Filed by Automated Filing Services Inc. (604) 609-0244 - Carbiz Inc. - Exhibit 10.2






SECOND AMENDED AND RESTATED 
LOAN AND SECURITY AGREEMENT

	CARBIZ USA INC., 
	CARBIZ AUTO CREDIT, INC., 
	CARBIZ AUTO CREDIT JV1, LLC, 
	CARBIZ AUTO CREDIT AQ, INC., and 
	TEXAS AUTO CREDIT, INC. 
	as Borrowers, 
	  
	CARBIZ INC., 
	as a Guarantor, 
	  
	SWC SERVICES LLC, 
	as Initial Lender, 


THE OTHER LENDERS FROM TIME TO TIME PARTY HERETO,

SWC SERVICES LLC, 
as Administrative Agent,

and

AGM, LLC, 
as Additional Collateral Agent

Up to $111,975,000 Revolving and Term Loan Facilities

December 24, 2007




TABLE OF CONTENTS

	  	  	Page 
	  	  	  
	ARTICLE
      1 DEFINITIONS 	1
      
	  	DEFINITIONS
      	1
      
	  	EXHIBITS
      AND SCHEDULES; ADDITIONAL DEFINITIONS 	19
      
	  	AMENDMENT
      OF DEFINED DOCUMENTS 	20
      
	  	REFERENCES
      AND TITLES 	20
      
	  	  	  
	ARTICLE
      2 LOAN(S), INTEREST RATE AND OTHER CHARGES 	20
      
	  	RECEIVABLES
      LOAN A 	20
      
	  	INVENTORY
      LOAN A 	22
      
	  	TERM
      LOAN A 	24
      
	  	RECEIVABLES
      LOAN B 	25
      
	  	INVENTORY
      LOAN B 	27
      
	  	TERM
      LOAN B 	29
      
	Section
      2.7. 	INTEREST
      RATE. 	30
      
	  	PAYMENTS
      	32
      
	  	PAYMENT
      DUE ON A NON-BUSINESS DAY 	32
      
	  	MANDATORY
      PAYMENTS 	32
      
		TERMINATION
      OF THE COMMITMENTS; VOLUNTARY PREPAYMENTS 	33
      
	  	MAXIMUM
      INTEREST; CONTROLLING AGREEMENT 	34
      
	  	INTEREST
      AFTER DEFAULT 	35
      
	  	APPLICATION
      OF PAYMENTS 	35
      
	  	FEES
      	39
      
	  	CAPITAL
      REIMBURSEMENT 	39
      
	  	[Reserved]
      	39
      
	Section
      2.18. 	TAXES
      	39
      
	  	COMMITMENT
      INCREASES 	40
      
	  	  	  
	ARTICLE
      3 SECURITY 	42
      
	  	SECURITY
      INTEREST 	42
      
		COLLATERAL
      ASSIGNMENT OF CONSUMER LOAN DOCUMENTS AND AUTO TITLE
    	43
      
	  	FINANCING
      STATEMENTS AND FURTHER ASSURANCES 	44
      
		DELIVERY
      OF RECEIVABLES; INSTRUMENTS, DOCUMENTS, ETC 	45
      
	  	FAILURE
      TO DELIVER 	46
      
		NOTICE
      OF SECURITY INTEREST AND COLLATERAL ASSIGNMENT 	46
      
	  	RECORDS
      AND INSPECTIONS 	47
      
	  	COLLECTION
      	47
      
	  	COLLECTION
      ACCOUNTS 	47
      
		PROTECTION
      OF RECEIVABLE RECORDS AND MANAGEMENT OF RECEIVABLES INFORMATION
      	48
      


i





	 	USE OF PROCEEDS 	49 
	 	RETURN OF COLLATERAL 	49 
	Section 3.13. 	COLLATERAL
      REPRESENTATIONS, WARRANTIES, AND COVENANTS 	49 
	 	LENDER'S PAYMENT OF CLAIMS 	51 
	 	  	  
	ARTICLE 4 CONDITIONS OF CLOSING; SUBSEQUENT ADVANCES
      	51 
	 	INITIAL ADVANCE 	51 
	 	ALL ADVANCES 	54 
	 	ALL ADVANCES TO CONSTITUTE ONE LOAN 	55 
	 	ADVANCES 	55 
	 	  	  
	ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF BORROWER
      AND RELATED PARTIES 	  55
	 	REPRESENTATIONS AND WARRANTIES 	55 
		REPRESENTATIONS AND WARRANTIES AS TO ELIGIBLE RECEIVABLES
      	59 
		REPRESENTATIONS AND WARRANTIES AS TO ELIGIBLE INVENTORY
      	60 
	 	  	  
	ARTICLE 6 COVENANTS AND OTHER AGREEMENTS 	60 
	 	AFFIRMATIVE COVENANTS 	60 
	 	NEGATIVE COVENANTS 	65 
		REPORTING REQUIREMENTS AND ACCOUNTING PRACTICES
      	69 
	 	ACCOUNT DEBTORS ADDRESSES 	70 
	 	FINANCIAL REPORTS 	70 
	 	NOTICE OF CHANGES 	72 
	 	NOTICE OF COMMERCIAL TORT CLAIMS 	72 
	 	OUTSIDE DIRECTOR 	73 
	 	financial covenants 	73 
	 	  	  
	ARTICLE 7 EVENTS OF DEFAULT AND REMEDIES 	77 
	 	EVENTS OF DEFAULT 	77 
	 	ACCELERATION OF THE INDEBTEDNESS 	80 
	 	REMEDIES 	81 
	 	NO WAIVER 	82 
	 	APPLICATION OF PROCEEDS 	83 
		APPOINTMENT OF ADMINISTRATIVE AGENT AS ATTORNEY-IN-FACT
      	83 
	 	  	  
	ARTICLE 8 ADMINISTRATIVE AGENT AND ADDITIONAL COLLATERAL
      AGENT; ASSIGNMENTS 	 84
	 	APPOINTMENT 	84 
	 	NATURE OF DUTIES 	84 
	 	LACK OF RELIANCE ON THE ADMINISTRATIVE AGENT 	85 
	 	CERTAIN RIGHTS OF THE AGENTS 	85 


ii





	 	RELIANCE
      	86
      
	 	INDEMNIFICATION
      	86
      
	 	HOLDERS
      	86
      
	 	RESIGNATION
      BY THE AGENTS 	86
      
	 	RELEASE
      OF COLLATERAL 	87
      
		CONFIRMATION
      OF AUTHORITY; EXECUTION OF RELEASES 	87
      
	 	ABSENCE
      OF DUTY 	87
      
	 	AGENCY
      FOR PERFECTION 	88
      
	 	AMENDMENTS,
      CONSENTS AND WAIVERS 	88
      
	 	  	  
	ARTICLE
      9 EXPENSES AND INDEMNITIES 	88
      
	 	PAYMENT
      FOR EXPENSES 	88
      
	 	GENERAL
      INDEMNIFICATION 	89
      
	 	  	  
	ARTICLE
      10 MISCELLANEOUS 	89
      
	 	NOTICES
      	89
      
	 Section
      10.2. 	APPOINTMENT
      OF BORROWER REPRESENTATIVE 	90
      
	 	ASSIGNMENTS
      AND PARTICIPATIONS 	90
      
	 	SURVIVAL
      OF AGREEMENTS 	92
      
	 	NO
      OBLIGATION BEYOND MATURITY 	92
      
	 	PRIOR
      AGREEMENTS SUPERSEDED 	92
      
	 	PARTIES
      BOUND 	92
      
	 	NO
      THIRD PARTY BENEFICIARY 	93
      
	 	EXECUTION
      IN COUNTERPARTS 	93
      
	 	SEVERABILITY
      OF PROVISIONS 	93
      
	 	FURTHER
      INSTRUMENTS 	93
      
	 	GOVERNING
      LAW 	93
      
	 	JURISDICTION
      AND VENUE 	93
      
	 	WAIVER
      	94
      
	 	ADVICE
      OF COUNSEL 	94
      
	 	WAIVER
      OF RIGHT TO TRIAL BY JURY 	94
      
	 	TIME
      OF ESSENCE 	95
      
	 	  	  
	ARTICLE
      11 JOINT AND SEVERAL LIABILITY; CROSS GUARANTY;
      SUBORDINATION	  96
      
	 	JOINT
      AND SEVERAL LIABILITY; cROSS gUARANTY 	96
      
	 	sUBORDINATION
      	98
      


iii





	Schedules and Exhibits
  
	 
	Schedule A 
	Exhibit A – Request for Advance 
	Exhibit B – Request for Return
      of Collateral 
	Exhibit C – Availability Report 
	Exhibit D – Schedule of
      Receivables and Assignment 
	Exhibit E – Compliance Certificate
  
	Exhibit F-1 – Form of
      Receivable Note A 
	Exhibit F-2 – Form of Inventory Note A
    
	Exhibit F-3 – Form of Term
      Note A 
	Exhibit F-1 – Form of Receivable Note B
    
	Exhibit F-2 – Form of
      Inventory Note B 
	Exhibit F-3 – Form of Term Note B

	Exhibit G – Loss to
      Liquidation Report 
	Exhibit H – Static Pool Report 
	Exhibit I – Tier 2 Guidelines
      


i




SECOND AMENDED AND RESTATED 
LOAN AND SECURITY
AGREEMENT

     THIS SECOND AMENDED AND
RESTATED LOAN AND SECURITY AGREEMENT (this “Agreement”) dated as of
December 24, 2007 is entered into by and among (a) CARBIZ USA INC., a Delaware
corporation (“Carbiz USA”), CARBIZ AUTO CREDIT, INC., a Florida
corporation (“Carbiz Auto”), CARBIZ AUTO CREDIT JV1, LLC, a Florida
limited liability company (“Carbiz LLC”), CARBIZ AUTO CREDIT AQ, INC., a
Florida corporation (“Carbiz AQ”) and TEXAS AUTO CREDIT, INC., a Florida
corporation (“Houston Auto”; Houston Auto, Carbiz USA, Carbiz Auto,
Carbiz LLC and Carbiz AQ are sometimes referred to herein individually as a
“Borrower” and, collectively, as the “Borrowers”), (b) CARBIZ
INC., an Ontario corporation (“Carbiz Parent”), as a Guarantor (as
defined below), (c) SWC SERVICES LLC, a Delaware limited liability company, for
itself as a lender (the “Initial Lender”), (d) the other Lenders (as
defined below) from time to time party hereto, (e) SWC SERVICES LLC, a Delaware
limited liability company, as administrative agent for the Lenders (in such
capacity, the “Administrative Agent”) and (f) AGM, LLC, a Delaware
limited liability company, as additional collateral agent for the Lenders (in
such capacity, the “Additional Collateral Agent”).

ARTICLE 1 
DEFINITIONS

     Section 1.1.
DEFINITIONS. As used in this Agreement, each of the following
terms has the meaning given to such term in this Section 1.1 or in the
schedules, sections and subsections referred to below.

     ACCOUNT. The term “Account”
shall have the meaning given to such term in the UCC.

     ACCOUNT CONTROL AGREEMENT.
The term “Account Control Agreement” shall mean those certain Account Control
Agreements between one or more Related Parties, Administrative Agent or
Additional Collateral Agent, as applicable, and the banking institutions listed
on Schedule A (or such other banking institutions at which a Related Party opens
a deposit account from time to time in accordance with the terms hereof),
pursuant to which the Administrative Agent or Additional Collateral Agent, as
applicable, establishes “control” over the subject accounts therein of such
Related Parties, in accordance with the UCC.

     ACCOUNT DEBTOR. The term
“Account Debtor” shall mean any Person that is an obligor (including without
limitation any co-signor) in respect of any Receivable.

     ACT. The term “Act” shall mean
the United States Securities Act of 1933, as amended.

     ADDITIONAL SUMS. The term
“Additional Sums” shall have the meaning given to such term in Section 2.12(b)
of this Agreement.

     ADDITIONAL TERM B AMORTIZATION
BALANCE. The term “Additional Term B Amortization Balance” shall mean the
outstanding principal balance of the Additional Term Loan B Advances as of 5:00
p.m. (Chicago, Illinois time) on July 1, 2008.




     AFFILIATE. The term
“Affiliate” shall mean, with respect to any Person (i) any Person that directly
or indirectly controls such Person, (ii) any Person which is controlled by or is
under common control with such controlling Person, (iii) each of such Person's
officers or directors (or Persons functioning in substantially similar roles)
and the spouses, parents, descendants and siblings of such officers, directors
or other Persons. As used in this definition, the term “Control” of a Person
means the possession, directly or indirectly, of the power to vote five percent
(5%) or more of any class of voting securities of such Person or to direct or
cause the direction of the management or policies of a Person, whether through
the ownership of voting securities, by contract or otherwise.

     AGING PROCEDURES. The term
“Aging Procedures” shall have the meaning set forth in Section 1.1(a)(i) of
Schedule A attached hereto.

     AGREEMENT. The term
“Agreement” shall mean this Amended and Restated Loan and Security Agreement by
and among the Lenders, the Administrative Agent, the Additional Collateral
Agent, the Borrowers and the Guarantors party hereto, and any amendment,
supplement, restatement, modifications or extension hereof.

     AGREEMENT TO OPERATE. The
term “Agreement to Operate” shall mean that certain Agreement to Operate dated
as of the date hereof by and between AGM, LLC and Houston Auto

     AMOUNT OF INVENTORY CREDIT
LINE A. The term “Amount of Inventory Credit Line A” shall mean Two Million
and No/100 Dollars ($2,000,000.00) .

     AMOUNT OF INVENTORY CREDIT
LINE B. The term “Amount of Inventory Credit Line B” shall mean Two Million
and No/100 Dollars ($2,000,000.00), as such amount may be adjusted pursuant to
Section 2.19 hereof.

     AMOUNT OF RECEIVABLES CREDIT
LINE A. The term “Amount of Receivables Credit Line A” shall mean
Twenty-Three Million and No/100 Dollars ($23,000,000.00) .

     AMOUNT OF RECEIVABLES CREDIT
LINE B. The term “Amount of Receivables Credit Line B” shall mean Fifteen
Million and No/100 Dollars ($15,000,000.00), as such amount may be adjusted
pursuant to Section 2.19 hereof.

     APPLICABLE STATED INTEREST
RATE. The term “Applicable Stated Interest Rate” shall mean, with respect to
the Receivables Loan A, the Inventory Loan A, the Term Loan A, the Receivables
Loan B, the Inventory Loan B, the Term Loan B shall be the “Receivable A Stated
Rate”, the “Inventory A Stated Rate”, the “Term Loan A Stated Rate,” the
“Receivable B Stated Rate”, the “Inventory B Stated Rate”, and the “Term Loan B
Stated Rate,” respectively, and, with respect to all other Indebtedness, the
Receivable A Stated Rate.

     APPLICABLE USURY LAW. The
term “Applicable Usury Law” shall mean all federal and state usury Laws
applicable to the Loans, the Indebtedness, this Agreement and the other Loan
Documents.

2




     APPROVED STATE. The term
“Approved State” shall have the meaning set forth in Section 1.1(a)(ii) of
Schedule A attached hereto.

     ASSET PURCHASE AGREEMENTS.
The term “Asset Purchase Agreement” shall mean, individually and collectively,
the Texas Asset Purchase Agreement, the Subsequent Texas Asset Purchase
Agreement and the Calcott Asset Purchase Agreement.

     ASSIGNEE. The term
“Assignee” shall have the meaning set forth in Section 10.3(b) hereof.

     ASSIGNMENT AND ACCEPTANCE.
The term “Assignment and Acceptance” shall mean an Assignment and Acceptance
Agreement executed pursuant to the terms of Section 10.3 hereof, in a form
reasonably acceptable to Administrative Agent and the parties thereto.

     AUTO TITLE. The term “Auto
Title” shall mean the certificate of title issued by the department of
transportation or other corresponding instrumentality or agency of any state
that relates to an automobile or other vehicle which is collateral for a
Receivable or constitutes Automobile Inventory, as applicable.

     AUTOMOBILE INVENTORY. The
term “Automobile Inventory” shall mean all automobiles, light trucks and other
vehicles owned by the Borrowers.

     AVAILABILITY ON ELIGIBLE
INVENTORY A. The term “Availability on Eligible Inventory A” shall have the
meaning set forth in Section 2.2(a)(i) of Schedule A attached hereto.

     AVAILABILITY ON ELIGIBLE
INVENTORY B. The term “Availability on Eligible Inventory A” shall have the
meaning set forth in Section 2.2(a)(ii) of Schedule A attached hereto.

     AVAILABILITY ON ELIGIBLE
RECEIVABLES A. The term “Availability on Eligible Receivables A” shall have
the meaning set forth in Section 2.1(b)(i) of Schedule A attached hereto.

     AVAILABILITY ON ELIGIBLE
RECEIVABLES B. The term “Availability on Eligible Receivables B” shall have
the meaning set forth in Section 2.1(b)(ii) of Schedule A attached hereto. 

     AVAILABILITY REPORT. The
term “Availability Report” shall mean an Availability Report in the form of
Exhibit C attached hereto.

     BORROWER REPRESENTATIVE.
The term “Borrower Representative” shall mean Carbiz USA, in its capacity as
Borrower Representative pursuant to Section 10.2 hereof.

     BUSINESS DAY. The term
“Business Day” shall mean a day, other than a Saturday or Sunday, on which
commercial banks are open for business to the public in Chicago, Illinois.

     CALCOTT AUTOMOBILE
INVENTORY. The term “Calcott Automobile Inventory” shall mean the Automobile
Inventory that originally was the subject of Consumer Loan 

3




Documents acquired by Carbiz AQ pursuant to the Calcott Asset
Purchase Agreement and subsequently repossessed or otherwise reacquired by
Carbiz AQ after the date hereof. 

     CALCOTT ASSET PURCHASE
AGREEMENT. The term “Calcott Asset Purchase Agreement” shall mean that
certain Asset Purchase Agreement dated as of October 1, 2007 by and among Carbiz
AQ, Astra Financial Services, Inc., a Nevada corporation, Calcars AB, Inc., an
Illinois corporation, and John R. Calcott, an individual.

     CALCOTT RECEIVABLES. The
term “Calcott Receivables” shall mean the Receivables consisting of consumer
auto loans acquired by Carbiz AQ pursuant to the terms of the Calcott Asset
Purchase Agreement

     CARBIZ AQ CUSTODIAN
AGREEMENT. The term “Carbiz AQ Custodian Agreement” shall mean that certain
Custodial Agreement dated as of April 11, 2006 (and amended as of the date
hereof pursuant to the First Amendment to Custodial Agreement dated as of the
date hereof among Administrative Agent, Additional Collateral Agent, The Calcott
Companies, Inc., Astra Financial Services, Inc., Calcars AB, Inc., Borrowers and
CAR Financial Services, Inc., as Custodian) among Borrowers, Administrative
Agent, Additional Collateral Agent and the Custodian party thereto, as the same
may be amended, supplemented, restated or otherwise modified in accordance with
the terms thereof.

     CARBIZ JV PURCHASE. The
term “Carbiz JV Purchase” means the purchase by Carbiz USA of the JV Shares from
JV Partner following the Closing Date (pursuant to documentation in form and
substance reasonably satisfactory to Administrative Agent) in exchange for (i)
common shares of Carbiz Parent having a market value not to exceed $400,000 as
of the date of such Carbiz JV Purchase and (ii) the issuance of the JV Purchase
Note.

     CLOSING DATE. The
  term “Closing Date” shall mean December 24, 2007.

     CODE. The term “Code”
shall mean the United States Internal Revenue Code of 1986, as amended from time
to time.

     COLLATERAL. The term
“Collateral” shall have the meaning set forth in Section 3.1. hereof.

     COLLECTION ACCOUNT. The
term “Collection Account” shall mean any of the deposit accounts set forth in
Section 3.9 of Schedule A attached hereto held in the name of Administrative
Agent or Additional Collateral Agent, as applicable, or any such other account
as may be designated to the Borrowers by Administrative Agent or Additional
Collateral Agent in writing from time to time upon not less than two (2)
Business Days prior written notice.

     COMMITMENT FEE. The term
“Commitment Fee” shall have the meaning for such term set forth in Section 2.12
of this Agreement.

     COMMONLY CONTROLLED
ENTITY. The term “Commonly Controlled Entity” shall mean an entity, whether
or not incorporated, which is under common control with any Related Party or
Validity Guarantor within the meaning of Section 414(b) or (c) of the Code.

4




     CONSUMER LOAN DOCUMENTS.
The term “Consumer Loan Documents” shall mean all promissory notes, chattel
paper, retail installment contracts, security agreements or other similar
documents, agreements, instruments and writings evidencing or securing a
Receivable which have been executed by an Account Debtor and any guarantor of
the related Receivable and are payable to or in favor of a Borrower.

     CUSTODIAL CERTIFICATE. The
term “Custodial Certificate” shall have the meaning for such term set forth in
the Custodian Agreements.

     CUSTODIAN. The term
“Custodian” shall mean (i) LaSalle Bank, NA, and its successors and permitted
assigns, in connection with the Existing Carbiz Custodian Agreement, (ii) CAR
Financial Services, Inc., and its successors and assigns, in connection with the
Carbiz AQ Custodian Agreement and (iii) CAR Financial Services, Inc., and its
successors and assigns, in connection with the Texas Legacy Custodian
Agreement.

     CUSTODIAN AGREEMENT. The
term “Custodian Agreement” means the Existing Carbiz Custodian Agreement, the
Carbiz AQ Custodian Agreement, or the Texas Legacy Custodian Agreement, as the
context requires, and “Custodian Agreements” means the Existing Carbiz Custodian
Agreement, the Carbiz AQ Custodian Agreement and the Texas Legacy Custodian
Agreement, collectively. 

     DEFAULT. The term
“Default” shall mean an event which with the passage of time or notice or both
would constitute an Event of Default.

     DEFAULT RATE. The term
“Default Rate” shall have the meaning for such term set forth in Section 2.13 of
this Agreement.

     DISTRIBUTION. The term
“Distribution” shall mean, during any period of determination, (i) any dividends
or other distribution of earnings to any Related Party’s shareholders, members
or equity holders, (ii) the net increase in the outstanding balance of all
obligations or indebtedness due from any Related Party’s shareholders, members
or equity holders to such Related Party and (iii) the net decrease in the
outstanding balance of all obligations or indebtedness due from any Related
Party to such Related Party’s shareholders, members or equity holders.

     DOLLARS. The term
“Dollars” and the symbol “$” shall mean the lawful currency of the United States
of America.

     EBITDA. The term “EBITDA”
shall mean, for any period of determination, all earnings of Carbiz Parent and
its consolidated Subsidiaries for said period before (a) all interest and tax
obligations for said period, (b) depreciation for said period, and (c)
amortization for said period, determined in accordance with GAAP on a consistent
basis with the latest financial statements of Carbiz Parent and its consolidated
Subsidiaries, but excluding the effect of extraordinary or non-reoccurring gains
or losses for such period.

     ELIGIBLE INVENTORY. The
term “Eligible Inventory” shall mean, individually and collectively, Eligible
Inventory A and Eligible Inventory B.

