Servicer for services rendered
during the related Collection Period, equal to: (i) so long as Credit Acceptance is the Servicer,
the product of (A) 6.00% and (B) the total Collections for the related Collection Period (exclusive
of amounts received under any Hedging Agreement) and (ii) if the Backup Servicer is



-25-









 







the Servicer, the sum of (1) the greatest of: (a) the product of 10.0% and the total
Collections for the related Collection Period (exclusive of amounts received under any Hedging
Agreement), (b) the actual costs incurred by the Backup Servicer as Successor Servicer, and (c) the
product of (x) $30.00 and (y) the aggregate number of Contracts serviced by it during the related
Collection Period, plus (2) without duplication, Late Fees and Servicer Expenses; provided,
however, with respect to each Payment Date on which the Backup Servicer is the Servicer,
the Servicing Fee shall be at least equal to $5,000.



     SIFMA: The Securities Industry and Financial Markets Association.



     Solvent: As to any Person at any time, having a state of affairs such that all of the
following conditions are met: (a) the fair value of the property of such Person is greater than the
amount of such Person’s liabilities (including disputed, contingent and unliquidated liabilities)
as such value is established and liabilities evaluated for purposes of Section 101(32) of the
Bankruptcy Code; (b) the present fair salable value of the property of such Person in an orderly
liquidation of such Person is not less than the amount that will be required to pay the probable
liability of such Person on its debts as they become absolute and matured; (c) such Person is able
to realize upon its property and pay its debts and other liabilities (including disputed,
contingent and unliquidated liabilities) as they mature in the normal course of business; (d) such
Person does not intend to, and does not believe that it will, incur debts or liabilities beyond
such Person’s ability to pay as such debts and liabilities mature; and (e) such Person is not
engaged in business or a transaction, and is not about to engage in a business or a transaction,
for which such Person’s property would constitute unreasonably small capital.



     SST: Systems & Services Technologies, Inc., a Delaware corporation.



     Structuring Fees: The structuring fee set forth in the Fee Letter related to the
Fifth Third Purchaser Group.



     Subsidiary: A corporation of which the Originator and/or its Subsidiaries own,
directly or indirectly, such number of outstanding shares as have more than 50% of the ordinary
voting power for the election of directors.



     Successor Servicer: Defined in Section 6.12(a).



     Taxes: Any present or future taxes, levies, imposts, duties, charges, assessments or
fees of any nature (including interest, penalties, and additions thereto) that are imposed by any
Governmental Authority.



     Termination Date: The earliest of: (a) the date that the Liquidity Agreement for the
Fifth Third Purchaser Group shall cease to be in full force and effect, (b) the date of the
declaration of the Termination Date pursuant to Section 10.1, (c) the Commitment
Termination Date and (d) the date of termination of the Facility Limit pursuant to Section
2.5.



     Termination Event: Defined in Section 10.1.



     Total Commitment: On any date of determination, the aggregate Commitments of all the
Investors.



-26-









 





     Transaction Documents: This Agreement, the Contribution Agreement, each Hedging
Agreement, the Fee Letters, the Backup Servicing Agreement, each Joinder and any additional
document the execution of which is necessary or incidental to carrying out the terms of the
foregoing documents.



     Transition Expenses: If the Backup Servicer has become the Successor Servicer, the
sum of: (i) reasonable costs and expenses incurred by the Backup Servicer in connection with its
assumption of the servicing obligations hereunder, related to travel, Obligor welcome letters,
freight and file shipping plus (ii) a boarding fee equal to the product of $7.50 and the number of
Contracts to be serviced.



     UCC: The Uniform Commercial Code as from time to time in effect in the applicable
jurisdiction or jurisdictions.



     United States: The United States of America.



     Unmatured Termination Event: Any event that, with the giving of notice or the lapse
of time, or both, would become a Termination Event.



     Unreimbursed Servicer Advances: At any time, the amount of all previous Servicer
Advances (or portions thereof) as to which the Servicer has not been reimbursed as of such time
pursuant to Section 2.7.



     Unsatisfactory Audit: The occurrence of any audit exceptions resulting from any
audit, inspection or review pursuant to Section 6.1(c), Section 6.2(e) or
Section 6.9, which, in the reasonable judgment of the Deal Agent, would have a Material
Adverse Effect on the ability of the Servicer to identify and allocate Collections or to service,
as provided in this Agreement, any Collateral.



     Weighted Average Original Advance Rate means, with respect to each Payment Date during
the Revolving Period, the ratio, expressed as a percentage, where the numerator is equal to the
aggregate for all Dealers of the product of: (i) the Original Advance Rate of each Dealer; and
(ii) the aggregate outstanding Net Loan Balance of all Eligible Loans for such Dealer and the
denominator is equal to the Aggregate Outstanding Eligible Loan Net Balance.



     Yield: With respect to each Lender and its portion of the Capital, with respect to
any Accrual Period, the sum of the products (for each day during such Accrual Period) of:



	 	 	 	 	 	 	 
	 

	 	YR
x C x  
	1	 	 
	 

	 	 	 
	 

	 	 
	 

	 	 	 	360	 	 






     where:



	 	 	 	 	 	 	 
	 	 	C
	 	=

	 	the outstanding principal amount of the Advance of such Lender;
	 	 	and
	 	 
	 	 
	 
	 	 
	 	 	YR
	 	=

	 	the Yield Rate for such Lender applicable on such day;






-27-









 





provided, however, that (i) no provision of this Agreement shall require the
payment or permit the collection of Yield in excess of the maximum permitted by Applicable Law and
(ii) Yield shall not be considered paid by any distribution if at any time such distribution is
rescinded or must otherwise be returned for any reason.




     Yield Rate: For any Accrual Period and for the aggregate principal amount of the
Advance allocated to such Accrual Period:



     (a) to the extent the relevant Lender funded the Advance (directly or indirectly) through the
issuance of commercial paper, a rate equal to the CP Rate; or



     (b) to the extent the relevant Lender funded the Advance with the proceeds of a borrowing
under the Bridge Loan Agreement, a rate equal to the LIBOR rate; or



     (c) to the extent the relevant Lender did not fund the Advance through the issuance of
commercial paper or a Bridge Loan, a rate equal to the Alternative Rate; or



     (d) after the occurrence of a Termination Event, with respect to any Purchaser Group, a rate
equal to the Base Rate, plus 2.0%.



     provided, however, the Yield Rate shall be the Base Rate for any Accrual
Period for any portion of the Advance as to which (1) any CP Entity has funded the acquisition or
maintenance thereof by the assignment of an interest therein to any Liquidity Bank under its
related Liquidity Agreement on any day other than the first day of such Accrual Period and without
giving such Liquidity Bank(s) at least two Business Days’ prior notice of such assignment or (2)
any Investor has funded the acquisition thereof on any day other than the first day of such Accrual
Period and without such Investor(s) having received at least two Business Days’ prior notice of
such funding pursuant to the provisions of Section 2.3.



     Section 1.2. Other Terms. All accounting terms used but not specifically defined
herein shall be construed in accordance with GAAP. All terms used in Article 9 of the UCC in the
State of Michigan, and used but not specifically defined herein, are used herein as defined in such
Article 9.



     Section 1.3. Computation of Time Periods. Unless otherwise stated in this Agreement,
in the computation of a period of time from a specified date to a later specified date, the word
“from” means “from and including” and the words “to” and “until” each mean “to but excluding.”



     Section 1.4. Interpretation. In each Transaction Document, unless a contrary
intention appears:




               (i) the singular number includes the plural number and vice versa;




               (ii) reference to any Person includes such Person’s successors and assigns but, if
applicable, only if such successors and assigns are permitted by the Transaction Documents;




               (iii) reference to any gender includes each other gender;



-28-









 






               (iv) reference to any agreement (including any Transaction Document), document or
instrument means such agreement, document or instrument as amended, supplemented or modified
and in effect from time to time in accordance with the terms thereof and, if applicable, the
terms of the other Transaction Documents, and reference to any promissory note includes any
promissory note that is an extension or renewal thereof or a substitute or replacement
therefor; and




               (v) reference to any Applicable Law means such Applicable Law as amended, modified,
codified, replaced or reenacted, in whole or in part, and in effect from time to time,
including rules and regulations promulgated thereunder and reference to any section or other
provision of any Applicable Law means that provision of such Applicable Law from time to
time in effect and constituting the substantive amendment, modification, codification,
replacement or reenactment of such section or other provision.



ARTICLE II

THE LOAN FACILITY




     Section 2.1. Funding of the Advance.



          (a) (i) On the terms and conditions hereinafter set forth (including, without limitation, the
conditions set forth in Sections 3.1 and 3.2), the Borrower may, at its option, on
the Closing Date and on any Funding Date request an advance (an “Advance” or a
“Funding”). Each CP Entity may, in its sole discretion, make such Advance, or if a CP
Entity shall decline to make such Advance, the Investors related to such CP Entity shall make the
Advance, in each case, from time to time requested by the Borrower during the period from the date
hereof to but not including the Termination Date. Under no circumstances shall any Lender make an
Advance if, after giving effect to such Advance, (A) the aggregate Capital outstanding hereunder
would exceed the lesser of (i) the Facility Limit and (ii) the Borrowing Base or (B) with respect
to each Purchaser Group, the aggregate Capital funded or maintained by the Lenders in such
Purchaser Group would exceed its Purchaser Group Facility Limit.




          (b) (i) The Borrower may, within 60 days, but no later than 45 days, prior to the then
existing Commitment Termination Date, by written notice to the Deal Agent and each Liquidity Agent,
make written request for the CP Entities and the Investors to extend the Commitment Termination
Date for an additional period of not greater than 364 days. Each Liquidity Agent will give prompt
notice to its Purchaser Group of its receipt of such request for extension of the Commitment
Termination Date. Each CP Entity and each Investor shall make a determination, in their sole
discretion, not less than 15 days prior to the then applicable Commitment Termination Date as to
whether or not it will agree to extend the Commitment Termination Date; provided,
however, that the failure of any CP Entity or any Investor to make a timely response to the
Borrower’s request for extension of the Commitment Termination Date shall be deemed to constitute a
refusal by such CP Entity or Investor, as the case may be, to extend the Commitment Termination
Date. The Commitment Termination Date shall only be extended upon the consent of all of the CP
Entities and all of the Investors.





               (ii) Within two Business Days following the end of the time period set forth in clause
(b)(i) above, the Liquidity Agent for each Purchaser Group shall notify



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each other Investor in such Purchaser Group, the Deal Agent, the Borrower and the
Servicer of the identity of any CP Entity or Investor who have refused (or been deemed to
have refused) to extend the Commitment Termination Date.



          (c) The Notes.





               (i) The Borrower’s obligation to pay the principal of and interest on all amounts
advanced by the Lenders pursuant to the Fundings shall be evidenced by a variable funding
note of the Borrower for each Purchaser Group (each, a “Note”) which shall: (1) be
dated the Effective Date; (2) be in the stated principal amount equal to the Commitment
Amount for such Purchaser Group (as reflected from time to time on the grid attached
thereto); (3) bear interest as provided therein; (4) be payable to the order of the
applicable Liquidity Agent for the account of the related Lenders in such Purchaser Group,
and mature (whether or not there are funds available therefor at such time, pursuant to
Section 2.7 or otherwise) on May 23, 2011 (the “Maturity Date”); and (5) be
substantially in the form of Exhibit I hereto, with blanks appropriately completed in
conformity herewith. The applicable Liquidity Agent shall, and is hereby authorized to,
make a notation on the schedule attached to each Note of the date and the amount of the
Fundings and the date and amount of the payment of principal thereon, and prior to any
transfer of a Note, the applicable Liquidity Agent shall endorse the outstanding principal
amount of such Note on the schedule attached thereto; provided, however,
that failure to make such notation shall not adversely affect any Lender’s rights with
respect to such Note.




               (ii) Although the Notes shall be dated the Effective Date, interest in respect thereof
shall be payable only for the periods during which amounts are outstanding thereunder. In
addition, although the stated principal amount of each Note shall be equal to the Commitment
Amount of the related Purchaser Group, such Note shall be enforceable with respect to the
Borrower’s obligation to pay the principal thereof only to the extent of the unpaid
principal amount of the Capital and Yield and all other amounts outstanding hereunder and
thereunder at the time such enforcement shall be sought.



     Section 2.2. Grant of Security Interest; Acceptance by Collateral Agent.



          (a) (i) As security for the prompt and complete payment of the Notes and the performance of
all of the Borrower’s obligations under the Notes, this Agreement and the other Transaction
Documents, the Borrower hereby grants to the Collateral Agent, for the benefit of the Secured
Parties, a security interest in and continuing Lien on all of the Borrower’s property (whether now
owned or hereafter acquired or arising, and wherever located) including, without limitation, all of
its right, title and interest to: (i) the Loans, and all monies due or to become due in payment
thereupon on and after the related Cut-Off Date; (ii) all Related Security; (iii) all of the
Borrower’s right title and interest in an to the Contribution Agreement and the other Transaction
Documents and the assignment to the Deal Agent of all UCC financing statements filed by the
Borrower against the Originator under or in connection with the Contribution Agreement and the
other Transaction Documents and (iv) all income, Collections and Proceeds of the foregoing
(collectively, the “Collateral”). The foregoing pledge does not




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constitute an assumption by the Collateral Agent of any obligations of the Borrower to
Obligors or any other Person in connection with the Collateral or under any agreement or instrument
relating to the Collateral, including, without limitation, any obligation to make future advances
to or on behalf of such Obligors.





               (ii) In connection with such grant, the Borrower authorizes Credit Acceptance, and
Credit Acceptance agrees to record and file, at Borrower’s expense, financing statements
with respect to the Collateral now existing and hereafter created meeting the requirements
of applicable state law in such manner and in such jurisdictions as are necessary to perfect
the first priority security interest of the Collateral Agent for the benefit of the Secured
Parties in the Collateral, and to deliver a file-stamped copy of such financing statements
or other evidence of such filing to the Collateral Agent, each Liquidity Agent and the Deal
Agent on or prior to each Funding Date. In addition, the Borrower and the Servicer agree to
clearly and unambiguously mark their respective general ledgers and all accounting records
and documents and all computer tapes and records to show that the Collateral, including that
portion of the Collateral consisting of the Dealer Agreements listed on Schedule V hereto
(and each addendum thereto), the Loans and the related Contracts and the rights to payment
under the related Dealer Agreements, has been pledged to the Collateral Agent for the
benefit of the Secured Parties hereunder.




               (iii) In connection with such pledge, the Borrower agrees to deliver to the Collateral
Agent on the Closing Date and each Funding Date on which new Pools or Purchased Loans are
pledged to the Collateral Agent, as the case may be, one or more computer files containing
true and complete lists of all applicable Dealer Agreements, Pools and Loans securing the
payment of the Notes and amounts due under the Transaction Documents and all of the
Borrower’s obligations under the Notes and the Transaction Documents as of the Closing Date
and each Funding Date, and all Contracts securing all such Loans, identified by, as
applicable, account number, dealer number, and pool number and Outstanding Balance as of the
end of the Collection Period immediately preceding the Funding Date. Such file shall be
marked as Schedule V hereto or as an addendum thereto, shall be delivered to the Collateral
Agent as confidential and proprietary, and such Schedule V and each addendum thereto are
hereby incorporated into and made a part of this Agreement and shall at all times be
maintained (and updated, from time to time, as applicable) by the Servicer and maintained by
the Collateral Agent.




               (iv) In connection with such pledge, each of the Borrower, Credit Acceptance and the
Servicer also agrees, within 180 days of the Closing Date or relevant Funding Date, as the
case may be, to clearly mark at least 98% of the Contracts or Contract folders securing a
Loan with the following legend: “THIS AGREEMENT AND ALL RELATED CONTRACTS AND LOANS HAVE
BEEN PLEDGED TO FIFTH THIRD BANK AS COLLATERAL AGENT FOR THE BENEFIT OF CERTAIN SECURED
PARTIES AND ANY PURCHASE, SALE OR COLLATERAL ASSIGNMENT OF ANY SUCH ASSET WOULD VIOLATE THE
RIGHTS OF SUCH SECURED PARTIES”. Such legend shall be in bold, in type face at least as
large as 12 point and shall be entirely in capital letters.



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          (b) The Collateral Agent hereby acknowledges its acceptance, on behalf of the Secured Parties,
of the pledge by the Borrower of the Loans and all other Collateral. The Collateral Agent further
acknowledges that, prior to or simultaneously with the execution and delivery of this Agreement,
the Borrower delivered to the Collateral Agent the computer file or microfiche list represented by
the Borrower to be the computer file or microfiche list described in Section 2.2(a)(iii).




          (c) The Collateral Agent hereby agrees not to disclose to any Person (other than to each
Secured Party) any of the account numbers or other information contained in the computer files or
microfiche lists delivered to the Collateral Agent by the Borrower pursuant to Section
2.2(a)(iii), except as is required in connection with the performance of its duties hereunder
or in enforcing the rights of the Secured Parties or to a Successor Servicer; provided,
however, that notwithstanding anything to the contrary in this Agreement, the Collateral
Agent may reply to a request from any Person for a list of Loans, Dealer Agreements, Contracts or
other information referred to in any financing statement. The Collateral Agent agrees to take such
measures as shall be necessary or reasonably requested by the Borrower to protect and maintain the
security and confidentiality of such information. The Collateral Agent shall provide the Borrower
with written notice five Business Days prior to any disclosure pursuant to this subsection 2.2(c).




     Section 2.3. Procedures for Funding of Advances.



          (a) Each Advance hereunder shall be requested by the Borrower delivering to the Deal Agent,
the Liquidity Agents and the Lenders (with a copy to the Collateral Agent) a duly completed Funding
Notice no later than 12:00 p.m. (New York time) at least two (2) Business Days prior to the
proposed Funding Date. Each Funding Notice shall: (i) specify the desired amount of such Funding
which amount must (a) in the case of the initial funding hereunder (the “Initial Funding”)
be in a minimum amount of $1,000,000, and (b) in the case of any Incremental Funding, be in an
amount equal to $1,000,000 or an integral multiple of $10,000 in excess thereof, (ii) specify the
date of such Funding, and (iii) include a representation that all conditions precedent for a
Funding described in Article III hereof have been met. Each Funding shall be allocated pro
rata among each Purchaser Group based upon the aggregate Commitments related to each
Purchaser Group as a percentage of the Total Commitment. Each Funding Notice shall be irrevocable.




          (b) Following receipt of such Funding Notice, the Deal Agent, in the case of the Fifth Third
Purchaser Group, and each Liquidity Agent, in the case of each other Purchaser Group, will consult
with RFC, or the related CP Entity, as applicable, in order to assist RFC or the CP Entity, as
applicable, in determining whether or not to make the Advance. If the CP Entity decides in its
sole discretion that it is unwilling or unable to make a proposed Advance, the Investors related to
such CP Entity will make such Advance. Each Liquidity Agent will notify the related Investors by
11:00 am (New York time) on such Funding Date if the CP Entity has elected not to effect all or a
portion of the proposed Funding. On the Funding Date, the CP Entity or Investors shall, upon
satisfaction of the applicable conditions set forth in Article III, initiate a wire to the Borrower
no later than 3:00 p.m. (New York time), at such bank or other location reasonably designated by
Borrower in its Funding Notice given pursuant to this Section 2.3, an amount equal to the
lesser of (A) the amount requested by the Borrower from such




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Purchaser Group for such Advance or (B) the excess of the total Commitments related to such
Purchaser Group over such Purchaser Group’s portion of Capital then outstanding.




          (c) In the event that notwithstanding the fulfillment of the applicable conditions set forth
in Article III hereof with respect to a Funding, the CP Entity elected to make a Funding on a
Funding Date but such CP Entity failed for any reason whatsoever (including, without limitation,
sufficiency of funds) to make such amount available to the Borrower on such date, the CP Entity
shall be deemed to have rescinded its election to make such purchase, and neither the Borrower nor
any other party shall have any claim against such CP Entity by reason of its failure to timely
effect such Funding. In any such case, the Liquidity Agent for the related Purchaser Group shall
give notice of such failure not later than 3:00 p.m. (New York time) on the Funding Date to each
Investor for such CP Entity and to the Borrower, which notice shall specify (i) the identity of
such CP Entity and (ii) the amount of the Funding which it had elected but failed to make. Subject
to receiving such notice, each of such CP Entity’s Investors shall effect such funding on such
Funding Date and otherwise in accordance with this Agreement.




          (d) In no event shall an Investor be required on any date to make any Funding which would
result in its portion of the Capital, determined after giving effect to such funding, exceeding its
Commitment.




     Section 2.4. Determination of Yield. On each Determination Date, RFC, with respect to
the Fifth Third Purchaser Group, and the related Liquidity Agent with respect to each other
Purchaser Group, shall provide an estimate of the applicable Yield Rate and the Yield (including
unpaid Yield, if any, due and payable on a prior Payment Date) to be paid by the Borrower with
respect to the Advance on each Payment Date and shall advise the Servicer and the Backup Servicer
thereof on the third Business Day prior to such Payment Date. Prior to the next succeeding
Determination Date, RFC, on behalf of the Fifth Third Purchaser Group and each Liquidity Agent,
with respect to its Purchaser Group, shall determine the actual Yield Rate and the Yield in respect
of the immediately preceding Accrual Period. The amount owed in respect of the Yield for the next
succeeding Accrual Period, as estimated by RFC, or Liquidity Agent, as applicable, shall be
increased or decreased, as appropriate, to take into account any excess Yield or Yield shortfall,
as applicable, relating to the immediately preceding Accrual Period.



     Section 2.5. Reduction of the Facility Limit and a Purchaser Group Facility Limit;
Repurchase. The Borrower may, upon at least ten (10) Business Days’ notice to the Deal Agent,
each Liquidity Agent and RFC, terminate in whole or reduce in part the portion of the Facility
Limit that exceeds the aggregate Capital. With respect to any such reduction, (a) the Commitments
of the Investors within each Purchaser Group shall be reduced proportionately based upon the total
Commitments of such Purchaser Group and (b) each Purchaser Group Facility Limit shall be reduced
pro rata based upon the Purchaser Group Facility Limit as a percentage of the Facility Limit;
provided, however, that each partial reduction of the Facility Limit shall be in an
aggregate amount equal to $1,000,000 or an integral multiple thereof. Each notice of reduction or
termination pursuant to this Section 2.5(a) shall be irrevocable.



     Section 2.6. Actions with Respect to Advance. The Deal Agent, with respect to the
Fifth Third Purchaser Group, and the related Liquidity Agent with respect to each other Purchaser
Group may take any of the following actions at any time with respect to the Advance: (i) divide



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the Advance funded by such Lender into two or more portions of having aggregate Capital equal
to the Capital of such divided Advance; (ii) combine one portion of the Advance funded by such
Lender with another portion of the Advance funded by such Lender with an Accrual Period ending on
the same day, creating a new Advance having Capital equal to the Capital of the two portions of
Advances combined or (iii) combine an Advance funded by such Lender with the Advance to be funded
on such day by such Lender, creating a new Advance having Capital equal to the Capital of the two
Advances combined.



     Section 2.7. Settlement Procedures.



          (a) On each Payment Date and on the Maturity Date, the Collateral Agent shall withdraw
Available Funds and any Excess Reserve Amount and Servicer Advances (to be applied in accordance
with Section 2.7(c)) and investment earnings on amounts on deposit in the Collection
Account from the Collection Account and allocate and distribute such amounts to the applicable
Person in the following order of priority:





               (i) FIRST, to the Hedge Counterparty, an amount equal to any Hedge Costs (exclusive of
termination payments) and any such Hedge Costs (exclusive of termination payments) unpaid
from any prior Payment Date.




               (ii) SECOND, to the Servicer, an amount equal to any Unreimbursed Servicer Advances;




               (iii) THIRD, to the Backup Servicer so long as it has not become the Servicer
hereunder, an amount equal to any accrued and unpaid Backup Servicing Fee due in respect of
such Payment Date, any unpaid Backup Servicing Fee from any prior Payment Date, any
reasonable out-of-pocket expenses incurred in SST’s capacity as Backup Servicer, and any
accrued and unpaid Indemnified Amounts owed by the Borrower to SST up to $17,000, monthly;




               (iv) FOURTH, (A) to the Servicer, an amount equal to any accrued and unpaid Servicing
Fees due in respect of such Payment Date and any Servicing Fees unpaid from any prior
Payment Date; provided, however, if the Servicer has been replaced pursuant
to Section 6.12 such amount shall not exceed the Capped Servicing Fee; and (B) to
the Backup Servicer, if it has become the Successor Servicer, any Transition Expenses;




               (v) FIFTH, to the Deal Agent for the account of the Lenders, an amount equal to the sum
of any accrued and unpaid (A) Yield and Breakage Costs, (B) the Program Fee, and (C) the
Facility Fee, Increased Costs and any Additional Amounts due in respect of such Payment Date
and any such amounts unpaid from any prior Payment Date;




               (vi) SIXTH, during the Revolving Period, to the Deal Agent for the account of the
Lenders, an amount equal to the Monthly Principal Payment Amount for such Payment Date;



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               (vii) SEVENTH, to any Successor Servicer, an amount equal to Reliening Expenses;




               (viii) EIGHTH, during the Amortization Period, to the Deal Agent for the account of the
Lenders, pro rata, the Additional Principal Payment Amount, until Capital has been reduced
to zero;




               (ix) NINTH, to the Deal Agent for the account of the Lenders and the Backup Servicer,
an amount equal to, without double counting, Increased Costs, any Additional Amounts and
Indemnified Amounts (provided that, with respect to the Backup Servicer,
such Indemnified Amounts shall include only those Indemnified Amounts not paid pursuant to
clause THIRD above) due in respect of such Payment Date and unpaid from any prior Payment
Date;




               (x) TENTH, to the Reserve Account, (A) an amount equal to any outstanding Reserve
Advances and (B) the amount necessary to cause the amount on deposit in the Reserve Account
to equal the Required Reserve Account Amount (after giving effect to any deposits made in
subclause (A));




               (xi) ELEVENTH, to the Backup Servicer, any Servicing Fee due in respect of such Payment
Date, to the extent not paid pursuant to clause FOURTH above and any such Servicing Fee
unpaid from any prior Payment Date;




               (xii) TWELFTH, to the Deal Agent for the account of any other applicable Person, all
remaining amounts up to all Aggregate Unpaids (during the Revolving Period, other than
Capital) until paid in full;




               (xiii) THIRTEENTH, to the Borrower any remaining amounts.



          (b) (i) One Business Day per calendar month, the date of which is to be chosen by the
Borrower, the Collateral Agent shall, upon two Business Days’ prior written request of the
Borrower, withdraw from the Collection Account an amount not to exceed the amount on deposit
therein on the date of such request. The Collateral Agent shall distribute such amount to the Deal
Agent for the account of the Lenders, to be distributed by the Deal Agent to the Lenders, pro rata,
as a payment in reduction of Capital. Notwithstanding anything in this Section 2.7(b) to
the contrary, the Collateral Agent shall not be required to effect any such withdrawal or the Deal
Agent make any such distribution until an Officer of the Servicer or a representative of the
Servicer designated by a Responsible Officer of the Servicer has certified to the Collateral Agent
and the Deal Agent in writing (which shall include electronic transmission) that it reasonably
believes that at the end of the related Collection Period the sum of Available Funds and Excess
Reserve Amount, after giving effect to such payment, will be greater than the amount needed to make
the payments required pursuant to Section 2.7(a)(i) through (xii). Any such
prepayment of principal shall include all accrued and unpaid Yield and any applicable Breakage
Costs relating thereto.




                    (ii) No more often than two (2) times per calendar month, the Borrower may, upon two Business
Days’ prior written notice (such notice to be received by the Deal Agent no later than 4:00 p.m.
(New York time) on such day) to the Deal Agent, reduce the Capital by



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remitting to the Deal Agent: (i) cash and (ii) instructions to reduce such Capital, related
accrued Yield and Breakage Costs. Such cash shall be remitted to the Deal Agent for the account of
the Lenders, to be distributed by the Deal Agent to the Lenders, pro-rata. Any such reduction of
the Capital shall be in a minimum amount of $500,000 and will occur only if sufficient funds have
been remitted to pay all such amounts in the succeeding sentence in full. Upon receipt of such
amounts, the Deal Agent shall apply such amounts first to the pro-rata reduction of the
Capital, second to the payment of related accrued Yield on the amount of the Yield to be
repaid by paying such amounts to the respective Lenders, and third to the payment of any
Breakage Costs. Any notice relating to any prepayment pursuant to this Section 2.7(b)(ii)
shall be irrevocable.



          (c) (i) If on any Payment Date the amount paid pursuant to Section 2.7(a)(v) and
(vi) is insufficient to cover all amounts due thereunder on such Payment Date the
Collateral Agent shall withdraw from the Reserve Account an amount equal to the lesser of such
shortfall and the amount of funds on deposit in the Reserve Account (such withdrawal, a
“Reserve Advance”) and deposit such amount to the Collection Account. The Collateral Agent
shall pay such amount to the Deal Agent for payment to the Lenders.





               (ii) If on any Payment Date the amount on deposit in the Reserve Account is
insufficient to pay the insufficiency set forth in Section 2.7(c)(i), on or prior to
9:00 a.m. (Cincinnati, Ohio time) Credit Acceptance shall deposit to the Collection Account
an amount equal to such insufficiency (each, a “Servicer Advance”), and the
Collateral Agent shall pay such amount to the Deal Agent for payment to the Lenders. Credit
Acceptance shall not be required to make any Servicer Advance to the extent it does not
reasonably deem such amount to be recoverable from future collections on the Loans.




               (iii) If on any Payment Date during the Amortization Period, the amount paid pursuant
to Section 2.7(a)(viii) is insufficient to reduce Capital to zero, the Deal Agent,
in its sole discretion, may direct the Collateral Agent to withdraw any or all of the amount
on deposit in the Reserve Account, and pay such amount to the Deal Agent, for payment to the
Lenders in respect of interest and principal and all other Aggregate Unpaids payable to the
Lenders at such time.



     Section 2.8. [Reserved.]



     Section 2.9. Collections and Allocations.



          (a) Collections. The Servicer shall transfer, or cause to be transferred, all
Collections on deposit in the form of available funds in the Credit Acceptance Payment Account to
the Collection Account by the close of business on the second Business Day such Collections are
received therein. The Servicer shall promptly (but in no event later than the second Business Day
(or if the Backup Servicer has become the Successor Servicer hereunder, the third Business Day)
after the receipt thereof) deposit all Collections received directly by it in the Collection
Account. The Servicer shall make such deposits or payments on the date indicated therein by wire
transfer, in immediately available funds.




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          (b) Initial Deposits. On the Funding Date, the Servicer will deposit (in immediately
available funds) into the Collection Account all Collections received on and after the applicable
Cut-Off Date and through and including the day immediately preceding the Funding Date, in respect
of the Loans.




          (c) Investment of Funds. (i) Until the occurrence of a Termination Event or Unmatured
Termination Event, to the extent there are uninvested amounts on deposit in the Collection Account
and the Reserve Account, all amounts therein shall be invested as set forth in Section
6.7(c).





               (ii) On the date on which Capital is reduced to zero and all Aggregate Unpaids have
been indefeasibly paid in full in cash, all Collateral is released from the Lien of this
Agreement, and this Agreement is terminated, any amounts on deposit in the Reserve Account
shall be released to the Borrower.



          (d) Allocation of Collections. The Servicer will allocate Collections monthly in
accordance with the actual amount of Collections received. The Servicer (including any applicable
Successor Servicer) shall determine each month the amount of Collections received during such month
which constitutes amounts which, pursuant to the terms of any Dealer Agreement, are required to be
remitted to the applicable Dealer (such collections, “Dealer Collections”) and shall so
notify the Collateral Agent. Notwithstanding any other provision hereof, the Collateral Agent, at
the direction of the Servicer, shall distribute on each Payment Date: (i) to the Borrower, an
amount equal to the aggregate amount of Dealer Collections received during or with respect to the
prior Collection Period and (ii) to the Backup Servicer, if it has become the Successor Servicer,
an amount equal to any Repossession Expenses related to the prior Collection Period prior to the
distribution of Available Funds pursuant to Section 2.7.




     Section 2.10. Payments, Computations, Etc.



          (a) Unless otherwise expressly provided herein, all amounts to be paid or deposited by the
Borrower or the Servicer hereunder shall be paid or deposited in accordance with the terms hereof
no later than 10:00 a.m. (New York time) on the day when due in lawful money of the United States
in immediately available funds to the Agent’s Account and the Deal Agent shall distribute such
amounts actually received by it to the Persons entitled thereto for receipt no later than 11:00
a.m. (New York time). Any amounts received in the Agent’s Account after 10:00 a.m. (New York time)
shall be deemed to be received on the next subsequent Business Day and the Deal Agent shall
distribute such amounts to the Persons entitled thereto no later than 11:00 a.m. (New York time) on
such next subsequent Business Day. The Borrower shall, to the extent permitted by law, pay to the
Secured Parties interest on all amounts not paid or deposited when due hereunder 3.0% per annum
above the Base Rate, payable on demand; provided, however, that such interest rate
shall not at any time exceed the maximum rate permitted by Applicable Law. All computations of
interest and all computations of Yield and other fees hereunder shall be made on the basis of a
year of 360 days for the actual number of days (including the first but excluding the last day)
elapsed.




          (b) Whenever any payment hereunder shall be stated to be due on a day other than a Business
Day, such payment shall be made on the next succeeding Business Day, and




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such extension of time shall in such case be included in the computation of payment of Yield,
interest or any fee payable hereunder, as the case may be.




          (c) If the Advance requested by the Borrower for any Funding Date and approved by a Lender,
its Liquidity Agent and the Deal Agent pursuant to Section 2.1 and Section 2.3, is
not for any reason made or effectuated, as the case may be, on the requested Funding Date, the
Borrower shall indemnify such Lender against Breakage Costs, any reasonable loss, cost or expense
incurred by such Lender, including, without limitation, any loss (including loss of anticipated
profits, net of anticipated profits in the reemployment of such funds in the manner determined by
such Lender), cost or expense incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by such Lender to fund or maintain the Funding.




     Section 2.11. [Reserved.]



     Section 2.12. Fees.



          (a) The Borrower shall pay to the Deal Agent, for the account of each Purchaser Group from the
Collection Account on each Payment Date, monthly in arrears, the Program Fee for each Purchaser
Group agreed to in each Fee Letter.




          (b) The Servicer shall be entitled to receive the Servicing Fee, monthly in arrears in
accordance with Section 2.7(a).




          (c) The Backup Servicer shall be entitled to receive the Backup Servicing Fee in accordance
with Section 2.7(a).




          (d) The Borrower shall pay to Mayer Brown LLP, as counsel to the Deal Agent, on the Effective
Date, their respective estimated reasonable fees and out-of-pocket expenses in immediately
available funds and shall pay all additional reasonable fees and out-of-pocket expenses of Mayer
Brown LLP, within ten (10) Business Days after receiving an invoice for such amounts.




     Section 2.13. Increased Costs; Capital Adequacy; Illegality.



          (a) If either (i) the introduction of or any change (including, without limitation, any change
by way of imposition or increase of reserve requirements) in or in the interpretation of any law or
regulation or (ii) the compliance by an Affected Party with any guideline or request from any
central bank or other Governmental Authority (whether or not having the force of law), shall (A)
subject an Affected Party to any Tax (except for Taxes on the overall net income of such Affected
Party imposed on it by the jurisdiction under the laws of which such Affected Party is organized),
duty or other charge with respect to the Advance made by it hereunder, or any right to make the
Funding hereunder, or on any payment made hereunder, (B) impose, modify or deem applicable any
reserve requirement (including, without limitation, any reserve requirement imposed by the Board of
Governors of the Federal Reserve System, but excluding any reserve requirement, if any, included in
the determination of Yield), special deposit or similar requirement against assets of, deposits
with or for the amount of, or credit extended by, any Affected Party or (C) impose any other
condition affecting the Advance made




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by it hereunder or a Lender’s rights hereunder, the result of which is to increase the cost to
any Affected Party or to reduce the amount of any sum received or receivable by an Affected Party
under this Agreement, then within ten days after demand by such Affected Party (which demand shall
be accompanied by a statement setting forth the basis for such demand), the Borrower shall pay
directly to such Affected Party such additional amount or amounts as will compensate such Affected
Party for such additional or increased cost incurred or such reduction suffered.




          (b) If either (i) the introduction of or any change in or in the interpretation of any law,
guideline, rule, regulation, directive or request or (ii) compliance by any Affected Party with any
law, guideline, rule, regulation, directive or request from any central bank or other governmental
authority or agency (whether or not having the force of law), including, without limitation,
compliance by an Affected Party with any request or directive regarding capital adequacy, has or
would have the effect of reducing the rate of return on the capital of any Affected Party as a
consequence of its obligations hereunder or arising in connection herewith to a level below that
which any such Affected Party could have achieved but for such introduction, change or compliance
(taking into consideration the policies of such Affected Party with respect to capital adequacy) by
an amount deemed by such Affected Party to be material, then from time to time, within ten days
after demand by such Affected Party (which demand shall be accompanied by a statement setting forth
the basis for such demand), the Borrower shall pay directly to such Affected Party such additional
amount or amounts as will compensate such Affected Party for such reduction. For avoidance of
doubt, any interpretation of Accounting Research Bulletin No. 51 by the Financial Accounting
Standards Board shall constitute an adoption, change, request or directive subject to this
subsection 2.13(b).




          (c) If as a result of any event or circumstance similar to those described in clauses (a) or
(b) of this section, any Affected Party is required to compensate a bank or other financial
institution providing liquidity support, credit enhancement or other similar support to such
Affected Party in connection with this Agreement or the funding or maintenance of the Advance
hereunder, then within ten days after demand by such Affected Party, the Borrower shall pay to such
Affected Party such additional amount or amounts as may be necessary to reimburse such Affected
Party for any amounts payable or paid by it.




          (d) In determining any amount provided for in this section, the Affected Party may use any
reasonable averaging and attribution methods. Any Affected Party making a claim under this section
shall submit to the Borrower a written description as to such additional or increased cost or
reduction and the calculation thereof, which written description shall be conclusive absent
manifest error.




          (e) If a Lender shall notify the Deal Agent that a Eurodollar Disruption Event as described in
clause (a) of the definition of “Eurodollar Disruption Event” has occurred, the Deal Agent shall in
turn so notify the Borrower, whereupon all Capital in respect of which Yield accrues at the
Adjusted Eurodollar Rate shall immediately be converted into Capital in respect of which Yield
accrues at the Base Rate.




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     Section 2.14. Taxes.



          (a) All payments made by an Obligor in respect of each Loan and each Contract and all payments
made by the Borrower, Originator or Credit Acceptance under this Agreement or the other Transaction
Documents will be made free and clear of and without deduction or withholding for or on account of
any Taxes. If any Taxes are required to be withheld from any amounts payable to the Deal Agent,
the Liquidity Agent or any Secured Party, then the amount payable to such Person will be increased
(such increase, the “Additional Amount”) such that every net payment made under this
Agreement after withholding for or on account of any Taxes (including, without limitation, any
Taxes on such increase) is not less than the amount that would have been paid had no such deduction
or withholding been deducted or withheld. The foregoing obligation to pay Additional Amounts,
however, will not apply with respect to net income or franchise taxes imposed on a Lender or the
Deal Agent, respectively, with respect to payments required to be made by the Borrower or Credit
Acceptance under this Agreement, by a taxing jurisdiction in which such Lender or Deal Agent is
organized, conducts business or is paying taxes (in either case of conducting business or paying
taxes, other than solely as a result of the transactions contemplated by this Agreement and the
other Transaction Documents) as of the Effective Date (as the case may be).




          (b) The Borrower will indemnify each Affected Party for the full amount of Taxes payable by
such Person in respect of Additional Amounts and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto. All payments in respect of this
indemnification shall be made within ten days from the date a written invoice therefor is delivered
to the Borrower.




          (c) The Borrower will notify the Deal Agent and each Liquidity Agent on a quarterly annual
basis of any payments by the Borrower in respect of any Taxes, not including those Taxes paid by
Credit Acceptance on a consolidated basis.




          (d) If a Lender is not created or organized under the laws of the United States or a political
subdivision thereof, such Lender shall deliver to the Borrower, with a copy to the Deal Agent and
each Liquidity Agent, (i) within 15 days after the date hereof, or, if such Lender becomes a Lender
after the Closing Date, the date on which such Lender becomes a Lender hereunder, two (or such
other number as may from time to time be prescribed by Applicable Laws) duly completed copies of
IRS Form W-8BEN or Form W-8ECI (or any successor forms or other certificates or statements that may
be required from time to time by the relevant United States taxing authorities or Applicable Laws),
as appropriate, to permit the Borrower to make payments hereunder for the account of such Lender,
as the case may be, without deduction or withholding of United States federal income or similar
Taxes and (ii) upon the obsolescence of or after the occurrence of any event requiring a change in,
any form or certificate previously delivered pursuant to this Section 2.14(d), copies (in
such numbers as may from time to time be prescribed by Applicable Laws or regulations) of such
additional, amended or successor forms, certificates or statements as may be required under
Applicable Laws or regulations to permit the Borrower to make payments hereunder for the account of
such Lender, without deduction or withholding of United States federal income or similar Taxes.




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          (e) If, in connection with an agreement or other document providing liquidity support, credit
enhancement or other similar support to the Lenders in connection with this Agreement or the
funding or maintenance of the Funding hereunder, the Lenders are required to compensate a bank or
other financial institution in respect of Taxes under circumstances similar to those described in
this section then within 10 days after demand by the Lenders, the Borrower shall pay to the Lenders
such additional amount or amounts as may be necessary to reimburse the Lenders for any amounts paid
by them.




          (f) Without prejudice to the survival of any other agreement of the Borrower hereunder, the
agreements and obligations of the Borrower contained in this section shall survive the termination
of this Agreement.




     Section 2.15. Assignment of the Contribution Agreement. The Borrower hereby assigns
to the Deal Agent, for the ratable benefit of the Secured Parties hereunder, all of the Borrower’s
right, title and interest in and to, but none of its obligations under, the Contribution Agreement,
the Hedging Agreement and any other Transaction Documents. The Borrower confirms that the Deal
Agent on behalf of the Secured Parties shall have the sole right to enforce the Borrower’s rights
and remedies under the Contribution Agreement and the Hedging Agreement for the benefit of the
Secured Parties.



     Section 2.16. Servicer Clean-up Call.



          (a) (i) On any Payment Date after the last day of any Collection Period during the
Amortization Period as of which the amount of Capital shall be less than or equal to 10% of the
amount of Capital as of the beginning of the Amortization Period, Credit Acceptance shall have the
option to purchase the Loans, subsequent Collections and Related Security for a price equal to the
aggregate Release Price for the Loans. To exercise such option, Credit Acceptance shall deposit in
the Collection Account an amount equal to such aggregate Release Price plus accrued Yield, Hedge
Costs and Breakage Costs in immediately available funds. Notwithstanding the foregoing, Credit
Acceptance shall not exercise such option unless the amount so deposited equals or exceeds the
Retransfer Price for the Loans.




               (ii) Credit Acceptance shall have the right to purchase from time to time Loans, subsequent
Collections and Related Security (as selected by the Borrower without adverse selection) so long as
in the aggregate such purchases do not exceed 1.0% of the Loans based upon the Aggregate
Outstanding Eligible Loan Net Balance on the date of purchase, for an amount equal to the greater
of: (A) the Release Price plus any accrued Yield, Hedging Costs and Breakage Costs related to such
Loans; and (B) the aggregate fair market value of such Loans. Such amount shall be paid by
depositing immediately available funds in the Collection Account.



               (iii) Credit Acceptance shall give at least 2 Business Days’ notice to the Collateral Agent,
each Liquidity Agent and the Deal Agent of its intent to exercise either of the foregoing options.



          (b) The Borrower hereby agrees to pay the reasonable legal fees and expenses of the Deal
Agent, any Successor Servicer, the Liquidity Agents and the Lenders in connection with any such
purchase option (including, but not limited to, expenses incurred in connection




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with the release of the Lien of the Collateral Agent, the Lenders and any other party having
such an interest in the Loans).




          (c) In connection with any such purchase option, on the related date of purchase, the
Collateral Agent, on behalf of the Lenders, shall, at the expense of the Borrower: (i) arrange for
the execution by the Lenders of such instruments of release with respect to the Loans being
released, in favor of the Borrower and the purchaser as the Borrower or purchaser may reasonably
request, including without limitation, a release in the form of Exhibit G hereto; (ii) deliver any
portion of the Loans to be released in its possession to the Borrower or purchaser; and (iii)
otherwise take such actions, and cause or permit the Collateral Agent to take such actions, as are
necessary and appropriate to release the Lien of the Collateral Agent on the Loans to be released
and deliver to the Borrower or purchaser such Loans; provided, that the Collateral Agent
shall not have the power or authority to sign any document in the name of RFC.




ARTICLE III

CONDITIONS TO THE CLOSING AND EACH FUNDING




     Section 3.1. Conditions to the Closing and the Initial Funding. The Closing Date
shall not occur and no Lender shall be obligated to make an Advance hereunder on the occasion of
the Initial Funding, nor shall any Lender, the Deal Agent, the Liquidity Agent, the Backup Servicer
or the Collateral Agent be obligated to take, fulfill or perform any other action hereunder, until
(i) in the case of the Closing Date, the conditions set forth in clauses (a)(i) (other than with
respect to the Hedging Agreements), (b), (c), (d), (e), (f) and (j) and (ii) in the case of the
Initial Funding, all of the following conditions, after giving effect to the proposed Advance, in
each case, have been satisfied, in the sole discretion of, or waived in writing by, the Deal Agent:



          (a) (i) Each Transaction Document, each Liquidity Agreement and the Bridge Loan Agreement
shall have been duly executed by, and delivered to, the parties hereto and thereto and the Deal
Agent shall have received such other documents, instruments, agreements and legal opinions as the
Deal Agent shall request in connection with the transactions contemplated by this Agreement,
including, without limitation, all those specified in the Schedule of Documents attached hereto as
Schedule I, each in form and substance satisfactory to the Deal Agent, and (ii) the executed Notes
in the aggregate face amount of $50,000,000 shall have been delivered to the Deal Agent.




          (b) The Deal Agent shall have received (i) satisfactory evidence that the Borrower, the
Originator and Credit Acceptance have obtained all required consents and approvals of all Persons,
including all requisite Governmental Authorities, to the execution, delivery and performance of
this Agreement and the other Transaction Documents to which each is a party and the consummation of
the transactions contemplated hereby or thereby or (ii) an Officer’s Certificate from each of the
Borrower, the Originator and Credit Acceptance in form and substance satisfactory to the Deal Agent
affirming that no such consents or approvals are required; it being understood that the acceptance
of such evidence or officer’s certificate shall in no way limit the recourse of the Deal Agent or
any Secured Party against the Borrower, the Originator or Credit Acceptance for a breach of its
representation or warranty that all such consents and approvals have, in fact, been obtained.




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          (c) The Borrower, the Originator and Credit Acceptance shall each be in compliance in all
material respects with all Applicable Laws and shall have delivered a Certificate to the Deal Agent
as to this and other closing matters.




          (d) The Borrower shall have paid all fees required to be paid by it on the Closing Date,
including all fees required hereunder and under the Fee Letter related to the Fifth Third Purchaser
Group, and shall have reimbursed each Lender, the Backup Servicer, the Deal Agent and the
Collateral Agent for all fees, costs and expenses of closing the transactions contemplated
hereunder and under the other Transaction Documents, including the attorney fees and any other
legal and document preparation costs incurred by any Lender, the Backup Servicer, the Deal Agent
and/or the Collateral Agent.




          (e) No Amortization Event, Termination Event or Unmatured Termination Event shall have
occurred.




          (f) No Servicer Termination Event or Potential Servicer Termination Event shall have occurred.




          (g) No adverse selection procedures were used by the Borrower with respect to the Loans,
Contracts or Dealer Agreements.




          (h) The Borrower shall have deposited to the Reserve Account an amount equal to 1.0% of the
Capital after giving effect to the proposed Advance.




          (i) The Hedging Agreement shall be in effect.




          (j) The Borrower shall have deposited $500,000 to the Reserve Account.




     Section 3.2. Conditions Precedent To All Fundings. Each request for a Funding
hereunder (each, a “Transaction”) shall be subject to the further conditions precedent:



          (a) With respect to any Advance (including the Initial Funding), the Borrower shall have
delivered to the Deal Agent and the Liquidity Agents, on or prior to the date of the Advance in
form and substance satisfactory to the Deal Agent, (i) the Funding Notice and (ii) Exhibit A to the
Contribution Agreement, including the Schedule of Loans and Contracts attached thereto, thereto
dated within two (2) Business Days prior to the date of the Advance and containing such additional
information as may be reasonably requested by the Deal Agent.




          (b) On the date of such Transaction the following statements shall be true and the Borrower
shall be deemed to have certified that, after giving effect to the proposed Advance and pledge of
Additional Loans:





               (i) The representations and warranties contained in Sections 4.1, 4.2
and 4.3 are true and correct on and as of such day as though made on and as of such
day and shall be deemed to have been made on such day;




               (ii) On and as of such day, after giving effect to the proposed Advance, (A) the
outstanding Capital does not exceed the lesser of (1) the Borrowing Base and (2)



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the Facility Limit and (B) with respect to each Purchaser Group the aggregate Capital
funded or maintained by the Lender in such Purchaser Group does not exceed the total
Commitments of the Investors in such Purchaser Group or its Purchaser Group Facility Limit;




               (iii) On and as of such day, the Borrower, the Originator and the Servicer each has
performed all of the agreements contained in this Agreement and the other Transaction
Documents to which it is a party to be performed by such person at or prior to such day; and




               (iv) No law or regulation shall prohibit, and no order, judgment or decree of any
federal, state or local court or governmental body, agency or instrumentality shall prohibit
or enjoin, the making of the Funding by the Lender in accordance with the provisions hereof.



          (c) The Borrower shall have delivered to the Collateral Agent the information described in
Section 2.2(a)(iii).




          (d) All financing statements necessary to perfect the Collateral Agent’s first priority
security interest in the Collateral shall have been filed in the appropriate filing offices.




          (e) Forecasted Collections for the Aggregate Outstanding Eligible Loan Net Balance (after
giving effect to the proposed Advance) shall be greater than or equal to Capital, after giving
effect to the proposed Advance.




          (f) (i) All other documents, opinions, certificates and documents listed on Schedule I hereto
shall have been delivered to the Deal Agent, in form and substance satisfactory to the Deal Agent
and its counsel and (ii) all conditions required to be satisfied in the Contribution Agreement
shall have been satisfied.




          (g) No Amortization Event, Termination Event or Unmatured Termination Event shall have
occurred.




          (h) No Servicer Termination Event or any event, that with the giving of notice or the lapse of
time, or both, would become a Servicer Termination Event shall have occurred.




          (i) No adverse selection procedures were used by the Borrower with respect to the Loans,
Contracts or Dealer Agreements.




          (j) The Borrower shall have deposited to the Reserve Account an amount equal to 1.0% of the
Capital after giving effect to the proposed Advance. In addition, the amount on deposit in the
Reserve Account shall not be less than the Required Reserve Account Amount.




          (k) The Hedging Agreement shall be in effect.




          (l) There shall be no litigation, proceeding or investigation, to the best knowledge of the
Borrower and Servicer, threatened against the Borrower or the Servicer, before any Governmental
Authority (i) asserting the invalidity of this Agreement or any other




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Transaction Document to which the Borrower or Servicer is a party, (ii) seeking to prevent the
consummation of any of the transactions contemplated by this Agreement or any other Transaction
Document to which the Borrower or Servicer is a party or (iii) seeking any determination or ruling
that could reasonably be expected to have Material Adverse Effect.




          (m) The Deal Agent shall have received such other approvals, opinions or documents as the Deal
Agent or its counsel may reasonably require.




     Section 3.3. Conditions to Effectiveness of this Loan and Security Agreement. This
Loan and Security Agreement shall not become effective until:




          (a) Each document specified in the Schedule of Documents attached hereto has been duly
executed by, and delivered to, the parties hereto and thereto and the Deal Agent has received all
such executed documents.




          (b) the executed Notes in the face amounts representing the Commitment Amount of each
Purchaser Group have been delivered to each Purchaser Group.




          (c) The Deal Agent has received such other approvals, opinions or documents as the Deal Agent
or its counsel may reasonably require.




ARTICLE IV

REPRESENTATIONS AND WARRANTIES




     Section 4.1. Representations and Warranties of the Borrower. The Borrower represents
and warrants to the Collateral Agent, the Deal Agent, any Successor Servicer, the Backup Servicer
and the Secured Parties on the Closing Date, and on each date thereafter until the Collection Date,
as follows:



          (a) Organization and Good Standing. The Borrower has been duly organized, and is
validly existing as a limited liability company in good standing under the laws of the State of
Delaware, with all requisite power and authority to own or lease its properties and conduct its
business as such business is presently conducted, and the Borrower had at all relevant times, and
now has all necessary power, authority and legal right to acquire, own and pledge the Collateral
and perform its obligations under this Agreement.




          (b) Due Qualification. The Borrower is duly qualified to do business and is in good
standing as a limited liability company and has obtained all necessary licenses and approvals, in
all jurisdictions in which the ownership or lease of property or the conduct of its business
requires such qualification, licenses or approvals.




          (c) Power and Authority; Due Authorization. The Borrower: (i) has all necessary
power, authority and legal right to: (A) execute and deliver this Agreement and the other
Transaction Documents to which it is a party, (B) carry out the terms of the Transaction Documents
to which it is a party, and (C) transfer and assign each Loan, Related Security and all other
Collateral on the terms and conditions herein provided and (ii) has duly authorized by all
necessary action the execution, delivery and performance of this Agreement and the other
Transaction Documents to which it is a party and the transfer and assignment of the Loans,


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Related Security and all other Collateral on the terms and conditions herein provided. This
Agreement and each other Transaction Document to which it is a party have been duly executed and
delivered by it.




          (d) Binding Obligation. This Agreement and each other Transaction Document to which
the Borrower is a party constitutes a legal, valid and binding obligation of the Borrower, each
enforceable against the Borrower in accordance with its terms, subject to any defense, if any,
arising out of a breach or other action or inaction of a party thereto other than the Borrower or
any Affiliate of the Borrower.




          (e) No Violation. The consummation of the transactions contemplated by this Agreement
and the other Transaction Documents to which it is a party and the fulfillment of the terms hereof
and thereof will not (i) conflict with, result in any breach of any of the terms and provisions of,
or constitute (with or without notice or lapse of time or both) a default under, the Borrower’s
certificate of formation, operating agent or any Contractual Obligation of the Borrower, (ii)
result in the creation or imposition of any Lien upon any of the Borrower’s properties pursuant to
the terms of any such Contractual Obligation, other than this Agreement, or (iii) violate any
Applicable Law.




          (f) No Proceedings. There is no litigation, proceeding or investigation pending
against the Borrower, before any Governmental Authority (i) asserting the invalidity of this
Agreement or any other Transaction Document to which the Borrower is a party, (ii) seeking to
prevent the consummation of any of the transactions contemplated by this Agreement or any other
Transaction Document to which the Borrower is a party or (iii) seeking any determination or ruling
that would reasonably be expected to have Material Adverse Effect and is reasonably expected to
occur.




          (g) All Consents Required. All approvals, authorizations, consents, orders or other
actions of any Person or of any Governmental Authority (if any) required for the due execution,
delivery and performance by the Borrower of this Agreement and any other Transaction Document to
which the Borrower is a party have been obtained except where the failure to so obtain is not
reasonably expected to result in a Material Adverse Effect.




          (h) Bulk Sales. The execution, delivery and performance of this Agreement do not
require compliance with any “bulk sales” act or similar law by Borrower.




          (i) Solvency. The transactions under this Agreement and any other Transaction
Document to which the Borrower is a party do not and will not render the Borrower not Solvent and
the Borrower shall deliver to the Deal Agent on the Closing Date and the Effective Date a
certification in the form of Exhibit F. The Originator has confirmed in writing to the Borrower
that, so long as the Borrower is Solvent, the Originator will not cause the Borrower to file a
voluntary petition under the Bankruptcy Code or any other Insolvency Laws and, in any event, no
such action shall be taken other than in accordance with and as permitted by the Borrower’s
organizational documents.




          (j) Selection Procedures. No procedures believed by the Borrower to be adverse to the
interests of the Collateral Agent or the Lenders were utilized by the Borrower in




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identifying and/or selecting Loans or Dealer Agreements. In addition, each Loan shall have
been underwritten in accordance with and satisfy the standards of any Credit Guidelines that has
been established by the Borrower or the Originator and is then in effect.




          (k) Taxes. The Borrower has filed or caused to be filed all tax returns that are
required to be filed by it. The Borrower has paid or made adequate provisions for the payment of
all Taxes and all assessments made against it or any of its property (other than any amount of Tax
the validity of which is currently being contested in good faith by appropriate proceedings and
with respect to which reserves in accordance with GAAP have been provided on the books of the
Borrower), and no tax lien has been filed and, to the Borrower’s knowledge, no claim is being
asserted, with respect to any such Tax, fee or other charge.




          (l) Exchange Act Compliance; Regulations T, U and X. None of the transactions
contemplated herein (including, without limitation, the use of the proceeds from the pledge of the
Collateral) will violate or result in a violation of Section 7 of the Securities Exchange Act, or
any regulations issued pursuant thereto, including, without limitation, Regulations T, U and X of
the Board of Governors of the Federal Reserve System, 12 C.F.R., Chapter II. The Borrower does not
own or intend to carry or purchase, and no proceeds from the pledge of the Collateral will be used
to carry or purchase, any “margin stock” within the meaning of Regulation U or to extend “purchase
credit” within the meaning of Regulation U.




          (m) Quality of Title. Each Loan, together with the Related Security related thereto,
shall, at all times, be owned by the Borrower free and clear of any Lien except as provided in
Section 4.2(a)(iii), and upon each Funding, the Collateral Agent as agent for the Secured
Parties shall acquire a valid and perfected first priority security interest in such Loans, the
Related Security related thereto and all Collections then existing or thereafter arising, free and
clear of any Lien, except as provided in Section 4.2(a)(iii). No effective financing
statement or other instrument similar in effect covering any Loan or Dealer Agreement shall at any
time be on file in any recording office except such as may be filed (i) in favor of the Borrower in
accordance with the Contribution Agreement or (ii) in favor of the Collateral Agent in accordance
with this Agreement.




          (n) Security Interest. The Borrower has granted a security interest (as defined in
the UCC) to the Collateral Agent, as agent for the Secured Parties, in the Collateral, which is
enforceable in accordance with applicable law upon execution and delivery of this Agreement. Upon
the filing of UCC-1 financing statements naming the Collateral Agent as secured party and the
Borrower as debtor, the Collateral Agent, as agent for the Secured Parties, shall have a first
priority perfected security interest in the Collateral. All filings (including, without
limitation, such UCC filings) as are necessary in any jurisdiction to perfect the interest of the
Collateral Agent, as agent for the Secured Parties, in the Collateral have been made.




          (o) Accuracy of Information. All information heretofore furnished by the Borrower
(including without limitation, the Monthly Report and Credit Acceptance’s financial statements) to
the Deal Agent, Collateral Agent, any Liquidity Agent or any Lender for purposes of or in
connection with this Agreement or any other Transaction Document, or any transaction contemplated
hereby or thereby, will be true, correct, complete and accurate in every material respect, on the
date such information is stated or certified.




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          (p) Location of Offices. The principal place of business and chief executive office
of the Borrower and the office where the Borrower keeps all the Records are located at the address
of the Borrower referred to in Section 14.2 hereof (or at such other locations as to which
the notice and other requirements specified in Section 5.2(g) shall have been satisfied).




          (q) [Reserved.]




          (r) Tradenames; Place of Business; Correct Legal Name. (i) Except as described in
Schedule III, the Borrower has no trade names, fictitious names, assumed names or “doing
business as” names or other names under which it has done or is doing business; (ii) the principal
place of business, chief executive office and location of the Borrower (for purposes of the
applicable UCC) and the of the Borrower are located at the address of the Borrower set forth on the
signature pages hereto; and (iii) “CAC Warehouse Funding III, LLC” is the correct legal name of the
Borrower indicated on the public records of the Borrower’s jurisdiction of organization.




          (s) Contribution Agreement. The Contribution Agreement is the only agreement pursuant
to which the Borrower purchases Loans from the Originator.




          (t) Value Given. The Borrower shall have given reasonably equivalent value to the
Originator in consideration for the transfer to the Borrower of the Loans and Related Security
under the Contribution Agreement, no such transfer shall have been made for or on account of an
antecedent debt owed by the Originator to the Borrower, and no such transfer is or may be voidable
or subject to avoidance under any section of the Bankruptcy Code.




          (u) Accounting. The Borrower accounts for the transfers to it from the Originator of
Loans and Related Security under the Contribution Agreement as sales or contributions to capital of
such Loans and Related Security in its books, records and financial statements, in each case
consistent with the requirements set forth herein.




          (v) Special Purpose Entity. The Borrower is in compliance with Section 5.2(o)
hereof in all material respects.




          (w) Confirmation from the Originator. The Borrower has received in writing from the
Originator confirmation that, so long as the Borrower is not “insolvent” within the meaning of the
Bankruptcy Code, the Originator will not cause the Borrower to file a voluntary petition under the
Bankruptcy Code or any other bankruptcy or insolvency laws and, in any event, no such action shall
be taken other than in accordance with and as permitted by the Borrower’s organizational documents.
Each of the Borrower and the Originator is aware that in light of the circumstances described in
the preceding sentence and other relevant facts, the filing of a voluntary petition under the
Bankruptcy Code for the purpose of making any Loan or any other assets of the Borrower available to
satisfy claims of the creditors of the Originator would not result in making such assets available
to satisfy such creditors under the Bankruptcy Code.




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




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          (y) ERISA. The present value of all benefits vested under all “employee pension
benefit plans,” as such term is defined in Section 3 of ERISA, maintained by the Borrower, or in
which employees of the Borrower are entitled to participate, as from time to time in effect (herein
called the “Pension Plans”), does not exceed the value of the assets of the Pension Plan
allocable to such vested benefits (based on the value of such assets as of the last annual
violation date). No prohibited transactions, accumulated funding deficiencies, withdrawals or
reportable events have occurred with respect to any Pension Plans that, in the aggregate, could
subject the Borrower to any material tax, penalty or other liability. No notice of intent to
terminate a Pension Plan has been billed, nor has any Pension Plan been terminated under Section
4041(f) of ERISA, nor has the Pension Benefit Guaranty Corporation instituted proceedings to
terminate, or appoint a trustee to administer a Pension Plan and no event has occurred or condition
exists that might constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Pension Plan.




          (z) [Reserved.]




          (aa) Representations and Warranties in Contribution Agreement. The representations
and warranties made by the Originator to the Borrower in the Contribution Agreement are hereby
remade by the Borrower on each date to which they speak in the Contribution Agreement as if such
representations and warranties were set forth herein. For purposes of this Section
4.2(aa), such representations and warranties are incorporated herein by reference as if made by
the Borrower to the Deal Agent, the Successor Servicer, the Collateral Agent and to each of the
Secured Parties under the terms hereof mutatis mutandis.