5




     ELIGIBLE INVENTORY A. The
term “Eligible Inventory A” shall have meaning for such term set forth in
Section 1.1(b)(i) of Schedule A attached hereto.

     ELIGIBLE INVENTORY B. The
term “Eligible Inventory B” shall have meaning for such term set forth in
Section 1.1(b)(ii) of Schedule A attached hereto.

     ELIGIBLE RECEIVABLES. The
term “Eligible Receivables” shall mean, individually and collectively, Eligible
Receivables A and Eligible Receivables B.

     ELIGIBLE RECEIVABLES A.
The term “Eligible Receivables A” shall have the meaning for such term set forth
in Section 1.1(a)(iii) of Schedule A attached hereto.

     ELIGIBLE RECEIVABLES B.
The term “Eligible Receivables B” shall have the meaning for such term set forth
in Section 1.1(a)(vi) of Schedule A attached hereto.

     ERISA. The term “ERISA”
shall mean the United States Employee Retirement Income Security Act of 1974, as
amended from time to time.

     EVENT OF DEFAULT. The term
“Event of Default” shall have the meaning given to such term in Section 7.1.

     EXISTING CARBIZ CUSTODIAN
AGREEMENT. The term “Existing Carbiz Custodian Agreement” shall mean that
certain Custodial Agreement dated as of March 23, 2007 among certain of the
Borrowers, Administrative Agent and the Custodian party thereto, as supplemented
by that certain joinder to custodian agreement dated as of the date hereof by
Houston Auto and as the same may be amended, supplemented, restated or otherwise
modified in accordance with the terms thereof.

     EXISTING CARBIZ LOAN
AGREEMENT. The term “Existing Carbiz Loan Agreement” shall mean that certain
Amended and Restated Loan and Security Agreement dated as of October 1, 2007, as
amended, restated, supplemented or otherwise modified from time to time
immediately prior to the effectiveness of this Agreement, by and among Carbiz
USA, Carbiz Auto, Carbiz LLC and Carbiz AQ, as “Borrowers” thereunder, Carbiz
Parent, as a “Guarantor” thereunder, SWC Services LLC, as the “Administrative
Agent” thereunder and the “Lenders” party thereto.

     FIRST INTEREST RATE A INCREASE
PERIOD. The term “First Interest Rate A Increase Period” shall mean the
period commencing October 1, 2008 and continuing through January 31, 2009. 

     FIRST INTEREST RATE B INCREASE
PERIOD. The term “First Interest Rate B Increase Period” shall mean the
period commencing January 1, 2009 and continuing through April 30, 2009. 

     FOURTH TRANCHE COMMITMENT
INCREASE. The term “Fourth Tranche Commitment Increase” shall mean the
increase of (i) the Amount of Receivables Credit Line B hereunder from
$45,000,000 to $60,000,000 and (ii) the Amount of Inventory Credit Line B
hereunder from $3,000,000 to $4,000,000 in accordance with Section 2.19(c)
hereof.

6




     FOURTH TRANCHE EFFECTIVE
DATE. The term “Fourth Tranche Effective Date” shall mean the date on which
the Borrowers shall satisfy the terms and conditions precedent to the Fourth
Tranche Commitment Increase as set forth in Section 2.19(c) hereof.

     GAAP. The term “GAAP”
shall mean generally accepted accounting principles and other standards as
promulgated by the American Institute of Certified Public Accountants.

     GUARANTOR. The term
“Guarantor” shall mean Carbiz Parent and each other Person or Persons (other
than a Validity Guarantor or JV Partner) who now or hereafter execute a Guaranty
Agreement in favor of Administrative Agent, for the benefit of the Lender
Parties, with respect to all or any part of the Indebtedness.

     GUARANTY AGREEMENT. The
term “Guaranty Agreement” shall mean (i) that certain Guaranty and Security
Agreement dated as of March 23, 2007 by Carbiz Parent in favor of Administrative
Agent for the benefit of the Lender Parties, (ii) that certain Limited Recourse
Guaranty and Pledge Agreement dated as of March 23, 2007 by the JV Partner in
favor of Administrative Agent for the benefit of the Lender Parties, (iii) each
Validity Guaranty, and (iv) each other guaranty of all or part of the
Indebtedness from time to time executed by a Guarantor in favor of
Administrative Agent, for the benefit of the Lender Parties, in each case, in
form and substance satisfactory to Administrative Agent.

     INDEBTEDNESS. The term
“Indebtedness” shall mean all amounts advanced hereunder by Lenders to Borrowers
(including, without limitation, the Loans) together with all other amounts owing
or becoming owing to any Lender Party by any Borrower, any Guarantor, any
Validity Guarantor or any other Related Party under or pursuant to the Loan
Documents, the Texas Asset Purchase Agreement or the Subsequent Texas Purchase
Agreement, whether direct or indirect, absolute or contingent, now or hereafter
existing.

     INITIAL BORROWERS. The
term “Initial Borrowers” shall mean, individually and collectively, each of
Carbiz USA, Carbiz Auto, Carbiz LLC and Carbiz AQ.

     INITIAL TERM B AMORTIZATION
BALANCE. The term “Initial Term B Amortization Balance” shall mean the
outstanding principal balance of the Initial Term Loan B as of 5:00 p.m.
(Chicago, Illinois time) on January 1, 2010.

     INTEREST COVERAGE RATIO.
The term “Interest Coverage Ratio” shall mean, at any time of determination, the
ratio of Carbiz Parent’s and its consolidated Subsidiaries’ EBITDA divided by
Carbiz Parent’s and its consolidated Subsidiaries’ Interest Expense, in each
case for the immediately preceding two (2) calendar month period.

     INTEREST EXPENSE. The term
“Interest Expense” shall mean, during the period of determination, the total
interest expense of Carbiz Parent and its consolidated Subsidiaries, including,
without limitation, all interest paid or accrued with respect to (a) the Loans
and all other outstanding Indebtedness, (b) the Trafalgar Subordinated Debt and
(c) the Management Subordinated Debt; provided, that, notwithstanding the
foregoing, interest on the Trafalgar Subordinated Debt and/or Management
Subordinated Debt paid by the issuance of equity of Carbiz Parent pursuant to
the terms of the Trafalgar Subordinated Debt Documents or 

7




Management Subordinated Debt Documents (and not in cash) shall
not be deemed to constitute interest expense for the purpose hereof.

     INVENTORY A ADVANCE RATE.
The term “Inventory A Advance Rate” shall have the meaning set forth in Section
2.2(a)(i) of Schedule A attached hereto.

     INVENTORY B ADVANCE RATE.
The term “Inventory B Advance Rate” shall have the meaning set forth in Section
2.2(a)(ii) of Schedule A attached hereto.

     INVENTORY A LOAN ADVANCE.
The term “Inventory A Loan Advance” shall have the meaning given to such term in
Section 2.2(a) hereof.

     INVENTORY LOAN A. The term
“Inventory Loan A” shall have the meaning set forth in Section 2.2(a)
hereof.

     INVENTORY LOAN B. The term
“Inventory Loan B” shall have the meaning set forth in Section 2.5(a)
hereof.

     INVENTORY B LOAN ADVANCE.
The term “Inventory B Loan Advance” shall have the meaning given to such term in
Section 2.5(a) hereof.

     INVENTORY LOANS. The term
“Inventory Loans” shall mean collectively, the Inventory Loan A and the
Inventory Loan B.

     INVENTORY NOTE A. The term
“Inventory Note A” shall mean, individually and collectively, any promissory
note of Borrowers issued to Initial Lender (or subsequently reissued by the
Borrowers to an assignee of Initial Lender pursuant to Section 10.3 hereof) in
respect of an Inventory Loan A hereunder, as such promissory note may be
amended, modified, supplemented or restated from time to time, and any
substitutions for or renewals of such promissory note.

     INVENTORY NOTE B. The term
“Inventory Note B” shall mean, individually and collectively, any promissory
note of Houston Auto issued to Initial Lender (or subsequently reissued by
Houston Auto to an assignee of Initial Lender pursuant to Section 10.3 hereof)
in respect of an Inventory Loan B hereunder, as such promissory note may be
amended, modified, supplemented or restated from time to time, and any
substitutions for or renewals of such promissory note.

     INVENTORY PURCHASER. The
term “Inventory Purchaser” shall mean any Person that purchases Automobile
Inventory from a Borrower.

     INVENTORY A STATED RATE.
The term “Inventory A Stated Rate” shall mean twelve percent (12%) per
annum.

     INVENTORY B STATED RATE.
The term “Inventory B Stated Rate” shall mean twelve percent (12%) per
annum.

8




     ITEMS. The term “Items”
shall mean all cash payments, checks, drafts, or similar items of payment upon
and/or proceeds of the Receivables and/or Automobile Inventory.

     JV PARTNER. The term “JV
Partner” shall mean JonRoss Inc., a Florida corporation.

     JV PURCHASE NOTE. The term
“JV Purchase Note” shall mean an unsecured promissory note issued by Carbiz USA
to JV Partner in an original principal amount not to exceed $200,000, which
promissory note shall be in form and substance reasonably satisfactory to
Administrative Agent and shall (i) provide for monthly payments of interest in
kind at a per annum rate not to exceed 8% (and shall not provide for any cash
payment of interest), (ii) not require or permit payments of principal prior to
maturity, and (iii) shall provide for the maturity of such promissory note and
the payment of outstanding principal (including principal consisting of interest
paid in kind) on the one year anniversary of such promissory note. 

     JV SHARES. The term “JV
Shares” shall mean the limited liability company membership interests of Carbiz
LLC owned by JV Partner as of the Closing Date, which membership interests
constitute fifty percent (50%) of the outstanding membership interests of Carbiz
LLC.

     LANDLORD WAIVERS. The term
“Landlord Waivers” shall mean all waivers, consents, agreements for quiet
attornment, collateral access agreements and other agreements with lessors of
Borrowers, as may be required by Administrative Agent and each in form and
substance satisfactory to Administrative Agent.

     LAW. The term “Law” shall
mean any statute, law, regulation, ordinance, rule, treaty, judgment, order,
decree, permit, concession, franchise, license, agreement or other governmental
restriction of the United States or any state or political subdivision thereof
or of any foreign country (including, without limitation, Canada) or any
department, state, province or other political subdivision thereof.

     LENDER. The term “Lender”
shall mean each of the Initial Lender and its permitted assigns pursuant to
Section 10.3 of this Agreement, and the successors thereof.

     LENDER PARTIES. The term
“Lender Parties” shall mean Administrative Agent, Additional Collateral Agent
and all Lenders.

     LEVERAGE RATIO. The term
“Leverage Ratio” shall mean, on any date of determination, an amount equal to
the ratio of: (a) the amount of the total Liabilities of Carbiz Parent and its
consolidated Subsidiaries on such date, including the outstanding balance of the
Indebtedness, divided by (b) the amount of Carbiz Parent’s and its consolidated
Subsidiaries’ Tangible Net Worth.

     LIABILITIES. The term
“Liabilities” shall mean, as to any Person, all indebtedness, liabilities and
obligations of such Person, whether matured or unmatured, liquidated or
unliquidated, primary or secondary, direct or indirect, absolute, fixed or
contingent, and whether or not required to be considered pursuant to GAAP.

9




     LIEN. The term “Lien”
shall mean, with respect to any property or assets, any right or interest
therein of a creditor to secure Liabilities owed to it or any other arrangement
with such creditor which provides for the payment of such Liabilities out of
such property or assets or which allows such creditor to have such Liabilities
satisfied out of such property or assets prior to the general creditors of any
owner thereof, including any lien, mortgage, security interest, pledge, deposit,
rights of a vendor under any title retention or conditional sale agreement or
lease substantially equivalent thereto, tax lien, mechanic’s or materialman’s
lien, or any other charge or encumbrance for security purposes, whether arising
by Law or agreement or otherwise, but excluding any right of offset which arises
without agreement in the ordinary course of business. “Lien” also includes any
financing statement, any registration of a pledge (such as with an issuer of
uncertificated securities), or any other arrangement or action which would serve
to perfect a Lien described in the preceding sentence, regardless of whether
such financing statement is filed, such registration is made, or such
arrangement or action is undertaken before or after such Lien exists.

     LIQUIDATED DAMAGES. The
term “Liquidated Damages” shall have the meaning set forth in Section 2.11 of
Schedule A attached hereto.

     LOANS. The term “Loans”
shall mean, collectively, the Receivables Loan A, the Inventory Loan A, the Term
Loan A, the Receivable Loan B, the Inventory Loan B and the Term Loan B.

     LOAN ADVANCE. The term
“Loan Advance” shall mean, individually and collectively, each Loan A Advance
and each Loan B Advance hereunder.

     LOAN A ADVANCE. The term
“Loan A Advance” shall mean, individually and collectively, each Inventory Loan
A Advance, each Receivable Loan A Advance and each advance of the Term Loan A
hereunder.

     LOAN B ADVANCE. The term
“Loan B Advance” shall mean, individually and collectively, each Inventory Loan
B Advance, each Receivable Loan B Advance and each advance of the Term Loan B
hereunder.

     LOAN DOCUMENTS. The term
“Loan Documents” shall mean this Agreement, the Notes, each Guaranty Agreement,
each Pledge Agreement, each Security Agreement, the Subordination Agreement(s),
the Custodian Agreements, the Account Control Agreements, and all other
documents, instruments, writings and other agreements executed in connection
with this Agreement, together with any and all renewals, amendments,
restatements or replacements thereof and all exhibits, schedules and annexes
thereto.

     LOSS TO LIQUIDATION RATIO.
The term “Loss to Liquidation Ratio” shall mean, as of any date of
determination, a percentage equal to (i) the amount of Receivables which became
charged-off receivables during the period of 3 to 12 consecutive calendar months
then most recently ended less recoveries of any cash or equivalent for wholesale
value for vehicles resold during such period with respect to any charged-off
receivables, divided by (ii) the aggregate amount of collections (payments and
payoffs) and charged-off receivables, before recoveries of cash or equivalents,
during such corresponding 3 to 12 month period.

10




     LOT CODE. The term “Lot
Code” shall mean the identification codes applied to Borrowers’ Receivables and
Automobile Inventory pursuant to the software system used by Borrowers for the
purpose of monitoring Receivables and Automobile Inventory.

     MANAGEMENT SUBORDINATED
DEBT. The term “Management Subordinated Debt” shall mean the Liabilities of
Carbiz Parent to the Management Subordinated Lenders pursuant to the Management
Subordinated Debt Documents, the principal amount of which shall not exceed
$800,000 at any time (plus interest capitalized or paid in kind pursuant to the
terms thereof).

     MANAGEMENT SUBORDINATED DEBT
DOCUMENTS. The term “Management Subordinated Debt Documents” shall mean a
collective reference to the Secured Convertible Debentures dated on or about
October 1, 2007 issued by Carbiz Parent to the Management Subordinated Lenders
and each other document and agreement executed and delivered in connection
therewith.

     MANAGEMENT SUBORDINATED
LENDERS. The term “Management Subordinated Lenders” shall mean,
collectively, the members of management of Carbiz Parent and its Subsidiaries
and the other Persons issued Secured Convertible Debentures on the date hereof
constituting Management Subordinated Debt Documents, together with their
permitted successors and assigns pursuant to the terms of the Management
Subordination Agreement.

     MANAGEMENT SUBORDINATION
AGREEMENT. The term “Management Subordination Agreement” shall mean that
certain Subordination and Intercreditor Agreement dated on or about October 1,
2007 by and among Administrative Agent, Additional Collateral Agent, the
Borrowers, the Guarantors and the Management Subordinated Lenders, as the same
may be amended, supplemented or otherwise modified in accordance with the terms
thereof.

     MATURITY DATE. The term
“Maturity Date” shall mean (i) for the Receivables Loan A and the Inventory Loan
A, October 1, 2011, (ii) for the Term Loan A, April 1, 2011, (iii) for the
Receivables Loan B and the Inventory Loan B, October 1, 2011 and (iv) for the
Term Loan B, April 1, 2011.

     MAXIMUM AGGREGATE CREDIT LINE
A. The term “Maximum Aggregate Credit Line A” shall mean Thirty Million and
No/100 Dollars ($30,000,000.00) .

     MAXIMUM AMOUNT OF AN ELIGIBLE
RECEIVABLE A. The term “Maximum Amount of an Eligible Receivable A” shall
have the meaning set forth in Section 1.1(a)(iv) of Schedule A attached
hereto.

     MAXIMUM AMOUNT OF AN ELIGIBLE
RECEIVABLE B. The term “Maximum Amount of an Eligible Receivable B” shall
have the meaning set forth in Section 1.1(a)(vii) of Schedule A attached
hereto.

     MAXIMUM RATE. The term
“Maximum Rate” shall mean the highest lawful and nonusurious rate of interest
that at any time or from time to time may be contracted for, taken, reserved,
charged, or received on the Notes and the Indebtedness under Applicable Usury
Law.

11




     MAXIMUM TERM OF AN ELIGIBLE
RECEIVABLE A. The term “Maximum Term of an Eligible Receivable A” shall have
the meaning set forth in Section 1.1(a)(v) of Schedule A attached hereto.

     MAXIMUM TERM OF AN ELIGIBLE
RECEIVABLE B. The term “Maximum Term of an Eligible Receivable B” shall have
the meaning set forth in Section 1.1(a)(viii) of Schedule A attached hereto.

     MORTGAGES. The term
“Mortgages” shall mean those certain mortgages or deeds of trust executed by
each Related Party that owns any real estate being mortgaged to the
Administrative Agent or Additional Collateral Agent, for the benefit of the
Lender Parties, in form and substance reasonably satisfactory to Administrative
Agent or Additional Collateral Agent, as applicable.

     NET INCOME. The term “Net
Income” shall mean, with respect to any period, the net earnings of Carbiz
Parent and its consolidated Subsidiaries (excluding all extraordinary gains or
nonrecurring income) before provision for income taxes for such period, all as
reflected on the financial statements of Carbiz Parent and its consolidated
Subsidiaries supplied to Administrative Agent pursuant to Section 6.5
hereof.

     NOTES. The term “Notes”
shall mean, individually and collectively, the Receivables Note A, the Inventory
Note A, the Term Note A, the Receivables Note B, the Inventory Note B and the
Term Note B.

     “OCCC” means the Texas Office
of the Consumer Credit Commissioner.

     “OCCC License” means that
certain Motor Vehicle Sales Finance License (License No. 12391-51449) issued by
the OCCC to AGM, LLC, under Chapter 348 of the Texas Finance Code

     OPERATING ACCOUNT. The
term “Operating Account” shall mean the deposit accounts of a Borrower
identified in Section 2.1(c) of Schedule A hereto, together with any replacement
deposit accounts subject to an Account Control Agreement from time to time
identified by the Borrower Representative to Administrative Agent in
writing.

     ORIGINAL CARBIZ LOAN
AGREEMENT. The term “Original Carbiz Loan Agreement” shall mean that certain
Loan and Security Agreement dated as of March 23, 2007, as amended, restated,
supplemented or otherwise modified from time to time immediately prior to the
effectiveness of the Existing Carbiz Loan Agreement, by and among Carbiz USA,
Carbiz Auto and Carbiz LLC, as “Borrowers” thereunder, Carbiz Parent, as a
“Guarantor” thereunder, SWC Services LLC, as the “Administrative Agent”
thereunder and the “Lenders” party thereto.

     ORIGINAL CLOSING DATE. The
term “Original Closing Date” shall mean March 23, 2007.

     OUTSIDE DIRECTOR. The term
“Outside Director” shall have the meaning given to such term is Section 6.8.

12




     PATRIOT ACT. The term
“Patriot Act” shall mean the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, P.L.
107-56, as amended.

     PERSON. The term “Person”
shall mean an individual, partnership, corporation, limited liability company,
limited liability partnership, joint venture, joint stock company, association,
trust, unincorporated organization or any other entity or organization,
including without limitation a government or agency or political subdivision
thereof.

     PLAN. The term “Plan”
shall mean any pension plan that is covered by Title IV of ERISA and with
respect to which Borrower or a Commonly Controlled Entity is an “Employer” as
defined in Section 3(5) of ERISA.

     PLEDGE AGREEMENT. The term
“Pledge Agreement” shall mean, collectively, those certain pledge agreements
dated as of the Original Closing Date by each of Carbiz Parent, Carbiz USA, and
Carbiz Auto in favor of Administrative Agent, for the benefit of the Lender
Parties, together with each other pledge agreement from time to time executed by
a Related Party in favor of Administrative Agent or Additional Collateral Agent,
for the benefit of the Lender Parties, securing all or any part of the
Indebtedness. 

     RECEIVABLE A STATED RATE.
The term “Receivable A Stated Rate” shall mean twelve percent (12%) per
annum.

     RECEIVABLE B STATED RATE.
The term “Receivable B Stated Rate” shall mean twelve percent (12%) per
annum.

     RECEIVABLES. The term
“Receivables” shall mean all Accounts of the Borrowers and any other right of a
Borrower to receive payment, including, without limitation, all loans,
extensions of credit or a Borrower’s right to payment for goods sold or services
rendered by such Borrower.

     RECEIVABLES A ADVANCE
RATE. The term “Receivables A Advance Rate” shall have the meaning set forth
in Section 2.1(b)(i) of Schedule A attached hereto.

     RECEIVABLES B ADVANCE
RATE. The term “Receivables B Advance Rate” shall have the meaning set forth
in Section 2.1(b)(ii) of Schedule A attached hereto.

     RECEIVABLES LOAN A
ADVANCE. The term “Receivables Loan A Advance” shall have the meaning given
to such term in Section 2.1(a) .

     RECEIVABLES LOAN B
ADVANCE. The term “Receivables Loan B Advance” shall have the meaning given
to such term in Section 2.4(a) .

     RECEIVABLES LOANS. The
term “Receivables Loans” shall mean collectively, the Receivables Loan A and the
Receivables Loan B.

     RECEIVABLES NOTE A. The
term “Receivables Note A” shall mean, individually and collectively, any
promissory note of the Borrowers issued to Initial Lender (or subsequently
re-

13




issued by the Borrowers to an assignee of Initial Lender
pursuant to Section 10.3 hereof) in respect of a Receivables Loan A hereunder,
as such promissory note may be amended, modified, supplemented or restated from
time to time, and any substitutions for or renewals of such promissory note.

     RECEIVABLES NOTE B. The
term “Receivables Note B” shall mean, individually and collectively, any
promissory note of the Borrowers issued to Initial Lender (or subsequently
reissued by the Borrowers to an assignee of Initial Lender pursuant to Section
10.3 hereof) in respect of a Receivables Loan B hereunder, as such promissory
note may be amended, modified, supplemented or restated from time to time, and
any substitutions for or renewals of such promissory note.

     RELATED PARTY. The term
“Related Party” shall mean, collectively, each Borrower, each Guarantor, each
Subsidiary of a Borrower and/or Carbiz Parent and each Subsidiary and/or
Affiliate of a Borrower and/or a Guarantor that is a party to this Agreement or
any other Loan Document (other than a Validity Guarantor or JV Partner).