          (bb) Amount of Loans and Contracts; Computer File. When new Pools or Purchased Loans
are pledged to the Collateral Agent, the related Funding Notice shall provide (A) the aggregate
Outstanding Balance of the Contracts to be pledged to the Collateral Agent on the related Funding
Date; (B) the Aggregate Outstanding Eligible Loan Balance; and (C) the Aggregate Outstanding
Eligible Loan Net Balance; each as of the applicable Cut-off Date and as reported in the Loan
Servicing System or as a product of the Loan Loss Reserve analysis. The computer file or
microfiche list delivered pursuant to Section 2.2(a)(iii) hereof is complete and accurately
reflects the information regarding the Loans, applicable Dealer Agreements and Contracts in all
material respects.




          (cc) Use of Proceeds. The proceeds of each Funding will be used by the Borrower
solely to purchase the Loans and related Collateral from the Originator pursuant to the
Contribution Agreement.




          (dd) Subsidiaries. The Borrower does not have any Subsidiaries.




          (ee) Capital Stock. The Borrower has neither sold nor pledged any of its equity
interests to any entity other than Credit Acceptance.




     The representations and warranties set forth in this Section 4.1 shall survive the
Borrower’s pledge of the Collateral to the Collateral Agent and the termination and rights and
obligations of the Servicer. Upon discovery by the Borrower, the Servicer (provided that, if SST
is Successor Servicer, SST shall only be obligated to inform the other parties to the Agreement




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of breaches detailed in Section 4.1 of which a Responsible Officer has actual
knowledge), Credit Acceptance or the Collateral Agent of a breach of any of the representations and
warranties set forth herein, the party discovering such breach shall give prompt written notice to
the other parties of such breach.




     Section 4.2. Representations and Warranties of the Borrower Relating to the Loans and the
Related Contracts.



          (a) Eligibility of Loans. The Borrower hereby represents and warrants to the Deal
Agent, the Collateral Agent, the Backup Servicer, any Successor Servicer, and the Secured Parties
as of the Closing Date, the Effective Date and each Funding Date (or on such dates as otherwise
provided herein) with respect to the Dealer Agreements, Loans, Contracts and Related Security
pledged to the Collateral Agent on such date that:





          (i) each Loan classified as an “Eligible Dealer Loan” (or included in any aggregation
of balances of “Eligible Dealer Loans”) or as an “Eligible Purchased Loan” (or included in
any aggregation of balances of “Eligible Purchased Loans”) by the Borrower or Credit
Acceptance in any document or report delivered hereunder satisfied the requirements
contained in the definition of Eligible Dealer Loan or Eligible Purchased Loan, as
applicable, on the date so delivered; each Contract classified as an “Eligible Dealer Loan
Contract” (or included in any aggregation of balances of “Eligible Dealer Loan Contracts”)
by the Borrower or Credit Acceptance in any document or report delivered hereunder satisfied
the requirements contained in the definition of Eligible Dealer Loan Contract on the date so
delivered;




          (ii) all information with respect to the Dealer Agreements, Purchase Agreements and the
Loans and the Contracts and the other Collateral provided to the Collateral Agent, any
Liquidity Agent or the Deal Agent by the Borrower or the Servicer was true and correct in
all material respects as of the date such information was provided to the Collateral Agent,
such Liquidity Agent or the Deal Agent, as applicable;




          (iii) each Loan and all other Collateral has been pledged to the Collateral Agent free
and clear of any Lien of any Person (other than, with respect to the Dealer Loan Contracts,
the second priority Lien of the related Dealer therein as set forth in the related Dealer
Agreement) and in compliance, in all material respects, with all Applicable Laws;




          (iv) with respect to each Dealer Agreement, Purchase Agreement, Loan, Contract and all
other Collateral, all consents, licenses, approvals or authorizations of or registrations or
declarations with any Governmental Authority required to be obtained, effected or given by
the Borrower, in connection with the pledge of such Dealer Agreement, Purchase Agreement,
Loan, Contract or other Collateral to the Collateral Agent have been duly obtained, effected
or given and are in full force and effect;




          (v) Schedules V and IX to this Agreement (and any addendums thereto) are and will be
accurate and complete listings of all Loans, Contracts and Dealer Agreements in all material
respects on the date each such Loan, Contract or Dealer



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Agreement was pledged to the
Collateral Agent hereunder, and the information contained therein is and will be true and
correct in all material respects as of such date;




          (vi) each Contract and Purchased Loan constitutes tangible, and not electronic, chattel
paper;




          (vii) with respect to the purchase by the Borrower of Loans and Related Security on
each Payment Date during the Revolving Period, on each such Payment Date, immediately after
giving effect thereto, the weighted average of the Final Scores of all Contracts that are or
remain transferred on such distribution Date is 665 or greater; and




          (viii) no selection procedure believed by the Borrower to be adverse to the interests
of the Secured Parties has been or will be used in selecting the Dealer Agreements, Loans or
Contracts.



          (b) Notice of Breach. The representations and warranties set forth in this
Section 4.2 shall survive the pledge of the Collateral to the Collateral Agent and the
termination of the rights and obligations of the Servicer. Upon discovery by the Borrower, Credit
Acceptance, the Servicer (provided that, if SST is Successor Servicer, SST shall only be obligated
to inform the other parties to the Agreement of breaches detailed in Section 4.2 of which a
Responsible Officer has actual knowledge) or the Collateral Agent of a breach of any of the
representations and warranties set forth in this Section 4.2, the party discovering such
breach shall give prompt written notice to the other parties of such breach.




     Section 4.3. Representations and Warranties of the Servicer. Credit Acceptance, as
Servicer, represents and warrants as follows on the Closing Date, the Effective Date and each day
thereafter until the Collection Date:



          (a) Organization and Good Standing. The Servicer has been duly organized and is
validly existing as a corporation in good standing under the laws of the State of Michigan, with
all requisite corporate power and authority to own or lease its properties and to conduct its
business as such business is presently conducted and to enter into and perform its obligations
pursuant to this Agreement and the other Transaction Documents to which it is a party.




          (b) Due Qualification. The Servicer is duly qualified to do business as a corporation
and is in good standing as a corporation, and has obtained all necessary licenses and approvals in
all jurisdictions in which the ownership or lease of its property and or the conduct of its
business requires such qualification, licenses or approvals.




          (c) Power and Authority; Due Authorization. The Servicer (i) has all necessary power,
authority and legal right to (A) execute and deliver this Agreement and the other Transaction
Documents to which it is a party, (B) carry out the terms of this Agreement and the other
Transaction Documents to which it is a party, and (ii) has duly authorized by all necessary
corporate action the execution, delivery and performance of this Agreement and the
other Transaction Documents to which it is a party. This Agreement and each other Transaction
Document to which it is a party have been duly executed and delivered by the Servicer.




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          (d) Binding Obligation. This Agreement and each other Transaction Document to which
the Servicer is a party constitutes a legal, valid and binding obligation of the Servicer, each
enforceable against the Servicer in accordance with its terms, subject to any defense, if any,
arising out of a breach or other action or inaction of a party thereto other than the Servicer or
any Affiliate of the Servicer.




          (e) No Violation. The consummation of the transactions contemplated by this Agreement
and the other Transaction Documents to which it is a party and the fulfillment of the terms hereof
and thereof will not (i) conflict with, result in any breach of any of the terms and provisions of,
or constitute (with or without notice or lapse of time or both) a default under, the Servicer’s
certificate of incorporation, bylaws or any Contractual Obligation of the Servicer, (ii) result in
the creation or imposition of any Lien upon any of the Servicer’s properties pursuant to the terms
of any such Contractual Obligation, or (iii) violate any Applicable Law.




          (f) No Proceedings. There is no litigation, proceeding or investigation pending
against the Servicer, before any Governmental Authority (i) asserting the invalidity of this
Agreement or any other Transaction Document to which the Servicer is a party, (ii) seeking to
prevent the consummation of any of the transactions contemplated by this Agreement or any other
Transaction Document to which the Servicer is a party or (iii) seeking any determination or ruling
that would reasonably be expected to have Material Adverse Effect and is reasonably expected to
occur.




          (g) All Consents Required. All approvals, authorizations, consents, orders or other
actions of any Person or of any Governmental Authority (if any) required for the due execution,
delivery and performance by the Servicer of this Agreement and any other Transaction Document to
which the Servicer is a party have been obtained except where the failure to so obtain is not
reasonably expected to result in a Material Adverse Effect.




          (h) Reports Accurate. All Monthly Reports and other written and electronic
information, exhibits, financial statements, documents, books, records or reports furnished by the
Servicer to the Deal Agent, the Backup Servicer, the Collateral Agent, any Liquidity Agent or a
Lender in connection with this Agreement are accurate, true, complete and correct in all material
respects as of the date delivered.




          (i) Servicer’s Performance. The Servicer has the knowledge, the experience and the
systems, financial and operational capacity available to timely perform each of its obligations
hereunder and under each Transaction Document to which it is a party.




          (j) Compliance With Credit Guidelines and Collection Guidelines. The initial Servicer
has, with respect to the Loans and Contracts, complied in all material respects with the Credit
Guidelines and the Collection Guidelines.




     Section 4.4. Representations and Warranties of the Backup Servicer. The Backup
Servicer represents and warrants as follows:



          (a) Organization and Good Standing. The Backup Servicer has been duly organized, and
is validly existing as a corporation and in good standing under the laws of Delaware, with all
requisite power and authority to own or lease its properties and to conduct its




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business as such
business is presently conducted and to enter into and perform its obligations pursuant to this
Agreement and each Transaction Document to which it is a party.




          (b) Binding Obligation. This Agreement and each other Transaction Document to which
it is a party constitutes a legal, valid and binding obligation of the Backup Servicer, each
enforceable against the Backup 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 equitable limitations on the availability of
specific remedies, regardless of whether such enforceability is considered in a proceeding in
equity or at law.




          (c) Backup Servicing Agreement. The Backup Servicer hereby remakes the representations
and warranties made by it under the Backup Servicing Agreement.




     Section 4.5. Breach of Representations and Warranties.



          (a) Payment in respect of an Ineligible Loan. If a Loan is an Ineligible Loan, no
later than the earlier of (i) knowledge by the Borrower of such Loan being an Ineligible Loan and
(ii) receipt by the Borrower from the Deal Agent, the Collateral Agent or the Servicer (provided
that, if SST is Successor Servicer, SST shall only be obligated to inform the other parties to the
Agreement of breaches detailed in Section 4.2 of which a Responsible Officer has actual
knowledge) of written notice thereof the Borrower shall make a payment to the Collection Account in
respect of each such Loan in an amount equal to the related Release Price. On and after the date
of such payment, the related Loan or Loans shall for all purposes of this Agreement be deemed to be
an Ineligible Loan or Ineligible Loans. The Borrower shall make a deposit to the Collection
Account (for allocation pursuant to Section 2.7) in immediately available funds an amount
(the “Release Price”) equal to the sum of (i): the product of the Net Loan Balance related
to such Loan as of the last day of the related Collection Period and the Net Advance Rate in effect
on the date of such payment; (ii) accrued and unpaid Carrying Costs, Breakage Costs, Increased
Costs, Indemnified Amounts and Additional Amounts related to such Loan through the date of such
deposit; (iii) any related Servicer Advances; and (iv) and all Hedge Costs due to the relevant
Hedge Counterparties for any termination in whole or in part of one or more transactions related to
the relevant Hedging Agreement, as required by the terms of any Hedging Agreement.




          (b) Retransfer of All of the Loans. In the event of a breach of any representation or
warranty set forth in Section 4.2 hereof which breach could reasonably be expected to have
a Material Adverse Effect, by notice then given in writing to the Borrower, the Deal Agent may
direct the Borrower to accept the release by the Collateral Agent of all of the Loans, in which
case the Borrower shall be obligated to accept the release of such Loans on a Payment Date
specified by the Deal Agent (such date, the “Release Date”); provided,
however, that no such release shall be given effect unless Borrower has complied with the
terms of any Hedging Agreement requiring that any derivative transaction related thereto be
terminated in whole or in part and the Borrower has paid all Hedge Costs due with respect to such
termination.
The Borrower shall deposit in the Collection Account on the Release Date an amount equal to:
(A) the Aggregate Unpaids minus (B) the amount, if any, available in the Collection Account and
Reserve Account on such Payment Date (the “Retransfer Amount”) for allocation and



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distribution in accordance with Section 2.7 in respect of such Aggregate Unpaids. On the
Release Date, provided that the full Retransfer Amount has been deposited into the Collection
Account, the Loans and Related Security related thereto shall be transferred to the Borrower; and
the Collateral Agent as agent for the Secured Parties shall, at the sole expense of Credit
Acceptance, execute and deliver such instruments of transfer, in each case without recourse,
representation or warranty, as shall be prepared and reasonably requested by Credit Acceptance on
behalf of the Borrower to vest in the Borrower, or its designee or assignee, all right, title and
interest of the Collateral Agent as agent for the Secured Parties in, to and under the Loans.




          (c) [Reserved.]




          (d) Remedy for Breach. The parties hereto agree that the sole remedy for the breach
by the Borrower of the representations and warranties set forth in Section 4.2 hereof with
respect to the eligibility of a Loan or Contract shall be set forth in this Section 4.5 and
Section 6.2(c)(ii).




          (e) Application. Amounts paid in accordance with Section 4.5(a) and
(b) shall be distributed on the next succeeding Payment Date in accordance with Section
2.7.




          (f) Notwithstanding anything herein to the contrary, during the Revolving Period, payments
required under Section 4.5(a) and (b) shall not be required if the Capital is equal
to or less than the Borrowing Base.




ARTICLE V

GENERAL COVENANTS




     Section 5.1. Affirmative Covenants of the Borrower. From the date hereof until the
Collection Date:



          (a) Compliance with Laws. The Borrower will comply in all material respects with all
Applicable Laws, including those with respect to the Loans and Dealer Agreements.




          (b) Preservation of Corporate Existence; Conduct of Business. The Borrower will
preserve and maintain its existence, rights, franchises and privileges in the jurisdiction of its
formation, and qualify and remain qualified in good standing as a foreign corporation in each
jurisdiction where the failure to preserve and maintain such existence, rights, franchises,
privileges and qualification has had, or could reasonably be expected to have, a Material Adverse
Effect. The Borrower will carry on and conduct its business in substantially the same manner and
in substantially the same fields of enterprise as it is presently conducted and do all things
necessary to remain duly incorporated, validly existing and in good standing as a domestic
corporation in its jurisdiction of incorporation and maintain all requisite authority to conduct
its business in each jurisdiction in which its business is conducted.




          (c) Performance and Compliance with Loans, Dealer Agreements and Contracts. The
Borrower will, at its expense, timely and fully perform and comply (or cause the
Originator to perform and comply pursuant to the Contribution Agreement) with all provisions,
covenants and other promises required to be observed by it under the Loans, Dealer Agreements and
Contracts in and all other agreements related thereto in all material respects.




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          (d) Keeping of Records and Books of Account. The Borrower will maintain and implement
administrative and operating procedures (including, without limitation, an ability to recreate
records evidencing Loans in the event of the destruction of the originals thereof), and keep and
maintain all documents, books, records and other information reasonably necessary or advisable for
the collection of all Loans.




          (e) Originator Assets. With respect to each Loan acquired by the Borrower, the
Borrower will: (i) acquire such Loan pursuant to and in accordance with the terms of the
Contribution Agreement; (ii) take all action necessary to perfect, protect and more fully evidence
the Borrower’s ownership of such Loan, including, without limitation, (A) filing and maintaining,
effective financing statements (Form UCC-1) against the Originator in all necessary or appropriate
filing offices, and filing continuation statements, amendments or assignments with respect thereto
in such filing offices, and (B) executing or causing to be executed such other instruments or
notices as may be necessary or appropriate; and (iii) take all additional action that the Deal
Agent or the Collateral Agent may reasonably request to perfect, protect and more fully evidence
the respective interests of the parties to this Agreement in the Collateral.




          (f) Delivery of Collections. Subject to Section 2.9(d) hereof, the Borrower
will deposit to the Collection Account promptly (but in no event later than two (2) Business Days
after receipt) all Collections received by Borrower in respect of the Loans or the Contracts.




          (g) Separate Corporate Existence. The Borrower shall be in compliance with the
requirements set forth in Section 5.2(o).




          (h) Credit Guidelines and Collection Guidelines. The Borrower will comply in all
material respects with the Credit Guidelines and the Collection Guidelines with respect to each
Loan and Contract.




          (i) Taxes. The Borrower will file and pay any and all Taxes.




          (j) Use of Proceeds. The Borrower will use the proceeds of the Funding only to
acquire Loans pursuant to the Contribution Agreement or to make distributions to Credit Acceptance.




          (k) Reporting. The Borrower will maintain for itself a system of accounting
established and administered in accordance with GAAP and furnish or cause to be furnished to the
Deal Agent, each Liquidity Agent and the Lenders the following information:





          (i) [Reserved];




          (ii) Annual Reporting. Within 120 days after the close of the Borrower’s and
Credit Acceptance’s fiscal years, (A) audited financial statements for Credit Acceptance and
all of its Subsidiaries, prepared in accordance with GAAP on a consolidated basis and (B)
unaudited financial statements for each of (x) Credit
Acceptance and all of its Subsidiaries relating to its business segments, and (y) the
Borrower, including, in each case, balance sheets as of the end of such period, and related
statements of operations, accompanied by an unqualified audit report certified by
independent certified public accountants, acceptable to the Deal Agent, prepared in



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accordance with generally accepted auditing principles and any management letter prepared by
said accountants;




          (iii) Quarterly Reporting. Within sixty (60) days after the close of the first
three quarterly periods of each of the Borrower’s and Credit Acceptance’s fiscal years, for
(x) the Borrower and (y) for Credit Acceptance and its Subsidiaries, in each case,
consolidated unaudited balance sheets as at the close of each such period, consolidated
related statements of operations, and, for Credit Acceptance, consolidated related
statements of shareholder’s equity and cash flows, for the period from the beginning of such
fiscal year to the end of such quarter, all certified by its chief financial officer or
treasurer as true, accurate and complete in all material respects;




          (iv) Compliance Certificate. Together with the financial statements required
hereunder, a compliance certificate signed by the Borrower’s or Credit Acceptance’s, as
applicable, chief financial officer or treasurer stating that (x) the attached financial
statements have been prepared in accordance with GAAP and accurately reflect the financial
condition of the Borrower or Credit Acceptance as applicable and (y) to the best of such
Person’s knowledge, no Servicer Termination Event, Potential Servicer Termination Event,
Termination Event or Unmatured Termination Event exists, or if any Servicer Termination
Event, Potential Servicer Termination Event, Termination Event or Unmatured Termination
Event exists, stating the nature and status thereof;




          (v) Shareholders Statements and Reports. Promptly upon the furnishing thereof
to the shareholders of the Borrower or Credit Acceptance, copies of all financial
statements, reports and proxy statements so furnished, to the extent such information has
not been provided pursuant to another clause of this Section 5.1(k);




          (vi) S.E.C. Filings. Promptly upon the filing thereof, copies of all
registration statements and annual, quarterly, monthly or other regular reports which Credit
Acceptance or any subsidiary files with the Securities and Exchange Commission;




          (vii) Notice of Servicer Termination Events, Potential Servicer Termination Events,
Termination Events or Unmatured Termination Events. As soon as possible and in any
event within two (2) days after the occurrence of each Servicer Termination Event, Potential
Servicer Termination Event, Termination Event or each Unmatured Termination Event, a
statement of the chief financial officer or treasurer of the Borrower setting forth details
of such Servicer Termination Event, Potential Servicer Termination Event, Termination Event
or Unmatured Termination Event and the action which the Borrower proposes to take with
respect thereto;




          (viii) Change in Credit Guidelines or Collection Guidelines. Prior to the date
of the effectiveness of any material change in or amendment to the Credit Guidelines
or Collection Guidelines (which shall be in accordance with the terms of this
Agreement), a notice describing such change or amendment.



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          (ix) Credit Guidelines and Collection Guidelines. On the Closing Date, a
complete copy of the Credit Guidelines and Collection Guidelines then in effect;




          (x) ERISA. Promptly after the filing or receiving thereof, copies of all
reports and notices with respect to any Reportable Event (as defined in Article IV of ERISA)
which the Borrower, Credit Acceptance or any ERISA Affiliate of the Borrower or Credit
Acceptance files under ERISA with the Internal Revenue Service, the Pension Benefit Guaranty
Corporation or the U.S. Department of Labor or which the Borrower, Credit Acceptance or any
ERISA Affiliates of the Borrower or Credit Acceptance receives from the Internal Revenue
Service, the Pension Benefit Guaranty Corporation or the U.S. Department of Labor;




          (xi) Proceedings. As soon as possible and in any event within two (2) Business
Days after any executive officer of the Borrower receives notice or obtains knowledge
thereof, any settlement of, material judgment (including a material judgment with respect to
the liability phase of a bifurcated trial) in or commencement of any labor controversy
litigation, action, suit or proceeding (in each case, of a material nature), before any
court or governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, affecting the Borrower or any of its Affiliates;




          (xii) Notice of Material Events. Promptly upon becoming aware thereof, notice
of any other event or circumstances that, in the reasonable judgment of the Borrower, is
likely to have a Material Adverse Effect; and




          (xiii) Other Information. Such other information, documents, records or
reports (including non-financial information) as the Deal Agent, each Liquidity Agent or the
Collateral Agent may from time to time reasonably request with respect to Credit Acceptance,
the Borrower, the Servicer or any Subsidiary of any of the foregoing.



          (l) Compliance with Applicable Law. The Borrower shall duly satisfy in all material
respects its obligations under or in connection with any Loan and Contract, will maintain in effect
all material qualifications required under all Applicable Law, and will comply in all material
respects with all other Applicable Law in connection with each Loan and Contract the failure to
comply with which would have a material adverse effect on the interests of the Secured Parties in
the Collateral.




          (m) Furnishing of Information and Inspection of Records. The Borrower will furnish to
the Deal Agent, each Liquidity Agent, the Backup Servicer and the Collateral Agent, from time to
time, such information with respect to the Loans and Contracts as may be reasonably requested,
including, without limitation, a computer file, microfiche list or other list identifying each Loan
and Contract by pool number, account number and dealer number and by the Outstanding Balance and
identifying the Obligor on such Loan or Contract. The Borrower will, at any time and from time to
time during regular business hours, upon reasonable notice, permit the Deal Agent, each Liquidity
Agent, the Backup Servicer and the Collateral Agent, or
its agents or representatives, to examine and make copies of and abstracts from all Records,
to visit the offices and properties of the Borrower for the purpose of examining such Records, and
to discuss matters relating to the Loans or Contracts or the Borrower’s performance hereunder




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and
under the other Transaction Documents with any of the officers, directors, employees or independent
public accountants of the Borrower having knowledge of such matters; provided,
however, that the Deal Agent, each Liquidity Agent and the Collateral Agent each
acknowledges that in exercising the rights and privileges conferred in this Section 5.1(m)
it or its agents and representatives may, from time to time, obtain knowledge of information,
practices, books, correspondence and records of a confidential nature and in which the Borrower has
a proprietary interest. The Deal Agent, each Liquidity Agent and the Collateral Agent each agrees
that all such information, practices, books, correspondence and records are to be regarded as
confidential information and agrees that it shall retain in strict confidence and shall use its
reasonable efforts to ensure that its agents and representatives retain in strict confidence, and
will not disclose without the prior written consent of the Borrower, any such information,
practices, books, correspondence and records furnished to them except that it may disclose such
information: (i) to its officers, directors, employees, agents, counsel, accountants, auditors,
affiliates, advisors or representatives (provided that such Persons are informed of the
confidential nature of such information); (ii) to the extent such information has become available
to the public other than as a result of a disclosure by or through the Deal Agent, any Liquidity
Agent, the Collateral Agent or its officers, directors, employees, agents, counsel, accountants,
auditors, affiliates, advisors or representatives; (iii) to the extent such information was
available to the Deal Agent, any Liquidity Agent or the Collateral Agent on a non-confidential
basis prior to its disclosure hereunder; (iv) to the extent the Deal Agent, any Liquidity Agent or
the Collateral Agent should be (A) required under the Transaction Documents or in connection with
any legal or regulatory proceeding or (B) requested by any bank regulatory authority to disclose
such information; (v) to the Liquidity Agent, any Liquidity Bank, or any other Rating Agency or any
other person providing liquidity or credit enhancement to or rating the Commercial Paper Notes of,
a CP Entity (or its related source of funds); or (vi) to any Lender or prospective assignee or
Investor; provided, that the relevant Liquidity Agent shall notify such assignee of the
confidentiality provisions of this Section 5.1(m).




          (n) Keeping of Records and Books of Account. The Borrower will maintain and implement
or cause to be maintained and implemented administrative and operating procedures (including,
without limitation, an ability to recreate records evidencing the Loans and Contracts in the event
of the destruction of the originals thereof), and keep and maintain, or obtain, as and when
required, all documents, books, records and other information reasonably necessary or advisable for
the collection of all amounts due under the Loans and Contracts (including, without limitation,
records adequate to permit adjustments to amounts due under each existing Loan and Contract). The
Borrower will give the Deal Agent and each Liquidity Agent notice of any material change in the
administrative and operating procedures of the Borrower referred to in the previous sentence.




          (o) Notice of Liens. The Borrower will advise the Deal Agent, each Liquidity Agent
and the Collateral Agent promptly, in reasonable detail of: (i) any Lien asserted by a Person
against any of the Loans or Contracts or other Collateral; (ii) any breach by the Borrower, the
Originator or the Servicer of any of its representations, warranties and covenants contained
herein or in any other Transaction Document; and (iii) of the occurrence of any other event
which has had or is reasonably expected to have a Material Adverse Effect.




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          (p) Protection of Interest in Collateral. The Borrower shall file such continuation
statements and any other documents reasonably requested by the Collateral Agent, the Deal Agent or
any Lender or which may be required by law to fully preserve and protect the interest of the
Collateral Agent and the Secured Parties in and to the Loans, the Contracts and the other
Collateral.




          (q) Contribution Agreement. The Borrower will at all times enforce the covenants and
agreements of Credit Acceptance in the Contribution Agreement (including, without limitation, the
rights and remedies against the Dealers).




          (r) Notice of Delegation of Servicer’s Duties. The Borrower promptly shall notify the
Collateral Agent and the Deal Agent of any delegation by the Servicer of any of the Servicer’s
duties under this Agreement which is not in the ordinary course of business of the Servicer.




          (s) Organizational Documents. The Borrower shall only amend, alter, change or repeal
its Certificate of Incorporation with the prior written consent of the Deal Agent.




     Section 5.2. Negative Covenants of the Borrower. From the date hereof until the
Collection Date:



          (a) Other Business. Borrower will not: (i) engage in any business other than the
transactions contemplated by the Transaction Documents; (ii) incur any indebtedness, obligation,
liability or contingent obligation of any kind other than pursuant to the Transaction Documents; or
(iii) form any Subsidiary or make any Investments in any other Person.




          (b) Loans Not to be Evidenced by Instruments. The Borrower will take no action to
cause any Loan that is not, as of the Closing Date, evidenced by an Instrument, to be so evidenced
except in connection with the enforcement or collection of such Loan.




          (c) Security Interests. The Borrower will not sell, pledge, assign or transfer to any
other Person, or grant, create, incur, assume or suffer to exist any Lien (other than the Lien
described in Section 4.2(a)(iii)) on any Loan, Contract, Related Security or any other
Collateral, whether now existing or hereafter transferred hereunder, or any interest therein, and
the Borrower will not sell, pledge, assign or suffer to exist any Lien on its interest, if any,
hereunder. The Borrower will promptly notify the Deal Agent of the existence of any Lien on any
Loan, Contract, Related Security or any other Collateral and the Borrower shall defend the right,
title and interest of the Deal Agent and Collateral Agent as agent for the Secured Parties in, to
and under the Loans, Contracts, Related Security and other Collateral, against all claims of third
parties.




          (d) Mergers, Acquisitions, Sales, etc. The Borrower will not be a party to any merger
or consolidation, or purchase or otherwise acquire 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, convey or lease all or any substantial part of its assets, or sell or assign with or
without
recourse any Loan, Contracts, Related Security or other Collateral or any interest therein
(other than pursuant to and in accordance with the Transaction Documents).




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          (e) [Reserved.]




          (f) Distributions. The Borrower shall not directly or indirectly, make any
distribution (whether in cash or other property) with respect to the profits, assets or capital of
the Borrower or any Person’s interest therein, except that so long as no Termination Event or
Unmatured Termination Event has occurred and is continuing or would result therefrom, the Borrower
may declare and make distributions to its members.




          (g) Change of Name or Location; Change of Location of Records Files. The Borrower
shall not (x) change its name or state of organization, (y) move the location of its principal
place of business or chief executive office or the offices where it keeps the Records from the
location referred to in Section 14.2 or (z) move, or consent to the Custodian or Servicer
moving, the Records/Contract Files from the location thereof on the Closing Date, unless the
Borrower has given at least thirty (30) days’ written notice to the Deal Agent, the Collateral
Agent and RFC and has taken all actions required under the UCC of each relevant jurisdiction in
order to continue the first priority perfected security interest of the Collateral Agent, as agent
for the Secured Parties, in the Collateral.




          (h) Accounting of the Contribution Agreement. The Borrower will not account for or
treat (whether in financial statements or otherwise) the transaction contemplated by the
Contribution Agreement in any manner other than as a contribution, or absolute assignment, of the
Loans and related assets by the Originator to the Borrower.




          (i) ERISA Matters. The Borrower will not: (i) engage or permit any ERISA Affiliate
to engage in any prohibited transaction for which an exemption is not available or has not
previously been obtained from the United States Department of Labor; (ii) permit to exist any
accumulated funding deficiency, as defined in Section 302(a) of ERISA and Section 412(a) of the
Code, or funding deficiency with respect to any Benefit Plan other than a Multiemployer Plan; (iii)
fail to make any payments to a Multiemployer Plan that the Borrower or any ERISA Affiliate may be
required to make under the agreement relating to such Multiemployer Plan or any law pertaining
thereto; (iv) terminate any Benefit Plan so as to result in any liability; or (v) permit to exist
any occurrence of any reportable event described in Title IV of ERISA.




          (j) Certificate of Incorporation; Contribution Agreement. The Borrower will not
(without the prior written consent of the Deal Agent) amend, modify, waive or terminate any
provision of its Certificate of Formation, the Contribution Agreement or any other Transaction
Document. The Borrower will not take any action under the Contribution Agreement which would have
a Material Adverse Effect.




          (k) Changes in Payment Instructions to Obligors. The Borrower will not make any
change, or permit Servicer to make any change, in its instructions to Obligors regarding where
payments in respect of Contracts are to be made to Borrower or Servicer, unless the Deal Agent
shall have consented to such change in writing and has received duly executed copies of all
documentation related thereto.




          (l) Extension or Amendment. The Borrower will not, except as otherwise permitted
hereunder or by law, extend, amend or otherwise modify, or permit the Servicer to




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extend, amend or
otherwise modify, the terms of any Dealer Agreement, Loan or Contract; provided,
however, the Dealer Agreements may be amended in connection with the closing of or opening
of a pool.




          (m) Credit Guidelines or Collection Guidelines. The Borrower will not permit the
amendment, modification, restatement or replacement, in whole or in part, of the Credit Guidelines
or Collection Guidelines, which change would materially impair the collectibility of any Loan or
Contract or otherwise adversely affect the interests or the remedies of the Deal Agent, Collateral
Agent or the Secured Parties under this Agreement or any other Transaction Document, without the
prior written consent of the Deal Agent.