     REQUEST FOR ADVANCE. The
term “Request for Advance” shall mean a written request for an advance in the
form of Exhibit A attached hereto and made a part hereof.

     REQUIRED LENDERS. The term
“Required Lenders” shall mean, at any one time, any group of Lenders holding
commitments to make Receivables Loan A Advances, Inventory Loan A Advances,
Receivables Loan B Advances, Inventory Loan B Advances, together with the
principal amount of the Term Loan A and Term Loan B, which constitute a majority
of the then aggregate outstanding commitments to make Receivables Loan A
Advances, Inventory Loan A Advances, Receivables Loan B Advances, Inventory Loan
B Advances, and the principal amount of the Term Loan A and Term Loan B;
provided that if the commitments to make Receivables Loan A Advances, Inventory
Loan A Advances, Receivables Loan B Advances and Inventory Loan B Advances have
terminated or expired, then “Required Lenders” shall mean, at any one time, any
group of Lenders holding the principal amount of Loans which constitute a
majority of the then aggregate outstanding principal amount of the Loans.

     RESTATEMENT CLOSING DATE.
The term “Restatement Closing Date shall mean October 1, 2007.

     SCHEDULE A. The term
“Schedule A” shall mean Schedule A of this Agreement of even date herewith
executed by the Borrowers, as amended, supplemented or restated from time to
time, upon written agreement of Administrative Agent, Required Lenders and the
Borrowers.

     SCHEDULE OF RECEIVABLES AND
ASSIGNMENT. The term “Schedule of Receivables and Assignment” shall mean an
assignment in the form and substance of Exhibit D attached hereto.

     SECOND INTEREST RATE A
INCREASE PERIOD. The term “Second Interest Rate A Increase Period” shall
mean the period commencing February 1, 2009 and continuing through July 31,
2009.

14




     SECOND INTEREST RATE B
INCREASE PERIOD. The term “Second Interest Rate B Increase Period” shall
mean the period commencing May 1, 2009 and continuing through October 31,
2009.

     SECOND TRANCHE COMMITMENT
INCREASE. The term “Second Tranche Commitment Increase” shall mean the
increase of (i) the Amount of Receivables Credit Line B hereunder from
$15,000,000 to $30,000,000 and (ii) the Amount of Inventory Credit Line B
hereunder from $2,000,000 to $2,500,000 in accordance with Section 2.19(a)
hereof.

     SECOND TRANCHE EFFECTIVE
DATE. The term “Second Tranche Effective Date” shall mean the date on which
the Borrowers shall satisfy the terms and conditions precedent to the Second
Tranche Commitment Increase as set forth in Section 2.19(a) hereof.

     SECURITY AGREEMENTS. The
term “Security Agreements” shall mean each security agreement from time to time
executed by a Related Party in favor of Administrative Agent OR Additional
Collateral Agent, for the benefit of the Lender Parties, securing all or any
part of the Indebtedness.

     SID/GPS DEVICE. The term
“SID/GPS Device” shall mean a starter interrupt / GPS tracking device of a type
satisfactory to Administrative Agent. 

     STATIC POOL. The term
“Static Pool” shall mean a series of consumer loans underwritten with the same
criteria during the same month, quarter, or year.

     SUBORDINATED DEBT. The
term “Subordinated Debt” shall mean the aggregate amount of any Liabilities of
any Related Party to any Person that are issued in an amount and on terms and
conditions acceptable to Administrative Agent and Lenders and subordinated in
all respects, including, but not limited to, the right of payment, to the prior
payment in full of the Indebtedness pursuant to a Subordination Agreement, in
each case, in form and substance satisfactory to Administrative Agent. Trafalgar
Subordinated Debt and Management Subordinated Debt shall be deemed to be
Subordinated Debt.

     SUBORDINATION AGREEMENT.
The term “Subordination Agreement” shall mean, collectively, the Trafalgar
Subordination Agreement, the Management Subordination Agreement and each other
subordination and intercreditor agreement executed by a holder of Subordinated
Debt in favor of Administrative Agent and the Lenders, which Subordination
Agreement is in form and substance satisfactory to the Administrative Agent in
its sole discretion.

     SUBSEQUENT TEXAS ASSET
PURCHASE AGREEMENT. The term “Subsequent Texas Asset Purchase Agreement”
shall mean an Asset Purchase to be dated on or about January 10, 2008 by and
among Houston Auto and the “Seller” party thereto to be entered into by Houston
Auto pursuant to the terms of Section 14 of the Texas Asset Purchase
Agreement.

     SUBSIDIARY. The term
“Subsidiary” shall mean, with respect to any Person, (i) any corporation of
which an aggregate of more than fifty percent (50%) of the outstanding capital
stock having ordinary voting power to elect a majority of the board of directors
of such corporation (irrespective of whether, at the time, capital stock of any
other class or classes of such corporation shall have or might have voting power
by reason of the happening of any 

15




contingency) is at the time, directly or indirectly, owned
legally or beneficially by such Person or one or more Subsidiaries of such
Person, or with respect to which any such Person has the right to vote or
designate the vote of more than fifty percent (50%) of such capital stock
whether by proxy, agreement, operation of law or otherwise, and (ii) any
partnership or limited liability company in which such Person and/or one or more
Subsidiaries of such Person shall have an interest (whether in the form of
voting or participation in profits or capital contribution) of more than fifty
percent (50%) or of which any such Person is a general partner or may exercise
the powers of a general partner. Unless the context otherwise requires, each
reference to a Subsidiary shall be a reference to a Subsidiary of a Borrower.
For purposes of the Loan Documents, Carbiz LLC shall at all times be deemed a
Subsidiary of Carbiz USA.

     TANGIBLE NET WORTH. The
term “Tangible Net Worth” shall mean, at any time of determination, an amount
equal to (a) the shareholder's equity of Carbiz Parent and its consolidated
Subsidiaries on such date, determined in accordance with GAAP, minus (b) the
aggregate amount on such date of all intangible assets and all assets consisting
of obligations due to Carbiz Parent and its consolidated Subsidiaries from
shareholders, directors, officers, any Guarantor or any Affiliate of a Borrower
or a Guarantor hereunder (other than Carbiz Parent and its Subsidiaries
themselves).

     TERM A AMORTIZATION
BALANCE. The term “Term A Amortization Balance” shall mean the outstanding
principal balance of the Term Loan A as of 5:00 p.m. (Chicago, Illinois time) on
April 30, 2010. 

     TERM LOAN A. The term
“Term Loan A” shall have the meaning set forth in Section 2.3 hereof.

     TERM LOAN B. The term
“Term Loan B” shall have the meaning set forth in Section 2.6 hereof.

     TERM LOANS. The term “Term
Loans” shall mean collectively, the Term Loan A and the Term Loan B.

     TERM NOTE A. The term
“Term Note A” shall mean, individually and collectively, any promissory note of
Borrowers issued to Initial Lender (or subsequently re-issued by the Borrowers
to an assignee of Initial Lender pursuant to Section 10.3 hereof) in respect of
the Term Loan A hereunder, as such promissory note may be amended, modified,
supplemented or restated from time to time, and any substitutions for or
renewals of such promissory note.

     TERM NOTE B. The term
“Term Note B” shall mean, individually and collectively, any promissory note of
Houston Auto issued to Initial Lender (or subsequently re-issued by the
Borrowers to an assignee of Initial Lender pursuant to Section 10.3 hereof) in
respect of the Term Loan B hereunder, as such promissory note may be amended,
modified, supplemented or restated from time to time, and any substitutions for
or renewals of such promissory note.

     TERM LOAN A STATED RATE.
The term “Term Loan A Stated Rate” shall mean twelve percent (12%) per
annum.

16




     TERM LOAN B STATED RATE.
The term “Term Loan B Stated Rate” shall mean twelve percent (12%) per
annum.

     TERMINATION DATE. The term
“Termination Date” shall have the meaning given to such term in Section 2.11 of
this Agreement.

     TERMINATION NOTICE. The
term “Termination Notice” shall have the meaning given to such term in Section
2.11 of this Agreement.

     TEXAS ASSET PURCHASE
AGREEMENT. The term “Texas Asset Purchase Agreement” shall mean that certain
Asset Purchase Agreement dated as of December 24, 2007 by and among Houston Auto
and the “Seller” party thereto.

     TEXAS LEGACY AUTOMOBILE
INVENTORY. The term “Texas Legacy Automobile Inventory” shall mean (i) the
Automobile Inventory acquired by Houston Auto pursuant to the Texas Asset
Purchase Agreement and (ii) any Automobile Inventory that originally was the
subject of Consumer Loan Documents acquired by Houston Auto pursuant to the
Texas Asset Purchase Agreement and subsequently repossessed or otherwise
reacquired by Houston Auto after the date hereof. 

     TEXAS LEGACY RECEIVABLES.
The term “Texas Legacy Receivables” shall mean the Receivables consisting of
consumer auto loans acquired by Houston Auto pursuant to the terms of the Texas
Asset Purchase Agreement or the Subsequent Texas Asset Purchase Agreement. 

     TEXAS LEGACY CUSTODIAN
AGREEMENT. The term “Texas Legacy Custodian Agreement” shall mean a
Custodial Agreement by and among Houston Auto, Administrative Agent and the
Custodian party thereto, which Custodial Agreement shall be in form and
substance satisfactory to Administrative Agent, as the same may be amended,
supplemented, restated or otherwise modified in accordance with the terms
thereof.

     THIRD INTEREST RATE A INCREASE
PERIOD. The term “Third Interest Rate A Increase Period” shall mean the
period commencing August 1, 2009 and continuing through January 31, 2010.

     THIRD INTEREST RATE B INCREASE
PERIOD. The term “Third Interest Rate B Increase Period” shall mean the
period commencing November 1, 2009 and continuing through April 30, 2010.

     THIRD TRANCHE COMMITMENT
INCREASE. The term “Third Tranche Commitment Increase” shall mean the
increase of (i) the Amount of Receivables Credit Line B hereunder from
$30,000,000 to $45,000,000 and (ii) the Amount of Inventory Credit Line B
hereunder from $2,500,000 to $3,000,000 in accordance with Section 2.19(b)
hereof.

     THIRD TRANCHE EFFECTIVE
DATE. The term “Third Tranche Effective Date” shall mean the date on which
the Borrowers shall satisfy the terms and conditions precedent to the Third
Tranche Commitment Increase as set forth in Section 2.19(b) hereof.

17




     TIER 2 ELIGIBLE RECEIVABLE
A. The term “Tier 2 Eligible Receivable A” shall mean an Eligible
Receivable A having (i) a Maximum Amount of an Eligible Receivable A in excess
of $6,500 or (ii) a Maximum Term of an Eligible Receivable A in excess of 120
weeks, in each case, as a result of its satisfaction of the Tier 2
Guidelines.

     TIER 2 ELIGIBLE RECEIVABLE
B. The term “Tier 2 Eligible Receivable B” shall mean an Eligible
Receivable B having (i) a Maximum Amount of an Eligible Receivable B in excess
of $6,500 or (ii) a Maximum Term of an Eligible Receivable B in excess of 120
weeks, in each case, as a result of its satisfaction of the Tier 2
Guidelines.

     TIER 2 GUIDELINES. The
term “Tier 2 Guidelines” shall mean the finance requirement guidelines attached
hereto as Exhibit I, as such guidelines may be amended from time to time;
provided that such amendments have been approved by Administrative Agent and
Required Lenders in writing.

     TRAFALGAR SUBORDINATED
DEBT. The term “Trafalgar Subordinated Debt” shall mean a collective
reference to the Liabilities of Carbiz Parent to the Trafalgar Subordinated
Lenders pursuant to the Trafalgar Subordinated Debt Documents, the principal
amount of which shall not exceed (i) $2,500,000 with respect to the Trafalgar
Subordinated Debt Documents described in clause (i) of the definition thereof,
(ii) $1,000,000 with respect to the Trafalgar Subordinated Debt Documents
described in clause (ii) of the definition thereof and (iii) $1,500,000 with
respect to the Trafalgar Subordinated Debt Documents described in clause (iii)
of the definition thereof, in each case plus interest capitalized or paid in
kind pursuant to the terms thereof.

     TRAFALGAR SUBORDINATED DEBT
DOCUMENTS. The term “Trafalgar Subordinated Debt Documents” shall mean a
collective reference to (i) that certain Securities Purchase Agreement dated as
of February 28, 2007 between Carbiz Parent and the Trafalgar Subordinated
Lenders, each Secured Convertible Debenture issued by Carbiz Parent thereunder
and each other document and agreement executed and delivered in connection
therewith, (ii) that certain Securities Purchase Agreement dated as of August
31, 2007 between Carbiz Parent and the Trafalgar Subordinated Lenders, each
Secured Convertible Debenture issued by Carbiz Parent thereunder and each other
document and agreement executed and delivered in connection therewith and (iii)
that certain Securities Purchase Agreement dated as of September 26, 2007
between Carbiz Parent and the Trafalgar Subordinated Lenders, each Secured
Convertible Debenture issued by Carbiz Parent thereunder and each other document
and agreement executed and delivered in connection therewith.

     TRAFALGAR SUBORDINATED
LENDERS. The term “Trafalgar Subordinated Lenders” shall mean, collectively,
Trafalgar Capital Specialized Investment Fund, Luxembourg, a Luxembourg SICAV
fund, together with its permitted successors and assigns pursuant to the terms
of the Trafalgar Subordination Agreement.

     TRAFALGAR SUBORDINATION
AGREEMENT. The term “Trafalgar Subordination Agreement” shall mean that
certain Subordination and Intercreditor Agreement dated as of March 23, 2007 by
and among Administrative Agent, the Borrowers, the Guarantors and the Trafalgar
Subordinated Lenders, as the same has been amended pursuant to that certain
Consent 

18




and Amendment to Subordination Agreement dated August 31, 2007
and that certain Consent and Second Amendment to Subordination Agreement dated
September 26, 2007, and as the same may hereafter be amended, supplemented or
otherwise modified in accordance with the terms thereof.

     UCC. The term “UCC” shall
mean the Uniform Commercial Code as in effect in the State of Illinois.

     UNDERWRITING GUIDELINES.
The term “Underwriting Guidelines” shall mean the Borrowers’ customary credit
and underwriting guidelines as of the date hereof, a copy of which has been
delivered to Administrative Agent, as such guidelines are amended from time to
time; provided that such amendments have been approved by Administrative Agent
and Required Lenders in writing.

     VALIDITY GUARANTOR. The
term “Validity Guarantor” shall mean each of Carl W. Ritter, Ross Richard Lye
and Stanton C. Heintz.

     VALIDITY GUARANTY. The
term “Validity Guaranty” shall mean each Limited Validity Guaranty by the
Validity Guarantors in favor of Administrative Agent for the benefit of the
Lender Parties.

     VOLUNTARY TERMINATION. The
term “Voluntary Termination” shall have the meaning given to such term in
Section 2.11 of this Agreement.

     Section 1.2.
EXHIBITS AND SCHEDULES; ADDITIONAL DEFINITIONS. All Exhibits
and Schedules attached to this Agreement are a part hereof for all purposes.
Reference is hereby made to Schedule A for the meaning of certain terms defined
therein and used but not defined herein, which definitions are incorporated
herein by reference. All terms defined in the UCC and not otherwise defined
herein (including, without limitation, certificated security, chattel paper,
commercial tort claims, deposit accounts, documents, equipment, fixtures,
general intangibles, goods, instruments, inventory, investment property,
letter-of-credit rights, supporting obligations, uncertificated security and
proceeds) shall have the meanings assigned to them in the UCC.

     Section 1.3.
AMENDMENT OF DEFINED DOCUMENTS. Unless the context otherwise
requires or unless otherwise provided herein the terms defined in this Agreement
which refer to a particular agreement, instrument or document also refer to and
include all renewals, extensions, modifications, amendments and restatements of
such agreement, instrument or documents provided that nothing contained in this
Section shall be construed to authorize any such renewal, extension,
modification, amendment or restatement.

     Section 1.4.
REFERENCES AND TITLES. All references in this Agreement to
Exhibits, Schedules, articles, sections, subsections and other subdivisions
refer to the Exhibits, Schedules, articles, sections, subsections and other
subdivisions of this Agreement unless expressly provided otherwise. Exhibits and
Schedules to any Loan Document shall be deemed incorporated by reference in such
Loan Document. References to any document, instrument, or agreement (a) shall
include all exhibits, schedules and other attachments thereto and (b) shall
include all documents, instruments or agreements issued or executed in
replacement thereof.

19




Titles appearing at the beginning of any subdivisions are for
convenience only and do not constitute any part of such subdivisions and shall
be disregarded in construing the language contained in such subdivisions. The
words “this Agreement”, “herein”, “hereof”, “hereby”, “hereunder” and words of
similar import refer to this Agreement as a whole and not to any particular
subdivision unless expressly so limited. The phrases “this section” and “this
subsection” and similar phrases refer only to the sections or subsections hereof
in which such phrases occur. The word “or” is not exclusive, and the word
“including” (in its various forms) means “including without limitation”.
References to “days” shall mean calendar days unless the term Business Day is
used. Unless otherwise specified, references herein to any particular Person
also refer to its successors and permitted assigns. The meanings of defined
terms shall be equally applicable to the singular and plural forms of the
defined terms.

ARTICLE 2
LOAN(S), INTEREST RATE AND OTHER
CHARGES

     Section 2.1. RECEIVABLES
LOAN A.

          (a)
Subject to the terms, covenants and conditions hereinafter set forth (including,
without limitation, the terms set forth in Schedule A attached hereto), Initial
Lender agrees to, upon the Borrower Representative’s request from time to time
(but in no event more often than, together with any Inventory Loan A Advances
made pursuant to Section 2.2, one (1) time per week), until the applicable
Maturity Date, to make loans to the Initial Borrowers (collectively, the
“Receivables Loan A” and each advance thereof a “Receivables Loan
A Advance”), in an aggregate amount (including accrued but unpaid
interest thereon) not to exceed at any time outstanding the lesser of the
following: (i) the Amount of Receivables Credit Line A as in effect from time to
time or (ii) the Availability on Eligible Receivables A. In no event shall
Initial Lender be required to fund Receivables Loan A Advances if after giving
effect to any Receivables Loan A Advance either (i) the aggregate amount of the
outstanding Receivables Loan A would exceed the Amount of Receivables Credit
Line A then in effect or (ii) the aggregate amount of the Loan A Advances would
exceed the Maximum Aggregate Credit Line A. Within the limits of this Section
2.1, Initial Borrowers may borrow, repay and reborrow the Receivables Loan A.
The Borrowers acknowledge and agree that certain Receivables Loan A Advances
were made prior to the date hereof pursuant to the terms of the Existing Credit
Agreement, and that as of the date hereof, the aggregate outstanding principal
amount of the Receivables Loan A is $472,216.12.

          (b)
The obligation of the Borrowers to repay to a Lender the aggregate amount of
each Receivables Loan A Advance made by such Lender (whether directly or as
assignee of another Lender), together with interest accruing in connection
therewith, shall be evidenced by a Receivables Note A in substantially the form
of Exhibit F-1 attached hereto and made a part hereof, issued in the
principal amount of such Receivables Loan A Advance and dated the date on which
the proceeds of such Receivables Loan A Advance are advanced hereunder to or for
the account of the Initial Borrowers. The amount of principal owing on any
Receivables Note A at any given time shall be the aggregate amount of the
Receivables Loan A Advance evidenced thereby minus all payments of principal
theretofore received by the Administrative Agent on such Receivables Note A.
Interest on each Receivables Note A shall accrue and be due and payable as
provided herein and therein. Each Receivables Note A shall be 

20




due and payable as provided herein and therein and the
principal amount of the Loan Advance evidenced thereby, together with all
accrued and unpaid interest thereon, shall be due and payable in full on the
Maturity Date applicable to the Receivables Loan A and Borrowers jointly and
severally unconditionally promise to pay each Receivables Note A and the
outstanding Receivables Loan A and all other outstanding Indebtedness, to the
extent not earlier paid in full pursuant to the terms of the Loan Documents, in
full on the Maturity Date applicable to the Receivables Loan A.

          (c)
The Borrower Representative, on behalf of itself and the other Initial
Borrowers, will make a request for a Receivables Loan A Advance to the
Administrative Agent in such manner as the Administrative Agent may from time to
time prescribe. Each Receivables Loan A Advance, combined with any Inventory
Loan A Advance made on the same date, shall be in a minimum amount of $100,000.
In the absence of any such further direction from the Administrative Agent and
subject to the provisions hereof, the Initial Borrowers shall request a
Receivables Loan A Advance by having the Borrower Representative submit such
request in the form of Exhibit A attached hereto (each such request, a
“Request for Advance”) and an Availability Report to the Administrative
Agent, together with such other information as the Administrative Agent
reasonably requests in accordance with the terms hereof, and must be given so as
to be received by the Administrative Agent not later than 2:00 p.m. (Chicago
time) on the second Business Day prior to the requested funding date of such
proposed Receivables Loan A Advance. Each Request for Advance shall specify such
information as Administrative Agent may reasonably request, in each case in form
and substance reasonably acceptable to Administrative Agent. Each Request for
Advance shall be deemed a representation and warranty by each Borrower that (i)
all conditions precedent specified in Article IV hereof with respect to such
Receivables Loan A Advance are satisfied on the date of such request and (ii) no
breach or default under, and no Event of Default defined or described in, this
Agreement or any of the Loan Documents exists or, after giving effect to the
Receivables Loan A Advance requested pursuant to such Request for Advance, will
exist. Unless otherwise requested in writing by the Borrower Representative and
agreed by Administrative Agent and the Required Lenders, each Receivables Loan A
Advance shall be funded by the Lenders by wire transfer to the Operating Account
described as the “Primary Operating Account” on Section 2.1(c) of Schedule A
hereto pursuant to the wire transfer instructions set forth on Section 2.1(c) of
Schedule A hereto or to another Operating Account if so requested in writing by
Borrower Representative. 

     Section 2.2. INVENTORY LOAN
A.

          (a)
Subject to the terms, covenants and conditions hereinafter set forth (including,
without limitation, the terms set forth in Schedule A attached hereto), Initial
Lender agrees to, upon the Borrower Representative’s request from time to time
(but in no event more often than, together with any Receivables Loan A Advances
made pursuant to Section 2.1, one (1) time per week), until the applicable
Maturity Date, to make loans to the Initial Borrowers (collectively, the
“Inventory Loan A” and each advance thereof an “Inventory Loan A
Advance”), in an aggregate amount (including accrued but unpaid interest
thereon) not to exceed at any time outstanding the lesser of the following: (i)
the Amount of Inventory Credit Line A as in effect from time to time or (ii) the
Availability on Eligible Inventory A. In no event shall Initial Lender be
required to fund Inventory Loan A Advances if after giving effect to any
Inventory Loan A Advance either (i) the aggregate amount of the outstanding
Inventory Loan A 

21




would exceed the Amount of Inventory Credit Line A then in
effect or (ii) the aggregate amount of the Loan A Advances would exceed the
Maximum Aggregate Credit Line A. Within the limits of this Section 2.2, Initial
Borrowers may borrow, repay and reborrow the Inventory Loan A. The Borrowers
acknowledge and agree that certain Inventory Loan A Advances were made prior to
the date hereof pursuant to the terms of the Existing Credit Agreement, and that
as of the date hereof, the aggregate outstanding principal amount of the
Inventory Loan A is $624,245.00.

          (b)
The obligation of the Borrowers to repay to a Lender the aggregate amount of
each Inventory Loan A Advance made by such Lender (whether directly or as
assignee of another Lender), together with interest accruing in connection
therewith, shall be evidenced by an Inventory Note A in substantially the form
of Exhibit F-2 attached hereto and made a part hereof, issued in the
principal amount of such Inventory Loan A Advance and dated the date on which
the proceeds of such Inventory Loan A Advance are advanced hereunder to or for
the account of the Initial Borrowers. The amount of principal owing on any
Inventory Note A at any given time shall be the aggregate amount of the
Inventory Loan A Advances evidenced thereby minus all payments of principal
theretofore received by the Administrative Agent on such Inventory Note A.
Interest on each Inventory Note A shall accrue and be due and payable as
provided herein and therein. Each Inventory Note A shall be due and payable as
provided herein and therein and the principal amount of the Inventory Loan A
Advance evidenced thereby, together with all accrued and unpaid interest
thereon, shall be due and payable in full on the Maturity Date applicable to the
Inventory Loan A and Borrowers jointly and severally unconditionally promise to
pay each Inventory Note A and the outstanding Inventory Loan A and all other
outstanding Indebtedness, to the extent not earlier paid in full pursuant to the
terms of the Loan Documents, in full on the Maturity Date applicable to the
Inventory Loan A.

          (c)
The Borrower Representative, on behalf of itself and the other Initial
Borrowers, will make a request for an Inventory Loan A Advance to the
Administrative Agent in such manner as the Administrative Agent may from time to
time prescribe. Each Inventory Loan A Advance, combined with any Receivable Loan
A Advance made on the same date, shall be in a minimum amount of $100,000. In
the absence of any such further direction from the Administrative Agent and
subject to the provisions hereof, the Initial Borrowers shall request an
Inventory Loan A Advance by having the Borrower Representative submit a Request
for Advance and an Availability Report to the Administrative Agent, together
with such other information as the Administrative Agent reasonably requests in
accordance with the terms hereof, and must be given so as to be received by the
Administrative Agent not later than 2:00 p.m. (Chicago time) on the second
Business Day prior to the requested funding date of such proposed Inventory Loan
A Advance. Each Request for Advance shall specify such information as
Administrative Agent may reasonably request, in each case in form and substance
acceptable to Administrative Agent. Each Request for Advance shall be deemed a
representation and warranty by each Borrower that (i) all conditions precedent
specified in Article IV hereof with respect to such Inventory Loan A Advance are
satisfied on the date of such request and (ii) no breach or default under, and
no Event of Default defined or described in, this Agreement or any of the Loan
Documents exists or, after giving effect to the Inventory Loan A Advance
requested pursuant to such Request for Advance, will exist. Unless otherwise
requested in writing by the Borrower Representative and agreed by Administrative
Agent and the Required Lenders, each Inventory Loan A Advance shall be funded by
the Lenders by wire transfer to the Operating Account described as the “Primary
Operating Account” on Section 2.1(c) of Schedule A hereto 

22




pursuant to the wire transfer instructions set forth on Section
2.1(c) of Schedule A hereto or to another Operating Account if so requested in
writing by Borrower Representative.

          (d)
Notwithstanding the foregoing provisions of this Section 2.2 to the contrary,
Administrative Agent has been advised that the Borrowers have established an
Operating Account (the “Inventory A Operating Account”) for the sole
purpose of holding funds to be used by the Initial Borrowers to acquire
Automobile Inventory, pay for costs and expenses associated with detailing,
reconditioning and otherwise preparing Automobile Inventory for resale and pay
for costs and expenses relating to the installation of SID/GPS Devices in
Automobile Inventory (each of the foregoing, a “Permitted A Use”). The
Inventory A Operating Account is identified on Section 2.1(c) of Schedule A
hereto. Borrowers hereby represent, warrant and covenant that they will not use
proceeds on deposit in the Inventory A Operating Account for any purpose other
than a Permitted A Use and will not maintain funds on deposit in the Inventory A
Operating Account in excess of $350,000 in the aggregate at any time. Initial
Borrowers shall be permitted to request an Inventory Loan A Advance (without
regard to Availability on Eligible Inventory A at such time) of up to $350,000
to the Inventory A Operating Account so long as (i) all conditions to funding
such Inventory Loan A Advance are satisfied (without regard to Availability on
Eligible Inventory A) and (ii) the Inventory A Operating Account is covered by
an Account Control Agreement in favor of Administrative Agent). Lenders shall
fund their pro rata share of such requested Inventory Loan A Advance to the
Inventory A Operating Account (it being agreed to and understood that the
request for an Inventory Loan A Advance pursuant to this Section 2.2(d) shall
not count against the limitation on the number of Loan A Advance requests that
can be made per week set forth in Sections 2.1(a) and 2.2(a) hereof). On the
first Business Day of each week Borrower Representative shall deliver to
Administrative Agent a report in form and detail reasonably acceptable to
Administrative Agent describing the amounts of all Permitted A Uses funded with
proceeds on deposit in the Inventory A Operating Account during the prior week.
If the Borrower Representative, on behalf of the Initial Borrowers, delivers to
Administrative Agent a properly completed Request for Advance related to funding
the Inventory A Operating Account, then, so long as all conditions set forth in
this Agreement relating to the funding of Inventory Loan A Advances are
satisfied before and after giving effect to such Inventory Loan A Advance,
Lenders shall, in accordance with all other terms of this Agreement relating to
the funding of Inventory Loan A Advances, fund to the Inventory A Operating
Account an amount equal to $350,000 less the aggregate amount of Permitted A
Uses for the preceding week.

     Section 2.3. TERM LOAN
A.

          (a)
Subject to the terms, covenants and conditions set forth in the Existing Credit
Agreement (as amended and restated herein), Initial Lender made, (i) on the
Restatement Closing Date, a term loan to the Initial Borrowers in an original
principal amount equal to Eighteen Million Five Hundred Fifty-Nine Thousand
Seven Hundred Eight and 87/100 Dollars ($18,559,708.87) and (ii) on October 31,
2007, a term loan to the Initial Borrowers in an original principal amount equal
to Two Million Two Hundred Eighty-Five Thousand and No/100 Dollars ($2,285,000)
(collectively, the “Term Loan A”). Amounts of the Term Loan A which are
repaid or prepaid may not be reborrowed. The Borrowers acknowledge and agree
that the aggregate outstanding principal amount of the Term Loan A as of the
date hereof is $17,719,229.51.

23




          (b)
The obligation of the Borrowers to repay to a Lender the portion of the Term
Loan A made by such Lender (whether directly or as assignee of another Lender),
together with interest accruing in connection therewith, shall be evidenced by a
Term Note A in substantially the form of Exhibit F-3 attached hereto and
made a part hereof, issued in the principal amount of such Lender’s portion of
the Term Loan A and dated as of the date on which the proceeds of such portion
of the Term Loan A are advanced hereunder to or for the account of the Initial
Borrowers. The amount of principal owing on any Term Note A at any given time
shall be the aggregate amount of the Term Loan A evidenced thereby minus all
payments of principal theretofore received by the Administrative Agent on such
Term Note A. Interest on each Term Note A shall accrue and be due and payable as
provided herein and therein. All outstanding principal and all accrued but
unpaid interest on Term Loan A shall be due and payable on the Maturity Date
applicable to the Term Loan A. Borrowers jointly and severally unconditionally
promise to pay each Term Note A and the outstanding principal balance of the
Term Loan A in full on the Maturity Date applicable to the Term Loan A.

          (c)
Initial Borrowers may request that Lenders holding portions of the Term Loan A
make an additional advance under the Term Loan A in the aggregate amount of up
to One Million and No/100, which advance shall constitute a portion of the
outstanding principal balance of the Term Loan A for all purposes hereunder and
under the other Loan Documents (such additional advance of the Term Loan A, the
“Additional Term Loan A Advance”). Each Lender shall fund its pro rata
share (based on such Lender’s percentage interest of the aggregate outstanding
principal balance of the Term Loan A) of the Additional Term Loan A Advance
requested by Initial Borrowers by wire transfer to an Operating Account
designated by Borrower Representative pursuant to the wire transfer instructions
set forth on Section 2.1(c) of Schedule A hereto applicable to such Operating
Account. In addition to the foregoing, requests for Additional Term Loan A
Advance (and Lenders’ obligations to fund same) shall be subject to the
following terms and conditions: (i) no such request shall be made if an Event of
Default under any of Sections 7.1(a), 7.1(b), 7.1(c) (with respect to Section
7.1(c), as a result of a breach of Sections 6.2(a), 6.2(f), 6.2(n) or 6.2(o)
only), 7.1(g), 7.1(h), 7.1(i) or 7.1(n) has occurred and is continuing or would
arise after giving effect to such Additional Term Loan A Advance (and no Lender
shall be obligated to fund the Additional Term Loan A Advance if any such Event
of Default has occurred and is continuing), (ii) the Additional Term Loan A
Advance shall only be funded in one draw of up to $1,000,000 on January 2, 2008,
and (iii) a request for an Additional Term Loan A Advance shall be made in
writing to Administrative Agent in form and substance reasonably acceptable to
Administrative Agent and must be given so as to be received by the
Administrative Agent not later than 2:00 p.m. (Chicago time) on the second
Business Day prior to the funding date of such proposed Additional Term Loan A
Advance in accordance with the immediately preceding clause (ii). Any Lender
funding the Additional Term Loan A Advance may request a new Term Note A in
order to evidence its funding of such Additional Term Loan A Advance. Lenders’
commitment to fund the Additional Term Loan A Advance hereunder shall
immediately and irrevocably terminate on January 2, 2008 (after giving effect to
any funding of the Additional Term Loan A Advance on such date in accordance
with this Section 2.3(c)) . Notwithstanding anything to the contrary contained
herein, Lenders shall not be obligated to fund the Additional Term Loan A
Advance if after giving effect thereto the aggregate outstanding principal
balance of the Loan A Advances would exceed the Maximum Aggregate Credit Line A.


24




          (d)
In addition to any other amounts required to be repaid or prepaid on the Term
Loan A pursuant to the terms of this Agreement, Borrowers jointly and severally
unconditionally agree to repay the outstanding principal balance of the Term
Loan A in twelve (12) equal monthly installments equal to 1/12 of the Term A
Amortization Balance on May 1, 2010 and again on the first day of each calendar
month thereafter.

     Section 2.4. RECEIVABLES
LOAN B.

          (a)
Subject to the terms, covenants and conditions hereinafter set forth (including,
without limitation, the terms set forth in Schedule A attached hereto), Initial
Lender agrees to, upon the Borrower Representative’s request from time to time
on behalf of Houston Auto (but in no event more often than, together with any
Inventory Loan B Advances made pursuant to Section 2.5, one (1) time per week),
until the applicable Maturity Date, to make loans to Houston Auto (collectively,
the “Receivables Loan B” and each advance thereof a “Receivables Loan
B Advance”), in an aggregate amount (including accrued but unpaid interest
thereon) not to exceed at any time outstanding the lesser of the following: (i)
the Amount of Receivables Credit Line B as in effect from time to time or (ii)
the Availability on Eligible Receivables B. In no event shall Initial Lender be
required to fund Receivables Loan B Advances if after giving effect to any
Receivables Loan B Advance, the aggregate amount of the outstanding Receivables
Loan B would exceed the Amount of Receivables Credit Line B then in effect.
Within the limits of this Section 2.4, Houston Auto may borrow, repay and
reborrow the Receivables Loan B.

          (b)
The obligation of the Borrowers to repay to a Lender the aggregate amount of
each Receivables Loan B Advance made by such Lender (whether directly or as
assignee of another Lender), together with interest accruing in connection
therewith, shall be evidenced by a Receivables Note B in substantially the form
of Exhibit F-4 attached hereto and made a part hereof, issued in the
principal amount of such Receivables Loan B Advance and dated the date on which
the proceeds of such Receivables Loan B Advance are advanced hereunder to or for
the account of Houston Auto. The amount of principal owing on any Receivables
Note B at any given time shall be the aggregate amount of the Receivables Loan B
Advance evidenced thereby minus all payments of principal theretofore received
by the Administrative Agent on such Receivables Note B. Interest on each
Receivables Note B shall accrue and be due and payable as provided herein and
therein. Each Receivables Note B shall be due and payable as provided herein and
therein and the principal amount of the Loan Advance evidenced thereby, together
with all accrued and unpaid interest thereon, shall be due and payable in full
on the Maturity Date applicable to the Receivables Loan B and Borrowers jointly
and severally unconditionally promise to pay each Receivables Note B and the
outstanding Receivables Loan B and all other outstanding Indebtedness, to the
extent not earlier paid in full pursuant to the terms of the Loan Documents, in
full on the Maturity Date applicable to the Receivables Loan B.

          (c)
The Borrower Representative, on behalf of Houston Auto, will make a request for
a Receivables Loan B Advance to the Administrative Agent in such manner as the
Administrative Agent may from time to time prescribe. Each Receivables Loan B
Advance, combined with any Inventory Loan B Advance made on the same date, shall
be in a minimum amount of $100,000. In the absence of any such further direction
from the Administrative Agent 

25




and subject to the provisions hereof, Houston Auto shall
request a Receivables Loan B Advance by having the Borrower Representative
submit such request in the form of a Request for Advance and an Availability
Report to the Administrative Agent, together with such other information as the
Administrative Agent reasonably requests in accordance with the terms hereof,
and must be given so as to be received by the Administrative Agent not later
than 2:00 p.m. (Chicago time) on the second Business Day prior to the requested
funding date of such proposed Receivables Loan B Advance. Each Request for
Advance shall specify such information as Administrative Agent may reasonably
request, in each case in form and substance reasonably acceptable to
Administrative Agent. Each Request for Advance shall be deemed a representation
and warranty by each Borrower that (i) all conditions precedent specified in
Article IV hereof with respect to such Receivables Loan B Advance are satisfied
on the date of such request and (ii) no breach or default under, and no Event of
Default defined or described in, this Agreement or any of the Loan Documents
exists or, after giving effect to the Receivables Loan B Advance requested
pursuant to such Request for Advance, will exist. Unless otherwise requested in
writing by the Borrower Representative on behalf of Houston Auto and agreed by
Administrative Agent and the Required Lenders, each Receivables Loan B Advance
shall be funded by the Lenders by wire transfer to the Operating Account
described as the “Houston Auto Primary Operating Account” on Section 2.1(c) of
Schedule A hereto pursuant to the wire transfer instructions set forth on
Section 2.1(c) of Schedule A hereto or to another Operating Account if so
requested in writing by Borrower Representative. 

     Section 2.5. INVENTORY LOAN
B.

          (a)
Subject to the terms, covenants and conditions hereinafter set forth (including,
without limitation, the terms set forth in Schedule A attached hereto), Initial
Lender agrees to, upon the Borrower Representative’s request from time to time
on behalf of Houston Auto (but in no event more often than, together with any
Receivables Loan B Advances made pursuant to Section 2.4, one (1) time per
week), until the applicable Maturity Date, to make loans to Houston Auto
(collectively, the “Inventory Loan B” and each advance thereof an
“Inventory Loan B Advance”), in an aggregate amount (including accrued
but unpaid interest thereon) not to exceed at any time outstanding the lesser of
the following: (i) the Amount of Inventory Credit Line B as in effect from time
to time or (ii) the Availability on Eligible Inventory B. In no event shall
Initial Lender be required to fund Inventory Loan B Advances if after giving
effect to any Inventory Loan B Advance, the aggregate amount of the outstanding
Inventory Loan B would exceed the Amount of Inventory Credit Line B then in
effect. Within the limits of this Section 2.5, Houston Auto may borrow, repay
and reborrow the Inventory Loan B.

          (b)
The obligation of the Borrowers to repay to a Lender the aggregate amount of
each Inventory Loan B Advance made by such Lender (whether directly or as
assignee of another Lender), together with interest accruing in connection
therewith, shall be evidenced by an Inventory Note B in substantially the form
of Exhibit F-5 attached hereto and made a part hereof, issued in the
principal amount of such Inventory Loan B Advance and dated the date on which
the proceeds of such Inventory Loan B Advance are advanced hereunder to or for
the account of Houston Auto. The amount of principal owing on any Inventory Note
B at any given time shall be the aggregate amount of the Inventory Loan B
Advances evidenced thereby minus all payments of principal theretofore received
by the Administrative Agent on such Inventory Note B. Interest on each Inventory
Note B shall accrue and be due and payable 

26




as provided herein and therein. Each Inventory Note B shall be
due and payable as provided herein and therein and the principal amount of the
Inventory Loan B Advance evidenced thereby, together with all accrued and unpaid
interest thereon, shall be due and payable in full on the Maturity Date
applicable to the Inventory Loan B and Borrowers jointly and severally
unconditionally promise to pay each Inventory Note B and the outstanding
Inventory Loan B and all other outstanding Indebtedness, to the extent not
earlier paid in full pursuant to the terms of the Loan Documents, in full on the
Maturity Date applicable to the Inventory Loan B.

          (c)
The Borrower Representative, on behalf of Houston Auto, will make a request for
an Inventory Loan B Advance to the Administrative Agent in such manner as the
Administrative Agent may from time to time prescribe. Each Inventory Loan B
Advance, combined with any Receivable Loan B Advance made on the same date,
shall be in a minimum amount of $100,000. In the absence of any such further
direction from the Administrative Agent and subject to the provisions hereof,
the Houston Auto shall request an Inventory Loan B Advance by having the
Borrower Representative submit a Request for Advance and an Availability Report
to the Administrative Agent, together with such other information as the
Administrative Agent reasonably requests in accordance with the terms hereof,
and must be given so as to be received by the Administrative Agent not later
than 2:00 p.m. (Chicago time) on the second Business Day prior to the requested
funding date of such proposed Inventory Loan B Advance. Each Request for Advance
shall specify such information as Administrative Agent may reasonably request,
in each case in form and substance acceptable to Administrative Agent. Each
Request for Advance shall be deemed a representation and warranty by each
Borrower that (i) all conditions precedent specified in Article IV hereof with
respect to such Inventory Loan B Advance are satisfied on the date of such
request and (ii) no breach or default under, and no Event of Default defined or
described in, this Agreement or any of the Loan Documents exists or, after
giving effect to the Inventory Loan B Advance requested pursuant to such Request
for Advance, will exist. Unless otherwise requested in writing by the Borrower
Representative on behalf of Houston Auto and agreed by Administrative Agent and
the Required Lenders, each Inventory Loan B Advance shall be funded by the
Lenders by wire transfer to the Operating Account described as the “Houston Auto
Primary Operating Account” on Section 2.1(c) of Schedule A hereto pursuant to
the wire transfer instructions set forth on Section 2.1(c) of Schedule A hereto
or to another Operating Account if so requested in writing by Borrower
Representative.

          (d)
Notwithstanding the foregoing provisions of this Section 2.5 to the contrary,
Administrative Agent has been advised by Houston Auto that it intends to
establish an Operating Account (the “Inventory B Operating Account”) for
the sole purpose of holding funds to be used by Houston Auto to acquire
Automobile Inventory, pay for costs and expenses associated with detailing,
reconditioning and otherwise preparing Automobile Inventory for resale and pay
for costs and expenses relating to the installation of SID/GPS Devices in
Automobile Inventory (each of the foregoing, a “Permitted B Use”).
Borrowers hereby represent, warrant and covenant that they will not use proceeds
on deposit in the Inventory B Operating Account for any purpose other than a
Permitted B Use and will not maintain funds on deposit in the Inventory B
Operating Account in excess of $350,000 in the aggregate at any time. Houston
Auto shall be permitted to request an Inventory Loan B Advance (without regard
to Availability on Eligible Inventory B at such time) of up to $350,000 to the
Inventory B Operating Account so long as (i) all conditions to funding such
Inventory Loan B Advance are 

27




satisfied (without regard to Availability on Eligible Inventory
B) and (ii) the Inventory B Operating Account is covered by an Account Control
Agreement in favor of Administrative Agent). Lenders shall fund their pro rata
share of such requested Inventory Loan B Advance to the Inventory B Operating
Account (it being agreed to and understood that the request for an Inventory
Loan B Advance pursuant to this Section 2.5(d) shall not count against the
limitation on the number of Loan A Advance requests that can be made per week
set forth in Sections 2.4(a) and 2.5(a) hereof). On the first Business Day of
each week Borrower Representative shall deliver to Administrative Agent a report
in form and detail reasonably acceptable to Administrative Agent describing the
amounts of all Permitted B Uses funded with proceeds on deposit in the Inventory
B Operating Account during the prior week. If the Borrower Representative, on
behalf of Houston Auto, delivers to Administrative Agent a properly completed
Request for Advance related to funding the Inventory B Operating Account, then,
so long as all conditions set forth in this Agreement relating to the funding of
Inventory Loan B Advances are satisfied before and after giving effect to such
Inventory Loan B Advance, Lenders shall, in accordance with all other terms of
this Agreement relating to the funding of Inventory Loan B Advances, fund to the
Inventory B Operating Account an amount equal to $350,000 less the aggregate
amount of Permitted B Uses for the preceding week. 

     Section 2.6. TERM LOAN
B.

          (a)
Subject to the terms, covenants and conditions hereinafter set forth, Initial
Lender agrees to, on the Closing Date, make a term loan to Houston Auto in an
original principal amount equal to Fifteen Million and No/100 Dollars
($15,000,000.00) (the “Initial Term Loan B”). Amounts of the Term Loan B
which are repaid or prepaid may not be reborrowed. 

          (b)
The obligation of the Borrowers to repay to a Lender the portion of the Term
Loan B made by such Lender (whether directly or as assignee of another Lender),
together with interest accruing in connection therewith, shall be evidenced by a
Term Note B in substantially the form of Exhibit F-6 attached hereto and
made a part hereof, issued in the principal amount of such Lender’s portion of
the Term Loan B and dated as of the date on which the proceeds of such portion
of the Term Loan B are advanced hereunder to or for the account of Houston Auto.
The amount of principal owing on any Term Note B at any given time shall be the
aggregate amount of the Term Loan B evidenced thereby minus all payments of
principal theretofore received by the Administrative Agent on such Term Note B.
Interest on each Term Note B shall accrue and be due and payable as provided
herein and therein. All outstanding principal and all accrued but unpaid
interest on Term Loan B shall be due and payable on the Maturity Date applicable
to the Term Loan B. Borrowers jointly and severally unconditionally promise to
pay each Term Note B and the outstanding principal balance of the Term Loan B in
full on the Maturity Date applicable to the Term Loan B.