          (n) No Assignments. The Borrower will not assign or delegate, or grant any interest
in, or permit any Lien to exist upon, any of its rights, obligations or duties under this Agreement
or any other Transaction Document without the prior written consent of the Deal Agent and the
Liquidity Agents for each of the Purchaser Groups.




          (o) Special Purpose Entity. The Borrower has not and shall not:





          (i) engage in any business or activity other than the purchase and receipt of Loans and
related assets from the Originator under the Contribution Agreement, the pledge of Loans and
related assets under the Transaction Documents and such other activities as are incidental
thereto;




          (ii) acquire or own any material assets other than (A) the Loans and related assets
from the Originator under the Contribution Agreement and (B) incidental property as may be
necessary for the operation of the Borrower;




          (iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in
whole or in part, transfer or otherwise dispose of all or substantially all of its assets or
change its legal structure, without in each case first obtaining the Deal Agent’s consent;




          (iv) fail to preserve its existence as an entity duly organized, validly existing and
in good standing under the laws of the jurisdiction of its organization or formation, or
without the prior written consent of the Deal Agent, amend, modify, terminate, fail to
comply with the provisions of its Certificate of Incorporation, or fail to observe corporate
formalities;




          (v) own any subsidiary or make any investment in any Person without the consent of the
Deal Agent;




          (vi) commingle its assets or funds with the assets or funds of any of its Affiliates,
or of any other Person, except for (A) Dealer Collections, (B) erroneous deposits or (C)
prior to the identification and separation of such funds or assets by the Servicer in
accordance with the Servicer’s normal and customary business practices;




          (vii) incur any debt, secured or unsecured, direct or contingent (including
guaranteeing any obligation), other than indebtedness to the Lenders



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hereunder or in
conjunction with a repayment of Aggregate Unpaids owed to the Lenders except for trade
payables in the ordinary course of its business and in an amount not to exceed $12,300 at
any one time outstanding, provided that such debt is not evidenced by a note and is paid
when due;




          (viii) become insolvent or fail to pay its debts and liabilities from its assets as the
same shall become due;




          (ix) fail to maintain its records, books of account and bank accounts separate and
apart from those of its principal and Affiliates, and any other Person;




          (x) enter into any contract or agreement with any of its principals or Affiliates or
any other Person, except upon terms and conditions that are commercially reasonable and
intrinsically fair and substantially similar to those that would be available on an
arms-length basis with third parties other than any principal or Affiliates;




          (xi) seek its dissolution or winding up in whole or in part;




          (xii) fail to correct any known misunderstandings regarding the separate identity of
Borrower or Affiliate thereof or any other Person;




          (xiii) guarantee, become obligated for, or hold itself out to be responsible for the
debt of another Person;




          (xiv) make any loan or advances to any third party, including Affiliate, or hold
evidence of indebtedness issued by any other Person (other than cash and investment-grade
securities);




          (xv) fail either to hold itself out to the public as a legal entity separate and
distinct from any other Person or to conduct its business solely in its own name in order
not (A) to mislead others as to the identity with which such other party is transacting
business, or (B) to suggest that it is responsible for the debts of any third party
(including any of its Affiliates);




          (xvi) fail to maintain adequate capital for the normal obligations reasonably
foreseeable in a business of its size and character and in light of its contemplated
business operations;




          (xvii) file or consent to the filing or any petition, either voluntary or involuntary,
to take advantage of any applicable insolvency, bankruptcy, liquidation or reorganization
statute, or make an assignment for the benefit of creditors;




          (xviii) share any common logo with or hold itself out as or be considered as a
department or division of (A) any of its Affiliates or (B) any other Person;




          (xix) permit any transfer (whether in any one or more transactions) of any direct or
indirect ownership interest in the Borrower;



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          (xx) fail to maintain separate financial statements, showing its assets and liabilities
separate and apart from those of any other Person, or have its assets listed on the
financial statement of any other Person;




          (xxi) fail to pay its own liabilities and expenses only out of its own funds;




          (xxii) fail to pay the salaries of its own employees in light of its contemplated
business operations;




          (xxiii) acquire the obligations or securities of its Affiliates or stockholders;




          (xxiv) fail to allocate fairly and reasonably any overhead expenses that are shared
with an Affiliate, including paying for office space and services performed by any employee
of an Affiliate;




          (xxv) to the extent it has invoices or checks, fail to use separate invoices or checks
bearing its own name;




          (xxvi) pledge its assets for the benefit of any other Person, other than with respect
to payment of the indebtedness to the Lenders hereunder;




          (xxvii) fail at any time to have at least two (2) independent directors (each, an
“Independent Director”) on its board of directors that is not and has not been for
at least five (5) years a director, officer, employee, trade creditor or shareholder (or
spouse, parent, sibling or child of the foregoing) of (A) the Servicer, (B) the Borrower, or
(C) any Affiliate of the Servicer or Borrower; provided, however, such
Independent Director may be an independent director or manager of another special purpose
entity affiliated with the Servicer;




          (xxviii) fail to provide that the unanimous consent of all directors (including the
consent of the Independent Directors) is required for the Borrower to (A) dissolve or
liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or
insolvent, (B) institute or consent to the institution of bankruptcy or insolvency
proceedings against it, (C) file a petition seeking or consent to reorganization or relief
under any applicable federal or state law relating to bankruptcy or insolvency, (D) seek or
consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator,
custodian or any similar official for the Borrower, (E) make any assignment for the benefit
of the Borrower’s creditors, (F) admit in writing its inability to pay its debts generally
as they become due, or (G) take any action in furtherance of any of the foregoing; and




          (xxix) take or refrain from taking, as applicable, each of the activities specified in
the non-consolidation opinion of Dykema Gossett, delivered on the Closing Date, upon which
the conclusions expressed therein are based.



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     Section 5.3. Covenant of the Borrower Relating to the Hedging Agreement. At all times
during, on and after the Initial Funding until the Collection Date, a Hedging Agreement shall be in
place.



     Section 5.4. Affirmative Covenants of the Servicer. From the date hereof until the
Collection Date:



          (a) Compliance with Law. The Servicer will comply in all material respects with all
Applicable Laws, including those with respect to the Contracts, the Loans and the Dealer Agreements
or any part thereof.




          (b) Preservation of Existence. The Servicer will preserve and maintain its existence,
rights, franchises and privileges in the jurisdiction of its formation, and qualify and remain
qualified in good standing as a foreign corporation in each jurisdiction where the failure to
preserve and maintain such existence, rights, franchises, privileges and qualification has had, or
could reasonably be expected to have, a Material Adverse Effect.




          (c) Obligations and Compliance with Loans and Contracts. Credit Acceptance will duly
fulfill and comply with all obligations on the part of the Borrower to be fulfilled or complied
with under or in connection with each Loan and each Contract and will do nothing to impair the
rights of the Collateral Agent as agent for the Secured Parties or of the Secured Parties in, to
and under the Collateral.




          (d) Keeping of Records and Books of Account. The Servicer will maintain and implement
administrative and operating procedures (including without limitation, an ability to recreate
records evidencing the Loans and Contracts in the event of the destruction of the originals
thereof), and keep and maintain all documents, books, records and other information reasonably
necessary or advisable for the collection of all Loans.




          (e) Preservation of Security Interest. Credit Acceptance will file such financing and
continuation statements and any other documents that may be required by any law or regulation of
any Governmental Authority to preserve and protect fully the security interest of the Collateral
Agent as agent for the Secured Parties in, to and under the Collateral. In its capacity as
Custodian, it will maintain possession of the Contract Files and Records, as Custodian for the
Secured Parties, as set forth in Section 6.2(c).




          (f) Credit Guidelines and Collection Guidelines. (i) Credit Acceptance will (a)
comply in all material respects with the Credit Guidelines and Collection Guidelines in regard to
each Loan and Contract, and (b) furnish to the Deal Agent quarterly, prompt notice of any material
change in the Credit Guidelines and Collection Guidelines and will deliver a copy of such changes
to the Deal Agent and each Liquidity Agent, quarterly.





          (ii) Credit Acceptance will not agree to or otherwise permit to occur any material
change in the Credit Guidelines and Collection Guidelines, which change
would impair the collectibility of any Loan or Contract or otherwise adversely affect
the interests or remedies of the Deal Agent, the Collateral Agent or the Secured Parties
under this Agreement or any other Transaction Document, without the prior written consent of
the Deal Agent.



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          (g) Amortization Events, Servicer Termination Events and Termination Events. The
Servicer will furnish to the Deal Agent and each Liquidity Agent, as soon as possible and in any
event within two (2) Business Days after the occurrence of each Amortization Event, each
Termination Event, each Unmatured Termination Event, each Servicer Termination Event and Potential
Servicer Termination Event, a written statement of the chief financial officer or treasurer (or if
the Backup Servicer has become the Servicer, only to the extent a Responsible Officer has actual
knowledge of such event) of the Servicer setting forth the details of such event and the action
that the Servicer purposes to take with respect thereto.




          (h) Other. The Servicer will furnish to the Deal Agent, any Liquidity Agent or the
Collateral Agent, as applicable, promptly, from time to time, such other information, documents,
records or reports respecting the Collateral or the condition or operations, financial or
otherwise, of Borrower or the Servicer as the Deal Agent, any Liquidity Agent or the Collateral
Agent may from time to time reasonably request in connection with the interests of the Collateral
Agent or the Secured Parties under or as contemplated by this Agreement and the other Transaction
Documents.




          (i) Losses, Etc. In any suit, proceeding or action brought by the Deal Agent, the
Collateral Agent or any Secured Party for any sum owing thereto, the Servicer shall save, indemnify
and keep the Deal Agent, the Collateral Agent and the Secured Parties harmless from and against all
expense, loss or damage suffered by reason of any defense, setoff, counterclaim, recoupment or
reduction of liability whatsoever of the Obligor under a Loan or Contract, arising out of a breach
by Credit Acceptance of any obligation under the related Loan or Contract or arising out of any
other agreement, indebtedness or liability at any time owing to or in favor of such Obligor or its
successor from Credit Acceptance, and all such obligations of Credit Acceptance shall be and remain
enforceable against and only against Credit Acceptance and shall not be enforceable against the
Deal Agent, the Collateral Agent or any Secured Party.




          (j) Notice of Liens Credit Acceptance shall advise the Collateral Agent, each
Liquidity Agent, the Deal Agent and RFC promptly, in reasonable detail of: (i) any Lien asserted
or claim made against any portion of the Collateral; (ii) the occurrence of any breach by Credit
Acceptance of any of its representations, warranties and covenants contained herein or in any other
Transaction Document; and (iii) the occurrence of any other event which has had or could be
reasonably expected to have a Material Adverse Effect.




          (k) Realization on Loans or Contracts. In the event that the Servicer realizes upon
any Loan or Contract, the methods utilized by the Servicer to realize upon such Loan or Contract or
otherwise enforce any provisions of such Loan or Contract will not subject the Servicer, the
Borrower, any Secured Party, the Deal Agent or the Collateral Agent to liability under any federal,
state or local law, and that such enforcement by the Servicer will be conducted in accordance with
the provisions of the Credit Guidelines (not in the case of SST if SST is Successor Servicer), the
Collection Guidelines, Applicable Law and, in the case of Credit
Acceptance, this Agreement, and in the case of the Backup Servicer if it has become the
Servicer, the Backup Servicing Agreement.




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          (l) Backup Servicing Agreement. The Servicer shall provide the Backup Servicer with
all information, data and reports as required by the terms of the Backup Servicing Agreement.




          (m) Change in Accounting Policies or Debt Rating. The Servicer shall notify the
Collateral Agent of any material change in or amendment to the Servicer’s accounting policies
within ten (10) days after the date such change or amendment has been made. Within two (2) days
after the date of any change in the Borrower’s or Credit Acceptance’s public or private debt
ratings, if any, a written certification of the Borrower’s or Credit Acceptance’s public and
private debt ratings after giving effect to any such change;




          (n) Monthly Reports. Not later than the Determination Date preceding each Payment
Date, the Servicer will furnish to the Deal Agent, each Liquidity Agent, the Backup Servicer and
RFC a Monthly Report relating to the immediately preceding Collection Period




     Section 5.5. Negative Covenants of the Servicer. From the date hereof until the
Collection Date.



          (a) Mergers, Acquisition, Sales, etc. Credit Acceptance will not consolidate with or
merge into any other Person or convey or transfer its properties and assets substantially as an
entirety to any Person, unless Credit Acceptance is the surviving entity and unless:





          (i) Either (A) each Person merged into Credit Acceptance was a wholly-owned subsidiary
of Credit Acceptance at all times after the date hereof and prior to the merger, or (B)
Credit Acceptance has delivered to the Deal Agent and the Backup Servicer an Officer’s
Certificate and an Opinion of Counsel each stating that any consolidation, merger,
conveyance or transfer and such supplemental agreement comply with this Section 5.5
and that all conditions precedent herein provided for relating to such transaction have been
complied with and, in the case of the Opinion of Counsel, that such supplemental agreement
is legal, valid and binding with respect to Credit Acceptance and such other matters as the
Deal Agent may reasonably request;




          (ii) Credit Acceptance shall have delivered notice of such consolidation, merger,
conveyance or transfer to the Deal Agent;




          (iii) after giving effect thereto, no Termination Event, Unmatured Termination Event or
Servicer Termination Event or event that with notice or lapse of time, or both, would
constitute a Servicer Termination Event shall have occurred.



          (b) Change of Name or Location; Change of Location of Records. Credit Acceptance
shall not (x) change its name or its state of organization, (y) move the location of its principal
place of business or chief executive office or the offices where it keeps records concerning the
Loans from the location referred to in Section 14.2 or (z) move, or consent to the
Custodian moving, the Records from the location thereof on the Closing Date, unless Credit
Acceptance has given at least thirty (30) days’ written notice to the Deal Agent and RFC and has
taken all actions required under the UCC of each relevant jurisdiction in order to continue
the first priority perfected security interest of the Collateral Agent as agent for the Secured
Parties in the Collateral.




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          (c) Change in Payment Instructions to Obligors. The Servicer will not make any change
in its instructions to Obligors regarding where payments in respect of Contracts are to be made,
unless the Deal Agent has consented to such change and has received duly executed documentation
related thereto.




          (d) [Reserved].




          (e) No Instruments. The Servicer shall take no action to cause any Loan to be
evidenced by any instrument (as defined in the UCC as in effect in the Relevant UCC).




          (f) No Liens. The Servicer shall not sell, pledge, assign or transfer to any other
Person, or grant, create, incur, assume or suffer to exist any Lien (other than the Lien described
in Section 4.2(a)(iii)) on the Collateral or any interest therein; the Servicer will notify
the Collateral Agent and the Deal Agent of the existence of any Lien on any portion of the
Collateral immediately upon discovery thereof. Credit Acceptance shall defend the right, title and
interest of the Collateral Agent on behalf of the Secured Parties in, to and under the Collateral
against all claims of third parties claiming through or under Credit Acceptance.




          (g) Information. The Servicer shall, within two (2) Business Days of its receipt
thereof, respond to reasonable written directions or written requests for information that the
Backup Servicer, the Borrower, the Deal Agent, any Liquidity Agent or the Collateral Agent might
have with respect to the administration of the Loans.




          (h) Consent. The Servicer will promptly advise the Borrower, the Backup Servicer, the
Deal Agent and the Collateral Agent of any inquiry received from an Obligor which requires the
consent of the Borrower, the Deal Agent or the Collateral Agent.




          (i) Credit Guidelines and Collection Guidelines. The Servicer will not amend, modify,
restate or replace in any material way the Credit Guidelines (not in the case of SST if SST is
Successor Servicer) or the Collection Guidelines, which change would impair the collectibility of
any Loan or Contract or otherwise adversely affect the interests or the remedies of the Deal Agent,
Collateral Agent or the Secured Parties under this Agreement or any other Transaction Document,
without the prior written consent of the Deal Agent and the Liquidity Agent for each Purchaser
Group.




     Section 5.6. Negative Covenants of the Backup Servicer. From the date hereof until
the Collection Date.



          (a) No Changes in Backup Servicer Fee. The Backup Servicer will not make any changes
to the Backup Servicer Fee without the prior written approval of the Deal Agent.




ARTICLE VI

ADMINISTRATION AND SERVICING OF CONTRACTS




     Section 6.1. Servicing.



          (a) The Borrower, the Deal Agent and the Collateral Agent hereby revocably appoint Credit
Acceptance as servicer hereunder and Credit Acceptance hereby accepts such




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appointment and agrees
to manage, collect and administer each of the Loans and Contracts as Servicer. In the event of a
Servicer Termination Event, the Deal Agent shall have the right to terminate Credit Acceptance as
servicer hereunder. Upon termination of Credit Acceptance as servicer of the Loans pursuant to
Section 6.11 hereof, the Deal Agent shall have the right to appoint a Successor Servicer
and enter into a servicing agreement with such Successor Servicer at such time and exercise all of
its rights under Section 6.3 hereof. Such servicing agreement shall specify the duties and
obligations of such Successor Servicer, and all references herein to the Servicer shall be deemed
to refer to such Successor Servicer. Notwithstanding the above, the Deal Agent may appoint any
established financial institution having a net worth of not less than $50,000,000 and whose regular
business includes the servicing of automobile installment sales contracts as the Successor Servicer
hereunder.




          (b) The Borrower shall cause the Servicer to deposit all Collections to the Collection Account
no later than two Business Days after receipt (if SST is Successor Servicer, within one (1)
Business Day with respect to cleared funds, and in all other cases within three (3) Business Days
of receipt). The Servicer agrees to deposit all Collections to the Collection Account no later
than two (2) Business Days after receipt (if SST is Successor Servicer, within one (1) Business Day
with respect to cleared funds, and in all other cases within three (3) Business Days of receipt).




          (c) On or before 120 days after the end of each fiscal year of Credit Acceptance, beginning
with the fiscal year ending December 31, 2008, Credit Acceptance shall cause a firm of nationally
recognized independent public accountants acceptable to the Deal agent (who may also render other
services to Credit Acceptance or the Borrower) to furnish a report to the Collateral Agent, the
Deal Agent and the Secured Parties to the effect that they have (i) compared the information
contained in the Monthly Reports delivered during such fiscal year, based on a sample size provided
by the Collateral Agent, with the information contained in the Loans, the Contracts and Credit
Acceptance’s records and computer systems for such period, and that, on the basis of such agreed
upon procedures, such firm is of the opinion that the information contained in the Monthly Reports
reconciles with the information contained in the Loans and the Contracts and Credit Acceptance’s
records and computer system and that the servicing of the Loans and the Contracts has been
conducted in compliance with this Agreement, (ii) verified the Aggregate Outstanding Eligible Loan
Balance as of the end of each Collection Period during such fiscal year, and (iii) verified that a
sample of Loans and Contracts treated by Credit Acceptance as Eligible Loans and as Eligible Dealer
Loan Contracts, as applicable, in fact satisfied the requirements of the definition thereof
contained herein and (iv) conducted a ‘negative confirmation’ of a sample of the Loans and
Contracts and verified that Credit Acceptance’s records and computer system used in servicing the
Loans and Contracts contained correct information with regard to due dates and outstanding
balances, except, in each case for
such exceptions as such firm shall believe to be immaterial (which exceptions need not be
enumerated).




     Section 6.2. Duties of the Servicer and Custodian.



          (a) The Servicer shall take or cause to be taken all such action as may be necessary or
advisable to collect all amounts due under the Loans and Contracts from time to time, all in
accordance with applicable laws, rules and regulations, with reasonable care and




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diligence, and in
accordance with the Collection Guidelines and Credit Guidelines, it being understood that there
shall be no recourse to the Servicer (in its capacity as such) with regard to the Loans and
Contracts except as otherwise provided herein and in the other Transaction Documents. In
performing its duties as Servicer, the Servicer shall use the same degree of care and attention it
employs with respect to similar contracts and loans which it services for itself or others. Each
of the Borrower, the Deal Agent, the Collateral Agent and the Secured Parties hereby appoints as
its agent the Servicer, from time to time designated pursuant to Section 6.1 hereof, to
enforce its respective rights and interests in and under the Collateral. The Servicer shall hold
in trust for the Secured Parties all Records and any amounts it receives in respect of the
Collateral. In the event that a Successor Servicer is appointed, the outgoing Servicer shall
deliver to the Successor Servicer and the Successor Servicer shall hold in trust for the Borrower
and the Secured Parties all records which evidence or relate to all or any part of the Collateral.




          (b) The Servicer, if other than Credit Acceptance, shall as soon as practicable upon demand,
deliver to the Borrower all records in its possession which evidence or relate to indebtedness of
an Obligor which is not a Loan or a Contract.




          (c) (i) The Borrower, Deal Agent and Collateral Agent hereby revocably appoint Credit
Acceptance as custodian (or if there has been a Successor Servicer appointed hereunder then such
Successor Servicer shall act as custodian), and Credit Acceptance (or the Successor Servicer, if
applicable) hereby accepts such appointment, to hold and maintain physical possession of the
Contract Files and all Records (in such capacity together with its successors in such capacity, the
“Custodian”). The Contract Files and Records are to be delivered to the Custodian or its
designated bailee by or on behalf of the Borrower, the Deal Agent and Collateral Agent within two
(2) Business Days preceding the Funding Date or within 2 Business Days after each Addition Date, as
the case may be, with respect to each Loan acquired on the Funding Date or Addition Date.





          (ii) The Custodian shall within 180 days after the Closing Date or Funding Date, as
applicable, review 100% of the Contract Files to verify the presence of the original retail
installment contract and security agreement and/or installment loans with respect to each
Contract, provided, however, that the Certificate of Title or other evidence
of lien with respect to a Contract need not be verified. If the number of Contracts for
which any of the foregoing documents have not been delivered to the Custodian within 180
days of the Closing Date or relevant Funding Date, as the case may be, or corrected (each
such Contract, a “Nonconforming Contract”), exceeds 2% of the aggregate number of
Contract Files required to be reviewed pursuant to this Section 6.2(c)(ii), the
Borrower shall make a deposit to the Reserve Account only with respect to the excess number
of Nonconforming Contracts, in an amount equal to the related
Nonconforming Contract Payment Amount. Once per month, the amount on deposit in the
Reserve Account in respect of Nonconforming Contracts shall be adjusted to account for
increases or decreases in the excess number of Nonconforming Contracts and for changes in
the Outstanding Balance of such Nonconforming Contracts. The Borrower shall, in the case of
an increase, promptly deposit to the Reserve Account the amount of any such increase. In
the case of a decrease, the amount of any such decrease shall be deemed to be part of the
Excess Reserve Amount. During the Revolving Period, payments required under this
Section 6.2(c)(ii) shall not be required if the Capital is equal



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to or less than the
Borrowing Base by the amount of the payment that would otherwise be required to be made by
this clause.




          (iii) The Custodian agrees to maintain the Contract Files and Records which are
delivered to it at the offices of the Custodian as shall from time to time be identified to
the Deal Agent by written notice. Subject to the foregoing, Credit Acceptance may
temporarily move individual Contract Files or Records, or any portion thereof without notice
as necessary to allow the Servicer to conduct collection and other servicing activities in
accordance with its customary practices and procedures.




          (iv) The Custodian shall have the following powers and perform the following duties:




          (A) hold the Contract Files and Records for the benefit of the Secured Parties
and maintain a current inventory thereof; and




          (B) carry out such policies and procedures in accordance with its customary
actions with respect to the handling and custody of the Contract Files and Records
so that the integrity and physical possession of the Contract Files and Records will
be maintained.



     In performing its duties as custodian, the Custodian agrees to act with reasonable care, using
that degree of skill and care that it exercises with respect to similar Contracts or Loans owned or
held by it for its own account or for any other Person.




          (v) Credit Acceptance shall have the obligation (i) to physically segregate the
Contract Files from the other custodial files it is holding for its own account or on behalf
of any other Person and (ii) to physically mark the Contract folders to demonstrate the
transfer of Contract Files and the Collateral Agent’s security interest hereunder.



          (d) (i) If (A) an Unsatisfactory Audit occurs or (B) a Termination Event, Unmatured
Termination Event, Servicer Termination Event or a Potential Servicer Termination Event occurs, the
Deal Agent shall have the right to terminate Credit Acceptance as the Custodian hereunder and the
Deal Agent shall have the right to appoint a successor Custodian hereunder who shall assume all the
rights and obligations of the “Custodian” hereunder. On the effective date of the termination of
Credit Acceptance as Servicer, Credit Acceptance shall be released of all of its obligations as
Custodian arising on or after such date. The Contract Files
and Records shall be delivered by Credit Acceptance to the successor Custodian, on or before
the date which is two (2) Business Days prior to such date.





          (ii) Upon the occurrence of a Servicer Termination Event, Potential Servicer
Termination Event, Termination Event or Unmatured Termination Event, the Servicer and the
Borrower shall, at the request of the Deal Agent, in the Deal Agent’s sole discretion, take
all steps necessary to cause the Certificate of Title or other evidence of ownership of each
Financed Vehicle to be revised to name the Collateral Agent on behalf of the Secured Parties
as lienholder. Any costs associated with such revision of the Certificate of Title
(“Reliening Expenses”) shall be paid by Credit Acceptance and,



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and to the extent
such costs are not paid by Credit Acceptance such unpaid costs shall be recovered as
described in Section 2.7 hereof. In no event shall the Collateral Agent be required
to expend funds in connection with this Section 6.2(d).




          (iii) The Custodian shall provide to the Deal Agent access to the Contract Files and
Records and all other documentation regarding the Contracts, Dealer Agreement and the Loans
and the related Financed Vehicles in such cases where the Collateral Agent is required in
connection with the enforcement of the rights or interests of the Secured Parties, or by
applicable statutes or regulations to review such documentation, such access being afforded
without charge.



          (e) From time to time during normal business hours, at the expense of the Servicer (provided
that the Deal Agent and the Liquidity Agent may review the Successor Servicer’s collection and
administration of the Loans, Dealer Agreements and Contracts two times per calendar year, at the
expense of the party requesting such review, with prior written notice and without undue
disruption of the Successor Servicer’s business before the occurrence of a Servicer Termination
Event at a time after the Assumption Date, and the Deal Agent and the Liquidity Agent may conduct
such review, with prior written notice but otherwise without limitation, at the Successor
Servicer’s expense if the Servicer Termination Event is due to the actions of the current Successor
Servicer and otherwise at the expense of the party requesting such review, after the occurrence of
a Servicer Termination Event at a time after the Assumption Date) (but at the Servicer’s expense
not more than twice during any calendar year), the Deal Agent and any Liquidity Agent may review
the Servicer’s collection and administration of the Loans, Dealer Agreements and Contracts in order
to assess compliance by the Servicer with the Servicer’s written policies and procedures, as well
as with this Agreement and at the Servicer’s (provided that the Deal Agent and the Liquidity Agent
may review the Successor Servicer’s collection and administration of the Loans, Dealer Agreements
and Contracts two times per calendar year, at the expense of the party requesting such review,
with prior written notice and without undue disruption of the Successor Servicer’s business before
the occurrence of a Servicer Termination Event at a time after the Assumption Date, and the Deal
Agent and the Liquidity Agent may conduct such review, with prior written notice but otherwise
without limitation, at the Successor Servicer’s expense if the Servicer Termination Event is due to
the actions of the current Successor Servicer and otherwise at the expense of the party requesting
such review, after the occurrence of a Servicer Termination Event at a time after the Assumption
Date) expense may conduct an audit (but not more than two such audits during any calendar year
except as described in the next sentence) of the Loans, Dealer Agreements and Contracts and
Contract Files in conjunction with such a review. On and after the occurrence of a Termination
Event or Servicer Termination Event, the Deal Agent or any Liquidity Agent may conduct such
reviews and audits without limitation, at the Servicer’s expense.




     Section 6.3. Rights After Designation of Successor Servicer. At any time following
the designation of a Successor Servicer pursuant to Section 6.12(a):




          (i) The Collateral Agent may intercept payments made by or on behalf of Obligors and
direct that payment of all amounts payable under any Loan or Contract be made directly to
the Collateral Agent or its designee; provided, that the Collateral



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Agent shall pay
to any Dealer, to the extent to which such Dealer is entitled, all related Dealer
Collections.




          (ii) The Borrower shall, at the Collateral Agent’s request and at the Borrower’s
expense, give notice of the Collateral Agent’s interest in the Loans and Contracts to each
Obligor and direct that payments be made directly to the Collateral Agent or its designee.




          (iii) The Borrower and Credit Acceptance shall, at the Collateral Agent’s request, (A)
assemble all of the records relating to the Collateral, including all Records with respect
to the Loans and Contracts, and shall make the same available to the Collateral Agent at a
place selected by the Collateral Agent or its designee, and (B) segregate all cash, checks
and other instruments received by it from time to time constituting collections of
Collateral in a manner acceptable to the Collateral Agent and shall, promptly upon receipt
but in any event within two (2) Business Days, remit all such cash, checks and instruments,
duly endorsed or with duly executed instruments of transfer, to the Collateral Agent or its
designee.




          (iv) The Borrower and Credit Acceptance hereby authorize the Collateral Agent to take
any and all steps in the Borrower’s or the Servicer’s name and on behalf of the Borrower and
the Servicer necessary or desirable, in the determination of the Collateral Agent, to
collect all amounts due under any and all of the Collateral with respect thereto, including,
without limitation, endorsing the Borrower’s name on checks and other instruments
representing Collections and enforcing the Loans and Contracts.



     Section 6.4. Responsibilities of the Borrower. Anything herein to the contrary
notwithstanding, the Borrower shall (i) perform all of its obligations under the Loans and
Contracts to the same extent as if a security interest in such Loans and Contracts had not been
granted hereunder and the exercise by the Collateral Agent of its rights hereunder shall not
relieve the Borrower from such obligations and (ii) pay when due any taxes, including without
limitation, any sales taxes payable in connection with the Loans or Contracts and their creation
and satisfaction. Neither the Collateral Agent, the Deal Agent nor any Secured Party shall have
any obligation or liability with respect to any Loan, nor shall any of them be obligated to perform
any of the obligations of the Borrower thereunder.



     Section 6.5. Reports.



          (a) Monthly Report. On each Determination Date, the Servicer shall deliver to the
Deal Agent, the Backup Servicer, each Liquidity Agent, the Collateral Agent and RFC a
report in substantially the form of Exhibit C attached hereto (the “Monthly Report”)
for the related Collection Period (provided that, if SST is Successor Servicer, SST shall only be
responsible to the extent it has received sufficient assistance from the Borrower). The Deal Agent
shall provide to the Borrower, the Servicer, the Backup Servicer and RFC by the third Business Day
prior to each Payment Date, information relating to the amount of each obligation which comprises
Carrying Costs, Increased Costs, Indemnified Amounts and Additional Amounts for such Collection
Period. The Monthly Report shall specify whether an Amortization Event, Servicer Termination
Event, Potential Servicer Termination Event,




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Termination Event or Unmatured Termination Event has
occurred with respect to the Collection Period preceding such Determination Date. Upon receipt of
the Monthly Report, the Deal Agent and the Collateral Agent shall rely (and shall be fully
protected in so relying) on the information contained therein for the purposes of making
distributions and allocations as provided for herein. Each Monthly Report shall be certified by a
Responsible Officer of the Servicer.




          (b) Credit Agreement. Credit Acceptance shall deliver to the Deal Agent and each
Liquidity Agent all reports or certificates required to be delivered under Section 7.3 of the
Credit Agreement at the times set forth therein.




          (c) Financial Statements. Credit Acceptance will submit to the Deal Agent, the
Collateral Agent, each Liquidity Agent, the Backup Servicer and RFC, within 60 days of the end of
each of its fiscal quarters, commencing June 30, 2008 unaudited consolidated financial statements
as of the end of each such fiscal quarter. Credit Acceptance will submit to the Deal Agent, each
Liquidity Agent, the Collateral Agent and RFC, within 120 days of the end of each of its fiscal
years, commencing with the fiscal year ending December 31, 2008 audited consolidated financial
statements as of the end of each such fiscal year. Credit Acceptance will submit to the Deal
Agent, the Collateral Agent, each Liquidity Agent, the Backup Servicer and RFC an analysis of the
static pool performance of Credit Acceptance for each fiscal quarter.