          (c)
The Borrower Representative, on behalf of Houston Auto, may request that Lenders
holding portions of the Term Loan B make additional advances under the Term Loan
B in the aggregate amount of up to Two Million Nine Hundred Seventy-Five
Thousand and No/100 Dollars ($2,975,000.00), which advances shall constitute a
portion of the outstanding principal balance of the Term Loan B for all purposes
hereunder and under the other Loan Documents (such additional advances of the
Term Loan B, the “Additional Term Loan B

28




Advances”). Each Lender shall fund its pro rata share
(based on such Lender’s percentage interest of the aggregate outstanding
principal balance of the Term Loan B) of each Additional Term Loan B Advance
requested by the Borrower Representative on behalf of Houston Auto by wire
transfer to an Operating Account designated by Borrower Representative on behalf
of Houston Auto pursuant to the wire transfer instructions set forth on Section
2.1(c) of Schedule A hereto applicable to such Operating Account (or, with
respect to the January 10 Term B Advance (as hereinafter defined), by transfer
directly to the seller of additional Texas Legacy Receivables pursuant to the
Subsequent Texas Asset Purchase Agreement). In addition to the foregoing,
requests for Additional Term Loan B Advances (and Lenders’ obligations to fund
same) shall be subject to the following terms and conditions: (i) no such
request shall be made if an Event of Default under any of Sections 7.1(a),
7.1(b), 7.1(c) (with respect to Section 7.1(c), as a result of a breach of
Sections 6.2(a), 6.2(f), 6.2(n) or 6.2(o) only), 7.1(g), 7.1(h), 7.1(i) or
7.1(n) has occurred and is continuing or would arise after giving effect to such
Additional Term Loan B Advance (and no Lender shall be obligated to fund an
Additional Term Loan B Advance if any such Event of Default has occurred and is
continuing), (ii) Additional Term Loan B Advances shall only be funded in three
(3) draws as follows: (A) up to $1,225,000 to be funded on January 8, 2008, (B)
up to $1,000,000 to be funded in one advance between January 1, 2008 and January
10, 2008 (such Additional Term Loan B Advance, the “January 10 Term B
Advance”) and (C) up to $750,000 to be funded on April 16, 2008 and (iii) a
request for an Additional Term Loan B Advance shall be made in writing to
Administrative Agent in form and substance reasonably acceptable to
Administrative Agent and must be given so as to be received by the
Administrative Agent not later than 2:00 p.m. (Chicago time) on the second
Business Day prior to the applicable funding date of such proposed Additional
Term Loan B Advance in accordance with the immediately preceding clause (ii).
Any Lender funding an Additional Term Loan B Advance may request a new Term Note
B in order to evidence its funding of such Additional Term Loan B Advance.
Lenders’ commitment to fund Additional Term Loan B Advances hereunder shall
immediately and irrevocably terminate on April 16, 2008 (after giving effect to
any funding of an Additional Term Loan B Advance on such date in accordance with
this Section 2.6(c)) .

          (d)
In addition to any other amounts required to be repaid or prepaid on the Term
Loan B pursuant to the terms of this Agreement, Borrowers jointly and severally
unconditionally agree to repay the outstanding principal balance of the Term
Loan B as follows. 

          (i)
The principal balance of the Initial Term Loan B shall be repaid in twelve (12)
equal monthly installments equal to 1/12 of the Initial Term B Amortization
Balance on May 1, 2010 and again on the first day of each calendar month
thereafter.

          (ii)
The principal balance of the Additional Term Loan B Advances, if any (other than
the January 10 Term B Advance), shall be repaid in thirty (30) equal monthly
installments equal to 1/30 of the Additional Term B Amortization Balance on July
1, 2008 and again on the first day of each calendar month thereafter.

          (iii)
The principal balance of the January 10 Term B Advance shall repaid as follows:
(A) $250,000 on January 10, 2009 and (B) $750,000 on January 10, 2010.

     Section 2.7. INTEREST
RATE.

29




          (a)
Unless the Default Rate shall apply, the outstanding principal balance of each
Loan shall bear interest at the Applicable Stated Interest Rate on each day
outstanding. If any Lender is ever prevented from charging or collecting
interest at the Applicable Stated Interest Rate on all or a portion of the
Indebtedness because interest at such rate would exceed the Maximum Rate, then
the interest rate applicable to such Indebtedness to such Lender shall be the
Maximum Rate until such Lender has charged and collected the full amount of
interest chargeable and collectable had the Applicable Stated Interest Rate
always been lawfully chargeable and collectible. Accrued but unpaid interest for
each calendar month during the term hereof shall be due and payable, in arrears,
on the fifth (5th) day of the immediately succeeding calendar
month.

          (b)
The monthly interest due on the principal balance of the Loans outstanding shall
be computed for the actual number of days elapsed during the month in question
on the basis of a year consisting of three hundred sixty (360) days and shall be
calculated by determining the average daily principal balance outstanding for
each day of the month in question. The daily rate shall be equal to 1/360th
times the Applicable Stated Interest Rate (but shall not exceed the Maximum
Rate).

          (c)
Notwithstanding anything to the contrary contained herein, (i) the Term Loan A
Stated Rate shall automatically increase by six percent (6%) per annum on
October 1, 2008, (ii) the Term Loan A Stated Rate shall automatically increase
by an additional three percent (3%) per annum on February 1, 2009, (iii) the
Term Loan A Stated Rate shall automatically increase by an additional three
percent (3%) per annum on August 1, 2009, (iv) the Term Loan A Stated Rate shall
automatically increase to an amount equal to twenty-eight percent (28%) per
annum on February 1, 2010 and (v) on each August 1 and February 1 thereafter,
commencing August 1, 2010, the Term Loan A Stated Rate shall automatically
increase by an additional three percent (3%) per annum until the Term Loan is
paid in full. All interest that accrues at the Term Loan A Stated Rate in excess
of twelve percent (12%) per annum (exclusive of any increases to the Term Loan A
Stated Rate as a result of interest accruing at the Default Rate) as a result of
the preceding sentence prior to February 1, 2010 (the “Deferred Term A Loan
Interest”) shall be due and payable on February 1, 2010 (and on each
regularly scheduled payment dates of interest hereunder thereafter); provided
that Lenders hereby agree that (A) the Term Loan A Stated Rate shall be twelve
percent (12%) per annum during the First Interest Rate A Increase Period for the
period thereof when the outstanding principal balance of the Term Loan A is less
than $7,500,000, (B) the Term Loan A Stated Rate shall be twelve percent (12%)
per annum during the Second Interest Rate A Increase Period for the period
thereof when the outstanding principal balance of the Term Loan A is less than
$4,000,000, and (C) the Term Loan A Stated Rate shall be twelve percent (12%)
per annum during the Third Interest Rate A Increase Period for the period
thereof when the outstanding principal balance of the Term Loan A is less than
$2,000,000.

          (d)
Notwithstanding anything to the contrary contained herein, (i) the Term Loan B
Stated Rate shall automatically increase by six percent (6%) per annum on
January 1, 2009, (ii) the Term Loan B Stated Rate shall automatically increase
by an additional three percent (3%) per annum on May 1, 2009, (iii) the Term
Loan B Stated Rate shall automatically increase by an additional three percent
(3%) per annum on November 1, 2009, (iv) the Term Loan B Stated Rate shall
automatically increase to an amount equal to twenty-eight percent 

30




(28%) per annum on May 1, 2010 and (v) on each November 1 and
May 1 thereafter, commencing November 1, 2010, the Term Loan B Stated Rate shall
automatically increase by an additional three percent (3%) per annum until the
Term Loan B is paid in full. All interest that accrues at the Term Loan B Stated
Rate in excess of twelve percent (12%) per annum (exclusive of any increases to
the Term Loan B Stated Rate as a result of interest accruing at the Default
Rate) as a result of the preceding sentence prior to May 1, 2010 (the
“Deferred Term B Loan Interest”) shall be due and payable on May
1, 2010 (and on each regularly scheduled payment dates of interest hereunder
thereafter); provided that Lenders hereby agree that (A) the Term Loan B Stated
Rate shall be twelve percent (12%) per annum during the First Interest Rate B
Increase Period for the period thereof when the outstanding principal balance of
the Term Loan B is less than $7,500,000, (B) the Term Loan B Stated Rate shall
be twelve percent (12%) per annum during the Second Interest Rate B Increase
Period for the period thereof when the outstanding principal balance of the Term
Loan B is less than $4,000,000, and (C) the Term Loan B Stated Rate shall be
twelve percent (12%) per annum during the Third Interest Rate B Increase Period
for the period thereof when the outstanding principal balance of the Term Loan B
is less than $2,000,000.

     Section 2.8.
PAYMENTS. All payments on the Indebtedness shall be made by
wire transfer or other method of electronic transfer acceptable to
Administrative Agent and shall be made to:

Banco Popular 
Rosemont, Illinois
USA 
ABA No.: 071924458 
For: SWC Carbiz 
Account No.: 68043234182

Or such other account as may be designated to Borrower
Representative by Administrative Agent in writing from time to time, and at
least two (2) days prior to such payment being due and payable hereunder (such
account, the “Payment Account”), and all such payments shall be without
set-off, deduction, or counterclaim for the account of the Lender Parties. All
payments received pursuant to this Agreement by wire transfer or other
electronic transfer method, where immediate credit occurs, shall be applied to
the Indebtedness on the Business Day of actual receipt of such payment in the
Payment Account by Administrative Agent’s depository bank; provided, however,
for purposes of calculating the interest due on the outstanding principal
balance of the Loans, such payment is subject to a four (4) Business Day
clearance period.

     Section 2.9. PAYMENT
DUE ON A NON-BUSINESS DAY. If any payment of the Indebtedness falls due
on a day other than a Business Day, then such due date shall be extended to the
next succeeding Business Day.

     Section 2.10.
MANDATORY PAYMENTS. Provided that a Default or Event of
Default has not otherwise occurred and be continuing hereunder, if at any time
(i) the aggregate outstanding amount of the Receivables Loan A advanced
hereunder by Lenders to Initial Borrowers exceeds the maximum amount of the
Receivables Loan A allowed pursuant to Section 2.1(a) (a “Receivables A
Overadvance”), (ii) the aggregate outstanding amount of the Inventory Loan
advanced hereunder by Lenders to Initial Borrowers exceeds the maximum amount of
the 

31




Inventory Loan A allowed pursuant to Section 2.2(a) (an
“Inventory A Overadvance”), (iii) the aggregate outstanding amount of the
Receivables Loan B advanced hereunder by Lenders to Houston Auto exceeds the
maximum amount of the Receivables Loan B allowed pursuant to Section 2.4(a) (a
“Receivables B Overadvance”; a Receivables B Overadvance and a
Receivables A Overadvance, each a “Receivables Overadvance”), or (iv) the
aggregate outstanding amount of the Inventory Loan B advanced hereunder by
Lenders to Houston Auto exceeds the maximum amount of the Inventory Loan B
allowed pursuant to Section 2.5(a) (an “Inventory B Overadvance”; a
Inventory B Overadvance and an Inventory A Overadvance, each an “Inventory
Overadvance”) Borrowers shall immediately and without notice, repay to
Administrative Agent, for the account of Lenders, an amount sufficient to
eliminate any such excess. In the event an Initial Borrower sells, transfers,
assigns or otherwise disposes of all or any portion of its Receivables or
Automobile Inventory, other than in the ordinary course of business (subject, at
all times, to the restrictions set forth in Section 6.2(c) of this Agreement),
Initial Borrowers shall apply all proceeds of any such sale, transfer,
assignment or other disposition to reduce the outstanding balance of the
Indebtedness (with such proceeds, in the case of a sale of Receivables, shall be
applied first to the Receivables Loan A, and proceeds of the sale of Automobile
Inventory to be applied first to the Inventory Loan A (unless such Automobile
Inventory constitutes Calcott Automobile Inventory, in which case the proceeds
of such sale shall be applied first to the Term Loan A)). In the event Houston
Auto sells, transfers, assigns or otherwise disposes of all or any portion of
its Receivables or Automobile Inventory, other than in the ordinary course of
business (subject, at all times, to the restrictions set forth in Section 6.2(c)
of this Agreement), Houston Auto shall apply all proceeds of any such sale,
transfer, assignment or other disposition to reduce the outstanding balance of
the Indebtedness (with such proceeds, in the case of a sale of Receivables,
shall be applied first to the Receivables Loan B, and proceeds of the sale of
Automobile Inventory to be applied first to the Inventory Loan B (unless such
Automobile Inventory constitutes Texas Legacy Automobile Inventory, in which
case the proceeds of such sale shall be applied first to the Term Loan B)). 

     Section 2.11.
TERMINATION OF THE COMMITMENTS; VOLUNTARY
PREPAYMENTS.

          (a)
Borrowers may, at any time, terminate financing under this Agreement and prepay
the Indebtedness in full (a “Voluntary Termination”) by providing
Administrative Agent and Lenders with written notice (the “Termination
Notice”) at least sixty (60) calendar days prior to the specific date upon
which Borrowers intend to cease financing hereunder and prepay the Indebtedness
in full (the “Termination Date”), and Lenders shall cease making advances
under this Agreement and all Indebtedness shall be immediately due and payable
upon the earlier of the applicable Maturity Date or the Termination Date, as
applicable. In connection with a Voluntary Termination, the Indebtedness owing
and to be paid by Borrowers to Administrative Agent for the account of Lender
Parties on the Termination Date shall include as liquidated damages, and not as
a penalty, the amount of liquidated damages (“Liquidated Damages”)
set forth in Section 2.11 of Schedule A attached hereto. Notwithstanding any
other provision of any Loan Document, no termination of financing under this
Agreement shall affect Lender Parties’ rights or any of the Indebtedness
existing as of the Termination Date, and the provisions of the Loan Documents
shall continue to be fully operative until all Indebtedness (other than
indemnity obligations under the Loan Documents that are not then due and payable
or for which any events or claims that would give rise thereto are not then
pending) have been 

32




fully performed and indefeasibly paid in cash in full. The
Liens granted to Administrative Agent and Additional Collateral Agent for the
benefit of the Lender Parties under the Loan Documents and the financing
statements filed pursuant thereto and the rights and powers of Administrative
Agent, Additional Collateral Agent and Lenders thereunder shall continue in full
force and effect until (a) all of the Indebtedness (other than indemnity
obligations under the Loan Documents that are not then due and payable or for
which any events or claims that would give rise thereto are not then pending)
has been fully performed and indefeasibly paid in full in cash, and (b) this
Agreement and the financing commitments under this Agreement have been
terminated, as provided herein. Administrative Agent hereby agrees to give
Borrower written confirmation of the amount of the Indebtedness (presuming no
further Loan Advances prior to the Termination Date) in a timely fashion
following receipt of a Termination Notice.

          (b)
Borrowers may from time to time, with at least two (2) Business Days prior
written notice to Administrative Agent by the Borrower Representative, prepay a
portion of the outstanding principal amount of any Loan designated by the
Borrower Representative; provided that any such prepayment shall be in an
amount equal to $100,000 or a higher integral multiple of $25,000 (or such
lesser amount as may be the remaining outstanding principal balance of such
Loan), and provided further, that any such prepayment received upon the
occurrence and during the continuance of a Default or Event of Default may be
applied to the Indebtedness at the discretion of Administrative Agent in
accordance with Section 2.14 hereof.

     Section 2.12. MAXIMUM
INTEREST; CONTROLLING AGREEMENT.

          (a)
The contracted for rate of interest of each Loan, without limitation, shall
consist of the following: (i) the Applicable Stated Interest Rate, calculated
and applied to the principal balance of the applicable Note in accordance with
the provisions of the applicable Note and this Agreement; (ii) additional
interest charged when the Default Rate is charged pursuant to the terms hereof,
calculated and applied to the amounts due under the applicable Note in
accordance with the provisions of the applicable Note and this Agreement; and
(iii) all Additional Sums, if any. Borrowers agree to pay an effective
contracted for rate of interest which is the sum of the above-referenced
elements.

          (b)
All fees, charges, goods, things in action or any other sums or things of value
(other than amounts described in the immediately previous paragraph), paid or
payable by Borrowers (collectively, the “Additional Sums”), whether
pursuant to the Notes, this Agreement or any other documents or instruments in
any way pertaining to this lending transaction, or otherwise with respect to
this lending transaction, that under any applicable Law may be deemed to be
interest with respect to this lending transaction, for the purpose of any
applicable Law that may limit the maximum amount of interest to be charged with
respect to this lending transaction, shall be payable by Borrowers as, and shall
be deemed to be, additional interest and for such purposes only, the agreed upon
and “contracted for rate of interest” of this lending transaction shall be
deemed to be increased by the rate of interest resulting from the inclusion of
the Additional Sums.

          (c)
It is the intent of the parties to comply with Applicable Usury Law.
Accordingly, it is agreed that notwithstanding any provisions to the contrary in
the Loan Documents, or in any of the documents securing payment hereof or
otherwise relating hereto, in 

33




no event shall the Loan Documents or such other documents
require the payment or permit the collection of interest in excess of the
Maximum Rate permitted by Applicable Usury Law. In the event (i) any such excess
of interest otherwise would be contracted for, charged or received from
Borrowers or otherwise in connection with the Loans or other Indebtedness, or
(ii) the Maturity Date is accelerated in whole or in part, or (iii) all or part
of the principal or interest of the Loans shall be prepaid, so that under any of
such circumstances the amount of interest contracted for, charged or received in
connection with the Loans, would exceed the Maximum Rate permitted by Applicable
Usury Law, then in any such event (1) the provisions of this paragraph shall
govern and control, (2) neither any Borrower, any Guarantor nor any other Person
now or hereafter liable for the payment of any Indebtedness will be obligated to
pay the amount of such interest to the extent that it is in excess of the
Maximum Rate, (3) any such excess which may have been collected shall be either
applied as a credit against the then unpaid principal amount of the Indebtedness
or refunded to Borrowers, at Lenders' option, and (4) the effective rate of
interest will be automatically reduced to the Maximum Rate. It is further
agreed, without limiting the generality of the foregoing, that to the extent
permitted by Applicable Usury Law, (i) all calculations of interest which are
made for the purpose of determining whether such rate would exceed the Maximum
Rate shall be made by amortizing, prorating, allocating and spreading during the
period of the full stated term of the Loans, all interest at any time contracted
for, charged or received from Borrowers or otherwise in connection with the
Loans; and (ii) in the event that the effective rate of interest on the Loans
should at any time exceed the Maximum Rate, such excess interest that would
otherwise have been collected had there been no ceiling imposed by Applicable
Usury Law shall be paid to Administrative Agent, for the benefit of the Lender
Parties, from time to time, if and when the effective interest rate on the Loans
otherwise falls below the Maximum Rate, to the extent that interest paid to the
date of calculation does not exceed the Maximum Rate, until the entire amount of
interest which would have otherwise been collected had there been no ceiling
imposed by Applicable Usury Law has been paid in full. Borrowers further agree
that should the Maximum Rate be increased at any time hereafter because of a
change in the Law, then to the extent not prohibited by Applicable Usury Law,
such increases shall apply to all Indebtedness evidenced hereby regardless of
when incurred; but, again to the extent not prohibited by Applicable Usury Law,
should the Maximum Rate be decreased because of a change in the Law, such
decreases shall not apply to the Indebtedness evidenced hereby regardless of
when incurred.

     Section 2.13.
INTEREST AFTER DEFAULT. Upon the occurrence and during the
continuation of an Event of Default, and without notice or demand to Borrowers,
Borrowers shall pay interest on the daily outstanding balance of the Loans at a
rate per annum which is six percent (6%) in excess of the Applicable Stated
Interest Rate (the “Default Rate”); provided, however, the Default Rate
shall never exceed the Maximum Rate.

     Section 2.14. APPLICATION
OF PAYMENTS.

          (a)
The amount of all payments to or amounts received by Administrative Agent
consisting of the proceeds of Receivables of the Initial Borrowers (including
proceeds in respect of Eligible Receivables A and payments received in the
Collection Accounts pursuant to Section 3.9 hereof) shall be applied to the
extent applicable under this Agreement:

34




          (i)
first, to any fees and expenses due to Lender Parties hereunder;

          (ii)
then, to any fees and expenses (including, without limitation, any legal fees
and expenses) of any of the Custodians;

          (iii)
then, to any fees and expenses (including, without limitation, any legal fees
and expenses) of any third party back-up servicer (if applicable) of the
Receivables;

          (iv)
then, to accrued and unpaid interest on the Loan A Advances through the date of
such payment (other than interest accrued on account of the Term Loan A),
including any interest calculated at the Default Rate in accordance with Section
2.11 hereof;

          (v)
then, to the unpaid principal balance of the Receivables Loan A and the
Inventory Loan A, as applicable, in an amount sufficient to cure any Receivables
A Overadvance or Inventory A Overadvance;

          (vi)
then, to the unpaid principal balance of the Receivables Loan A;

          (vii)
then, to the unpaid principal balance of the Inventory Loan A;

          (viii)
then, to accrued and unpaid interest on account of the Term Loan A (but not
accrued and unpaid Deferred Term Loan A Interest until after January 31,
2010);

          (ix)
then, if on or after May 1, 2010, to all or any portion of the Term Loan A which
is due and unpaid or past-due; and

          (x)
then, to accrued and unpaid interest on the Loan B Advances through the date of
such payment (other than interest accrued on account of the Term Loan B),
including any interest calculated at the Default Rate in accordance with Section
2.11 hereof;

          (xi)
then, to the unpaid principal balance of the Receivables Loan B and the
Inventory Loan B, as applicable, in an amount sufficient to cure any Receivables
B Overadvance or Inventory B Overadvance;

          (xii)
then, to the unpaid principal balance of the Receivables Loan B;

          (xiii)
then, to the unpaid principal balance of the Inventory Loan B;

35




          (xiv)
then, to accrued and unpaid interest on account of the Term Loan B (first to the
Initial Term Loan B and then to the Additional Term Loan B Advances) but not
accrued and unpaid Deferred Term Loan Interest until after January 31, 2010;

          (xv)
then, if on or after May 1, 2010, to all or any portion of the Term Loan B which
is due and unpaid or past-due; and

          (xvi)
last, so long as no Default or Event of Default shall have occurred and be
continuing, the remaining balance, if any, shall be transferred to the Operating
Account for the benefit of the Borrowers;

provided, however, that if such Receivables are on account of
Calcott Receivables or such Receivables (or any other proceeds) arise from the
sale of Calcott Automobile Inventory (whether or not in the ordinary course of
business), the proceeds of such Receivables (and any other proceeds from such
sale of Calcott Automobile Inventory) shall be applied to the Indebtedness in
the following order of priority: first pursuant to clause (i) above, then
pursuant to clause (ii) above, then pursuant to clause (iii) above, then
pursuant to clause (viii) above, then to the outstanding principal balance of
the Term Loan A (applied to the remaining scheduled installments thereof in
inverse order of maturity if such application is made on or after May 1, 2010),
then in the order otherwise set forth above; provided, further, that upon the
occurrence and during the continuance of an Event of Default, any and all
proceeds of Receivables shall be applied to the Indebtedness in such order of
priority as Administrative Agent in its sole discretion may determine.

          (b)
The amount of all payments to or amounts received by Administrative Agent
consisting of the proceeds of Receivables of Houston Auto (including proceeds in
respect of Eligible Receivables B and payments received in the Collection
Accounts pursuant to Section 3.9 hereof) shall be applied to the extent
applicable under this Agreement:

          (i)
first, to any fees and expenses due to Lender Parties hereunder;

          (ii)
then, to any fees and expenses (including, without limitation, any legal fees
and expenses) of any of the Custodians;

          (iii)
then, to any fees and expenses (including, without limitation, any legal fees
and expenses) of any third party back-up servicer (if applicable) of the
Receivables;

          (iv)
then, to accrued and unpaid interest on the Loan B Advances through the date of
such payment (other than interest accrued on account of the Term Loan B),
including any interest calculated at the Default Rate in accordance with Section
2.11 hereof;

          (v)
then, to the unpaid principal balance of the Receivables Loan B and the
Inventory Loan B, as applicable, in an amount sufficient to cure any Receivables
B Overadvance or Inventory B Overadvance;

36




          (vi)
then, to the unpaid principal balance of the Receivables Loan B;

          (vii)
then, to the unpaid principal balance of the Inventory Loan B;

          (viii)
then, to accrued and unpaid interest on account of the Term Loan B (first to the
Initial Term Loan B and then to the Additional Term Loan B Advances), but not
accrued and unpaid Deferred Term Loan B Interest until after April 30,
2010);

          (ix)
then, to all or any portion of the Term Loan B which is due and unpaid or
past-due; and

          (x)
then, to accrued and unpaid interest on the Loan A Advances through the date of
such payment (other than interest accrued on account of the Term Loan A),
including any interest calculated at the Default Rate in accordance with Section
2.11 hereof;

          (xi)
then, to the unpaid principal balance of the Receivables Loan A and the
Inventory Loan A, as applicable, in an amount sufficient to cure any Receivables
A Overadvance or Inventory A Overadvance;

          (xii)
then, to the unpaid principal balance of the Receivables Loan A;

          (xiii)
then, to the unpaid principal balance of the Inventory Loan A;

          (xiv)
then, to accrued and unpaid interest on account of the Term Loan A (but not
accrued and unpaid Deferred Term Loan Interest until after April 30, 2010);

          (xv)
then, if on or after May 1, 2010, to all or any portion of the Term Loan A which
is due and unpaid or past-due; and

          (xvi)
last, so long as no Default or Event of Default shall have occurred and be
continuing, the remaining balance, if any, shall be transferred to the Operating
Account for the benefit of the Borrowers;

provided, however, that if such Receivables are on account of
Texas Legacy Receivables, or such Receivables (or any other proceeds) arise from
the sale of Texas Legacy Automobile Inventory (whether or not in the ordinary
course of business), the proceeds of such Receivables (and any other proceeds
from such sale of Texas Legacy Automobile Inventory) shall be applied to the
Indebtedness in the following order of priority: first pursuant to clause (i)
above, then pursuant to clause (ii) above, then pursuant to clause (iii) above,
then pursuant to clause (viii) above, then to the outstanding principal balance
of the Term Loan B (applied to the remaining scheduled installments thereof in
inverse order of maturity if such application is made on or after 

37




December 31, 2009), then in the order otherwise set forth
above; provided, further, that upon the occurrence and during the continuance of
an Event of Default, any and all proceeds of Receivables shall be applied to the
Indebtedness in such order of priority as Administrative Agent in its sole
discretion may determine.

          (c)
In calculating interest and applying payments as set forth in clauses (a) and
(b) above; (i) interest shall be calculated and collected through the date a
payment is actually applied thereto under the terms of this Agreement; (ii)
interest on the outstanding balance shall be charged during any grace period
permitted hereunder; (iii) on the sixth (6th) day of each calendar
month, at Administrative Agent’s option, all accrued and unpaid interest and
other charges provided for hereunder as of the last day of the preceding
calendar month shall be added to the principal balance of the applicable Loans;
and (iv) to the extent that any Borrower, any other Related Party, JV Partner or
a Validity Guarantor makes a payment or any Lender Party receives any payment or
proceeds of the Collateral for Borrowers’ benefit that is subsequently
invalidated, set aside or required to be repaid to any other Person, then, to
such extent, the obligations intended to be satisfied shall be revived and
continue as if such payment or proceeds had not been received by such Lender
Party and the outstanding balance of the Indebtedness may be adjusted as
Administrative Agent, in its sole discretion, deems appropriate under the
circumstances.

     Section 2.15.
FEES. The Borrowers shall pay to the Administrative Agent, for
the account of Initial Lender, the commitment fee (the “Commitment Fee”)
as set forth in Section 2.15 of Schedule A attached hereto, which Commitment Fee
shall be fully earned and due and payable on the date set forth in Section 2.15
of Schedule A.

     Section 2.16.
CAPITAL REIMBURSEMENT. If either (a) the introduction or
implementation after the date hereof of or the compliance with or any change
after the date hereof in or in the interpretation of any Law regarding capital
adequacy, or (b) the introduction or implementation after the date hereof of or
the compliance with any request, directive or guideline issued after the date
hereof from any central bank or other governmental authority (whether or not
having the force of Law) regarding capital requirements has or would have the
effect of reducing the rate of return on any Lender’s capital, or on the capital
of any corporation controlling such Lender, as a consequence of the Loans made
by such Lender, to a level below that which such Lender or such corporation
could have achieved but for such change (taking into consideration such Lender’s
policies and the policies of any such corporation with respect to capital
adequacy), then from time to time Borrowers will pay to such Lender, within ten
(10) Business Days of demand therefore by such Lender, such additional amount or
amounts as will compensate such Lender for such reduction. In determining such
amount or amounts, a Lender may use any reasonable averaging or attribution
methods. Any such demand by a Lender shall include a brief summary description,
in reasonable detail, of the basis for such demand.

     Section 2.17.
[Reserved].

     Section 2.18.
TAXES. All payments of principal and interest on the
Loans and all other amounts payable hereunder shall be made free and clear of
and without deduction for any present or future income, excise, stamp,
documentary, property or franchise taxes and other taxes, fees, duties, levies,
assessments, withholdings or other charges of any nature whatsoever (including


38




interest and penalties thereon) imposed by any taxing
authority, excluding taxes imposed on or measured by a Lender Party’s net income
by the jurisdiction under which such Lender Party is organized or conducts
business (other than solely as the result of entering into any of the Loan
Documents or taking any action thereunder) (all non-excluded items being called
“Taxes”). If any withholding or deduction from any payment to be made by
a Borrower hereunder is required in respect of any Taxes pursuant to any
applicable Law, then Borrowers will: (i) pay directly to the relevant authority
the full amount required to be so withheld or deducted; (ii) promptly forward to
Administrative Agent an official receipt or other documentation reasonably
satisfactory to Administrative Agent evidencing such payment to such authority;
and (iii) pay to Administrative Agent for the account of the Lender Parties such
additional amount or amounts as is necessary to ensure that the net amount
actually received by the Lender Parties will equal the full amount the Lender
Parties would have received had no such withholding or deduction been required.
If any Taxes are directly asserted against any Lender Party with respect to any
payment received by such Lender Party hereunder, such Lender Party may pay such
Taxes and Borrowers will promptly pay such additional amounts (including any
penalty, interest or expense) as is necessary in order that the net amount
received by such Lender Party after the payment of such Taxes (including any
Taxes on such additional amount) shall equal the amount such Lender Party would
have received had such Taxes not been asserted so long as such amounts have
accrued on or after the day which is two hundred seventy (270) days prior to the
date on which such Lender Party first made demand therefor. If Borrowers fail to
pay any Taxes when due to the appropriate taxing authority or fails to remit to
Administrative Agent, for the account of the respective Lender Parties, the
required receipts or other required documentary evidence, Borrowers shall
indemnify the Lender Parties for any incremental Taxes, interest or penalties
that may become payable by any Lender Party as a result of any such failure.

     Section 2.19. COMMITMENT
INCREASES.

          (a)
Subject to the terms of this Section 2.19(a), the Borrowers shall have the
option to increase (i) the “Amount of Receivables Credit Line B” from
$15,000,000 as in effect on the Closing Date to $30,000,000 and (ii) the “Amount
of Inventory Credit Line B” from $2,000,000 as in effect on the Closing Date to
$2,500,000 (together, the “Second Tranche Commitment Increase”).
At any time from the Closing Date to the Maturity Date of the Inventory Loan B,
the Borrowers may request the Second Tranche Commitment Increase by delivering
to Administrative Agent (i) a written request by each Borrower to effect the
Second Tranche Commitment Increase, which written notice shall be in form and
substance reasonably satisfactory to Administrative Agent and (ii) such other
supporting documentation as Administrative Agent shall require. The
effectiveness of the Second Tranche Commitment Increase shall be subject to
following conditions precedent: (A) Administrative Agent’s receipt of the
written request referenced in the immediately preceding sentence, (B) the
Borrowers’ receipt of written approval of the Second Tranche Commitment Increase
by Administrative Agent (such approval to be given in Administrative Agent’s
sole discretion), (C) the Borrowers shall be in compliance with the financial
covenants set forth in Section 6.9 hereof on a pro forma basis after giving
effect to such Second Tranche Commitment Increase and (D) unless otherwise
waived by Administrative Agent and each Lender, no Default or Event of Default
shall have occurred and be continuing. Following the Second Tranche Effective
Date, the “Amount of Receivables Credit Line B” shall be deemed to be
$30,000,000 and the “Amount of Inventory Credit Line B” shall be deemed to be
$2,500,000, in each case, for all purposes hereunder. 

39




          (b)
Subject to the terms of this Section 2.19(b), the Borrowers shall have the
option to increase (i) the “Amount of Receivables Credit Line B” from
$30,000,000 as in effect on the Second Tranche Effective Date to $45,000,000 and
(ii) the “Amount of Inventory Credit Line B” from $2,500,000 as in effect on the
Second Tranche Effective Date to $3,000,000 (together, the “Third Tranche
Commitment Increase”). At any time from the Second Tranche Effective Date to
the Maturity Date of the Inventory Loan B, the Borrowers may request the Third
Tranche Commitment Increase by delivering to Administrative Agent (i) a written
request by each Borrower to effect the Third Tranche Commitment Increase, which
written notice shall be in form and substance reasonably satisfactory to
Administrative Agent and (ii) such other supporting documentation as
Administrative Agent shall require. The effectiveness of the Third Tranche
Commitment Increase shall be subject to following conditions precedent: (A)
Administrative Agent’s receipt of the written request referenced in the
immediately preceding sentence, (B) the Borrowers’ receipt of written approval
of the Third Tranche Commitment Increase by Administrative Agent (such approval
to be given in Administrative Agent’s sole discretion), (C) the Borrowers shall
be in compliance with the financial covenants set forth in Section 6.9 hereof on
a pro forma basis after giving effect to such Third Tranche Commitment Increase
and (D) unless otherwise waived by Administrative Agent and each Lender, no
Default or Event of Default shall have occurred and be continuing. Following the
Third Tranche Effective Date, the “Amount of Receivables Credit Line B” shall be
deemed to be $45,000,000 and the “Amount of Inventory Credit Line B” shall be
deemed to be $3,000,000, in each case, for all purposes hereunder. 

          (c)
Subject to the terms of this Section 2.19(c), the Borrowers shall have the
option to increase (i) the “Amount of Receivables Credit Line B” from
$45,000,000 as in effect on the Third Tranche Effective Date to $60,000,000 and
(ii) the “Amount of Inventory Credit Line B” from $3,000,000 as in effect on the
Third Tranche Effective Date to $4,000,000 (together, the “Fourth Tranche
Commitment Increase”). At any time from the Third Tranche Effective Date to
the Maturity Date of the Inventory Loan B, the Borrowers may request the Fourth
Tranche Commitment Increase by delivering to Administrative Agent (i) a written
request by each Borrower to effect the Fourth Tranche Commitment Increase, which
written notice shall be in form and substance reasonably satisfactory to
Administrative Agent and (ii) such other supporting documentation as
Administrative Agent shall require. The effectiveness of the Fourth Tranche
Commitment Increase shall be subject to following conditions precedent: (A)
Administrative Agent’s receipt of the written request referenced in the
immediately preceding sentence, (B) the Borrowers’ receipt of written approval
of the Fourth Tranche Commitment Increase by Administrative Agent (such approval
to be given in Administrative Agent’s sole discretion), (C) the Borrowers shall
be in compliance with the financial covenants set forth in Section 6.9 hereof on
a pro forma basis after giving effect to such Fourth Tranche Commitment Increase
and (D) unless otherwise waived by Administrative Agent and each Lender, no
Default or Event of Default shall have occurred and be continuing. Following the
Fourth Tranche Effective Date, the “Amount of Receivables Credit Line B” shall
be deemed to be $60,000,000 and the “Amount of Inventory Credit Line B” shall be
deemed to be $4,000,000, in each case, for all purposes hereunder. 

40




ARTICLE 3
 SECURITY

     Section 3.1.
SECURITY INTEREST. To secure the prompt payment to Lender
Parties of the Indebtedness, any and all other obligations owed by Borrowers to
Lender Parties, and the all obligations of the Borrowers to AGM, LLC pursuant to
the Texas Asset Purchase Agreement and the Agreement to Operate, whether now
existing or hereinafter arising, each Borrower hereby irrevocably grants to
Administrative Agent and Additional Collateral Agent, in each case for the
benefit of the Lender Parties, a first and continuing security interest in all
of the following property, whether now owned or existing or hereafter acquired,
of such Borrower: all assets of such Borrower, including all Accounts,
Automobile Inventory, chattel paper, commercial tort claims set forth on Section
3.1 to Schedule A hereto, deposit accounts and other bank accounts wherever
maintained and established (and all funds at any time paid, deposited, credited
or held in such accounts), documents, equipment, fixtures, general intangibles,
goods, instruments, inventory, investment property, letter-of-credit rights,
software (for purposes of this definition of Collateral only, “software” shall
have the meaning provided in Article 9 of the UCC), supporting obligations,
contract rights and all books and records related to the foregoing and all
proceeds (including, without limitation, “proceeds” as defined in Article 9 of
the UCC) of any of the foregoing, including without limitation interest,
dividends, cash, instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for or on
account of the sale or other disposition of any or all of the foregoing, and all
additions and accessions to any of the foregoing (the foregoing, together with
any other asset in which a Borrower or other Person shall grant a security
interest to Administrative Agent and/or Additional Collateral Agent, for the
benefit of the Lender Parties, to secure the Indebtedness, collectively, the
“Collateral”). Without limiting the foregoing, the Collateral shall
include, without limitation, the following:

          (a)
All right, title and interest of the Borrowers in and to the Receivables and the
underlying Consumer Loan Documents related thereto;

          (b)
All right, title and interest of the Borrowers in and to all other property
whether now or hereafter owned, acquired or held by the Borrowers which secure
(or constitute collateral for) any of the Receivables and Consumer Loan
Documents or other instruments or agreements which evidence any of the
Receivables, including without limitation, all right, title and interest in and
to all financing statements perfecting such security interests in any of the
foregoing;

          (c)
All right, title and interest of the Borrowers in and to all guaranties and
other instruments by which any Person guarantees the payment or performance of
the Receivables;

          (d)
All right, title and interest of the Borrowers in and to all insurance policies
pertaining to or obtained by any Account Debtor or the Borrowers in connection
with, or arising out of, any Consumer Loan Document;

          (e)
All right, title and interest of the Borrowers in and to all commitments and
other agreements to purchase any Receivables;

41




          (f)
All right, title and interest of the Borrowers in and to all collections on, and
proceeds of or from, any and all of the foregoing;

          (g)
All files, surveys, certificates, correspondence, appraisals, computer programs,
software, tapes, discs, cards, accounting records, and other records,
information, and data of the Borrowers relating to the Receivables (including
all information, data, programs, tapes, discs and cards necessary to administer
and service such Receivables);

          (h)
All contract rights, accounts, rights to payment of money, and general
intangibles, relating to such documents and contracts described in (a) through
(g) above and as to all such Collateral described in (a) through this
subparagraph (h) whether now existing or hereafter at any time acquired or
arising;

          (i)
Borrowers’ now existing or hereafter arising rights to service, administer
and/or collect on the Receivables and all rights to the payment of money on
account of such servicing, administration and/or collection activities;

          (j)
All monies, securities and property, now or hereafter held, received by,
entrusted to, or in the possession or under the control of the Administrative
Agent, for the benefit of the Lender Parties, or a bailee of the Administrative
Agent, for the benefit of the Lender Parties, and all investment property now or
hereafter owned by Borrowers;

          (k)
All accessions to, substitutions for and all replacements, products and proceeds
of the foregoing, including, without limitation, proceeds of insurance policies
(including but not limited to claims paid and premium refunds); and

          (l)
All books and records (including, without limitation, customer lists, credit
files, tapes, ledger cards, computer software and hardware, electronic data
processing software, computer printouts and other computer materials and
records) of Borrowers evidencing or containing information regarding any of the
foregoing.

The Borrowers will supplement this Agreement from time to time
at Administrative Agent’s request to grant the Administrative Agent, for the
benefit of the Lender Parties, a security interest in all commercial tort claims
that the Borrowers may at any time have against any Person. The parties hereto
hereby acknowledge and agree that the Administrative Agent and the Additional
Collateral Agent are both beneficiaries of the grants of liens and security
interests hereunder and that such liens and security interests may be perfected
by Administrative Agent, Additional Collateral Agent or both, and in any event
regardless of the manner of perfection and regardless whether such liens or
security interests are granted to or perfected by Administrative Agent,
Additional Collateral Agent or both, such liens and security interests shall
constitute first priority perfected liens and security interests securing all of
the Indebtedness. 

     Section 3.2. COLLATERAL
ASSIGNMENT OF CONSUMER LOAN DOCUMENTS AND AUTO TITLE.
Each Borrower hereby collaterally assigns to the Administrative Agent and
Additional Collateral Agent, in each case for the benefit of the Lender Parties,
all of such Borrower’s right and title to and interest in, to and under (but not
any obligations under) the Consumer Loan Documents and each Auto Title related
to each Receivable and all other agreements, documents and instruments related
to any of the foregoing 

42




(collectively, the “Assigned Documents”). Each Borrower
confirms and agrees that the Administrative Agent and Additional Collateral
Agent (or any designee thereof), following an Event of Default, shall, at its
option, have the sole right to enforce such Borrower’s rights and remedies under
each Assigned Document, but without any obligation on the part of the
Administrative Agent, the other Lender Parties or any of their respective
affiliates to perform any of the obligations of Borrower under any such Assigned
Document.

     Section 3.3. FINANCING
STATEMENTS AND FURTHER ASSURANCES.

          (a)
Each Borrower hereby authorizes Administrative Agent and Additional Collateral
Agent to file UCC-1 Financing Statements with respect to the Collateral, and any
amendments or continuations relating thereto, which UCC-1 Financing Statements
may describe the Collateral as “all present and future assets of the Debtor” or
words of similar effect, regardless of whether any particular asset comprised in
the Collateral falls within the scope of Article 9 of the Uniform Commercial
Code. Borrowers shall not allow any financing statement or notice of assignment
of any Receivables, other than those filed in favor of Administrative Agent or
Additional Collateral Agent, the Trafalgar Subordinated Lender(s) and the
holders of Liens permitted pursuant to Section 6.2(a) hereof, to be on file in
any public office covering any Collateral, proceeds thereof or other matters
subject to the security interest granted to Administrative Agent and Additional
Collateral Agent (for the benefit of the Lender Parties).

          (b)
Borrowers hereby agree to deliver to Administrative Agent, at such places as
Administrative Agent may reasonably designate, (i) schedules executed by
Borrowers, listing the Receivables and fully and correctly specifying in
adequate detail the aggregate unmatured unpaid face amount of each Receivable
and the amount of the deferred installments thereof falling due each month and
(ii) schedules executed by the Borrowers, listing the Automobile Inventory and
specifying in adequate detail each Borrower’s cost basis and current NADA trade
in value with respect thereto. These schedules shall be in form and tenor
satisfactory to or supplied by Administrative Agent. All schedules delivered and
Collateral pledged to Administrative Agent and Additional Collateral Agent, for
the benefit of the Lender Parties, shall be assigned to Administrative Agent and
Additional Collateral Agent, for the benefit of the Lender Parties.

          (c)
Each Borrower shall, from time to time, at its expense, promptly execute and
deliver all further instruments, documents and notices and take all further
action that may be necessary, or that Administrative Agent may reasonably
request in order to create, perfect and protect the Liens of Administrative
Agent and Additional Collateral Agent in the Collateral, or to enable
Administrative Agent or Additional Collateral Agent to exercise and enforce its
rights and remedies hereunder or under any other Loan Document with respect to
any Collateral, including, without limitation, (i) entering into deposit account
control agreements, securities account control agreements, intellectual property
security agreements, collateral assignments of lease, equity pledge agreements
(including irrevocable proxies and assignments separate from certificate) and
assignments separate from certificate, in each case in form and substance
reasonably satisfactory to Administrative Agent, (ii) delivering to
Administrative Agent or Additional Collateral Agent, all original instruments,
certificated securities and other assets, perfection of a Lien with respect to
which may be perfected by possession under applicable law, together with any
assignments separate from certificates and allonges ancillary thereto and (iii)


43




providing Administrative Agent or Additional Collateral Agent
with “control” (as such term is defined in any applicable uniform commercial
code) over any Collateral, a Lien with respect to which may be perfected by
“control”, pursuant to documentation in form and substance reasonably
satisfactory to Administrative Agent.

     Section 3.4.
DELIVERY OF RECEIVABLES; INSTRUMENTS, DOCUMENTS,
ETC.

          (a)
Each Borrower hereby agrees to deliver to the applicable Custodian (i) the
original Consumer Loan Documents evidencing each Receivable, and the executed
application for title within five (5) Business Days after such Consumer Loan
Documents are executed and delivered to such Borrower by the applicable Account
Debtor and the Receivable is created, (ii) the original Auto Title within five
(5) Business Days after issuance by the applicable state to such Borrower
reflecting such Borrower, Additional Collateral Agent and Administrative Agent
as lien holder on the vehicle securing such Receivable (with respect to listing
Additional Collateral Agent and Administrative Agent as lien holder, only with
respect to Receivables arising after the Restatement Closing Date (or the date
hereof with respect to Receivables of Houston Auto), and (iii) if an original
Auto Title has not yet been issued by the applicable state reflecting such
Borrower, Additional Collateral Agent and Administrative Agent as lien holder,
any applicable, “Title Guaranties,” “Title Applications” or “Title Application
Receipts” (as such terms are defined in the Existing Carbiz Custodian Agreement)
within five (5) Business Days after such Borrower’s receipt of same, each in
accordance with the applicable Custodian Agreement. All Receivables shall,
regardless of their location, be deemed to be under Administrative Agent’s and
Additional Collateral Agent’s (for the benefit of itself and the Lender Parties)
dominion and control (with files so labeled) and deemed to be in Administrative
Agent’s and Additional Collateral Agent’s (for the benefit of itself and the
Lender Parties’) possession. For purposes of this Section 3.4(a) the term
“applicable Custodian” shall mean the Custodian under the Existing Carbiz
Custodian Agreement unless (i) the applicable Receivable (and related Consumer
Loan Documents) was acquired by Carbiz AQ pursuant to the Calcott Asset Purchase
Agreement or arises (whether now or in the future) from a transaction involving
Calcott Automobile Inventory, in which case the term “applicable Custodian”
shall mean the Custodian under the Carbiz AQ Custodian Agreement or (ii) the
applicable Receivable (and related Consumer Loan Documents) was acquired by
Houston Auto pursuant to the Texas Asset Purchase Agreement, the Subsequent
Texas Asset Purchase Agreement or arises (whether now or in the future) from a
transaction involving Texas Legacy Automobile Inventory, in which case the term
“applicable Custodian” shall mean the Custodian under the Texas Legacy Custodian
Agreement.