          (d) Annual Statement as to Compliance. The Servicer will provide to the Deal Agent,
each Liquidity Agent, the Collateral Agent and RFC, within 120 days following the end of each
fiscal year of the Servicer, commencing with the fiscal year ending on December 31, 2008, an annual
report signed by a Responsible Officer of the Servicer certifying that (a) a review of the
activities of the Servicer, and the Servicer’s performance pursuant to this Agreement, for the
period ending on the last day of such fiscal year has been made under such Person’s supervision and
(b) the Servicer has performed or has caused to be performed in all material respects all of its
obligations under this Agreement throughout such year (or in the case of a Successor Servicer which
has been Servicer for less than one year, for so long as such Successor Servicer has been Servicer)
and no Servicer Termination Event or potential Servicer Termination Event has occurred and is
continuing (or if a Servicer Termination Event has so occurred and is continuing, specifying each
such event, the nature and status thereof and the steps necessary to remedy such event, and, if a
Servicer Termination Event or potential Servicer Termination Event occurred during such year and no
notice thereof has been given to the Deal Agent and the Collateral Agent, specifying such Servicer
Termination Event or potential Servicer Termination Event and the steps taken to remedy such event)
(it being understood and agreed that the provision of any such notice shall in no event constitute
or be deemed to constitute a waiver thereof for any purpose of this Agreement or any other
Transaction Document).




     Section 6.6. Additional Representations and Warranties of Credit Acceptance as
Servicer. Credit Acceptance, in its capacity as Servicer, represents and warrants to the
Collateral Agent, the Deal Agent, the Backup Servicer and each Liquidity Agent as of the Closing
Date, the Effective Date and each day thereafter until the Collection Date, that the only material
servicing computer systems and related software utilized by Credit Acceptance to service the Loans
and Contracts are: (i) provided by Ontario Systems Corporation under an agreement (and related
nonexclusive license) and related letter agreements dated May 18, 2001 and (ii) the “loan



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servicing
system” software developed by Credit Acceptance, which is owned by Credit Acceptance. Should
Credit Acceptance or any of its Affiliates develop or implement computer software for servicing
that is owned by or exclusively licensed to Credit Acceptance or an Affiliate and utilize such
software in the servicing of the Loans and Contracts, the Collateral Agent shall be entitled to
compel a license or sublicense for the benefit of the Collateral Agent or its designee of any such
rights to the extent the Collateral Agent deems reasonably necessary and appropriate to assure that
it or a duly appointed Successor Servicer would be able to continue to service the Loans and
Contracts should that be required in accordance with the terms hereof.



     Section 6.7. Establishment of the Accounts.



          (a) Establishment of the Collection Account and Reserve Account. The initial Servicer
shall cause to be established, on or before the Closing Date, and maintained in the name of the
Collateral Agent as agent for the Secured Parties (and at the expense of the Borrower), with an
office or branch of a depository institution or trust company acceptable to the Deal Agent (i) a
segregated corporate trust account entitled “Collection Account for Fifth Third, as agent for the
Secured Parties” (the “Collection Account”) and (ii) a segregated corporate trust account
entitled “Reserve Account for Fifth Third” as agent for the Secured Parties (the “Reserve
Account”), in each case, over which the Collateral Agent as agent for the Secured Parties shall
have sole dominion and control and from which neither the Originator, the Servicer nor the Borrower
shall have any right of withdrawal; provided, however, that at all times such
depository institution or trust company shall be a depository institution organized under the laws
of the United States of America or any one of the States thereof or the District of Columbia (or
any domestic branch of a foreign bank), (i) (A) that has either (1) a long-term unsecured debt
rating of AA- or better by S&P and Aa3 or better by Moody’s or (2) a short-term unsecured debt
rating or certificate of deposit rating of A-1 or better by S&P or P-1 or better by Moody’s, (B)
the parent corporation which has either (1) a long-term unsecured debt rating of AA- or better by
S&P and Aa3 or better by Moody’s or (2) a short-term unsecured debt rating or certificate of
deposit rating of A-1 or better by S&P and P-1 or better by Moody’s or (C) is otherwise acceptable
to the Deal Agent and (ii) whose deposits are insured by the Federal Deposit Insurance Corporation
(any such depository institution or trust company, a “Qualified Institution”).




          (b) Adjustments. If (i) the Servicer makes a deposit into the Collection Account in
respect of a Collection of a Loan and such Collection was received by the Servicer in the form of a
check that is not honored for any reason or (ii) the Servicer makes a mistake with respect to the
amount of any Collection and deposits an amount that is less than or more than the actual amount of
such Collection, the Servicer shall appropriately adjust the amount subsequently deposited into the
Collection Account to reflect such dishonored check or mistake.
Any payment in respect of which a dishonored check is received shall be deemed not to have
been paid.




          (c) Eligible Investments. Funds on deposit in the Collection Account and the Reserve
Account shall be invested in Eligible Investments by or at the written direction of the Borrower,
provided that if a Termination Event or Unmatured Termination Event shall have occurred, such
investments shall be made as directed by the Collateral Agent. Any such written directions shall
specify the particular investment to be made and shall certify that such




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investment is an Eligible
Investment and is permitted to be made under this Agreement. Funds on deposit in the Collection
Account and the Reserve Account shall be invested in Eligible Investments that will mature so that
such funds will be available no later than the Business Day prior to the next Payment Date, except
that in the case of funds representing Collections with respect to a succeeding Collection Period,
such Eligible Investments may mature so that such funds will be available no later than the
Business Day prior to the Payment Date for such Collection Period. No Eligible Investment may be
liquidated or disposed of prior to its maturity. All proceeds of any Eligible Investment shall be
deposited in the Collection Account or the Reserve Account, as applicable. Investments may be made
in either account on any date (provided such investments mature in accordance herewith), only after
giving effect to deposits to and withdrawals from such account on such date. Realized losses, if
any, on amounts invested in Eligible Investments shall be charged against investment earnings on
amounts on deposit in the Collection Account or the Reserve Account, as applicable.




     Section 6.8. Payment of Certain Expenses by Servicer. Credit Acceptance will be
required to pay all expenses incurred by it in connection with its activities under this Agreement,
including fees and disbursements of independent accountants, Taxes imposed on Credit Acceptance,
expenses incurred in connection with payments and reports pursuant to this Agreement, and all other
fees and expenses not expressly stated under this Agreement for the account of the Borrower.
Credit Acceptance will be required to pay all reasonable fees and expenses owing to any bank or
trust company in connection with the maintenance of the Collection Account, the Reserve Account and
the Credit Acceptance Payment Account. Credit Acceptance shall be required to pay such expenses
for its own account and shall not be entitled to any payment therefor other than the Servicing Fee.



     Section 6.9. Annual Independent Public Accountant’s Servicing Reports. Credit
Acceptance will cause a firm of nationally recognized independent public accountants (who may also
render other services to Credit Acceptance) to furnish to the Deal Agent, each Liquidity Agent and
RFC, within 120 days following the end of each fiscal year of Credit Acceptance, commencing with
the fiscal year ending on December 31, 2008: (i) a report relating to such fiscal year to the
effect that (A) such firm has reviewed certain documents and records relating to the servicing of
the Loans and Contracts included in the Collateral, and (B) based on such examination, such firm is
of the opinion that the Monthly Reports for such year were prepared in compliance with this
Agreement, except for such exceptions as it believes to be immaterial and (ii) a report covering
such fiscal year to the effect that such accountants have applied certain agreed-upon procedures,
as set forth in Section 6.1(c) (which procedures shall have been approved by the Deal Agent
and each Liquidity Agent) to certain documents and records relating to the Loans under any
Transaction Document, compared the information contained in the Monthly Reports delivered during
the period covered by such report which such documents and records
and that no matters came to the attention of such accountants that caused them to believe that
such servicing was not conducted in compliance with Article VI of this Agreement, except for such
exceptions as such accountants shall believe to be immaterial.



     Section 6.10. The Servicer Not to Resign. The Servicer shall not resign from the
obligations and duties hereby imposed on it hereunder except upon the Servicer’s determination that
(i) the performance of its duties hereunder is or becomes impermissible under Applicable Law and
(ii) there is no reasonable action that the Servicer could take to make the performance of its



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duties hereunder permissible under Applicable Law. Any such determination permitting the
resignation of the Servicer shall be evidenced as to clause (i) above by an Opinion of Counsel to
such effect delivered to the Deal Agent, the Collateral Agent, the Backup Servicer and RFC. No
such resignation shall become effective until a Successor Servicer shall have assumed the
responsibilities and obligations of the Servicer in accordance with Section 6.12.



     Section 6.11. Servicer Termination Events. If any one of the following events (a
“Servicer Termination Event”) shall occur and be continuing and remains unremedied for more
than thirty (30) days (or such other amount of time as specifically listed below) after knowledge
by or written notice to the Servicer:



          (a) any failure by the Servicer to make any payment, transfer or deposit as required by this
Agreement or any other Transaction Document, other than any such failure resulting from an
administrative or technical error of the Servicer in the amount so paid, transferred or deposited;
provided that within one (1) Business Day after the Servicer receives notice or becomes aware that,
as a result of an administrative or technical error of the Servicer, any amount previously paid,
transferred or deposited by the Servicer was less than the amount required to be paid, transferred
or deposited by the Servicer, the Servicer pays, transfers or deposits the amount of such
shortfall;




          (b) any failure by the Servicer (only with respect to Credit Acceptance) to give instructions
or notice to the Deal Agent as required by this Agreement or any other Transaction Document, or to
deliver any required Monthly Report or other required reports hereunder on or before the date
occurring two (2) Business Days after the date such instruction, notice or report is required to be
made or given, as the case may be, under the terms of this Agreement or the relevant Transaction
Document;




          (c) any failure on the part of the Servicer to duly observe or perform in any material respect
any other covenants or agreements of the Servicer set forth in this Agreement or the other
Transaction Documents (other than as set forth in clauses (a) or (b) above) to which the Servicer
is a party, which continues unremedied for a period of 10 days;




          (d) any material representation, warranty or certification made by the Servicer (only with
respect to Credit Acceptance) in any Transaction Document or in any certificate delivered pursuant
to any Transaction Document shall prove to have been incorrect when made;




          (e) an Insolvency Event shall occur with respect to the Servicer;




          (f) any delegation of the Servicer’s duties that is not permitted by Section 7.1;




          (g) any information related to the Collateral reasonably requested by the Deal Agent, the
Collateral Agent, any Liquidity Agent or any Lender as provided herein is not reasonably provided
as requested;




          (h) the rendering against the Servicer of one or more final judgments, decrees or orders for
the payment of money in excess of United States $5,000,000 (in the event SST is Successor Servicer,
the amount shall be $10,000,000) in the aggregate, and the continuance of




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such judgment, decree or
order unsatisfied and in effect for any period of more than 60 consecutive days without a stay of
execution;




          (i) the Servicer shall fail to pay any principal of or premium or interest on any indebtedness
in an aggregate outstanding principal amount of $5,000,000 (in the event SST is Successor Servicer,
the amount shall be $10,000,000) or more (“Material Debt”), when the same becomes due and
payable (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise) and
such failure shall continue after the applicable grace period, if any, specified in the agreement
or instrument relating to such Material Debt; or any other default under any agreement or
instrument relating to any Material Debt or any other event, shall occur and shall continue after
the applicable grace period, if any, specified in such agreement or instrument if the effect of
such default or event is to accelerate, or to permit the acceleration of, the maturity of such
Material Debt; or any such Material Debt shall be declared to be due and payable or required to be
prepaid (other than by a regularly scheduled required prepayment) prior to the stated maturity
thereof;




          (j) any change in the control of Credit Acceptance that takes the form of either a merger or
consolidation in which Credit Acceptance is not the surviving entity;




          (k) a Material Adverse Effect shall have occurred; or




          (l) if Credit Acceptance is Servicer, a Termination Event shall have occurred and such
Termination Event has not been waived by the Deal Agent;



then notwithstanding anything herein to the contrary, so long as any such Servicer Termination
Event shall not have been remedied, within any applicable cure period prior to the date of the
Servicer Termination Notice (defined below), the Deal Agent may, or at the direction of the
Required Investors, by written notice to the Servicer (with a copy to the Backup Servicer) (a
“Servicer Termination Notice”), shall terminate all of the rights and obligations of the
Servicer as Servicer under this Agreement.




     Section 6.12. Appointment of Successor Servicer.



          (a) On and after the receipt by the Servicer of a Servicer Termination Notice pursuant to
Section 6.11 or Section 10.2, the Servicer shall continue to perform all servicing
functions under this Agreement until the date specified in the Servicer Termination Notice or
otherwise specified by the Deal Agent in writing or, if no such date is specified in such Servicer
Termination Notice or otherwise specified by the Deal Agent, until a date mutually agreed upon by
the Servicer and the Deal Agent. The Deal Agent may at the time described in the immediately
preceding sentence at the direction of the Required Investors appoint the Backup Servicer by
written notice as the Servicer hereunder, and the Backup Servicer shall on such date
(which date shall be no less than 30 days after receipt of such written notice) assume all
obligations of the Servicer hereunder (except as specifically set forth herein or in the Backup
Servicing Agreement), and all authority and power of the Servicer under this Agreement and the
other Transaction Documents shall pass to and be vested in the Backup Servicer. In the event that
the Deal Agent does not so appoint the Backup Servicer, there is no Backup Servicer or the Backup
Servicer is unable to assume such obligations on such date, the Deal Agent shall as




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promptly as
possible appoint a successor servicer (together with the Backup Servicer, if the Backup Servicer
has been appointed Servicer hereunder, the “Successor Servicer”) who shall be acceptable to
the Required Investors, and such Successor Servicer shall accept its appointment by a written
assumption in a form acceptable to the Deal Agent. In the event that a Successor Servicer has not
accepted its appointment at the time when the Servicer ceases to act as Servicer, the Deal Agent
shall petition a court of competent jurisdiction to appoint any established financial institution
having a net worth of not less than United States $50,000,000 and whose regular business includes
the servicing of Loans as the Successor Servicer hereunder.




          (b) Upon its assumption as Successor Servicer, the Backup Servicer (except as specifically set
forth herein or in the Backup Servicing Agreement and subject to Section 6.12(a)) or any
other Successor Servicer, as applicable, shall be the successor in all respects to the Servicer
with respect to servicing functions under this Agreement and shall be subject to all the
responsibilities, duties and liabilities relating thereto placed on the Servicer by the terms and
provisions hereof, and all references in this Agreement and the other Transaction Documents to the
Servicer shall be deemed to refer to the Backup Servicer or the Successor Servicer, as applicable.
In no event shall the Backup Servicer be liable for any actions or omissions of any predecessor
Servicer.




          (c) Subject to Section 6.12(a) and (b) above, all authority and power granted
to the Servicer under this Agreement shall automatically cease and terminate upon the later of the
Collection Date and the termination of this Agreement and shall pass to and be vested in the
Borrower and, without limitation, the Borrower is hereby authorized and empowered to execute and
deliver, on behalf of the Servicer, as attorney-in-fact or otherwise, all documents and other
instruments, and to do and accomplish all other acts or things necessary or appropriate to effect
the purposes of such transfer of servicing rights. The Servicer agrees to cooperate with the
Borrower in effecting the termination of the responsibilities and rights of the Servicer to conduct
servicing on the Loans and the Contracts.




          (d) Within 30 days of receiving notice that the Backup Servicer is required to serve as the
Servicer hereunder pursuant to the foregoing provisions of this Section 6.12 the Backup
Servicer will begin the transition to its role as Servicer.




     Section 6.13. Responsibilities of the Borrower. Anything herein to the contrary
notwithstanding, the Borrower shall (i) perform all of its obligations under the Loans to the same
extent as if a security interest in such Loans had not been granted hereunder and (ii) pay when
due, from funds available to the Borrower under Section 2.7 hereto, any taxes. Neither the
Deal Agent, Collateral Agent nor any Secured Party shall have any obligation or liability with
respect to any Loan, nor shall any of them be obligated to perform any of the obligations of the
Borrower thereunder.



     Section 6.14. Segregated Payment Account. Upon the occurrence of a Servicer
Termination Event, a Potential Servicer Termination Event or an Unsatisfactory Audit, the Deal
Agent shall have the right to require the Borrower and the Servicer (i) to establish a segregated
payment trust account in the name of the Collateral Agent for Collections related to the Collateral
and (ii) to direct all Obligors to make payments into such account.



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ARTICLE VII

BACKUP SERVICER




     Section 7.1. Designation of the Backup Servicer. The backup servicing role with
respect to the Collateral shall be conducted by the Person designated as Backup Servicer under the
Backup Servicing Agreement, which shall initially be SST.



     Section 7.2. Duties of the Backup Servicer. On or before the Closing Date, and until
its removal pursuant to the Backup Servicing Agreement, the Backup Servicer shall perform, on
behalf of the Servicer, the Borrower, the Deal Agent, the Collateral Agent and the Secured Parties,
the duties and obligations set forth in the Backup Servicing Agreement.



     Section 7.3. Backup Servicing Compensation. As compensation for its backup servicing
activities hereunder and under the Backup Servicing Agreement, the Backup Servicer shall be
entitled to receive the Backup Servicing Fee pursuant to the provisions of Section 2.7(a).
The Backup Servicer’s entitlement to receive the Backup Servicing Fee shall cease on the earliest
to occur of: (i) it becoming the Successor Servicer; (ii) its removal as Backup Servicer pursuant
to the terms of the Backup Servicing Agreement; or (iii) the termination of this Agreement
following the Collection Date.



ARTICLE VIII

[Reserved]




ARTICLE IX

SECURITY INTEREST




     Section 9.1. Security Agreement.



          (a) The parties hereto intend that this Agreement constitute a security agreement and the
transactions effected hereby constitute secured loans by the Lender to the Borrower under
Applicable Law.




          (b) The Borrower hereby authorizes the Collateral Agent to file one or more financing or
continuation statements, and amendments thereto, relating to all or any part of the Collateral and
Proceeds thereof without the signature of the Borrower where permitted by law. A photographic or
other reproduction of this Agreement or any financing statement covering the Collateral or any part
thereof shall be sufficient as a financing statement where permitted by law.




     Section 9.2. Release of Lien. At the same time as any Loan by its terms and all
amounts in respect thereof has been finally paid in full by the related Obligor and deposited in
the Collection Account, the Deal Agent as agent for the Lender will, to the extent requested by the
Servicer, release its interest in such Loan and Related Security. The Deal Agent as agent for the
Lenders will after the deposit by the Servicer of the proceeds of such sale into the
Collection Account, at the sole expense of Credit Acceptance, execute and deliver to the Servicer
any assignments, termination statements and any other releases and instruments as Credit Acceptance
may reasonably request in order to effect such release and transfer; provided, that the
Deal Agent as agent for the Lenders will make no representation or warranty, express or implied,
with respect to any such Loan and Related Security in connection with such sale or transfer and
assignment.




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     Section 9.3. Further Assurances. The provisions of Section 14.12 shall apply
to the security interest granted under Section 2.2(a) as well as to each Funding hereunder.



     Section 9.4. Remedies. Upon the occurrence of a Termination Event, the Deal Agent,
the Collateral Agent and Secured Parties shall have, with respect to the Collateral granted
pursuant to Section 2.2(a), and in addition to all other rights and remedies available to
the Deal Agent, the Collateral Agent and Secured Parties under this Agreement or other Applicable
Law, all rights and remedies of a secured party under the UCC.



     Section 9.5. Waiver of Certain Laws. Each of the Borrower and the Servicer agrees, to
the full extent that it may lawfully so agree, that neither it nor anyone claiming through or under
it will set up, claim or seek to take advantage of any appraisement, valuation, stay, extension or
redemption law now or hereafter in force in any locality where all or any portion of the Collateral
may be situated in order to prevent, hinder or delay the enforcement or foreclosure of this
Agreement, or the absolute sale of all any portion of the Collateral, or the final and absolute
putting into possession thereof, immediately after such sale, of the purchasers thereof, and each
of the Borrower and the Servicer, for itself and all who may at any time claim through or under it,
hereby waives, to the full extent that it may be lawful so to do, the benefit of all such laws, and
any and all right to have any of the properties or assets constituting the Collateral marshaled
upon any such sale, and agrees that the Deal Agent, the Collateral Agent or any court having
jurisdiction to foreclosure the security interests granted in this Agreement may sell the
Collateral as an entirety or in such parcels as the Deal Agent, the Collateral Agent or such court
may determine (including, without limitation, on a servicing released basis).



     Section 9.6. Power of Attorney. The Borrower hereby irrevocably appoints the Deal
Agent and the Servicer and any Successor Servicer as its true and lawful attorney (with full power
of substitution) in its name, place and stead and at is expense, in connection with the enforcement
of the rights and remedies provided for in this Agreement, including without limitation the
following powers: (a) to give any necessary receipts or acquittance for amounts collected or
received hereunder, (b) to make all necessary transfers of the Collateral in connection with any
such sale or other disposition made pursuant hereto, (c) to execute and deliver for value all
necessary or appropriate bills of sale, assignments and other instruments in connection with any
such sale or other disposition, the Borrower hereby ratifying and confirming all that such attorney
(or any substitute) shall lawfully do hereunder and pursuant hereto, and (d) to sign any
agreements, orders or other documents in connection with or pursuant to any Transaction Document or
Hedging Agreement. Nevertheless, if so requested by the Deal Agent, the Servicer or any Successor
Servicer, the Collateral Agent or a purchaser of the Collateral, the Borrower and the Servicer
shall ratify and confirm any such sale or other disposition by executing and delivering to the Deal
Agent, the Collateral Agent or such purchaser all proper bills of sale, assignments, releases and
other instruments as may be designated in any such request.



ARTICLE X

TERMINATION EVENTS




     Section 10.1. Termination Events. The following events shall be termination events
(“Termination Events”) hereunder:



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          (a) [Reserved]; or




          (b) [Reserved]; or




          (c) [Reserved]; or




          (d) the Weighted Average Original Advance Rate exceeds 50.0%; or




          (e) [Reserved]; or




          (f) a Servicer Termination Event occurs and is continuing; or




          (g) (i) failure on the part of the Borrower or the Originator to make any payment or deposit
required by the terms of any Transaction Document on the day such payment or deposit is required to
be made (including, without limitation, the failure of the Borrower to fully repay all principal
and interest on the Notes on the related Maturity Date (whether or not sufficient funds are
available therefor at such time under Section 2.7 or otherwise)); or





          (ii) failure on the part of the Borrower or the Originator to observe or perform any of
its covenants or agreements set forth in this Agreement or any Transaction Document and such
failure continues unremedied for more than five (5) Business Days after knowledge by or
written notice to the Borrower or the Originator;



          (h) any representation or warranty made or deemed to be made by the Borrower or Credit
Acceptance under or in connection with this Agreement, any of the other Transaction Documents or
any information required to be given by the Borrower or Credit Acceptance to the Deal Agent or the
Collateral Agent to identify Loans or Contracts pursuant to any Transaction Document, shall prove
to have been false or incorrect in any material respect when made, deemed made or delivered and
such failure continues unremedied for more than thirty (30) days after knowledge by or written
notice to the Borrower or Credit Acceptance; or




          (i) the occurrence of an Insolvency Event relating to the Originator, the Borrower or the
Servicer; or




          (j) the Borrower or Originator shall become an “investment company” within the meaning of the
Investment Company Act of 1940, as amended or the arrangements contemplated by the Transaction
Document shall require registration as an “investment company” within the meaning of the 40 Act; or




          (k) a regulatory, tax or accounting body has ordered that the activities of the Borrower or
any Affiliate of the Borrower, contemplated hereby be terminated or, as a result of any other event
or circumstance, the activities of the Borrower or any Affiliate of the Borrower contemplated
hereby may reasonably be expected to cause the Borrower or any of its respective Affiliates to
suffer materially adverse regulatory, accounting or tax consequences; or




          (l) there shall exist any event or occurrence that has a reasonable possibility of causing a
Material Adverse Effect; or




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          (m) the Borrower or Credit Acceptance shall enter into any merger, consolidation or conveyance
transaction, unless in the case of Credit Acceptance or the Servicer, the Servicer or Credit
Acceptance, as applicable, is the surviving entity; or




          (n) the Internal Revenue Service shall file notice of a lien pursuant to Section 6323 of the
Code with regard to any assets of the Borrower or the Originator and such lien shall not have been
released within five (5) Business Days, or the Pension Benefit Guaranty Corporation shall file
notice of a lien pursuant to Section 4068 of ERISA with regard to any of the assets of the Borrower
or the Originator and such lien shall not have been released within five (5) Business Days; or




          (o) the Collateral Agent, as agent for the secured parties, shall fail for any reason to have
a first priority perfected security interest in the Collateral free and clear of all Liens other
than Permitted Liens; or




          (p) any Change-in-Control shall occur; or




          (q) (i) any Transaction Document, or any lien or security interest granted thereunder, shall
(except in accordance with its terms), in whole or in part, terminate, cease to be effective or
cease to be the legally valid, binding and enforceable obligation of the Borrower, the Originator
or the Servicer (ii) the Borrower, the Originator or the Servicer shall, directly or indirectly,
contest in any manner such effectiveness, validity, binding nature or enforceability or (iii) any
security interest securing any obligation under any Transaction Document shall, in whole or in
part, cease to be a perfected first priority security interest free and clear of all Liens other
than Permitted Liens; or




          (r) the occurrence of the thirtieth (30th) day after the end of the fiscal quarter in which a
breach of any covenant set forth in Sections 7.4, 7.5, 7.6 and 7.7 of the Credit Agreement shall
occur unless prior to such date, such breach is cured or waived by the Deal Agent in the Deal
Agent’s sole discretion; or




          (s) (i) Credit Acceptance shall fail to pay any principal of or premium or interest on any
Material Debt, when the same becomes due and payable (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise) and such failure shall continue after the applicable
grace period, if any, specified in the agreement or instrument relating to such Material Debt; or
any other default under any agreement or instrument relating to any Material Debt or any other
event, shall occur and shall continue after the applicable grace period, if any, specified in such
agreement or instrument if the effect of such default or event is to accelerate, or to permit the
acceleration of, the maturity of such Material Debt; or any such Material Debt shall be declared to
be due and payable or required to be prepaid (other than by a regularly scheduled required
prepayment) prior to the stated maturity thereof or (ii) other than as specifically described in
clauses (a) through (r) above, or (t) below, a breach or default shall occur under any agreement,
contract or document to which the Borrower is a party; or




          (t) Collections are less than 75.0% of Forecasted Collections for any three consecutive
Collection Periods.




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     Section 10.2. Remedies.



          (a) Upon the occurrence of a Termination Event (other than a Termination Event described in
Section 10.1(i), the Deal Agent may, or at the direction of the Required Investors, shall
by notice to the Borrower declare the Termination Date to have occurred.




          (b) Upon the occurrence of a Termination Event described in Section 10.1(i), the
Termination Date shall automatically occur.




          (c) Upon any Termination Date pursuant to this Section 10.2: (i) the rate on the
Capital outstanding with respect to each Purchaser Group shall be equal to the applicable Yield
Rate as described herein; (ii) the Deal Agent may, and shall at the direction of the Required
Investors by delivery of a Servicer Termination Notice, terminate the Servicer; and (iii) the Deal
Agent, may, and at the direction of the Required Investors, shall declare the entire outstanding
principal amount of the Notes be immediately due and payable. The Deal Agent, the Collateral Agent
and the Secured Parties shall have, in addition to all other rights and remedies under this
Agreement or otherwise, all other rights and remedies provided of a secured party under the UCC of
each applicable jurisdiction and other applicable laws, which rights shall be cumulative.




          (d) If the Notes have been declared due and payable pursuant to Section 10.2(c), the
Collateral Agent may institute proceedings to collect amounts due, exercise remedies as a secured
party (including foreclosure or sale of the Collateral (and each of the parties hereto hereby
acknowledges and agrees that any such sale may, in the sole discretion of the Deal Agent be on a
servicer released basis)) or elect to maintain the Collateral and continue to apply the proceeds
from the Collateral as if there had been no declaration of acceleration.




          (e) Upon the declaration of the Termination Date, the Borrower may not request and no Lender
shall be required to effect any Funding.




ARTICLE XI

INDEMNIFICATION




     Section 11.1. Indemnities by the Borrower.



          (a) Without limiting any other rights that any such Person may have hereunder or under
Applicable Law, the Borrower hereby agrees to indemnify the Deal Agent, the Backup Servicer, the
Collateral Agent, the Successor Servicer, the Liquidity Agents, the Secured Parties, and each of
their respective Affiliates and officers, directors, members, employees and agents thereof
(collectively, the “Indemnified Parties”), forthwith on demand, from and against any and
all damages, losses, claims, liabilities and related costs and expenses, including attorneys’ fees
and disbursements (all of the foregoing being collectively referred to as the “Indemnified
Amounts”) awarded against or incurred by such Indemnified Party or other non-monetary damages
of any such Indemnified Party any of them arising out of or as a result of this Agreement or the
financing or maintenance of the Capital or in respect of any Loan or any Contract,
excluding, however, (a) Indemnified Amounts to the extent resulting from gross
negligence or willful misconduct on the part of such Indemnified Party or (b) Indemnified Amounts
that have the effect of recourse for non-payment of the Loans due to credit problems of




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the Obligors (except as otherwise specifically provided in this Agreement). If the Borrower
has made any indemnity payment pursuant to this Section 11.1 and such payment fully
indemnified the recipient thereof and the recipient thereafter collects any payments from others in
respect of such Indemnified Amounts then, the recipient shall repay to the Borrower an amount equal
to the amount it has collected from others in respect of such indemnified amounts. Without
limiting the foregoing, the Borrower shall indemnify each Indemnified Party for Indemnified Amounts
relating to or resulting from:





               (i) any Contract or Loan treated as or represented by Credit Acceptance to be an
Eligible Dealer Loan Contract or Eligible Loan that is not at the applicable time an
Eligible Dealer Loan Contract or Eligible Loan;




               (ii) reliance on any representation or warranty made or deemed made by the Borrower or
any of its officers under or in connection with this Agreement, which shall have been false
or incorrect in any respect when made or deemed made or delivered;




               (iii) the failure by the Borrower to comply with any term, provision or covenant
contained in this Agreement or any agreement executed in connection with this Agreement, or
with any Applicable Law, with respect to any Loan, Dealer Agreement, Purchase Agreement, any
Contract, or the nonconformity of any Loan, Dealer Agreement, Purchase Agreement or Contract
with any such Applicable Law;




               (iv) the failure to vest and maintain vested in the Collateral Agent for the Secured
Parties a first priority perfected security interest in the Collateral, together with all
Collections, free and clear of any Lien whether existing at the time of any Funding or at
any time thereafter;




               (v) the failure to file, 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 the Collateral, whether at the time of the Funding or at any subsequent
time;




               (vi) any dispute, claim, offset or defense (other than the discharge in bankruptcy of
the Obligor) of the Obligor to the payment of any Loan or Contract (including, without
limitation, a defense based on such Loan or Contract not being a legal, valid and binding
obligation of such Obligor enforceable against it in accordance with its terms);




               (vii) any failure of the Borrower to perform its duties or obligations in accordance
with the provisions of this Agreement or any failure by the Borrower to perform its
respective duties under the Loans;




               (viii) the failure by Borrower to pay when due any Taxes for which the Borrower is
liable, including without limitation, sales, excise or personal property taxes payable in
connection with the Collateral;



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               (ix) any repayment by the Deal Agent, any Liquidity Agent or a Secured Party of any
amount previously distributed in reduction of Capital or payment of Yield or any other
amount due hereunder or under any Hedging Agreement, in each case which amount the Deal
Agent, any Liquidity Agent or a Secured Party believes in good faith is required to be
repaid;




               (x) the commingling of Collections of the Collateral at any time with other funds;




               (xi) any investigation, litigation or proceeding related to this Agreement or the use
of proceeds of the Funding or the funding of or maintenance of Capital or in respect of any
Loan or Contract;




               (xii) any failure by the Borrower to give reasonably equivalent value to the Originator
in consideration for the transfer by the Originator to the Borrower of the Loans, Related
Security or any portion thereof or any attempt by any Person to void or otherwise avoid any
such transfer under any statutory provision or common law or equitable action, including,
without limitation, any provision of the Bankruptcy Code;




               (xiii) the use of the Proceeds of any Funding; or




               (xiv) the failure of the Borrower or any of its agents or representatives to remit to
the Servicer, the Deal Agent, the Collateral Agent or any other Secured Party, any
Collections of the Collateral remitted to the Borrower or any such agent or representative.