          (b)
Each Borrower hereby agrees to deliver to the applicable Custodian (or cause to
be delivered to the applicable Custodian), within five (5) Business Day’s of
such Borrower’s acquisition of such Automobile Inventory, (i) the original Auto
Title evidencing each such item of Automobile Inventory reflecting Additional
Collateral Agent and Administrative Agent as lien holder of record (with respect
to listing Additional Collateral Agent and Administrative Agent as lien holder,
only with respect to Automobile Inventory acquired after the Restatement
Effective Date (or the date hereof with respect to Automobile Inventory acquired
by Houston Auto), or (ii) if an original Auto Title has not yet been issued by
the applicable state, any applicable, “Title Guaranties,” “Title Applications”
or “Title Receipts” (as 

44




such terms are defined in the Existing Carbiz Custodian
Agreement) obtained in connection with the acquisition of such Automobile
Inventory, in each case, in accordance with the applicable Custodian Agreement.
For purposes of this Section 3.4(b) the term “applicable Custodian” shall mean
the Custodian under the Existing Carbiz Custodian Agreement except with respect
to (i) Calcott Automobile Inventory (whenever acquired or reacquired by a
Borrower), in which case the “applicable Custodian” shall be the Custodian under
the Carbiz AQ Custodian Agreement or (ii) Texas Legacy Automobile Inventory
(whenever acquired or reacquired by a Borrower), in which case the “applicable
Custodian” shall be the Custodian under the Texas Legacy Custodian
Agreement.

          (c)
Each Borrower shall deliver and pledge to the Administrative Agent, Additional
Collateral Agent or any of their agents any and all other Instruments,
negotiable Documents, Chattel Paper and certificated securities (that are not
Consumer Loan Documents) duly endorsed and/or accompanied by such instruments of
assignment and transfer executed by such Borrower, in such form and substance as
the Administrative Agent may reasonably request, including the updated report of
subsequent Title submitted to replace the executed application for Title.

     Section 3.5. FAILURE
TO DELIVER. Failure to deliver physical possession of any instruments,
documents or writings in respect of any Receivable to Administrative Agent or
Additional Collateral Agent (including the applicable Custodian, as custodian
and bailee for the Administrative Agent and Additional Collateral Agent) shall
not invalidate Administrative Agent's or Additional Collateral Agent’s security
interest, for the benefit of the Lender Parties, therein. To the extent that
possession may be required by applicable law for the perfection of
Administrative Agent's and Additional Collateral Agent’s (for the benefit of the
Lender Parties) security interest, the original chattel paper and instruments
representing the Receivables so held by a Borrower shall be deemed to be held by
Administrative Agent and Additional Collateral Agent, although kept by such
Borrower as the custodial agent of Administrative Agent, Additional Collateral
Agent and the Lender Parties.

     Section 3.6. NOTICE
OF SECURITY INTEREST AND COLLATERAL ASSIGNMENT.
All contracts, documents or instruments representing or evidencing a
Receivable shall contain (by way of stamp or other method reasonably
satisfactory to Administrative Agent) the following language: “THIS DOCUMENT
IS SUBJECT TO A SECURITY INTEREST IN FAVOR OF, AND PLEDGED AS COLLATERAL TO SWC
SERVICES LLC, AS ADMINISTRATIVE AGENT, AND AGM, LLC, AS ADDITIONAL COLLATERAL
AGENT, FOR THE BENEFIT OF THEMSELVES AND CERTAIN LENDERS. THE CREATION OF ANY
SUBSEQUENT SECURITY INTEREST IN THIS DOCUMENT VIOLATES THE RIGHTS OF THE
ADMINISTRATIVE AGENT, ADDITIONAL COLLATERAL AGENT AND LENDERS.”

     Section 3.7. RECORDS
AND INSPECTIONS. Related Parties shall at all times keep complete and
accurate records pertaining to the Collateral, which records shall be current on
a daily basis and located only at the locations set forth in Section 3.7 of
Schedule A attached hereto. Administrative Agent and Additional Collateral
Agent, by or through any of their officers, agents, employees, attorneys or
accountants, shall have the right to enter any such locations, at any reasonable
time or times during regular business hours, for so long as 

45




Administrative Agent or Additional Collateral Agent may desire,
to inspect the Collateral and to inspect, audit and make extractions or copies
from the books, records, journals, orders, receipts, correspondence or other
data relating to the Collateral or this Agreement.

     Section 3.8.
COLLECTION. Subject to Section 3.9, Borrowers agree at their
own expense to promptly and diligently collect each installment of all
Receivables in trust for the exclusive account of Administrative Agent and
Additional Collateral Agent, for the benefit of the Lender Parties, to hold
Lender Parties harmless from any and all loss, damage, penalty, liability, fine
or expense arising from such collection by Borrowers or their agents, and to
faithfully account therefor to Administrative Agent and Additional Collateral
Agent. Upon the occurrence of a Default or an Event of Default, Administrative
Agent and Additional Collateral Agent each expressly retains the unqualified
right at any time it so elects to take over the collection of the Receivables
directly (through an agent of such Person or otherwise).

     Section 3.9.
COLLECTION ACCOUNTS. Borrowers shall ensure that all
collections of Receivables (including, without limitation, all scheduled
payments, all prepayments, all overdue payments, all insurance proceeds,
recoveries and all cash receipts and proceeds in respect of the underlying
automobile securing the Receivables), all other amounts remitted by any Account
Debtor, an insurer, any other Person making a payment on a Receivable or in
connection with proceeds of the underlying automobile securing such Receivable,
the proceeds of sales of Automobile Inventory and the proceeds of all other
Collateral are deposited into a Collection Account within one (1) Business Day
of receipt thereof. Borrowers shall cause all payments of Receivables and other
proceeds of the sale of Automobile Inventory and other Collateral to be
deposited into a Collection Account. Until such time as any Receivables
collections or other proceeds of Collateral are deposited by the Borrowers into
the applicable Collection Account, such collections and proceeds shall be held
in trust for the benefit of Administrative Agent and the other Lender Parties.
The Collection Accounts shall be swept automatically on a weekly basis and the
depository bank maintaining a Collection Account will wire, or otherwise
transfer, in immediately available funds, all funds received or deposited into
such Collection Account (other than $300 or such other nominal amount in each
account which the depository bank may require to be held as a compensating
balance) to the Payment Account or such other bank account as Administrative
Agent or Additional Collateral Agent, as the case may be, may from time to time
designate for such purpose. Borrowers hereby confirm and agree that all amounts
deposited in the Collection Accounts and any other funds received and collected
by Administrative Agent or Additional Collateral Agent, whether as proceeds of
Collateral or otherwise, shall constitute Collateral. Notwithstanding and
without limiting any other provision of this Agreement or any of the other Loan
Documents, Administrative Agent shall apply all funds transferred from the
Collection Accounts into the Payment Account or other bank account designated by
Administrative Agent or Additional Collateral Agent pursuant to this Section 3.9
as set forth in Section 2.14 hereof and subject to the clearance period set
forth in Section 2.8 hereof. If a credit balance exists with respect to the
Collection Accounts as the result of collections of Receivables or proceeds of
other Collateral pursuant to the terms and conditions of this Section 3.9, such
credit balance shall not accrue interest in favor of the Borrowers, but shall,
subject to the terms of Section 2.14 hereof, be available to Borrowers in
accordance with the terms of this Agreement. All funds transferred from the
Collection Accounts into the Payment Account or other bank account designated by
Administrative Agent or Additional Collateral Agent pursuant to this Section 3.9
shall be applied to reduce the Indebtedness (or be made 

46




available to Borrowers in accordance with Section 2.14 hereof),
but, for purposes of calculating interest hereunder, shall be subject to a four
(4) Business Day clearance period. All Items deposited in the Collection
Accounts shall be subject to final payment. If any such Item is returned
uncollected, the Borrowers will immediately pay the Administrative Agent, for
the account of the Lender Parties, or, for Items deposited in the Collection
Accounts, the bank maintaining such account, the amount of that Item, or such
bank at its discretion may charge any uncollected Item to the Borrowers’
commercial account or other account. The Borrowers shall be liable as an
endorser on all Items deposited in the Collection Accounts, whether or not in
fact endorsed by Borrowers. Upon Administrative Agent’s or Additional Collateral
Agent’s request any time following the occurrence of an Event of Default,
Borrowers agree to establish and maintain a lockbox with a bank acceptable to
Administrative Agent or Additional Collateral Agent and to execute with such
bank a lockbox agreement acceptable to Administrative Agent or Additional
Collateral Agent, as applicable, in its sole discretion. Thereafter, Borrowers
shall ensure that all collections of Receivables and the proceeds of other
Collateral are paid directly by the Account Debtors to the lockbox and to the
extent that any Receivables collections or other proceeds of Collateral are not
sent directly to the lockbox but are received by a Borrower, such collections
and proceeds shall be held in trust for the benefit of Administrative Agent and
Additional Collateral Agent and within one (1) Business Day of receipt thereof
shall be remitted via overnight mail to the Administrative Agent for deposit, in
the form received, to the lockbox

     Section 3.10. PROTECTION OF
RECEIVABLE RECORDS AND MANAGEMENT OF RECEIVABLES INFORMATION.
Borrowers hereby agree to take the following protective actions to prevent
destruction of the Collateral and records pertaining to the Collateral: (i) if a
Borrower maintains its Collateral records on a manual system such records shall
be kept in a fire proof cabinet or on no less than a monthly basis, a record of
all payments on Receivables and all other matters relating to the Collateral
shall be placed in an off site safety deposit box (and Administrative Agent
shall have access to such safety deposit box); or (ii) if the Collateral records
are computerized, Borrowers agree to create a tape or diskette “back-up” of the
computerized information and upon the request of Administrative Agent, provide
Administrative Agent with a tape or diskette copy of such “back-up” information.
Without limiting the foregoing, if the Borrowers have purchased a software
license for an internet based payment system, or use a proprietary electronic
payment system, and Borrowers have implemented any such payment system, then (i)
Borrowers shall grant to Administrative Agent full access rights to such
software and payment system, including but not limited to passwords and login
information with offsite internet access capability, if available, (ii)
Borrowers shall authorize and instruct the provider of such software to provide
Administrative Agent, at its request, with all back-up materials and information
for such payment system and (iii) in the event that such provider of software
becomes unable to provide such service to Borrowers, Borrowers will immediately
obtain another such internet based payment service that provides equivalent
software and access rights to Borrowers and Administrative Agent, including but
not limited to full access rights to Administrative Agent and back-up materials
and information as requested by Administrative Agent.

     Section 3.11. USE OF
PROCEEDS. Borrowers shall use the proceeds of the Loans in the ordinary
course of business, solely in its operations for working capital, refinancing on
the Closing Date of Liabilities, payments to Lender Parties hereunder or as set
forth in Section 3.11 

47




of Schedule A. The Borrowers shall not use the proceeds of the
Loans to repay any Liabilities in connection with the JV Purchase Note.

     Section 3.12. RETURN
OF COLLATERAL. Upon the payment in full of any Receivable to which the
written documents evidencing such Receivable are held by Administrative Agent,
Additional Collateral Agent or a Custodian, Borrowers shall submit a request to
the Administrative Agent or Additional Collateral Agent, as applicable, for the
return of such documents pursuant to a Request For Return of Collateral Form, a
copy of which is attached hereto as Exhibit B (and shall additionally
submit all requests required of it under the applicable Custodian Agreement to
the respective Custodian) and Administrative Agent or Additional Collateral
Agent, as applicable, shall return (or cause the appropriate Custodian to
return) such documents within five (5) Business Days after receipt of such
request.

     Section 3.13.
COLLATERAL REPRESENTATIONS, WARRANTIES, AND
COVENANTS. The Borrowers jointly and severally
represent and warrant to, and covenant with, Administrative Agent, for the
benefit of the Lender Parties, as follows:

          (a)
The Borrowers have good and marketable title to all of the Collateral and the
Borrowers have rights in and the power to transfer the Collateral in which they
purport to grant a security interest pursuant to Section 3.1 hereof (subject,
with respect to after acquired Collateral, to Borrowers’ acquiring the same) and
no Lien other than Liens permitted under Section 6.2(a) hereof exists or shall
exist upon such Collateral at any time;

          (b)
This Agreement is effective to create in favor of Administrative Agent and
Additional Collateral Agent, for the benefit of the Lender Parties, a valid
security interest in and Lien upon all of the Borrowers’ right, title and
interest in and to the Collateral, and, upon the filing of appropriate Uniform
Commercial Code financing statements in the jurisdictions listed on Section
3.13(b) of Schedule A attached hereto and, with respect to patents,
trademarks and copyrights (if any) of the Borrowers, the filing with the United
States Patent and Trademark Office and the United States Copyright Office, as
applicable, such security interest and Liens shall be duly perfected in all the
Collateral (other than Instruments not constituting Chattel Paper), and upon
delivery of the Instruments to Administrative Agent or Additional Collateral
Agent or one of their agents (including, a Custodian with respect to Consumer
Loan Documentation), duly endorsed by Debtor or accompanied by appropriate
instruments of transfer duly executed by the applicable Borrower, the security
interest and Liens in the Instruments shall be duly perfected;

          (c)
All of the Equipment, Automobile Inventory, Inventory and Goods of Borrowers are
located at the places as specified on Section 5.1(n) of Schedule A attached
hereto and, except for Consumer Loan Documentation in the possession of a
Custodian, none of the Collateral is in the possession of any bailee,
warehousemen, processor or consignee;

          (d) No
Borrower owns any registered copyrights, patents or trademarks except for those
copyrights, patents and trademarks described on Section 3.13(d) of Schedule A,
none of which have been adjudged invalid or unenforceable or have been canceled,
in whole or in part, or are not presently subsisting, and each of such
copyrights, patents and trademarks are valid and enforceable. The applicable
Borrower identified on Section 3.13(d) of Schedule A is the sole 

48




and exclusive owner of the entire and unencumbered right, title
and interest in and to each of such copyrights, patents and trademarks, free and
clear of any liens, charges and encumbrances, including without limitation
licenses, shop rights and covenants by Borrowers not to sue third persons. No
Borrower has any notice of any suits or actions commenced or threatened with
reference to such registered copyrights, patents or trademarks, or any claim of
intellectual property infringement with respect to any intellectual property
used by the Borrowers in the operation of their respective businesses. If any
Borrower shall (i) obtain rights to any new patentable inventions, any
registered copyrights, trademarks or any patents, or (ii) become entitled to the
benefit of any registered copyrights or trademarks or any patents or any
improvement on any patent, the provisions of this Agreement above shall
automatically apply thereto and such Borrower shall give to Administrative Agent
prompt written notice thereof. Borrowers shall have the duty, subject to the
exercise of their reasonable business judgment, (i) to prosecute diligently any
patent, trademark, or service mark applications pending as of the date hereof or
hereafter, (ii) to make application on unpatented but patentable inventions and
on trademarks, copyrights and service marks, as appropriate, (iii) to preserve
and maintain all rights in copyrights, trademarks or any patents, to the extent
material to the operations of the business of any Borrower and (iv) to ensure
that the copyrights, trademarks or any patents used by any Borrower are and
remain enforceable, to the extent material to the operations of the business of
any Borrower. Subject to the exercise of the Borrowers’ reasonable business
judgment, no Borrower shall abandon any right to file a patent, trademark or
service mark application, or abandon any pending patent, application or any
other copyright, patent or trademark without the written consent of
Administrative Agent, which consent shall not be unreasonably withheld.

          (e)
Borrowers shall deliver to the Administrative Agent an updated Section
3.13(b), 3.13(d), 3.13(f) and 5.1(n) of Schedule A within five (5) days
of any change thereto; provided, that delivery or receipt of such
subsequent disclosure shall not relieve or otherwise constitute a waiver by any
Lender Party or a cure of any Default or Event of Default resulting in
connection with the matters disclosed or a breach of the underlying covenant,
representation or warranty (regardless of such disclosure);

          (f)
All depositary and other accounts maintained by Borrowers and each Guarantor are
described on Section 3.13(f) of Schedule A hereto, which description
includes for each such account the name of the Related Party maintaining such
account, the name, address and telephone and telecopy numbers of the financial
institution at which such account is maintained, the account number and the
account officer, if any, of such account. No Borrower or Guarantor shall open
any new accounts unless such Related Party shall have given Administrative Agent
and Additional Collateral Agent at least ten (10) Business Days’ prior written
notice of its intention to open any such new accounts.

          (g)
Borrowers shall take any and all actions necessary or reasonably requested by
the Administrative Agent, from time to time, to (i) cause the Administrative
Agent and/or Additional Collateral Agent to obtain exclusive control of any
investment property owned by Borrowers in a manner acceptable to Administrative
Agent, and (ii) obtain from any issuers of investment property and such other
Persons, for the benefit of Administrative Agent and/or Additional Collateral
Agent, written confirmation of Administrative Agent’s or Additional Collateral
Agent’s control over such Investment Property. For purposes of this Section
3.13(g), Administrative Agent or Additional Collateral Agent, as applicable,
shall have exclusive control 

49




of investment property if (i) such investment property consists
of certificated securities and the applicable Borrower delivers such
certificated securities to the Administrative Agent or Additional Collateral
Agent, respectively (with appropriate endorsements if such certificated
securities are in registered form); (ii) such investment property consists of
uncertificated securities and either (x) the applicable Borrower delivers such
uncertificated securities to the Administrative Agent or Additional Collateral
Agent, as applicable or (y) the issuer thereof agrees, pursuant to documentation
in form and substance reasonably satisfactory to the Administrative Agent, that
it shall comply with instructions originated by Administrative Agent or
Additional Collateral Agent, as applicable, without further consent by such
Borrower, and (iii) such investment property consists of security entitlements
and either (x) Administrative Agent or Additional Collateral Agent, as
applicable, becomes the entitlement holder thereof or (y) the appropriate
securities intermediary agrees, pursuant to documentation in form and substance
reasonably satisfactory to Administrative Agent, that it shall comply with
entitlement orders originated by Administrative Agent or Additional Collateral
Agent, as applicable, without further consent by any Borrower.

     Section 3.14.
LENDER'S PAYMENT OF CLAIMS. Administrative Agent or Additional
Collateral Agent may, in such Person’s sole discretion, discharge or obtain the
release of any Lien asserted by any Person against the Collateral (other than
Liens permitted pursuant to Section 6.2 hereof). All sums paid by Administrative
Agent or Additional Collateral Agent in respect thereof shall be payable, on
demand, by Borrowers to Administrative Agent or Additional Collateral Agent, as
applicable, and shall be a part of the Indebtedness.

ARTICLE 4
CONDITIONS OF CLOSING; SUBSEQUENT
ADVANCES

     Section 4.1. INITIAL
ADVANCE. The obligation of Lender Parties to make the initial Loan
Advances hereunder is subject to the fulfillment, to the satisfaction of
Administrative Agent, Lenders and their counsel, of each of the following
conditions prior to such initial Loan Advance:

          (a)
Loan Documents. Administrative Agent shall have received each of the
following Loan Documents: (i) this Agreement executed by the respective parties;
(ii) Schedule A executed by the respective parties; (iii) the initial Note(s)
executed by Borrowers; (iv) the Master Reaffirmation of Loan Documents executed
by the Initial Borrowers, Guarantors, JV Partner Validity Guarantor, as
applicable; (v) a Pledge Supplement executed by Carbiz USA with respect to
Houston Auto, (vi) the First Amendment to the Existing Carbiz Custodian
Agreement executed by the applicable parties thereto; (vii) the First Amendment
to the Texas Legacy Custodian Agreement executed by the applicable parties
thereto; (viii) the additional Account Control Agreements executed by the
parties thereto; (ix) the Reaffirmation of and Fourth Amendment to Trafalgar
Subordination Agreement, (x) the Reaffirmation of and Amendment to Management
Subordination Agreement and (xi) such other documents, instruments and
agreements in connection herewith as Administrative Agent shall require,
executed, certified and/or acknowledged by such parties as Administrative Agent
shall designate.

          (b)
Texas Asset Purchase Agreement. The acquisition and related transactions
under the Texas Asset Purchase Agreement, the Agreement to Operate and all 

50




agreements, documents and instruments executed in connection
therewith shall have closed concurrently with the closing of this Agreement.


          (c)
Outside Director. (i) each of Carbiz USA, Carbiz Auto, Carbiz LLC, Carbiz
AQ shall have modified its charter documents to provide for the election of an
Outside Director as required by Section 6.8 hereof and (ii) Houston Auto shall
have elected an Outside Director as required by Section 6.8 hereof and such
Outsider Director shall have accepted such election.

          (d)
Charter Documents. Administrative Agent shall have received copies of
Borrowers’, each Guarantor’s and JV Partner’s charter documents, certified by
the appropriate official of such Person’s jurisdiction of organization and
Borrowers’, each Guarantor’s and JV Partner’s bylaws, partnership agreement or
operating agreement, as applicable, each as amended, modified, or supplemented
to the Closing Date and each certified by the Secretary of the applicable
Borrower, the applicable Guarantor and JV Partner, respectively.

          (e)
Good Standing. Administrative Agent shall have received a good standing
certificate with respect to each Borrower, each Guarantor and JV Partner, dated
within thirty (30) days of the Closing Date, by the appropriate official of such
Person’s jurisdiction of organization (unless such jurisdiction does not issue
such certificates), which certificates shall indicate that each Borrower, the
Guarantors and JV Partner are each in good standing in such jurisdictions.

          (f)
Foreign Qualification. Administrative Agent shall have received
certificates with respect to Borrower, each Guarantor and JV Partner relating to
such Person’s qualification to do business in each state where such Person
maintains assets or in which such Person’s failure to be duly qualified or
licensed would have a material adverse effect on its financial condition or
assets, each dated within thirty (30) days of the Closing Date, issued by the
appropriate official of each state and indicating that such Person is qualified
to do business in such state and in good standing.

          (g)
Authorizing Resolutions and Incumbency. Administrative Agent shall have
received a certificate from the Secretary of each Borrower, each Guarantor and
JV Partner attesting to (i) the adoption of resolutions of each respective Board
of Directors, partners or members, as applicable authorizing the borrowing of
money from Lenders or the guaranty of the Indebtedness, as the case may be, the
pledge of and granting of Liens upon its assets, and execution and delivery of
this Agreement and the other Loan Documents to which any such Person is a party,
and authorizing specific officers of such Person to execute same, and (ii) the
authenticity of original specimen signatures of such officers.