          (b) Any amounts subject to the indemnification provisions of this Section 11.1 shall
be paid by the Borrower to the relevant Indemnified Party on the earlier of the next Payment Date
or 5 Business Days following demand therefor.




          (c) The obligations of the Borrower under this Section 11.1 shall survive the
resignation or removal of the Deal Agent, the Collateral Agent, the Servicer, the Successor
Servicer, any Liquidity Agent, any Lender or the Backup Servicer or the termination of this
Agreement.




     Section 11.2. Indemnities by the Servicer.



          (a) Without limiting any other rights that any such Person may have hereunder or under
Applicable Law, the Servicer hereby agrees to indemnify each Indemnified Party, forthwith on
demand, from and against any and all Indemnified Amounts awarded against or incurred by any such
Indemnified Party by reason of any acts, omissions or alleged acts or omissions of the Servicer,
including, but not limited to: (i) any representation or warranty made by the Servicer under or in
connection with any Transaction Document, any Monthly Report or any other information or report
delivered by or on behalf of the Servicer pursuant hereto, which shall have been false, incorrect
or misleading in any respect (or if the Backup Servicer becomes the Successor Servicer hereunder,
in any material respect) when made or deemed made; (ii) the failure by the Servicer to comply with
any Applicable Law; (iii) the failure of the Servicer to comply with its duties or obligations in
accordance with the Agreement or any other Transaction




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Document to which it is a party; (iv) any litigation, proceedings or investigation against the
Servicer; (v) the commingling of Collections at any time with other funds; or (vi) the failure of
the Servicer or any of its agents or representatives to remit to the Collection Account, Deal Agent
or Collateral Agent any Collections or Proceeds of the Collateral. The provisions of this
indemnity shall run directly to and be enforceable by an Indemnified Party subject to the
limitations hereof.




          (b) Any amounts subject to the indemnification provisions of this Section 11.2 shall
be paid by the Servicer to the relevant Indemnified Party within five (5) Business Days following
such Person’s demand therefor.




          (c) The Servicer shall have no liability for making indemnification hereunder to the extent
any such indemnification constitutes recourse for uncollectible Contracts.




          (d) The obligations of the Servicer under this Section 11.2 shall survive the
resignation or removal of the Deal Agent, the Collateral Agent, the Servicer, the Successor
Servicer, any Liquidity Agent, any Lender or the Backup Servicer and the termination of this
Agreement.




          (e) Any indemnification pursuant to this Section 11.2 shall not be payable from the
Collateral.




     Section 11.3. After-Tax Basis. Indemnification under Sections 11.1 and
11.2 shall be in an amount necessary to make the Indemnified Party whole after taking into
account any tax consequences to the Indemnified Party of the receipt of the indemnity provided
hereunder, including the effect of such tax or refund on the amount of tax measured by net income
or profits that is or was payable by the Indemnified Party.



ARTICLE XII

THE DEAL AGENT AND THE LIQUIDITY AGENTS




     Section 12.1. Authorization and Action.



          (a) Each Secured Party hereby designates and appoints Fifth Third as Deal Agent hereunder, and
authorizes the Deal Agent to take such actions as agent on its behalf and to exercise such powers
as are delegated to the Deal Agent by the terms of this Agreement together with such powers as are
reasonably incidental thereto; provided, that the Deal Agent shall not have the power or
authority to sign any document in the name of RFC. The Deal Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary relationship with any
Secured Party, and no implied covenants, functions, responsibilities, duties, obligations or
liabilities on the part of the Deal Agent shall be read into this Agreement or otherwise exist for
the Deal Agent. In performing its functions and duties hereunder, the Deal Agent shall act solely
as agent for the Secured Parties and does not assume nor shall be deemed to have assumed any
obligation or relationship of trust or agency with or for the Borrower or any of its successors or
assigns. The Deal Agent shall not be required to take any action that exposes the Deal Agent to
personal liability or that is contrary to this Agreement or Applicable Law. The appointment and
authority of the Deal Agent hereunder shall terminate upon the indefeasible payment in full of the
Aggregate Unpaids.




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          (b) Each Investor hereby designates and appoints the Person identified as such on the
signature pages hereto or in its Joinder, as Liquidity Agent hereunder for such Investor’s
Purchaser Group, and authorizes such Liquidity Agent to take such actions as agent on its behalf
and to exercise such powers as are delegated to the Liquidity Agent by the terms of this Agreement
together with such powers as are reasonably incidental thereto; provided, that the
Liquidity Agent shall not have the power or authority to sign any document in the name of RFC. The
Liquidity Agent shall not have any duties or responsibilities, except those expressly set forth
herein, or any fiduciary relationship with any Investor, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities on the part of the Liquidity Agent shall be
read into this Agreement or otherwise exist for the Liquidity Agent. In performing its functions
and duties hereunder, each Liquidity Agent shall act solely as agent for the Investors in its
Purchaser Group and does not assume nor shall be deemed to have assumed any obligation or
relationship of trust or agency with or for the Borrower or any of its successors or assigns or any
other Investor or Purchaser Group. The Liquidity Agent shall not be required to take any action
that exposes the Liquidity Agent to personal liability or that is contrary to this Agreement or
Applicable Law. The appointment and authority of the Liquidity Agent hereunder shall terminate
upon the indefeasible payment in full of the Aggregate Unpaids.




          (c) Each Secured Party hereby designates and appoints Fifth Third as Collateral Agent
hereunder, and authorizes the Collateral Agent to take such actions as agent on its behalf and to
exercise such powers as are delegated to the Collateral Agent by the terms of this Agreement
together with such powers as are reasonably incidental thereto; provided, that the
Collateral Agent shall not have the power or authority to sign any document in the name of RFC.
The Collateral Agent shall not have any duties or responsibilities, except those expressly set
forth herein, or any fiduciary relationship with any Secured Party, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities on the part of the Collateral Agent
shall be read into this Agreement or otherwise exist for the Collateral Agent. In performing its
functions and duties hereunder, the Collateral Agent shall act solely as agent for the Secured
Parties and does not assume nor shall be deemed to have assumed any obligation or relationship of
trust or agency with or for the Borrower or any of its successors or assigns. The Collateral Agent
shall not be required to take any action that exposes the Collateral Agent to personal liability or
that is contrary to this Agreement or Applicable Law. The appointment and authority of the
Collateral Agent hereunder shall terminate upon the indefeasible payment in full of the Aggregate
Unpaids.




     Section 12.2. Delegation of Duties.



          (a) The Deal Agent may execute any of its duties under this Agreement by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to
such duties. The Deal Agent shall not be responsible for the negligence or misconduct of any
agents or attorneys-in-fact selected by it with reasonable care.




          (b) Each Liquidity Agent may execute any of its duties under this Agreement by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters
pertaining to such duties. No Liquidity Agent shall be responsible for the negligence or
misconduct of any agents or attorneys-in-fact selected by it with reasonable care.




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          (c) The Collateral Agent may execute any of its duties under this Agreement by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters
pertaining to such duties. The Collateral Agent shall not be responsible for the negligence or
misconduct of any agents or attorneys-in-fact selected by it with reasonable care.




     Section 12.3. Exculpatory Provisions.



          (a) Neither the Deal Agent nor any of its directors, officers, agents or employees shall be
(i) liable for any action lawfully taken or omitted to be taken by it or them under or in
connection with this Agreement (except for its, their or such Person’s own gross negligence or
willful misconduct), or (ii) responsible in any manner to any of the Secured Parties for any
recitals, statements, representations or warranties made by the Borrower contained in this
Agreement or in any certificate, report, statement or other document referred to or provided for
in, or received under or in connection with, this Agreement for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other document furnished in
connection herewith, or for any failure of the Borrower to perform its obligations hereunder, or
for the satisfaction of any condition specified in Article III. The Deal Agent shall not be under
any obligation to any Secured Party to ascertain or to inquire as to the observance or performance
of any of the agreements or covenants contained in, or conditions of, this Agreement, or to inspect
the properties, books or records of the Borrower. The Deal Agent shall not be deemed to have
knowledge of any Amortization Event, Unmatured Termination Event, Termination Event or Servicer
Termination Event unless the Deal Agent has received notice from the Borrower or a Secured Party.




          (b) No Liquidity Agent nor any of its directors, officers, agents or employees shall be (i)
liable for any action lawfully taken or omitted to be taken by it or them under or in connection
with this Agreement (except for its, their or such Person’s own gross negligence or willful
misconduct), or (ii) responsible in any manner to the Deal Agent or any of the Secured Parties for
any recitals, statements, representations or warranties made by the Borrower contained in this
Agreement or in any certificate, report, statement or other document referred to or provided for
in, or received under or in connection with, this Agreement or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other document
furnished in connection herewith, or for any failure of the Borrower to perform its obligations
hereunder, or for the satisfaction of any condition specified in Article III. No Liquidity Agent
shall be under any obligation to the Deal Agent or any Secured Party to ascertain or to inquire as
to the observance or performance of any of the agreements or covenants contained in, or conditions
of, this Agreement, or to inspect the properties, books or records of the Borrower. No Liquidity
Agent shall be deemed to have knowledge of any Amortization Event, Unmatured Termination Event,
Termination Event unless such Liquidity Agent has received notice from the Borrower, the Deal Agent
or a Secured Party.




          (c) Neither the Collateral Agent nor any of its directors, officers, agents or employees shall
be (i) liable for any action lawfully taken or omitted to be taken by it or them under or in
connection with this Agreement (except for its, their or such Person’s own gross negligence or
willful misconduct), or (ii) responsible in any manner to any of the Secured Parties for any
recitals, statements, representations or warranties made by the Borrower contained in this
Agreement or in any certificate, report, statement or other document referred to or provided for




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in, or received under or in connection with, this Agreement for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other document
furnished in connection herewith, or for any failure of the Borrower to perform its obligations
hereunder, or for the satisfaction of any condition specified in Article III. The Collateral Agent
shall not be under any obligation to any Secured Party to ascertain or to inquire as to the
observance or performance of any of the agreements or covenants contained in, or conditions of,
this Agreement, or to inspect the properties, books or records of the Borrower. The Collateral
Agent shall not be deemed to have knowledge of any Amortization Event, Unmatured Termination Event,
Termination Event or Servicer Termination Event unless the Collateral Agent has received notice
from the Borrower or a Secured Party.




     Section 12.4. Reliance.



          (a) The Deal Agent shall in all cases be entitled to rely, and shall be fully protected in
relying, upon any document or conversation believed by it to be genuine and correct and to have
been signed, sent or made by the proper Person or Persons and upon advice and statements of legal
counsel (including, without limitation, counsel to the Borrower), independent accountants and other
experts selected by the Deal Agent. The Deal Agent shall in all cases be fully justified in
failing or refusing to take any action under this Agreement or any other document furnished in
connection herewith unless it shall first receive such advice or concurrence of RFC or the Required
Investors or any of the Secured Parties, as applicable, as it deems appropriate or it shall first
be indemnified to its satisfaction by the Secured Parties, provided that unless and until the Deal
Agent shall have received such advice, the Deal Agent may take or refrain from taking any action,
as the Deal Agent shall deem advisable and in the best interests of the Secured Parties. The Deal
Agent shall in all cases be fully protected in acting, or in refraining from acting, in accordance
with a request of RFC or the Required Investors or any of the Secured Parties, as applicable, and
such request and any action taken or failure to act pursuant thereto shall be binding upon all the
Secured Parties.




          (b) Each Liquidity Agent shall in all cases be entitled to rely, and shall be fully protected
in relying, upon any document or conversation believed by it to be genuine and correct and to have
been signed, sent or made by the proper Person or Persons and upon advice and statements of legal
counsel (including, without limitation, counsel to the Borrower), independent accountants and other
experts selected by such Liquidity Agent. Each Liquidity Agent shall in all cases be fully
justified in failing or refusing to take any action under this Agreement or any other document
furnished in connection herewith unless it shall first receive such advice or concurrence of its
related Investors as it deems appropriate or it shall first be indemnified to its satisfaction by
its related Investors, provided that unless and until such Liquidity Agent shall have received such
advice, such Liquidity Agent may take or refrain from taking any action, as such Liquidity Agent
shall deem advisable and in the best interests of its related Investors. Each Liquidity Agent
shall in all cases be fully protected in acting, or in refraining from acting, in accordance with a
request of its related Investors and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the related Investors.




          (c) The Collateral Agent shall in all cases be entitled to rely, and shall be fully protected
in relying, upon any document or conversation believed by it to be genuine and correct and to have
been signed, sent or made by the proper Person or Persons and upon advice and




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statements of legal counsel (including, without limitation, counsel to the Borrower),
independent accountants and other experts selected by the Collateral Agent. The Collateral Agent
shall in all cases be fully justified in failing or refusing to take any action under this
Agreement or any other document furnished in connection herewith unless it shall first receive such
advice or concurrence of the Required Investors or any of the Secured Parties, as applicable, as it
deems appropriate or it shall first be indemnified to its satisfaction by the Secured Parties,
provided that unless and until the Collateral Agent shall have received such advice, the Collateral
Agent may take or refrain from taking any action, as the Collateral Agent shall deem advisable and
in the best interests of the Secured Parties. The Collateral Agent shall in all cases be fully
protected in acting, or in refraining from acting, in accordance with a request of the Required
Investors or any of the Secured Parties, as applicable, and such request and any action taken or
failure to act pursuant thereto shall be binding upon all the Secured Parties.




     Section 12.5. Non-Reliance on Deal Agent, Liquidity Agents, Collateral Agent and Other
Lenders. Each Secured Party expressly acknowledges that neither the Deal Agent, any Liquidity
Agent, the Collateral Agent 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 Deal Agent, any Liquidity Agent or the Collateral Agent hereafter taken, including, without
limitation, any review of the affairs of the Borrower, shall be deemed to constitute any
representation or warranty by the Deal Agent, any Liquidity Agent or the Collateral Agent. Each
Secured Party represents and warrants to the Deal Agent, each Liquidity Agent and the Collateral
Agent that it has and will, independently and without reliance upon the Deal Agent, any Liquidity
Agent, the Collateral Agent or any other Secured Party and based on such documents and information
as it has deemed appropriate, made its own appraisal of and investigation into the business,
operations, property, prospects, financial and other conditions and creditworthiness of the
Borrower and made its own decision to enter into this Agreement or Hedging Agreement, as the case
may be.



     Section 12.6. Reimbursement and Indemnification. The Investors agree to reimburse and
indemnify the Deal Agent, the related Liquidity Agent, the Collateral Agent and each of their
respective officers, directors, employees, representatives and agents ratably according to their
pro rata shares, to the extent not paid or reimbursed by the Borrower or the Servicer (i) for any
amounts for which a Liquidity Agent, acting in its capacity as Liquidity Agent for its related
Investors, the Deal Agent, acting in its capacity as Deal Agent, or the Collateral Agent, acting in
its capacity as Collateral Agent is entitled to reimbursement by the Borrower hereunder and (ii)
for any other expenses incurred by a Liquidity Agent, acting in its capacity as Liquidity Agent for
its related Investors, the Deal Agent, in its capacity as Deal Agent or the Collateral Agent,
acting in its capacity as Collateral Agent and acting on behalf of the Secured Parties, in
connection with the administration and enforcement of this Agreement.



     Section 12.7. Deal Agent, Liquidity Agents and Collateral Agent in their Individual
Capacities. The Deal Agent, the Liquidity Agents, the Collateral Agent and each of their
respective Affiliates may make loans to, accept deposits from and generally engage in any kind of
business with the Borrower or any Affiliate of the Borrower as though the Deal Agent, the Liquidity
Agents or the Collateral Agent, as the case may be, were not the Deal Agent, a Liquidity Agent or
the Collateral Agent, as the case may be, hereunder. With respect to each Funding pursuant to this
Agreement, the Deal Agent, the Liquidity Agents, the Collateral Agent and each



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of their respective Affiliates shall have the same rights and powers under this Agreement as
any Lender and may exercise the same as though it were not the Deal Agent, a Liquidity Agent or the
Collateral Agent, as the case may be, and the terms “Investor,” “Lender,”
“Investors” and “Lenders” shall include the Deal Agent, the Collateral Agent or the
Liquidity Agents, as the case may be, each in its individual capacity.




     Section 12.8. Successor Deal Agent, Liquidity Agents or Collateral Agent.



          (a) The Deal Agent may, upon 5 days’ notice to the Borrower and the Secured Parties, resign as
Deal Agent. If the Deal Agent shall resign, then RFC during such 5-day period may appoint a
successor agent. If for any reason no successor Deal Agent is appointed by RFC during such 5-day
period, then effective upon the expiration of such 5-day period, the Secured Parties other than RFC
shall perform all of the duties of the Deal Agent hereunder and the Borrower shall make all
payments in respect of the Aggregate Unpaids or under any fee letter delivered in connection
herewith directly to the applicable Secured Party and for all purposes shall deal directly with
each Secured Party. After any retiring Deal Agent’s resignation hereunder as Deal Agent, the
provisions of Article XI and Article XII shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Deal Agent under this Agreement.




          (b) The Collateral Agent may, upon 5 days’ notice to the Borrower and the Secured Parties, and
the Collateral Agent will, upon the direction of all of the Secured Parties resign as Collateral
Agent. If the Collateral Agent shall resign, then the Secured Parties, during such 5-day period
shall appoint a successor agent. If for any reason no successor Collateral Agent is appointed by
the Secured Parties during such 5-day period, then effective upon the expiration of such 5-day
period, the Secured Parties shall perform all of the duties of the Collateral Agent hereunder and
the Borrower shall make all payments in respect of the Aggregate Unpaids or under any fee letter
delivered in connection herewith directly to the applicable Secured Party and for all purposes
shall deal directly with each Secured Party. After any retiring Collateral Agent’s resignation
hereunder as Collateral Agent, the provisions of Article XI and Article XII shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was Collateral Agent under
this Agreement.




ARTICLE XIII

ASSIGNMENTS; PARTICIPATIONS




     Section 13.1. Assignments and Participations.



          (a) Each Investor may, with the express prior written consent of the Deal Agent (in its sole
discretion) upon at least 30 days notice to its related CP Entity, the Deal Agent, the Collateral
Agent, and the related Liquidity Agent, assign to one or more banks or other entities all or a
portion of its rights and obligations under this Agreement; provided, however, that
(i) each such assignment shall be of a constant, and not a varying percentage of all of the
assigning Investor’s rights and obligations under this Agreement; (ii) the amount of the Commitment
of the assigning Investor being assigned pursuant to each such assignment (determined as of the
date of the Assignment and Acceptance with respect to such assignment) shall in no event be less
than the lesser of (A) $15,000,000 or an integral multiple of $1,000,000 in excess of that amount
and (B) the full amount of the assigning Investor’s Commitment; (iii)




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each such assignment shall be to an Eligible Assignee; (iv) the parties to each such
assignment shall execute and deliver to the Deal Agent, for its acceptance and recording in the
Register, an Assignment and Acceptance, together with a processing and recordation fee of $3,500 or
such lesser amount as shall be approved by the Deal Agent; (v) the parties to each such assignment
shall have agreed to reimburse the Deal Agent, the Liquidity Agents, the Collateral Agent and the
CP Entities for all fees, costs and expenses (including, without limitation, the reasonable fees
and out-of-pocket expenses of counsel for each of the Deal Agent, the Liquidity Agents and the CP
Entities) incurred by the Deal Agent, the Liquidity Agents, the Collateral Agent and the CP
Entities, respectively, in connection with such assignment; and (vi) there shall be no increased
costs, expenses or taxes incurred by the Deal Agent, the Liquidity Agents, the Collateral Agent or
the CP Entities upon such assignment or participation. Upon such execution, delivery and
acceptance by the Deal Agent, the Collateral Agent and the Liquidity Agents and the recording by
the Deal Agent, from and after the effective date specified in each Assignment and Acceptance,
which effective date shall be the date of acceptance thereof by the Deal Agent, the Collateral
Agent and the Liquidity Agents, unless a later date is specified therein, (i) the assignee
thereunder shall be a party hereto and, to the extent that rights and obligations hereunder have
been assigned to it pursuant to such Assignment and Acceptance, have the rights and obligations of
an Investor hereunder and (ii) the Investor assignor thereunder shall, to the extent that rights
and obligations hereunder have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights and be released from its obligations under this Agreement (and, in the case
of an Assignment and Acceptance covering all or the remaining portion of an assigning Investor’s
rights and obligations under this Agreement, such Investor shall cease to be a party hereto).




          (b) By executing and delivering an Assignment and Acceptance, the Investor assignor thereunder
and the assignee thereunder confirm to and agree with each other and the other parties hereto as
follows: (i) other than as provided in such Assignment and Acceptance, such assigning Investor
makes no representation or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or any
other instrument or document furnished pursuant hereto; (ii) such assigning Investor makes no
representation or warranty and assumes no responsibility with respect to the financial condition of
its related CP Entity or any other CP Entity or the performance or observance by its related CP
Entity or any other CP Entity of any of its obligations under this Agreement or any other
instrument or document furnished pursuant hereto; (iii) such assignee confirms that it has received
a copy of this 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 Assignment and Acceptance; (iv) such assignee will, independently and without reliance upon
the Deal Agent, the Collateral Agent or the Liquidity Agents, such assigning Investor or any other
Investor and based on such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under this Agreement; (v)
such assigning Investor and such assignee confirm that such assignee is an Eligible Assignee; (vi)
such assignee appoints and authorizes each of the Deal Agent, the Collateral Agent and the
Liquidity Agents to take such action as agent on its behalf and to exercise such powers under this
Agreement as are delegated to such agent by the terms hereof, together with such powers as are
reasonably incidental thereto; and (vii) such assignee agrees that it will perform in accordance
with their




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terms all of the obligations which by the terms of this Agreement are required to be performed
by it as an Investor.




          (c) The Deal Agent, acting solely for this purpose as a non-fiduciary agent of the Borrower,
shall maintain at its address referred to herein a copy of each Assignment and Acceptance delivered
to and accepted by it and a register for the recordation of the names and addresses of the
Investors and the Commitment of, and the Capital of the Funding (the “Register”). The
entries in the Register shall be conclusive and binding for all purposes, absent manifest error,
and each CP Entity, the Borrower and the Investors may treat each Person whose name is recorded in
the Register as an Investor hereunder for all purposes of this Agreement. The Register shall be
available for inspection by each CP Entity, the Liquidity Agents or any Investor at any reasonable
time and from time to time upon reasonable prior notice.




          (d) Subject to the provisions of Section 13.1(a) (including receipt of Deal Agent’s
prior written consent), upon its receipt of an Assignment and Acceptance executed by an assigning
Investor and an assignee, the Deal Agent, the Collateral Agent and the Liquidity Agents shall each,
if such Assignment and Acceptance has been completed and is in substantially the form of Exhibit D
hereto, accept such Assignment and Acceptance, and the Deal Agent shall then (i) record the
information contained therein in the Register and (ii) give prompt notice thereof to each CP
Entity.




          (e) Each Investor may, with the express prior written consent of the Deal Agent (in its sole
discretion) sell participations to one or more banks or other entities in or to all or a portion of
its rights and obligations under this Agreement (including, without limitation, all or a portion of
its Commitment and its portion of the Funding and related Collateral); provided,
however, that (i) such Investor’s obligations under this Agreement (including, without
limitation, its Commitment hereunder) shall remain unchanged; (ii) such Investor shall remain
solely responsible to the other parties hereto for the performance of such obligations; and (iii)
the Deal Agent and the other Investors shall continue to deal solely and directly with such
Investor in connection with such Investor’s rights and obligations under this Agreement.
Notwithstanding anything herein to the contrary, each participant shall have the rights of an
Investor (including any right to receive payment) under Sections 2.13 and 2.14;
provided, however, that no participant shall be entitled to receive payment under
either such Section in excess of the amount that would have been payable under such Section by the
Borrower to the Investor granting its participation had such participation not been granted, and no
Investor granting a participation shall be entitled to receive payment under either such Section in
an amount that exceeds the sum of (i) the amount to which such Investor is entitled under such
Section with respect to any portion of the Capital that is not subject to any participation
plus (ii) the aggregate amount to which its participants are entitled under such Sections
with respect to the amounts of their respective participations. With respect to any participation
described in this Section 13.1, the participant’s rights as set forth in the agreement
between such participant and the applicable Investor to agree to or to restrict such Investor’s
ability to agree to any modification, waiver or release of any of the terms of this Agreement or to
exercise or refrain from exercising any powers or rights that such Investor may have under or in
respect of this Agreement shall be limited to the right to consent to any of the matters set forth
in Section 14.1 of this Agreement.




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          (f) Each Investor may, in connection with any assignment or participation or proposed
assignment or participation pursuant to this Section 13.1, disclose to the assignee or
participant or proposed assignee or participant any information relating to the Borrower or its
related CP Entity furnished to such Investor by or on behalf of the Borrower or its related CP
Entity.




          (g) [Reserved].




          (h) Nothing herein shall prohibit any Investor from pledging or assigning as collateral any of
its rights under this Agreement to any Federal Reserve Bank in accordance with Applicable Law and
any such pledge or collateral assignment may be made without compliance with Section
13.1(a) or Section 13.1(b).




          (i) In the event any Investor causes increased costs, expenses or taxes to be incurred by the
Deal Agent, Liquidity Agents, the Collateral Agent or the CP Entities in connection with the
assignment or participation of such Investor’s rights and obligations under this Agreement to an
Eligible Assignee, then such Investor agrees that it will make reasonable efforts to assign such
increased costs, expenses or taxes to such Eligible Assignee in accordance with the provisions of
this Agreement.




          (j) Notwithstanding anything herein or in any other Transaction Document to the contrary ,
each Investor and each CP Entity, may at any time (and without any prior notices to or consents
from any other Person) assign, or grant a security interest in or sell a participation interest or
other interest in all or a portion of its right and obligations under this Agreement to its
Liquidity Agent, any related Liquidity Bank, the Bridge Loan Lender or any other commercial paper
conduit or similar financing vehicle sponsored, or to whom liquidity and credit enhancement is
provided, by such Liquidity Agent, Liquidity Banks or Bridge Loan Lender. The parties to any such
assignment, grant or sale of participation interest, shall execute and deliver to the related
Liquidity Agent, for its acceptance and recording in its books and records, such agreement or
document as may be satisfactory to such parties and the related Liquidity Agent. The Borrower
agrees that any such Liquidity Agent, Liquidity Bank or the Bridge Loan Lender, as applicable, that
has been assigned or sold all or a portion of its right and obligations of any CP Entity or
Investor hereunder shall (in addition to any rights it may already have in the case of any Advance
or portion thereof funded by it at any time hereunder) have all of the rights and benefits of a
Lender hereunder.




          (k) Notwithstanding anything herein or in any other Transaction Document to the contrary, but
subject to Section 13.1(j), no Person or group of Persons (who is not as of the Closing
Date already a party hereto or any related Liquidity Agreement) shall become a party to this
Agreement as Lender, CP Entity, Liquidity Agent, Investor or Liquidity Bank (through assignment,
participation, Joinder or otherwise) without, in any such case, the express prior written consent
of the Deal Agent (in its sole discretion).




ARTICLE XIV

MISCELLANEOUS




     Section 14.1. Amendments and Waivers.



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          (a) Except as provided in this Section 14.1, no amendment, waiver or other
modification of any provision of this Agreement shall be effective without the written agreement of
the Borrower, the Deal Agent, the Collateral Agent and the Required Investors; provided,
however, that no such amendment, waiver or modification shall affect the rights or
obligations of any Hedge Counterparty or the Backup Servicer without the written agreement of such
Person. Any waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given.




          (b) No amendment, waiver or other modification of this Agreement shall:





               (i) without the consent of each affected Lender, (A) extend the Commitment Termination
Date or the date of any payment or deposit of Collections by the Borrower or the Servicer,
(B) reduce the rate or extend the time of payment of Yield (or any component thereof), (C)
reduce any fee payable to the Deal Agent for the benefit of the Lenders, (D) except pursuant
to Article XIII hereof, change the amount of the Capital of any Lender, an
Investor’s pro rata share or an Investor’s Commitment, (E) amend, modify or waive any
provision of the definition of “Required Investors”, Section 13.1(j), this
Section 14.1(b), Section 14.10 or Section 14.11, (F) consent to or
permit the assignment or transfer by the Borrower of any of its rights and obligations under
this Agreement, (G) increase the obligations of any CP Entity or (H) amend or modify any
defined term (or any defined term used directly or indirectly in such defined term) used in
clauses (A) through (F) above in a manner that would circumvent the intention of the
restrictions set forth in such clauses, including, without limitation, the definitions of
“Additional Entity”, “Breakage Costs”, “Commercial Paper Notes”, “CP Entity”, “CP Rate”,
“Eligible Assignee”, “Liquidity Agreement”, “Liquidity Bank” or “Yield Rate”;




               (ii) without the written consent of the Deal Agent or the Collateral Agent, as
applicable, amend, modify or waive any provision of this Agreement if the effect thereof is
to affect the rights or duties of the Deal Agent or the Collateral Agent, as applicable; or




               (iii) without the consent of the Deal Agent, amend or modify (A) Section 10.1,
(B) the definitions of “Amortization Event,” “Eligible Dealer Agreement,” “Hedging
Agreement,” “Net Advance Rate,” “Initial Facility Limit,” “Termination Date” and “Required
Reserve Account Amount” as set forth in Section 1.1, (C) Section 2.7(a) or
(D) Section 5.3.



          (c) Notwithstanding the foregoing provisions of this Section 14.1, without the consent
of the Investors, the Deal Agent may, with the consent of the Borrower amend this Agreement solely
to add additional Persons as Investors hereunder. Any modification or waiver shall apply to each
of the Lenders equally and shall be binding upon the Borrower, the Lenders, the Collateral Agent
and the Deal Agent.




     Section 14.2. Notices, Etc. All notices and other communications provided for
hereunder shall, unless otherwise stated herein, be in writing (including telex communication and
communication by facsimile copy) and mailed, telexed, transmitted or delivered, as to each party
hereto, at its address set forth under its name on the signature pages hereof, in the Joinder
related



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to such party or specified in such party’s Assignment and Acceptance, as the case may be, or
at such other address as shall be designated by such party in a written notice to the other parties
hereto. All such notices and communications shall be effective, upon receipt, or in the case of
(a) notice by mail, five days after being deposited in the United States mail, first class postage
prepaid, (b) notice by telex, when telexed against receipt of answer back, or (c) notice by
facsimile copy, when verbal communication of receipt is obtained, except that notices and
communications pursuant to Article XIV shall not be effective until received with respect
to any notice sent by mail or telex; provided, that in the case of RFC, notices are
effective only when received by RFC.




     Section 14.3. Ratable Payments. If any Secured Party, whether by setoff or otherwise,
has payment made to it with respect to any portion of the Aggregate Unpaids owing to such Secured
Party (other than payments received pursuant to Section 11.1) in a greater proportion than
that received by any other Secured Party, such Secured Party agrees, promptly upon demand, to
deliver such excess to the other Secured Parties (ratably) so that following such delivery each
Secured Party will hold its ratable proportion of the Aggregate Unpaids.



     Section 14.4. No Waiver; Remedies. No failure on the part of the Deal Agent, the
Collateral Agent, the Backup Servicer or a Secured Party to exercise, and no delay in exercising,
any right or remedy hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right or remedy hereunder preclude any other or further exercise thereof or the
exercise of any other right. The rights and remedies herein provided are cumulative and not
exclusive of any rights and remedies provided by law.



     Section 14.5. Binding Effect; Benefit of Agreement. This Agreement shall be binding
upon and inure to the benefit of the Borrower, the Deal Agent, the Backup Servicer, the Collateral
Agent, the Secured Parties and their respective successors and permitted assigns and, in addition,
the provisions of 2.7(a)(i) and 2.7(a)(xii) shall inure to the benefit of each
Hedge Counterparty, whether or not that Hedge Counterparty is a Secured Party.



     Section 14.6. Term of this Agreement. This Agreement, including, without limitation,
the Borrower’s representations, warranties and covenants set forth in Articles IV and V, and the
Servicer’s representations, warranties and covenants set forth in Articles V and VI hereof, create
and constitute the continuing obligation of the parties hereto in accordance with its terms, and
shall remain in full force and effect until the Collection Date; provided, however,
that the rights and remedies with respect to any breach of any representation and warranty made or
deemed made by the Borrower or Servicer pursuant to Articles III and IV and the indemnification and
payment provisions of Article XI and Article XII and the provisions of Section 14.10 and
Section 14.11 shall be continuing and shall survive any termination of this Agreement.



     Section 14.7. Governing Law; Consent to Jurisdiction; Waiver of Objection to Venue.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK. EACH OF THE PARTIES HERETO AND EACH HEDGE COUNTERPARTY HEREBY AGREES TO THE NON-EXCLUSIVE
JURISDICTION OF ANY FEDERAL COURT LOCATED WITHIN THE STATE OF NEW YORK. EACH OF THE PARTIES HERETO
AND EACH SECURED PARTY HEREBY WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS, AND ANY



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OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER IN ANY OF THE AFOREMENTIONED COURTS AND
CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT.




     Section 14.8. Waiver of Jury Trial. TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH
OF THE PARTIES HERETO AND EACH HEDGE COUNTERPARTY HEREBY WAIVES ANY RIGHT TO HAVE A JURY
PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE BETWEEN THE
PARTIES HERETO ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP
BETWEEN ANY OF THEM IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
INSTEAD, ANY SUCH DISPUTE RESOLVED IN COURT WILL BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY.



     Section 14.9. Costs, Expenses and Taxes.



          (a) In addition to the rights of indemnification granted to the Deal Agent, the Liquidity
Agents, the Backup Servicer, the Collateral Agent, the Secured Parties and its or their Affiliates
and officers, directors, employees and agents thereof under Article XI hereof, the Borrower agrees
to pay on demand all costs and expenses of the Deal Agent, the Liquidity Agents, the Backup
Servicer, the Collateral Agent and the Secured Parties incurred in connection with the preparation,
execution, delivery, administration (including periodic auditing), amendment or modification of, or
any waiver or consent issued in connection with, this Agreement, the other Transaction Documents
and the other documents to be delivered hereunder or thereunder, or in connection herewith or
therewith (excluding any Hedging Agreement), including, without limitation, the reasonable fees and
out-of-pocket expenses of counsel for the Deal Agent, the Liquidity Agents, the Backup Servicer,
the Collateral Agent and the Secured Parties with respect thereto and with respect to advising the
Deal Agent, the Liquidity Agents, the Backup Servicer, the Collateral Agent and the Secured Parties
as to their respective rights and remedies under this Agreement, the other Transaction Documents
and the other documents to be delivered hereunder or thereunder, or in connection herewith or
therewith (excluding any Hedging Agreement), and all costs and expenses, if any (including
reasonable counsel fees and expenses), incurred by the Deal Agent, the Liquidity Agents, the Backup
Servicer, the Collateral Agent or the Secured Parties in connection with the enforcement of this
Agreement, the other Transaction Documents and the other documents to be delivered hereunder or
thereunder, or in connection herewith or therewith (including any Hedging Agreement).




          (b) The Borrower shall pay on demand any and all stamp, sales, excise and other taxes and fees
payable or determined to be payable in connection with the execution, delivery, filing and
recording of this Agreement, the other Transaction Documents, the other documents to be delivered
hereunder or any agreement or other document providing liquidity support, credit enhancement or
other similar support to the Lender in connection with this Agreement or the funding or maintenance
of any Funding hereunder.




          (c) The Borrower shall pay on demand all other costs, expenses and Taxes (excluding income
taxes, imposed on such Person by the jurisdiction under the laws of which such Person is organized)
incurred by any Secured Party or any shareholder of such Secured




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Party (“Other Costs”), including, without limitation, all costs and expenses incurred
by the Deal Agent in connection with periodic audits of the Borrower’s or the Servicer’s books and
records and, in the case of any Lender, the cost of rating such Lender’s (or its related funding
source’s) commercial paper with respect to financing any Advance hereunder by independent financial
rating agencies.




     Section 14.10. No Petition.



          (a) Each of the parties hereto and each Hedge Counterparty (by accepting the benefits of this
Agreement) hereby covenants and agrees that, prior to the date which is one year and one day after
the payment in full of all outstanding Commercial Paper Notes or other indebtedness of each CP
Entity, it will not institute against or join any other Person in instituting against such CP
Entity any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or other
similar proceeding under the laws of the United States or any state of the United States. The
agreements set forth in this Section 14.10 and the parties’ respective obligations under
this Section 14.10 shall survive the termination of this Agreement.




          (b) Each of the parties hereto (other than the Deal Agent and each CP Entity) hereby agrees
that it will not institute against, or join any other Person in instituting against the Borrower
any Insolvency Proceeding so long as there shall not have elapsed one year and one day since the
Collection Date.




     Section 14.11. Recourse Against Certain Parties.



          (a) No recourse under or with respect to any obligation, covenant or agreement (including,
without limitation, the payment of any fees or any other obligations) of any Secured Party as
contained in this Agreement or any other agreement, instrument or document entered into by it
pursuant hereto or in connection herewith shall be had against any administrator of such Secured
Party or any incorporator, affiliate, stockholder, officer, employee or director of such Secured
Party or of any such administrator, as such, by the enforcement of any assessment or by any legal
or equitable proceeding, by virtue of any statute or otherwise; it being
expressly agreed and understood that the agreements of such Secured
Party contained in this Agreement and all of the other agreements, instruments and documents
entered into by it pursuant hereto or in connection herewith are, in each case, solely the
corporate obligations of such Secured Party, and that no personal liability whatsoever shall attach
to or be incurred by any administrator of such Secured Party or any incorporator, stockholder,
affiliate, officer, employee or director of such Secured Party or of any such administrator, as
such, or any other of them, under or by reason of any of the obligations, covenants or agreements
of such Secured Party contained in this Agreement or in any other such instruments, documents or
agreements, or that are implied therefrom, and that any and all personal liability of every such
administrator of such Secured Party and each incorporator, stockholder, affiliate, officer,
employee or director of such Secured Party or of any such administrator, or any of them, for
breaches by such Secured Party of any such obligations, covenants or agreements, which liability
may arise either at common law or at equity, by statute or constitution, or otherwise, is hereby
expressly waived as a condition of and in consideration for the execution of this Agreement. The
provisions of this Section 14.11 shall survive the termination of this Agreement.




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          (b) No CP Entity shall have any obligation to pay any amounts owing hereunder unless and until
such CP Entity has received such amounts pursuant to the Capital and such amounts are not necessary
to pay outstanding Commercial Paper Notes or other outstanding indebtedness of such CP Entity. In
addition, each party hereto hereby agrees that no liability or obligation of any CP Entity
hereunder for fees, expenses or indemnities shall constitute a claim (as defined in Section 101 of
Title 11 of the United States Bankruptcy Code) against such CP Entity unless such CP Entity has
received cash from the Capital sufficient to pay such amounts, and such amounts are not necessary
to pay outstanding Commercial Paper Notes or other indebtedness of such CP Entity. The agreements
set forth in this Section 14.11 and the parties’ respective obligations under this
Section 14.11 shall survive the termination of this Agreement.




     Section 14.12. Protection of Right, Title and Interest in Assets; Further Action
Evidencing the Funding.



          (a) Each of the Borrower and Credit Acceptance shall cause this Agreement, all amendments
hereto and/or all financing statements and continuation statements and any other necessary
documents covering the right, title and interest of the Deal Agent and/or the Collateral Agent, as
applicable, as agent for the Secured Parties and of the Secured Parties to the Assets to be
promptly recorded, registered and filed, and at all times to be kept recorded, registered and
filed, all in such manner and in such places as may be required by law fully to preserve and
protect the right, title and interest of the Deal Agent and/or the Collateral Agent, as applicable,
as agent for the Secured Parties hereunder to all property comprising the Assets. Each of the
Borrower and Credit Acceptance shall deliver to the Deal Agent file-stamped copies of, or filing
receipts for, any document recorded, registered or filed as provided above, as soon as available
following such recording, registration or filing. The Borrower shall cooperate fully with Credit
Acceptance in connection with the obligations set forth above and will execute any and all
documents reasonably required to fulfill the intent of this Section 14.12(a).




          (b) Each of the Borrower and the Servicer agrees that from time to time, at its expense (or if
the Backup Servicer becomes the Successor Servicer hereunder, at the expense of the Borrower), it
will promptly execute and deliver all instruments and documents, and take all actions, that the
Deal Agent may reasonably request in order to perfect, protect or more fully evidence the Funding
hereunder, or to enable the Deal Agent or the Secured Parties to exercise and enforce their rights
and remedies hereunder or under any Transaction Document.




          (c) If the Borrower or the Servicer fails to perform any of its obligations hereunder, the
Deal Agent or any Secured Party may (but shall not be required to) perform, or cause performance
of, such obligation; and the Deal Agent’s or such Secured Party’s costs and expenses incurred in
connection therewith shall be payable by the Borrower (if the Servicer that fails to so perform is
the Borrower or an Affiliate thereof) as provided in Article XI, as applicable. The Borrower
irrevocably authorizes the Deal Agent and appoints the Deal Agent as its attorney-in-fact to act on
behalf of the Borrower (i) to execute on behalf of the Borrower as debtor and to file financing
statements necessary or desirable in the Deal Agent’s sole discretion to perfect and to maintain
the perfection and priority of the interest of the Secured Parties in the Assets and (ii) to file a
carbon, photographic or other reproduction of this Agreement or any financing statement with
respect to the Assets as a financing statement in such offices as the Deal Agent in its sole
discretion deems necessary or desirable to perfect and to maintain the perfection




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and priority of the interests of the Secured Parties in the Assets. This appointment is
coupled with an interest and is irrevocable.




          (d) Without limiting the generality of the foregoing, each of the Borrower and Credit
Acceptance will, not earlier than six (6) months and not later than three (3) months prior to the
fifth anniversary of the date of filing of the financing statement referred to in Section
3.1 or any other financing statement filed pursuant to this Agreement or in connection with the
Funding hereunder, unless the Collection Date shall have occurred:





               (i) execute and deliver and file or cause to be filed an appropriate continuation
statement with respect to such financing statement; and




               (ii) deliver or cause to be delivered to the Deal Agent an opinion of the counsel for
Borrower, in form and substance reasonably satisfactory to the Deal Agent, confirming and
updating the opinion delivered pursuant to Section 3.1 with respect to perfection
and priority and otherwise to the effect that the grant of the security interest in the
Collateral hereunder continues to be an enforceable and perfected first priority security
interest, subject to no other Liens of record except as provided herein or otherwise
permitted hereunder, which opinion may contain usual and customary assumptions, limitations
and exceptions.



     Section 14.13. Confidentiality; Tax Treatment Disclosure.



          (a) Each of the Deal Agent, the Secured Parties, the Liquidity Agents, the Servicer, the
Collateral Agent, the Backup Servicer and the Borrower shall maintain and shall cause each of its
employees and officers to maintain the confidentiality of the Agreement and all information with
respect to the other parties, including all information regarding the business of the Borrower and
the Servicer hereto and their respective businesses obtained by it or them in connection with the
structuring, negotiating and execution of the transactions contemplated herein, except that each
such party and its officers and employees may (i) disclose such information to its external
accountants, attorneys, investors, potential investors and the agents of such Persons
(“Excepted Persons”), provided, however, that each Excepted Person shall be
advised that such information shall be used solely in connection with such Excepted Person’s
evaluation of, or relationship with, the Borrower and its affiliates, (ii) disclose the existence
of the Agreement, but not the financial terms thereof, (iii) disclose such information as is
required by the Transaction Documents or Applicable Law and (iv) disclose the Agreement and such
information in any suit, action, proceeding or investigation (whether in law or in equity or
pursuant to arbitration) involving any of the Transaction Documents or any Hedging Agreement for
the purpose of defending itself, reducing its liability, or protecting or exercising any of its
claims, rights, remedies, or interests under or in connection with any of the Transaction Documents
or any Hedging Agreement. It is understood that the financial terms that may not be disclosed
except in compliance with this Section 14.13(a) include, without limitation, all fees and
other pricing terms, and all Termination Events, Servicer Termination Events, and priority of
payment provisions




          (b) Anything herein to the contrary notwithstanding, each of the Borrower and the Servicer
hereby consents to the disclosure of any nonpublic information with respect to it and




-100-









 







the Transaction Documents (i) to the Deal Agent, the Liquidity Agents, the Collateral Agent,
the Backup Servicer or the Secured Parties by each other, (ii) by the Deal Agent or any Lender to
any prospective or actual assignee or participant of any of them or (iii) by the Deal Agent, the
Collateral Agent, any Liquidity Agent or a Lender to any Rating Agency, commercial paper dealer,
investor with respect to Commercial Paper Notes or provider of a surety, guaranty or credit or
liquidity enhancement to a Lender and to any officers, directors, members, employees, outside
accountants and attorneys of any of the foregoing, provided each such Person is informed of the
confidential nature of such information. In addition, the Secured Parties, the Liquidity Agents,
the Backup Servicer and the Deal Agent may disclose any such nonpublic information as required
pursuant to any law, rule, regulation, direction, request or order of any judicial, administrative
or regulatory authority or proceedings (whether or not having the force or effect of law).




          (c) Notwithstanding anything herein to the contrary, the foregoing shall not be construed to
prohibit (i) disclosure of any and all information that is or becomes publicly known or known to
any party hereto as a result of disclosure by any third party not bound by any obligation of
confidentiality, (ii) disclosure of any and all information (A) if required to do so by any
applicable statute, law, rule or regulation, (B) to any government agency or regulatory body having
or claiming authority to regulate or oversee any respects of the Collateral Agent’s, Deal Agent’s,
any Liquidity Agent’s, any Liquidity Bank’s, or Backup Servicer’s business or that of their
affiliates, (C) pursuant to any subpoena, civil investigative demand or similar demand or request
of any court, regulatory authority, arbitrator or arbitration to which the Deal Agent, Collateral
Agent, Backup Servicer, any Secured Party or an affiliate or an officer, director, employer or
shareholder thereof is a party, (D) in any preliminary or final offering circular, registration
statement or contract or other document pertaining to the transactions contemplated herein approved
in advance by the Borrower or Servicer or (E) to any affiliate, independent or internal auditor,
agent, employee or attorney of the Deal Agent, Collateral Agent, Backup Servicer, any Secured Party
having a need to know the same, provided that such Person advises such recipient of the
confidential nature of the information being disclosed, or (iii) any other disclosure authorized by
the Transaction Documents or the Borrower or Servicer.




          (d) Notwithstanding anything herein to the contrary, any party to this Agreement (and any
employee, representative or other agent of any party to this Agreement) may disclose to any and all
persons, without limitation of any kind, the tax treatment and tax structure of the transactions
contemplated by this Agreement and all materials of any kind (including opinions or other tax
analyses) that are provided to it relating to such tax treatment and tax structure;
provided, however, that such disclosure may not be made to the extent required to
be kept confidential to comply with any applicable federal or state securities laws; and
provided further that (to the extent not inconsistent with the foregoing) such
disclosure shall be made without disclosing the names or other identifying information of any
party.




     Section 14.14. Execution in Counterparts; Severability; Integration. This Agreement
may be executed in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original and all of which
when taken together shall constitute one and the same agreement. In case any provision in or
obligation under this Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or obligations, or of such
provision or obligation in



-101-









 




any other jurisdiction, shall not in any way be affected or impaired thereby. This Agreement
and any agreements or letters (including fee letters) executed in connection herewith contains the
final and complete integration of all prior expressions by the parties hereto with respect to the
subject matter hereof and shall constitute the entire agreement among the parties hereto with
respect to the subject matter hereof, superseding all prior oral or written understandings other
than any fee letter delivered by the Originator to the Deal Agent and the Lenders.




     Section 14.15. Waiver of Setoff. Each of the parties thereto (other than each CP
Entity, as to itself) hereby waives any right of setoff it may have or to which it may be entitled
under this Agreement from time to time against any CP Entity or its assets.



[Remainder of Page Intentionally Left Blank.]





-102-









 








     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.



	 	 	 	 	 
	THE BORROWER:	 	CAC WAREHOUSE FUNDING III, LLC
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Douglas W. Busk
	 

	 	 	 	 
	 

	 	Name:
	 	Douglas W. Busk
	 

	 	Title:
	 	Treasurer
	 
	 	 	 	 
	 	 	CAC Warehouse Funding III, LLC
	 	 	Silver Triangle Building
	 	 	25505 West Twelve Mile Road
	 	 	Southfield, Michigan 48034-8339
	 	 	Attention: Douglas W. Busk
	 	 	Facsimile No. 248-827-8542
	 	 	Confirmation No.: 248-353-2700 (ext. 4432)
	 
	 	 	 	 
	THE SERVICER:	 	CREDIT ACCEPTANCE CORPORATION
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Douglas W. Busk
	 

	 	 	 	 
	 

	 	Name:
	 	Douglas W. Busk
	 

	 	Title:
	 	Treasurer
	 
	 	 	 	 
	 	 	Silver Triangle Building
	 	 	25505 West Twelve Mile Road
	 	 	Southfield, Michigan 48034-8339
	 	 	Attention: Douglas W. Busk
	 	 	Facsimile No. 248-847-8542
	 	 	Confirmation No.: 248-353-2700 (ext. 4432)






[SIGNATURES CONTINUED ON THE FOLLOWING PAGE]




 









 








	 	 	 	 	 
	THE INVESTOR FOR THE FIFTH
THIRD PURCHASER GROUP:	 	FIFTH THIRD BANK
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Brian Gardner
	 

	 	 	 	 
	 

	 	Name:
	 	Brian Gardner
	 

	 	Title:
	 	Vice President
	 
	 	 	 	 
	 	 	Fifth Third Bank
	 	 	38 Fountain Square Plaza
	 	 	MD 109046
	 	 	Cincinnati, Ohio 45263
	 	 	Attention: Brian Gardner
	 	 	Facsimile No.: (513) 534-0319
	 	 	Confirmation No: (513) 534-7949
	 
	 	 	 	 
	RFC:	 	RELATIONSHIP FUNDING COMPANY, LLC
	 
	 	 	 	 
	 

	 	By:
	 	/s/ R. Scott Chisholm
	 

	 	 	 	 
	 

	 	Name:
	 	R. Scott Chisholm
	 

	 	Title:
	 	Authorized Signer
	 
	 	 	 	 
	 	 	Relationship Funding Company, LLC
	 	 	227 West Monroe, Suite 4900
	 	 	Chicago, Illinois 60606
	 	 	Attention: Operations
	 	 	Facsimile No.: (312) 977-1967
	 	 	Confirmation No: (312) 977-1699






[SIGNATURES CONTINUED ON THE FOLLOWING PAGE]




 









 









	 	 	 	 	 
	THE DEAL AGENT:	 	FIFTH THIRD BANK
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Brian Gardner
	 

	 	 	 	 
	 

	 	Name:
	 	Brian Gardner
	 

	 	Title:
	 	Vice President
	 
	 	 	 	 
	 	 	Fifth Third Bank
	 	 	38 Fountain Square Plaza
	 	 	MD 109046
	 	 	Cincinnati, Ohio 45263
	 	 	Attention: Brian Gardner
	 	 	Facsimile No.: (513) 534-0319
	 	 	Confirmation No: (513) 534-7949
	 
	 	 	 	 
	THE LIQUIDITY AGENT FOR THE FIFTH	 	
	THIRD PURCHASER GROUP: FIFTH THIRD BANK	 	
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Brian Gardner
	 

	 	 	 	 
	 

	 	Name:
	 	Brian Gardner
	 

	 	Title:
	 	Vice President
	 
	 	 	 	 
	 	 	Fifth Third Bank
	 	 	38 Fountain Square Plaza
	 	 	MD 109046
	 	 	Cincinnati, Ohio 45263
	 	 	Attention: Brian Gardner
	 	 	Facsimile No.: (513) 534-0319
	 	 	Confirmation No: (513) 534-7949






[SIGNATURES CONTINUED ON THE FOLLOWING PAGE]




 









 








	 	 	 	 	 
	THE COLLATERAL AGENT:	 	FIFTH THIRD BANK, as Collateral Agent
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Brian Gardner
	 

	 	 	 	 
	 

	 	Name:
	 	Brian Gardner
	 

	 	Title:
	 	Vice President
	 
	 	 	 	 
	 	 	Fifth Third Bank
	 	 	38 Fountain Square Plaza
	 	 	MD 109046
	 	 	Cincinnati, Ohio 45263
	 	 	Attention: Brian Gardner
	 	 	Facsimile No.: (513) 534-0319
	 	 	Confirmation No: (513) 534-7949
	 
	 	 	 	 
	THE BACKUP SERVICER:	 	SYSTEMS & SERVICES TECHNOLOGIES, INC., as Backup Servicer
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Joshua Gindin
	 

	 	 	 	 
	 

	 	Name:
	 	Joshua Gindin
	 

	 	Title:
	 	Secretary
	 
	 	 	 	 
	 	 	Systems & Services Technologies, Inc.
	 	 	4315 Pickett Road
	 	 	St. Joseph, MO 64503
	 	 	Attention:
	 	 	John Chappell, President,
	 	 	Joseph Booz, EVP/GeneralCounsel
	 
	 	 	 	 
	 	 	with a copy to NCO Group, Inc.
	 	 	507 Prudential Road
	 	 	Horsham, Pennsylvania 19044
	 	 	Attn: Joshua Gindin, EVP/General Counsel
	 
	 	 	 	 
	 	 	Facsimile: (816) 671-2029
	 	 	Telephone: (816) 671-2022; (816) 671-2028






 









 






Exhibit A




FORM OF FUNDING NOTICE



Reference is made to the Loan and Security Agreement, dated as of May ___, 2008 (as amended,
supplemented or otherwise modified and in effect from time to time, the “Agreement”), by
and among CAC Warehouse Funding III, LLC, as borrower (in such capacity, the “Borrower”),
Credit Acceptance Corporation, as servicer (in such capacity, the “Servicer”), Relationship
Funding Company, LLC (“RFC”) as Lenders, the Investors named therein, Fifth Third Bank, as
Liquidity Agent, Fifth Third Bank, as Deal Agent and Collateral Agent, Systems & Services
Technologies, Inc., as the Backup Servicer and each other CP Entity, Investor and Liquidity Agent
party thereto. Terms defined in the Agreement, or incorporated therein by reference, are used
herein as therein defined.




          (A) Funding Request. The Borrower hereby requests the Funding pursuant to Section 2.1
and Section 2.3 of the Loan Agreement.




          (B) Funding Information. The Funding shall (a) take place on [                    ] and (b)
shall be in an amount equal to $[                    ]. Each Purchaser Group’s pro rata share
of the Funding shall be: [(i)                                         ; and (ii)                        
                 .]




          (C) Representations. The Borrower hereby represents and warrants that (i) all
conditions precedent to the Funding described in Article III of the Agreement have been satisfied
and (ii) no Termination Event or Unmatured Termination Event shall have occurred. This Funding
Notice has been made in accordance with the provisions of Section 2.1(a) and Section 2.3 of the
Agreement.




          (D) Irrevocable. This Funding Notice shall be irrevocable.




          (E) Governing Law. This Funding Notice shall be governed by, and construed in
accordance with, the laws of the State of New York.




 









 








     IN WITNESS WHEREOF, the undersigned has caused this Funding Notice to be duly executed and
delivered by its duly authorized officer as of the date first above written.



	 	 	 	 	 
	 	CAC Warehouse Funding III, LLC

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



A-2









 






	 	 	 	 	 



Exhibit B




Form of Assignment and Acceptance





B-1











 





Exhibit B




FORM OF ASSIGNMENT AND ACCEPTANCE




Dated                                         , 20                    




     Reference is made to the Loan and Security Agreement dated as of May 23, 2008 (as amended or
modified from time to time, the “Agreement”) among CAC Warehouse Funding III, LLC, as
borrower (the “Borrower”), Credit Acceptance Corporation, as servicer (the
“Servicer”), the investors named therein, Relationship Funding Company, LLC, as a lender,
Fifth Third Bank, as deal agent collateral agent, as liquidity agent (the “Deal Agent”,
“Collateral Agent” and the “Liquidity Agent”), Systems & Services Technologies,
Inc., as backup servicer, and each other CP Entity, Investor and Liquidity Agent party thereto.
Terms defined in the Agreement are used herein with the same meaning.



                                             (the “Assignor”) and             
                  
          (the “Assignee”)
agree as follows:



     1. The Assignor hereby sells and assigns to the Assignee, and the Assignee hereby purchases
and assumes from the Assignor, that interest in and to all of the Assignor’s rights and obligations
under the Agreement as of the date hereof which represents the percentage interest specified in
Section 1 of Schedule 1 of all outstanding rights and obligations of the Assignor under the
Agreement, including, without limitation, such interest in the Investor’s Commitment of the
Assignor and the Advance made by the Assignor. After giving effect to such sale and assignment,
the Investor’s Commitment and the amount of the Capital made by the Assignee will be as set forth
in Section 2 of Schedule 1.



     2. The Assignor: (i) represents and warrants that it is the legal and beneficial owner of the
interest being assigned by it hereunder and that such interest is free and clear of any Adverse
Claim; (ii) makes no representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the Agreement or the
execution, legality, validity, enforceability, genuineness, sufficiency or value of the Agreement
or any other instrument or document furnished pursuant thereto; (iii) makes no representation or
warranty and assumes no responsibility with respect to the financial condition of [its related CP
Entity] or the performance or observance by [its related CP Entity] of any of its obligations under
the Agreement or any other instrument or document furnished pursuant thereto; and (iv) confirms
that the Assignee is an Eligible Assignee.



     3. The Assignee: (i) confirms that it has received a copy of the Agreement, together with
copies of such financial statements and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this Assignment and
Acceptance; (ii) agrees that it will, independently and without reliance upon the Deal Agent, the
Liquidity Agents, the Collateral Agent, the Assignor or any other Investor and based on such
documents and information as it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under the Agreement; (iii) confirms that it is an Eligible
Assignee; (iv) appoints and authorizes the Deal Agent, the Collateral Agent and the related
Liquidity Agent each to take such action as agent on its behalf and to exercise such



 









 







powers under the Agreement as are delegated to the Deal Agent and the related Liquidity Agent,
respectively, by the terms thereof, together with such powers as are reasonably incidental thereto;
(v) agrees that it will perform in accordance with their terms all of the obligations which by the
terms of the Agreement are required to be performed by it as an Investor; and (vi) agrees and
acknowledges that the Assignee, as Investor and Secured Party is bound by the confidentiality
provisions of Section 14.13 of the Agreement.



     4. Following the execution of this Assignment and Acceptance by the Assignor and the Assignee,
it will be delivered to each of the Deal Agent, the Collateral Agent and the related Liquidity
Agent for acceptance and recording by the Deal Agent. The effective date of this Assignment and
Acceptance (the “Assignment Date”) shall be the date of acceptance thereof by the Deal
Agent and the related Liquidity Agent, unless a later date is specified in Section 3 of Schedule 1.



     5. Upon such acceptance by the Deal Agent, the Collateral Agent and the related Liquidity
Agent and upon such recording by the Deal Agent, as of the Assignment Date, (i) the Assignee shall
be a party to the Agreement and, to the extent provided in this Assignment and Acceptance, have the
rights and obligations of an Investor thereunder and (ii) the Assignor shall, to the extent
provided in this Assignment and Acceptance, relinquish its rights and be released from its
obligations under the Agreement.



     6. Upon such acceptance by the related Liquidity Agent and upon such recording by the Deal
Agent, from and after the Assignment Date, the Deal Agent, the Collateral Agent and the related
Liquidity Agent shall make, or cause to be made, all payments under the Agreement in respect of the
interest assigned hereby (including, without limitation, all payments of principal, interest and
Facility Fee with respect thereto) to the Assignee. The Assignor and Assignee shall make all
appropriate adjustments in payments under the Agreement for periods prior to the Assignment Date
directly between themselves.



     7. This Assignment and Acceptance shall be governed by, and construed in accordance with, the
laws of the State of New York.



     8. Each of the parties hereto and each Hedge Counterparty (by accepting the benefits of this
Agreement) hereby covenants and agrees that, prior to the date which is one year and one day after
the payment in full of all outstanding Commercial Paper Notes or other indebtedness of each CP
Entity, it will not institute against or join any other Person in instituting against such CP
Entity any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or other
similar proceedings under the laws of the United States or any state of the United States. This
agreement set forth in this part 8 and the parties’ respective obligations under this part 8 shall
survive the termination of this Assignment and Acceptance.



     9. No CP Entity shall have any obligation to pay any amounts owing hereunder unless and until
such CP Entity has received such amounts pursuant to the Capital and such amounts are not necessary
to pay outstanding Commercial Paper Notes or other outstanding indebtedness of such CP Entity. In
addition, each party hereto hereby agrees that no liability or obligation of any CP Entity
hereunder for fees, expenses or indemnities shall constitute a claim (as defined in Section 101 of
Title 11 of the United States Bankruptcy Code) against such CP



B-3 









 







Entity unless such CP Entity has received cash from the Capital sufficient to pay such
amounts, and such amounts are not necessary to pay outstanding Commercial Paper Notes or other
indebtedness of such CP Entity. The agreements set forth in this part 9 and the parties’
respective obligations under this part 9 shall survive the termination of this Assignment and
Acceptance.



B-4 









 






     IN WITNESS WHEREOF, the parties hereto have caused this Assignment and Acceptance to be
executed by their respective officers thereunto duly authorized, as of the date first above
written, such execution being made on Schedule 1 hereto.



	 	 	 	 	 
	 	[ASSIGNOR]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	Address for notices





     
[Address]





[ASSIGNEE]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	Address for notices





     
[Address]

 	 
	 	 	 
	 	 	 
	 	 	 
	 


Acknowledged and accepted this                      day of

                                        ,                    



[                                                            ],

as Liquidity Agent for the [                                        ] Purchaser Group




	 	 	 	 	 	 	 
	By:
	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 





Consented and agreed this                     day of

                                        ,                    



FIFTH THIRD BANK,

as Deal Agent and Collateral Agent




	 	 	 	 	 	 	 
	By:
	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 






B-5 









 





Schedule 1

to

Assignment and Acceptance

Dated                                         , 200                    




	 	 	 	 	 
	Section 1.
	 	 	 	 
	 
	 	 	 	 
	 

	 	Percentage Interest:
	 	                                        %
	 
	 	 	 	 
	Section 2.
	 	 	 	 
	 
	 	 	 	 
	 

	 	Assignee’s Commitment:
	 	$                                                            
	 
	 	 	 	 
	 

	 	Aggregate Outstanding Advance owing
to the Assignee:
	 	$                                                            
	 
	 	 	 	 
	Section 3.
	 	 	 	 
	 
	 	 	 	 
	 

	 	Assignment Date:                                         , 200                    
	 	 






B-6 








 





Exhibit C




Form of Monthly Report




[Attached hereto]




 









 





Exhibit D




Form of Joinder




JOINDER




     JOINDER, dated as of                                         , 20                     (this “Joinder”), among the commercial
paper conduit identified in Item 2 of Schedule I hereto (the “Proposed Conduit”), the
Liquidity Agent for the Proposed Conduit named in Item 3 of Schedule I hereto (a “Liquidity
Agent”), its related investors (“Investors”), CAC Warehouse Funding III, LLC (the
“Borrower”), Credit Acceptance Corporation, as originator and initial servicer (“Credit
Acceptance”), and Fifth Third Bank, as deal agent, and Collateral Agent (the “Deal
Agent” and “Collateral Agent”).



W I T N E S S E T H:




     WHEREAS, this Joinder is being executed and delivered under the Loan and Security Agreement,
dated as of May ___, 2008 among the Borrower, Credit Acceptance, Fifth Third Bank, as an investor
for the Fifth Third Purchaser Group (an “Investor”), and the other Investors from time to
time party thereto, Relationship Funding Company, LLC (a “CP Entity”), and the other CP
Entities from time to time party thereto, the Deal Agent, the Collateral Agent, Fifth Third Bank,
as Liquidity Agent for the Fifth Third Purchaser Group, and the other Liquidity Agents from time to
time party thereto, Systems & Services Technologies, Inc. (the “Backup Servicer”) (as from
time to time amended, supplemented or otherwise modified in accordance with the terms thereof, the
“Loan Agreement” and



     WHEREAS, the Proposed Conduit wishes to become an Additional Conduit designated as a CP Entity
party to the Loan Agreement;



     NOW, THEREFORE, the parties hereto hereby agree as follows:



     (a) Upon receipt by the Deal Agent of an executed counterpart of this Joinder, to which is
attached a fully completed Schedule I and Schedule II, each of which has been executed by the
Proposed Conduit, its related Investors, its related Liquidity Agent, the Borrower, Credit
Acceptance and the Deal Agent, the Deal Agent will transmit to the Proposed Conduit, its related
Investors and its related Liquidity Agent, a Joinder Effective Notice, substantially in the form of
Schedule III to this Joinder (a “Joinder Effective Notice”). Such Joinder Effective Notice
shall be executed by the Deal Agent and shall set forth, inter alia, the date on
which the joinder effected by this Joinder shall become effective (the “Joinder Effective
Date”). From and after the Joinder Effective Date, the Proposed Conduit shall be an Additional
Conduit designated as a CP Entity party to the Loan Agreement for all purposes thereof.



     (b) Each of the parties to this Joinder agrees and acknowledges that at any time and from time
to time upon the written request of any other party, it will execute and deliver such further
documents and do such further acts and things as such other party may reasonably request in order
to effect the purposes of this Joinder.



     (c) By executing and delivering this Joinder, the Proposed Conduit confirms to and agrees with
the Deal Agent, the Liquidity Agents, the Borrower, Credit Acceptance and the CP



 









 







Entities as follows: (i) none of the Deal Agent, the Liquidity Agents or the CP Entities
makes any representation or warranty or assumes any responsibility with respect to any statements,
warranties or representations made in or in connection with the Loan Agreement or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of the Loan Agreement or any
other instrument or document furnished pursuant thereto, or with respect to the Note issued to the
Deal Agent pursuant to Section 2.1(c) the Loan Agreement, or the Collateral or the financial
condition of the Borrower or Credit Acceptance, or the performance or observance by the Borrower or
Credit Acceptance of any of their respective obligations under the Loan Agreement, any other
Transaction Document or any other instrument or document furnished pursuant thereto; (ii) the
Proposed Conduit confirms that it has received a copy of such documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into this Joinder; (iii)
the Proposed Conduit will, independently and without reliance upon the Deal Agent, any Liquidity
Agent or any other CP Entity and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or not taking action
under the Loan Agreement; (iv) the Proposed Conduit appoints and authorizes its Liquidity Agent to
take such action as agent on its behalf and to exercise such powers under the Loan Agreement as are
delegated to the Liquidity Agent by the terms thereof, together with such powers as are reasonably
incidental thereto, all in accordance with Article 12 of the Loan Agreement; (v) the Proposed
Conduit appoints and authorizes the Deal Agent to take such action as agent on its behalf and to
exercise such powers under the Loan Agreement as are delegated to the Deal Agent by the terms
thereof, together with such powers as are reasonably incidental thereto, all in accordance with
Article 12 of the Loan Agreement; (vi) the Proposed Conduit agrees (for the benefit of the parties
hereto and the other CP Entities) that it will perform in accordance with their terms all of the
obligations which by the terms of the Loan Agreement are required to be performed by it as an
Additional Conduit designated as a CP Entity; (vii) the Proposed Conduit agrees that its related
Liquidity Agent shall not have any duties or responsibilities, except those expressly set forth in
the Loan Agreement, or any fiduciary relationship with any Investor, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities on the part of its related
Liquidity Agent shall be read into this Joinder or otherwise exist for its related Liquidity Agent;
(viii) the Proposed Conduit agrees that its related Liquidity Agent, in performing its functions
and duties under the Loan Agreement, shall act solely as agent for its related Investors and does
not assume nor shall be deemed to have assumed any obligation or relationship of trust or agency
with or for the Borrower or any of its successors or assigns; (ix) the Proposed Conduit agrees that
its related Liquidity Agent shall not be required to take any action that exposes such Liquidity
Agent to personal liability or that is contrary to the Loan Agreement or Applicable Law; and (x)
the Proposed Conduit agrees that the appointment and authority of its related Liquidity Agent
hereunder shall terminate upon the indefeasible payment in full of the Aggregate Unpaids.



     (d) Schedule II hereto sets forth administrative information with respect to the Proposed
Conduit.



     (e) This Joinder shall be governed by, and construed in accordance with, the laws of the State
of New York.



     (f) Capitalized terms used herein and not defined herein have the meanings given such terms in
the Loan Agreement.



D-2 









 





     (g) Each of the parties hereto and each Hedge Counterparty (by accepting the benefits of this
Agreement) hereby covenants and agrees that, prior to the date which is one year and one day after
the payment in full of all outstanding Commercial Paper Notes or other indebtedness of each CP
Entity, it will not institute against or join any other Person in instituting against such CP
Entity any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or other
similar proceedings under the laws of the United States or any state of the United States. This
agreement set forth in this subsection (g) and the parties’ respective obligations under this
subsection (g) shall survive the termination of this Joinder.



     (h) No CP Entity shall have any obligation to pay any amounts owing hereunder unless and until
such CP Entity has received such amounts pursuant to the Capital and such amounts are not necessary
to pay outstanding Commercial Paper Notes or other outstanding indebtedness of such CP Entity. In
addition, each party hereto hereby agrees that no liability or obligation of any CP Entity
hereunder for fees, expenses or indemnities shall constitute a claim (as defined in Section 101 of
Title 11 of the United States Bankruptcy Code) against such CP Entity unless such CP Entity has
received cash from the Capital sufficient to pay such amounts, and such amounts are not necessary
to pay outstanding Commercial Paper Notes or other indebtedness of such CP Entity. The agreements
set forth in this subsection (h) and the parties’ respective obligations under this subsection (h)
shall survive the termination of this Joinder.



     IN WITNESS WHEREOF, the parties hereto have caused this Joinder to be executed by their
respective duly authorized officers on Schedule I hereto as of the date set forth in Item 1 of
Schedule I hereto.



D-3 









 





SCHEDULE I TO

JOINDER




COMPLETION OF INFORMATION AND

SIGNATURES FOR JOINDER





			
	Re:	 	Loan and Security Agreement, dated as of May                     , 2008, among CAC Warehouse Funding III, LLC,
as borrower, Credit Acceptance Corporation, as servicer and custodian, Fifth Third Bank, as an
investor for the Fifth Third Purchaser Group (an “Investor”), and the other Investors
from time to time party hereto, Relationship Funding Company, LLC (a “CP Entity”), and
the other CP Entities from time to time party hereto, Fifth Third Bank, as deal agent, and as
liquidity agent for the Fifth Third Purchaser Group (a “Liquidity Agent”), and the
other Liquidity Agents from time to time party hereto, Systems & Services Technologies, Inc.,
as backup servicer and Fifth Third Bank, as collateral agent.





	 	 	 
	Item 1: Date of Joinder:

	 	                                                            
	 
	 	 
	Item 2: Proposed Conduit:

	 	                                                            
	 
	 	 
	Item 3: Name of Liquidity Agent:

	 	                                                            
	 
	 	 
	Item 4: Name of Purchaser Group:

	 	                                                            
	 
	 	 
	Item 5: Name(s) of Investor(s) and Commitment:

	 	                                                            
	 
	 	 
	 

	 	                                                            
	 
	 	 
	 

	 	                                                            
	 
	 	 
	Item 6: Proposed Conduit’s Commitment (if any):

	 	                                                            
	 
	 	 
	Item 7: Purchaser Group Facility Limit:

	 	                                                            
	 
	 	 
	Item 8: Purchaser Group CP Rate:

	 	                                                            
	 
	 	 
	Item 9: Purchaser Group Yield Rate upon the Termination Date:

	 	                                                            
	 
	 	 
	Item 10: Signatures of Parties to Joinder:

	 	 






D-4 









 






	 	 	 	 	 	 	 
	PROPOSED CONDUIT:	 	[NAME OF PROPOSED CONDUIT]
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	NEW PURCHASER GROUP’S LIQUIDITY AGENT:	 	[NAME OF LIQUIDITY AGENT]
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	CONSENTED AND AGREED:
	 	 	 	 	 	 
	DEAL AGENT:	 	FIFTH THIRD BANK
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	ADDITIONAL INVESTOR:	 	[NAME OF NEW INVESTOR]
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	BORROWER:	 	CAC WAREHOUSE FUNDING III, LLC
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	ORIGINATOR AND INITIAL SERVICER:	 	CREDIT ACCEPTANCE CORPORATION
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 






D-5 









 






SCHEDULE II TO

JOINDER




LIST OF INVESTING OFFICES, ADDRESS

FOR NOTICES AND WIRE INSTRUCTIONS




	 	 	 	 	 
	Address for Notices:

	 	                                                            
	 	 
	 

	 	                                                            
	 	 
	 

	 	                                                            
	 	 
	 
	 	 	 	 
	Investing Office:

	 	                                                            
	 	 
	 
	 	 	 	 
	Wire Instructions:

	 	                                                            
	 	 






D-6 









 






SCHEDULE III TO

JOINDER




FORM OF

JOINDER EFFECTIVE NOTICE




To:      [Name and address of the Borrower, the Liquidity Agent and Proposed Conduit]




     The undersigned, as Deal Agent under the Loan and Security Agreement, dated as of May                     ,
2008, among the Borrower, Credit Acceptance, the Investors, the CP Entities, the Deal Agent, the
Liquidity Agents, the Backup Servicer and the Collateral Agent (as from time to time amended,
supplemented or otherwise modified in accordance with the terms thereof) consents and agrees (in
its sole discretion as provided in and required by the Loan Agreement Joinder. [Note: attach copies
of Schedules I and II from such Loan Agreement.] Terms defined in such Joinder are used herein as
therein defined.



     Pursuant to such Joinder, you are advised that the Joinder Effective Date for [Name of
Proposed Conduit] will be                                          and such Proposed Conduit will be an Additional Conduit
designated as a CP Entity.



	 	 	 	 	 
	 	Very truly yours,





FIFTH THIRD BANK,

as Deal Agent

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



D-7 









 






	 	 	 	 	 



SCHEDULE IV TO

JOINDER




PURCHASER GROUP FEE LETTER




D-8 









 








SCHEDULE V TO

JOINDER




PURCHASER GROUP LIQUIDITY AGREEMENT





D-9 









 








Exhibit E




Form of Hedging Agreement





 









 





Exhibit F




Form of Officer’s Certificate

CREDIT ACCEPTANCE CORPORATION

CERTIFICATE OF OFFICER




          I, Douglas W. Busk, on this date of May                     , 2008, hereby certify that I am the duly executed,
qualified and acting Treasurer of Credit Acceptance Corporation, a Michigan corporation (the
“Company”), and that, as such, I have access to its corporate records and am familiar with the
matters certified herein, and I am authorized to execute and deliver this certificate in the name
and on behalf of the Company, and that:




     1. This certificate is being delivered pursuant to that certain Loan and Security Agreement
(the “Loan and Security Agreement”), dated May                     , 2008, by and among the Company, CAC Warehouse
Funding III, LLC, Fifth Third Bank, Relationship Funding Company, and Systems & Services
Technologies, Inc. The capitalized terms used in this certificate and not defined herein have the
respective meanings specified in the Loan and Security Agreement.



     2. The closing conditions set forth in Sections 3.1(a)(i) (other than with respect to the
Hedging Agreements), (b), (c), (d), (e), (f) and (j) of the Loan and Security Agreement have been
satisfied, including without limitation, the following:



          (i) No Amortization Event, Termination Event or Unmatured Termination Event has occurred; and




          (ii) No Servicer Termination Event or Potential Servicer Termination Event has occurred.




     3. The transactions under the Loan and Security Agreement and any other Transaction Document
to which the Company is a party do not and will not render the Company not Solvent.



E-2 









 





     IN WITNESS WHEREOF, I have executed this certificate in the name and on behalf of the Company
on the date first written above.



	 	 	 	 	 
	 	CREDIT ACCEPTANCE CORPORATION

 	 
	 	By:  	 	 
	 	 	Douglas W. Busk 	 
	 	 	Treasurer 	 
	 




 









 





Exhibit G




FORM OF RELEASE




     Reference is hereby made to the Loan and Security Agreement dated as of May ___, 2008, among
CAC Warehouse Funding III, LLC, as the Borrower, Credit Acceptance Corporation, as the Servicer,
the Investors named therein, Relationship Funding Company, LLC, as a Lender, Fifth Third Bank, as
the Deal Agent, Collateral Agent, and as a Liquidity Agent, Systems & Services Technologies, Inc.,
as the Backup Servicer, and each other CP Entity, Liquidity Agent and Investor party thereto as it
may from time to time be amended, supplemented or otherwise modified in accordance with the terms
thereof (the “Agreement”).



     Capitalized terms not defined herein shall have the meaning given such terms in the Agreement.



     Pursuant to Section 2.16(a) of the Agreement, the Borrower requests the Collateral Agent to
release all of its right, title and interest, including any security interest and Lien, in and to
the Loans and Related Security identified on Schedule 1 hereto (the “Released Loans and
the Related Security”).



     The Servicer and Borrower hereby certify that after giving effect to the release to the
Borrower of the Loans and Related Security as provided below, (x) the representations and
warranties contained in Article IV of the Agreement shall continue to be correct in all material
respects, except to the extent relating to an earlier date, and (y) neither an Unmatured
Termination Event nor a Termination Event has occurred.



     Upon deposit in the Collection Account of $[___] in immediately available funds, the
Collateral Agent hereby releases all of its right, title and interest, including any security
interest and Lien, in and to [all of] the Loans and the Related Security identified on Schedule I
hereto (the “Released Loans and Related Security”):




	 	(i)	 	the [Released] Loans and the Related Security, all monies due
or to become due with respect thereto, whether accounts, chattel paper, general
intangibles or other property, all monies or remittances on deposit in the
Credit Acceptance Payment Account which constitute proceeds of such Loans and
the Loans;
	 
	 	(ii)	 	the security interests in the Contracts granted by Obligors
pursuant to the related Loan and all security related thereto;
	 
	 	(iii)	 	all of the Borrower’s rights under the Contribution Agreement
and each Dealer Agreement with respect to such Loans and the Related Security;
	 
	 	(iv)	 	the proceeds of any and all of the foregoing.





[REMAINDER OF PAGE BLANK. SIGNATURE PAGE FOLLOWS.]





 









 







Executed as of                                        .




	 	 	 	 	 
	 	 	Credit Acceptance Corporation, as the Servicer
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	Title:	 	 
	 
	 	 	 	 
	 	 	CAC Warehouse Funding III, LLC, as the Borrower
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	Title:	 	 
	 
	 	 	 	 
	 	 	Fifth Third Bank, as the Deal Agent and Collateral
Agent
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	Title:	 	 







 












 





Exhibit H




Form of Contribution Agreement





 









 








Exhibit I




FORM OF VARIABLE FUNDING NOTE




Cincinnati, Ohio

May ___, 2008




     FOR VALUE RECEIVED, the undersigned, CAC WAREHOUSE FUNDING III, LLC, a Delaware limited
liability company (the “Borrower”), promises to pay to the order of Fifth Third Bank, as
Deal Agent, on behalf of [the Lender], on the Maturity Date specified in Section 2.1(c) of the Loan
and Security Agreement (as hereinafter defined), at Fifth Third Bank, Asset Securitization, 38
Fountain Square Plaza, MD 109046, Cincinnati, OH 45263; Fax: 513-534-0319, in lawful money of the
United States of America and in immediately available funds, the principal amount of [ ] ($[ ]),
or, if less, the aggregate unpaid principal amount of the all Advances made by the Lenders to the
Borrower pursuant to the Loan and Security Agreement, and to pay interest at such office, in like
money, from the date hereof on the unpaid principal amount of the Advance from time to time
outstanding at the rates and on the dates specified in the Loan and Security Agreement.



     The Deal Agent is authorized to record, on the schedules annexed hereto and made a part hereof
or on other appropriate records of the Deal Agent, the date and the amount of the Advance made by
the Lenders, each continuation thereof, the funding period for such Advance and the date and amount
of each payment or prepayment of principal thereof. Any such recordation shall constitute
prima facie evidence of the accuracy of the information so recorded; provided that
the failure of the Deal Agent to make any such recordation (or any error in such recordation) shall
not affect the obligations of the Borrower hereunder, under the Loan and Security Agreement in
respect of the Advance.



     This Variable Funding Note is one of the Notes referred to in the Loan and Security Agreement,
dated as of May ___, 2008 (as amended, supplemented, or otherwise modified and in effect from time
to time, the “Loan and Security Agreement”), among CAC Warehouse Funding III, LLC (the
“Borrower”); Credit Acceptance Corporation (the “Servicer”); the financial
institutions listed on the signature pages thereto under the heading “The Investors” (the
“Investors”); Relationship Funding Company, LLC (“RFC”); Fifth Third Bank, as deal
agent (the “Deal Agent”) and as liquidity agent (a “Liquidity Agent”); and as
Collateral Agent (the “Collateral Agent”); Systems & Services Technologies, Inc. (the
“Backup Servicer”); and each other CP Entity, Liquidity Agent and Investor party thereto,
and is entitled to the benefits thereof. Capitalized terms used herein and defined herein have the
meanings given them in the Loan and Security Agreement.



     This Variable Funding Note is subject to optional and mandatory prepayment as provided in the
Loan and Security Agreement.



     Upon the occurrence of a Termination Event, the Secured Parties shall have all of the remedies
specified in the Loan and Security Agreement. The Borrower hereby waives presentment, demand,
protest, and all notices of any kind.



I-1









 





     THIS VARIABLE FUNDING NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.



	 	 	 	 	 
	 	CAC WAREHOUSE FUNDING III, LLC,

as Borrower

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 




I-2









 





Schedule 1 to

VARIABLE FUNDING NOTE




	 	 	 	 	 	 	 
	Principal of the	 	Yield on the	 	Prepayment	 	Notation by
	Advances	 	Advances	 	of the Advances	 	Date
	 
	 	 	 	 	 	 





 









 





Exhibit J-1




Form 1 of Dealer Agreement




 









 





Exhibit J-2




Form 2 of Dealer Agreement




 









 





Exhibit J-3




Form 3 of Dealer Agreement




 









 





Exhibit J-4




Form 4 of Dealer Agreement




 









 





Exhibit K




[Reserved]




 









 





Exhibit L




Forms of Contracts




 









 





Exhibit M




[Reserved]




 









 





Exhibit N




[Reserved]




 









 





Exhibit O




Form of Backup Servicing Agreement




 









 





Exhibit P




Form of Purchase Agreement




 









 





Schedule I




Condition Precedent Documents




	 	 	 	 	 	 	 
	CONDITION PRECEDENT DOCUMENTS	 	RESPONSIBLE PARTY
	I.	 	TRANSACTION DOCUMENTS	 	Mayer Brown
	 
	 	 	 	 	 	 
	 

	 	A.
	 	Loan and Security Agreement	 	 
	 
	 	 	 	 	 	 
	 	 	Exhibits to Loan and Security Agreement	 	 
	 
	 	 	 	 	 	 
	 	 	Exhibit A Form of Funding Notice	 	Fifth Third
	 	 	Exhibit B Form of Assignment and Acceptance	 	Mayer Brown
	 	 	Exhibit C Form of Monthly Report	 	Fifth Third
	 	 	Exhibit D Form of Joinder	 	Mayer Brown
	 	 	Exhibit E Form of Hedging Agreement (including
Schedule and Confirmation)	 	Fifth Third
	 	 	Exhibit F Form of Officer’s Certificate	 	Borrower
	 	 	Exhibit G Form of Release	 	Mayer Brown
	 	 	Exhibit H Form of Contribution Agreement	 	Dykema
	 	 	Exhibit I Form of RFC Note	 	Mayer Brown
	 	 	Exhibit J-1 Form 1 of Dealer Agreement	 	Credit Acceptance
	 	 	Exhibit J-2 Form 2 of Dealer Agreement	 	Credit Acceptance
	 	 	Exhibit K [Reserved]	 	 
	 	 	Exhibit L Form of Contracts	 	Credit Acceptance
	 	 	Exhibit M [Reserved]	 	 
	 	 	Exhibit N [Reserved]	 	 
	 	 	Exhibit O Form of Backup Servicing Agreement	 	Mayer Brown
	 
	 	 	 	 	 	 
	 	 	Schedules to Loan and Security Agreement	 	 
	 
	 	 	 	 	 	 
	 	 	Schedule I Condition Precedent Documents	 	Mayer Brown
	 	 	Schedule II Credit Guidelines	 	Dykema
	 	 	Schedule III Tradenames, Fictitious Names and
“Doing Business As” Names	 	Credit Acceptance
	 	 	Schedule IV Location of Records and Contract Files	 	Credit Acceptance
	 	 	Schedule V Loan, Pool and Contract List	 	Credit Acceptance
	 	 	Schedule VI Collection Guidelines	 	Credit Acceptance
	 	 	Schedule VII Forecasted Collections	 	Credit Acceptance
	 	 	Schedule VIII Commitment Amount of Each Investor	 	Mayer Brown
	 	 	Schedule IX List of Dealer Agreements and Pools	 	Credit Acceptance






 









 






	 	 	 	 	 	 	 
	CONDITION PRECEDENT DOCUMENTS	 	RESPONSIBLE PARTY
	 

	 	B.
	 	Contribution Agreement
	 	Dykema
	 
	 	 	 	 	 	 
	 	 	Exhibit A List of Loans	 	Credit Acceptance
	 
	 	 	 	 	 	 
	 

	 	C.
	 	Back-Up Servicing Agreement	 	 
	 
	 	 	 	 	 	 
	 

	 	D.
	 	Fee Letters	 	 
	 
	 	 	 	 	 	 
	 

	 	E.
	 	Hedge Agreements	 	 
	 	 	[Other — TBD]	 	 
	 
	 	 	 	 	 	 
	II.	 	DOCUMENTS RELATING TO THE BORROWER	 	 
	 
	 	 	 	 	 	 
	 

	 	A.
	 	Secretary’s Certificate with the following
items attached:
	 	Borrower/Dykema
	 

	 	 	 	- Certificate of Formation of the Borrower	 	 
	 

	 	 	 	-Operating Agreement of the Borrower	 	 
	 

	 	 	 	-Incumbency	 	 
	 
	 	 	 	 	 	 
	 

	 	B.
	 	On the Closing Date, an Officer’s Certificate
of the Borrower certifying the matters set forth
in Section 3.1 of the Loan and Security Agreement
and the Solvency Certificate described in Section
4.1(i) of the Loan and Security Agreement
	 	Borrower/Dykema
	 
	 	 	 	 	 	 
	 

	 	 	 	On the Funding Date, an Officer’s
Certificate of the Borrower certifying the
matters set forth in Section 3.1 of the
Loan and Security Agreement
	 	Borrower/Dykema
	 
	 	 	 	 	 	 
	 

	 	C.
	 	Certificate of Formation of the Borrower
certified by the Secretary of State of Delaware
	 	Borrower/Dykema
	 
	 	 	 	 	 	 
	 

	 	D.
	 	Good Standing Certificate issued by the
Secretary of State of the State of Delaware with
respect Borrower
	 	Borrower/Dykema
	 
	 	 	 	 	 	 
	 

	 	E.
	 	Copies of filed financing statement on Form
UCC-1 naming the Borrower as debtor and the
Collateral Agent, for the benefit of the Secured
Parties, as secured party
	 	Borrower/Dykema
	 
	 	 	 	 	 	 
	III.	 	DOCUMENTS RELATING TO CREDIT

ACCEPTANCE	 	 
	 
	 

	 	A.
	 	Secretary’s Certificate with the following
items attached:	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	- Resolutions of the Board of Directors of Credit
	 	Credit
	 

	 	 	 	Acceptance
	 	Acceptance/Dykema
	 

	 	 	 	- Certificate of Incorporation of Credit Acceptance	 	 






Sch. I-2









 






	 	 	 	 	 	 	 
	CONDITION PRECEDENT DOCUMENTS	 	RESPONSIBLE PARTY
	 

	 	 	 	- Bylaws of Credit Acceptance	 	 
	 

	 	 	 	- Incumbency	 	 
	 
	 	 	 	 	 	 
	 

	 	B.
	 	On the Closing Date, an Officer’s Certificate
of Credit Acceptance certifying the matters set
forth in Section 3.1 of the Loan and Security
Agreement
	 	Credit

Acceptance/Dykema
	 
	 	 	 	 	 	 
	 

	 	 	 	On the Funding Date, an Officer’s
Certificate of Credit Acceptance certifying
that no Unmatured Termination Event,
Termination Event, Servicer Termination
Event or potential Servicer Termination
Event shall have occurred
	 	Credit

Acceptance/Dykema
	 
	 	 	 	 	 	 
	 

	 	C.
	 	Certificate of Incorporation certified by the
Secretary of State of the State of Michigan
	 	Credit

Acceptance/Dykema
	 
	 	 	 	 	 	 
	 

	 	D.
	 	Good Standing Certificate issued by the
Secretary of State of the State of Michigan with
respect to Credit Acceptance
	 	Credit

Acceptance/Dykema
	 
	 	 	 	 	 	 
	 

	 	E.
	 	Copies of filed financing statement on Form
UCC-1 naming the Originator as the debtor/seller,
the Borrower as the secured party/purchaser, and
the Collateral Agent as Assignee
	 	Credit

Acceptance/Dykema
	 
	 	 	 	 	 	 
	IV.	 	OPINIONS OF COUNSEL	 	 
	 
	 	 	 	 	 	 
	 

	 	A.
	 	Opinion of Dykema as to true sale matters
	 	Dykema
	 
	 	 	 	 	 	 
	 

	 	B.
	 	Opinion of Dykema covering non-consolidation
matters
	 	Dykema
	 
	 	 	 	 	 	 
	 

	 	C.
	 	Opinion of Dykema as to certain corporate,
enforceability and perfection and priority matters
	 	Dykema
	 
	 	 	 	 	 	 
	 

	 	D.
	 	Opinion of counsel to the Backup Servicer as to
certain corporate and enforceability matters
	 	S&K
	 
	 	 	 	 	 	 
	V.	 	ADDITIONAL CLOSING DOCUMENTS/ACTIONS	 	 
	 
	 	 	 	 	 	 
	 

	 	A.
	 	A certificate of an officer of the Borrower
certifying that all of the conditions to funding
set forth in Sections 3.1 and 3.2 of the
Contribution Agreement have been satisfied
	 	Borrower/Dykema
	 
	 	 	 	 	 	 
	 

	 	B.
	 	Funding Notice
	 	Borrower






Sch. I-3









 






	 	 	 	 	 	 	 
	CONDITION PRECEDENT DOCUMENTS	 	RESPONSIBLE PARTY
	 

	 	C.
	 	UCC-3 Termination Statements, terminating all
security interests in the Collateral pledged to
the Collateral Agent under the Loan and Security
Agreement and the related Contractual Release
	 	Credit

Acceptance/Dykema
	 
	 	 	 	 	 	 
	 

	 	D.
	 	UCC search results (i) for the Borrower in
Nevada and (ii) for Credit Acceptance in Michigan
	 	Dykema
	 
	 	 	 	 	 	 
	 

	 	E.
	 	Evidence that the Collection Account and the
Reserve Account have been established
	 	Credit Acceptance
	 
	 	 	 	 	 	 
	 

	 	F.
	 	Evidence that the Structuring Fee and any other
fees or amounts due and payable on the Closing
Date in accordance with the Fee Letter have been
paid in full
	 	Borrower
	 
	 	 	 	 	 	 
	 

	 	G.
	 	Evidence that the Reserve Account has been funded
	 	Borrower






Key:




	 	 	 
	 	 	Fifth Third, the Deal Agent
	Fifth Third Bank	 	or the Collateral Agent
	Credit Acceptance Corporation

	 	Credit Acceptance
	CAC Warehouse Funding III, LLC

	 	Borrower
	Mayer Brown

	 	Mayer Brown LLP
	Dykema

	 	Dykema Gossett
	Systems & Services Technologies, Inc.

	 	Backup Servicer
	[Seward & Kissel LLP

	 	S&K]






Sch. I-4









 





Schedule II




Credit Guidelines




[On File with Servicer and Deal Agent]




 









 





Schedule III




Tradenames, Fictitious Names and “Doing Business As” Name




None




 









 





Schedule IV




Location of Records and Contract Files




Credit Acceptance Corporation

Silver Triangle Building

25505 W. Twelve Mile Road, Ste. 3000

Southfield, MI 48034




 









 





Schedule V




Loan and Contract List

[Disc on File with Deal Agent]




 









 





Schedule VI




Collection Guidelines




[On File with Servicer]




 









 





Schedule VII




Forecasted Collections




 









 





Schedule VIII

Commitment Amount of Each Investor




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Commitment
	Purchaser Group	 	Investor	 	Amount
	Fifth Third Purchaser Group
	 	Fifth Third Bank
	 	$	50,000,000	 






 









 





Schedule IX




List of Dealer Agreements and Pools




 









 





Schedule X




Bank Holidays




Ohio, Michigan and Missouri Bank Holidays




	 	 	 
	Name of Holiday	 	Date*
	New Year’s Day

	 	January 1
	Martin Luther King Jr. Day

	 	January 21
	President’s Day

	 	February 18
	Memorial Day

	 	May 26
	Independence Day

	 	July 4
	Labor Day

	 	September 1
	Columbus Day

	 	October 13
	Veteran’s Day

	 	November 11
	Thanksgiving Day

	 	November 27
	Christmas Day

	 	December 25








 




			
	*	 	All dates listed are the dates upon which the applicable holiday falls in 2008. In subsequent
years, each date shall be the date upon which the applicable holiday falls in such subsequent year.