          (h)
Property and Liability Insurance. Administrative Agent shall have
received the insurance certificates and certified copies of policies required
herein, along with a loss payable endorsement naming Administrative Agent, for
the benefit of the Lender Parties, as sole loss payee and as additional insured,
all in form and substance reasonably satisfactory to Administrative Agent and
its counsel.

          (i)
Searches; Certificates of Title. Administrative Agent shall have received
evidence reflecting the filing of its and Additional Collateral Agent’s
financing statements and 

51




other filings in such jurisdictions as it shall determine, and
shall have received certificates of title with respect to the Collateral which
shall have been duly executed in a manner sufficient to perfect all of the
security interests granted to Administrative Agent and Additional Collateral
Agent, for the benefit of the Lender Parties, and shall have received other
background reports and information with respect to Borrowers, Guarantors,
members of Borrowers’ senior management, the owners of Borrowers, and any other
Person who provides financial or collateral information to the Administrative
Agent or Additional Collateral Agent, which are satisfactory to Administrative
Agent, in Administrative Agent’s sole discretion.

          (j)
Landlord Waivers. Administrative Agent shall have received Landlord
Waivers in form and substance satisfactory to Administrative Agent from the
lessors of all locations where any Collateral is located.

          (k)
Fees. Borrowers shall have paid all fees payable by them on the Closing
Date pursuant to this Agreement, including, without limitation, fees and
expenses of Administrative Agent’s counsel.

          (l)
Opinion of Counsel. Administrative Agent shall have received an opinion
of Borrowers’ and Guarantors’ counsel, covering such matters as Administrative
Agent shall reasonably determine, which opinion shall be in form and substance
reasonably satisfactory to Administrative Agent.

          (m)
Solvency Certificate. A signed certificate of the Borrowers’ duly elected
Chief Financial Officer concerning the solvency and financial condition of the
Borrowers, in form and substance reasonably acceptable to Administrative
Agent.

          (n)
Collection Accounts. The Collection Accounts shall have been established
to the reasonable satisfaction of Administrative Agent and Additional Collateral
Agent in their sole discretion.

          (o)
Custodian Deliverables. The Custodians shall have received the applicable
Consumer Loan Documents and all other documents, instruments and writings
required to be delivered to the Custodians hereunder and under the Custodian
Agreements and Administrative Agent shall have received the Custodial
Certificate from the Custodians relating thereto.

          (p)
No Material Adverse Effect. No event or condition has occurred since
January 31, 2007, or is existing which has had or could reasonably be expected
to have (i) a material adverse effect on the business, operations, results of
operations, prospects, assets, liabilities or financial condition of any
Borrower or any Guarantor, or (ii) a material adverse effect on the ability of
any Borrower or any Guarantor to perform its obligations under the Loan
Documents.

          (q)
Cash Management System. Borrowers have established cash management
systems acceptable to the Administrative Agent and Additional Collateral Agent,
in their discretion.

52




          (r)
Due Diligence. The Administrative Agent and the Lender Parties shall have
completed all business, legal and collateral due diligence (including, without
limitation, completion by the Administrative Agent or its agents of an
examination and inspection of the Collateral, Borrowers’ financial information
including monthly projections, Borrowers’ historical performance and background
investigations of key members of management of the Borrowers), and the results
of such due diligence are satisfactory to the Administrative Agent and the
Lender Parties, in their sole discretion.

          (s)
Litigation. There is no material action, suit, proceeding or
investigation pending or threatened against or affecting any Related Party
before or by any court, administrative agency or other governmental authority,
except as may be acceptable to Administrative Agent and Initial Lender. 

          (t)
Other Matters. All other documents and legal matters in connection with
the transactions contemplated by this Agreement shall have been delivered,
executed and recorded and shall be in form and substance reasonably satisfactory
to Administrative Agent and its counsel.

     Section 4.2. ALL
ADVANCES. The obligation of any Lender to make any Loan Advance
hereunder (including the initial Loan Advance) shall be subject to the further
conditions precedent that, on and as of the date of such advance: (a) the
representations and warranties of each Borrower and each Guarantor set forth in
this Agreement and the other Loan Documents shall be accurate, before and after
giving effect to such advance or issuance and to the application of any proceeds
thereof; (b) no Default or Event of Default has occurred and is continuing, or
would result from such advance or issuance or from the application of any
proceeds thereof; (c) no material adverse change has occurred in the Borrowers’
business, operations, financial condition, or assets or in the prospect of
repayment of the Indebtedness or the enforceability of the material terms of any
Loan Document; (d) the applicable Custodian shall have received (i) the Consumer
Loan Documents, all related Auto Titles (or, if applicable, “Title Guaranties”
or “Title Applications” and “Title Receipts” (as such terms are defined in the
Existing Carbiz Custodian Agreement)) and other documents, instruments and
writings related to each Receivable and (ii) the Auto Titles (or, if applicable,
“Title Guaranties” or “Title Applications” and “Title Receipts”) and other
documents, instruments and writings related to each Automobile being financed by
such advance and shall have provided a written certification regarding receipt
of same to Administrative Agent; (e) Administrative Agent shall have received
such other approvals, opinions or documents as Administrative Agent shall
reasonably request; and (f) Borrower Representative shall have submitted to
Administrative Agent a completed Request for Advance in the form and substance
of Exhibit A attached hereto, on or before the Business Day preceding the
date such advance is requested.

     Section 4.3. ALL
ADVANCES TO CONSTITUTE ONE LOAN . All evidences of credit, loans and
advances made by a Lender to Borrowers under this Agreement and any other
documents or instruments executed in connection herewith shall constitute one
loan of such Lender, and all indebtedness and obligations of Borrowers to Lender
Parties under this Agreement and all other such documents and instruments shall
constitute Indebtedness secured by Administrative Agent's and Additional
Collateral Agent’s liens and security interests, for the benefit of the Lender
Parties, in all of the Collateral and by all other Liens heretofore, now, or at


53




any time or times hereafter granted by a Borrower to
Administrative Agent or Additional Collateral Agent, for the benefit of the
Lender Parties. Each Borrower agrees that all of the rights of Lender Parties
set forth in this Agreement shall apply to any modification of or supplement to
this Agreement and any other such documents and instruments.

     Section 4.4.
ADVANCES. Administrative Agent shall have the right in
Administrative Agent's discretion (but shall not be required), subject to
availability hereunder on behalf of and without notice to Borrowers, to make and
use Receivables Loan A Advances, Inventory Loan A Advances, Receivables Loan B
Advances and Inventory Loan B Advances to pay Lender Parties for any amounts due
to Lender Parties pursuant to this Agreement or any other Loan Document, or to
cure any default hereunder, notwithstanding the expiration of any applicable
cure period (and Administrative Agent shall be deemed a Lender hereunder with
respect to any Loan Advance so made).

ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF
BORROWER AND RELATED PARTIES.

     Section 5.1.
REPRESENTATIONS AND WARRANTIES. To confirm Lender Parties’
understanding concerning the Borrowers and Related Parties and their businesses,
properties and obligations, and to induce Lender Parties to enter into this
Agreement and to extend credit hereunder, each Borrower and each Guarantor party
hereto hereby continuously, including at any time a Request for Advance is
provided to Administrative Agent, represents and warrants to Lender Parties
that, during the term of this Agreement and so long as any Indebtedness remains
outstanding:

          (a)
Each Related Party is a corporation or limited liability company, as applicable
duly incorporated or organized, validly existing and in good standing under the
laws of the state of its incorporation or organization, is duly qualified to do
business and is in good standing as a foreign corporation in all states where
such qualification is required, has all necessary company power and authority to
enter into this Agreement and each of the other Loan Documents to which it is a
party and to perform all of its obligations hereunder and thereunder.

          (b)
Each Related Party operates its business only under its legal name and the
assumed names listed on Schedule 5.1(b) of Schedule A attached hereto and except
as set forth on Schedule 5.1(b) of Schedule A, has not used any other assumed
name or prior legal name for the operation of its business activities for the
previous seven (7) years.

          (c)
Each Related Party and JV Partner has all requisite right and power and is duly
authorized and empowered to enter into, execute, deliver and perform this
Agreement and each other Loan Document to which it is a party and this Agreement
and each other Loan Document to which such Related Party is a party are the
legal, valid and binding obligations of such Related Party and are enforceable
against such Related Party in accordance with their terms. By its execution
hereof, Carbiz Parent specifically acknowledges and agrees that the execution
and delivery of this Agreement, and the consummation of the transactions
contemplated hereby, was unanimously approved by all of the members of its board
of directors on December 21, 2007.

54




          (d)
Each Validity Guarantor is competent to enter into its respective Validity
Guaranty and to perform all of such Validity Guarantor's obligations
thereunder.

          (e)
The execution, delivery and performance by each Related Party of this Agreement
and the other Loan Documents to which it is a party does not and shall not (i)
violate any provision of any Law, order, writ, judgment, injunction, decree,
determination or award presently in effect having applicability to such Person;
(ii) violate any provision of its charter documents, bylaws, limited liability
company agreement, operating agreement or partnership agreement, as applicable;
or (iii) result in a breach of or constitute a default under any indenture or
loan or credit agreement or any other agreement, lease or instrument to which
such Person is a party or by which it or any of its assets or properties may be
bound or affected; and no Related Party is in default of any such Law, order,
writ, judgment, injunction, decree, determination or award or any such
indenture, agreement, lease or instrument.

          (f)
No consent, approval, license, exemption of or filing or registration with,
giving of notice to, or other authorization of or by, any court, administrative
agency or other governmental authority is or shall be required in connection
with the execution, delivery or performance by any Related Party of this
Agreement or any other Loan Document for the valid consummation of the
transactions contemplated hereby or thereby.

          (g)
No event has occurred and is continuing which constitutes a Default or an Event
of Default. There is no action, suit, proceeding or investigation pending or, to
the knowledge of any Related Party, threatened against or affecting any Related
Party before or by any court, administrative agency, other governmental
authority or arbitrator of any kind that brings into question the validity of
the transactions contemplated hereby, or that could reasonably be expected to
result in any material adverse change in the businesses, assets, properties or
financial conditions of any Related Party. 

          (h)
No Related Party is in default in the payment of any taxes levied or assessed
against it or any of its assets or properties, except for taxes being contested
in good faith and by appropriate proceedings.

          (i)
Each Related Party has good and marketable title to its assets and properties as
reflected in its financial statements furnished to Administrative Agent.

          (j)
Each of the financial statements furnished to Administrative Agent by the
Related Parties was prepared in accordance with GAAP and fairly and accurately
reflects their financial condition as of the date thereof; and each Related
Party hereby certifies that there have been no material adverse changes in their
condition, financial or otherwise, since the date of such statements, and there
are no known contingent liabilities not provided for or disclosed in such
statements.

          (k)
Neither this Agreement, any Availability Report or any statement or document
referred to herein or delivered to any Lender Party by any Related Party
contains any untrue statement of a material fact or omits to state a material
fact necessary to make the statements made herein or therein not misleading.

55




          (l)
Each Related Party has good, indefeasible and merchantable title to and
ownership of its respective Collateral, free and clear of all Liens, except (i)
those of Administrative Agent and Additional Collateral Agent and (ii) Liens
permitted pursuant to Section 6.2(a) hereof.

          (m)
All books, records and documents relating to the Collateral are and shall be
genuine and in all respects what they purport to be; the original amount and the
unpaid balance of each Receivable shown on the books and records of each
Borrower and in the schedules represented as owing by each Account Debtor is and
shall be the correct amount actually owing or to be owing by such Account Debtor
at maturity; no Borrower or other Related Party has knowledge of any fact which
would impair the validity or collectibility of any of the Receivables; and the
payments shown to have been made by each Account Debtor on the books and records
of Borrowers shall reflect the amounts of and dates on which said payments were
actually made.

          (n)
Each place of business of each Related Party is only at the locations set forth
in Section 5.1(n) of Schedule A attached hereto. No Related Party shall begin or
do business (either directly or through subsidiaries) at other locations or
cease to do business at any of the above locations or at Borrowers’ principal
place of business without first notifying Administrative Agent.

          (o)
The present value of all benefits vested under all Plans of the Related Parties
or any Commonly Controlled Entity (based on the assumptions used to fund the
Plans) did not, as of the last annual valuation date (which in case of any Plan
was not earlier than December 31, 1982) exceed the value of the assets of the
Plans applicable to such vested benefits.

          (p)
The liability to which any Related Party or any Commonly Controlled Entity would
become subject under Sections 4063 or 4064 of ERISA if such Related Party or any
Commonly Controlled Entity were to withdraw from all Multi-employer Plans or if
such Multi-employer Plans were to be terminated as of the valuation date most
closely preceding the date hereof, is not in excess of One Thousand and No/100
Dollars ($1,000.00);

          (q)
No Related Party is engaged nor shall it engage, principally or as one of its
important activities, in a business of extending credit for the purpose of
“purchasing” or “carrying” any “margin stock” within the respective meanings of
each of the quoted terms under Regulations U or X of the Board of Governors of
the Federal Reserve System as now and from time to time hereafter in effect. No
part of the proceeds of any advances hereunder shall be used for “purchasing” or
“carrying” “margin stock” as so defined or for any purpose which violates, or
which would be inconsistent with, the provisions of the Regulations of such
Board of Governors. All of the outstanding securities of each Related Party have
been offered, issued, sold and delivered in compliance with, or are exempt from,
all United States and Canadian federal, state, provincial, and local laws and
rules and all regulations of United States and Canadian federal, state and
provincial regulatory bodies governing the offering, issuance, sale and delivery
of securities.

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          (r)
No Related Party is an “investment company” or a company “controlled” by an
“investment company,” within the meaning of the Investment Company Act of 1940,
as amended.

          (s)
Each of the Exhibits and Schedules to this Agreement contain true, complete and
correct information.

          (t)
To the best of Related Parties’ knowledge, the land and improvements owned or
leased by each Related Party for use in its business operations are free of
dangerous levels of contaminates, oils, asbestos, radon, PCB's, hazardous
substances or waste as defined by federal, state or local environmental laws,
regulations or administrative orders or other materials, the removal of which is
required or the maintenance of which is prohibited, regulated or penalized by
any federal, state or local governmental authority.

          (u)
Each Related Party is solvent, generally able to pay its obligations as they
become due, has sufficient capital to carry on its business and transactions and
all businesses and transactions in which it intends to engage, and the current
value of such Related Party’s assets, at fair saleable valuation, exceeds the
sum of its liabilities. No Related Party shall be rendered insolvent by the
execution and delivery of this Agreement and the other Loan Documents and the
consummation of the transactions contemplated hereby and thereby and the capital
remaining in each Related Party is not now and shall not foreseeably become
unreasonably small to permit such Related Party to carry on its business and
transactions and all businesses and transactions in which it is about to engage.
No Related Party intends to, nor does it reasonably believe it shall, incur
debts beyond its ability to repay the same as they mature.

          (v)
Administrative Agent and Additional Collateral Agent have perfected first
priority security interests, for the benefit of the Lender Parties, in all of
Related Parties’ right, title and interest in the Collateral, prior and superior
to any other Lien, except for Liens permitted under Section 6.2(a) hereof.

          (w)
There are no material actions, suits or proceedings pending, or threatened
against or affecting the assets of any Related Party or the consummation of the
transactions contemplated hereby, at law, or in equity, or before or by any
governmental authority or instrumentality or before any arbitrator of any kind.
No Related Party is subject to any judgment, order, writ, injunction or decree
of any court or governmental agency. There is not a reasonable likelihood of an
adverse determination of any pending proceeding which would, individually or in
the aggregate, have a material adverse effect on the business operations or
financial condition of any Related Party.

          (x)
Section 5.1(x) of Schedule A attached hereto correctly and completely sets forth
for each Related Party, as applicable, (i) its full legal name and state of
organization, (ii) its Federal Tax Identification Number; (iii) its chief
executive office, (iv) all prior names used in the last five (5) years
(including, without limitation, such Related Party’s predecessors in interest as
a result of a merger or consolidation) and (v) the charter or other similar
organizational identification number for such Related Party in its state or
province of organization.

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          (y)
No Related Party or Guarantor (i) is a person whose property or interest in
property is blocked or subject to blocking pursuant to Section 1 of Executive
Order 13224 of September 23, 2001 Blocking Property and Prohibiting Transactions
With Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg.
49079 (2001)), (ii) engages in any dealings or transactions prohibited by
Section 2 of such executive order, or is otherwise associated with any such
person in any manner violative of Section 2, or (iii) is a Person on the list of
Specially Designated Nationals and Blocked Persons or subject to the limitations
or prohibitions under any other U.S. Department of Treasury’s Office of Foreign
Assets Control regulation or executive order.

          (z)
Each Borrower and each Guarantor is in compliance with the Patriot Act. No part
of the proceeds of any of the Loans will be used, directly or indirectly, for
any payments to any governmental official or employee, political party, official
of a political party, candidate for political office, or anyone else acting in
an official capacity, in order to obtain, retain or direct business or obtain
any improper advantage, in violation of the United States Foreign Corrupt
Practices Act of 1977, as amended.

     Section 5.2.
REPRESENTATIONS AND WARRANTIES AS TO ELIGIBLE
RECEIVABLES. With respect to the Eligible Receivables, the
Borrowers hereby continuously, including at any time a Request for Advance is
provided to Administrative Agent, represent and warrant to Lender Parties that
during the term of this Agreement and so long as any of the Indebtedness remains
unpaid that (i) in determining which Receivables are “Eligible Receivables A”
and/or “Eligible Receivables B,” Administrative Agent may rely upon all
statements or representations made by Borrowers; (ii) those Receivables
designated as Eligible Receivables A and/or Eligible Receivables B satisfy all
of the requirements of “Eligible Receivables A” and/or “Eligible Receivables B”,
as applicable, set forth herein and (iii) the amounts of the face value shown on
any schedule of Receivables provided to Administrative Agent, and/or all
invoices or statements delivered to Administrative Agent with respect to any
Eligible Receivables, are actually and absolutely owing to the applicable
Borrower and are not contingent for any reason.

     Section 5.3.
REPRESENTATIONS AND WARRANTIES AS TO ELIGIBLE
INVENTORY. With respect to the Eligible Inventory, the
Borrowers hereby continuously, including any time a Request for Advance is
provided to Administrative Agent, represent and warrant to Lender Parties that
during the term of this Agreement and so long as any of the Indebtedness remains
unpaid: (i) in determining which Automobile Inventory are “Eligible Inventory A”
and/or “Eligible Inventory B” Administrative Agent may rely upon all statements
or representations made by Borrowers; and (ii) the Automobile Inventory
designated as Eligible Inventory A and/or Eligible Inventory B satisfy the
requirements of “Eligible Inventory A” and “Eligible Inventory B,” as applicable
set forth herein.

ARTICLE 6
COVENANTS AND OTHER AGREEMENTS

     Section 6.1.
AFFIRMATIVE COVENANTS. During the term of this Agreement and
so long as any of the Indebtedness remains unpaid and until Lender Parties’
obligations to make Loan Advances under this Agreement have terminated, each
Borrower and each Guarantor party hereto agrees and covenants, jointly and
severally, that they shall: 

58




          (a)
Pay or cause to be paid currently all of their expenses and Liabilities,
including all payments on their obligations whenever due, as well as all
payments of any and all taxes of whatever nature when due, including the payment
of all sales tax on consumer loans. This provision shall not apply to taxes or
expenses which are due, but which are challenged in good faith.

          (b)
Maintain, preserve, and protect the Collateral, including, but not limited to,
keeping all Consumer Loan Documents and other written records otherwise
evidencing the Collateral in a fire proof cabinet (subject to the delivery
requirements to the Custodians set forth herein and in the Custodian
Agreements). 

          (c)
Furnish to Administrative Agent prompt written notice as to the occurrence of
any Default or Event of Default hereunder.

          (d)
Furnish to Administrative Agent prompt notice of: (i) any development related to
the business, financial condition, properties or assets of any Related Party
that would have or has a materially adverse affect on such business, financial
condition, properties or assets, or ability to perform their obligations under
this Agreement and the other Loan Documents and (ii) any material and adverse
litigation or investigation to which any of them may be a party.

          (e)
Carry on and conduct their business in the same manner and in the same fields of
enterprise as they are presently engaged, and each Related Party shall preserve
its existence, licenses or qualifications as a domestic corporation, limited
liability company or limited partnership, as applicable, in the jurisdiction of
its organization and as a foreign organization in every jurisdiction in which
the character of its assets or properties or the nature of the business
transacted by it at any time makes qualification as a foreign organization
necessary, and to maintain all other material organizational rights and
franchises, provided, however, nothing herein shall be construed to prevent any
Related Party from closing any retail location in the good faith exercise of its
business judgment.

          (f)
Comply, and cause each affiliate to comply, with all statutes, governmental
rules and regulations applicable to them and their business (including, without
limitation, applicable usury and consumer Laws). 

          (g)
Permit and authorize Administrative Agent and allow Administrative Agent, (i)
to, without notifying any Related Party, make such inquiries or investigation
through business credit, other credit reporting services or other sources
concerning any Related Party as Administrative Agent, in its sole discretion,
shall deem appropriate (ii) to (upon prior written notice to the Borrower
Representative to the extent no Event of Default shall have occurred and be
continuing) inspect, audit and examine the Collateral at the premises of Related
Parties, and provide Administrative Agent and any of its officers, employees and
agents reasonable access to the properties, facilities, advisors and employees
(including officers) of each Related Party and each of its Subsidiaries and to
the Collateral, (iii) together with any of its officers, employees and agents,
to inspect, audit and make extracts from the books and records of any Related
Party and its Subsidiaries, and (iv) together with its officers, employees and
agents, to inspect, review, evaluate and make test verifications and counts of
the Receivables, Automobile Inventory and other Collateral of any Related
Party.

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          (h)
Cause all debt due from a Borrower to any of such Borrower’s direct or indirect
shareholders or equity interest holders or any other Person to be subordinated
to the Indebtedness pursuant to a subordination agreement in form and substance
satisfactory to Administrative Agent.

          (i)
Provide Administrative Agent sixty (60) days prior written notice of any
Borrower initiating any activities in any state other than the then-Approved
States. Lender shall not provide financing for any Receivable generated in a
state other than the Approved States until Administrative Agent’s counsel has
reviewed applicable lending and homestead laws in such new state and
Administrative Agent has approved activities in such new state by adding such
new state to the Approved State list.

          (j)
Cause each Consumer Loan Document to have only one original counterpart.

          (k)
Purchase or make consumer loans evidenced by Consumer Loan Documents which are
solely on forms that are in compliance with applicable state and federal
Laws.

          (l)
Deliver to the applicable Custodian (or Administrative Agent or Additional
Collateral Agent) the original Consumer Loan Documents and all other
documentation required by Section 3.4 hereof to be governed by the terms of the
Custodian Agreements.

          (m)
[reserved]

          (n)
Maintain at all times the loan portfolio requirements set forth in Section
1.1(a) and 1.1(b) of Schedule A attached hereto.

          (o)
Execute and deliver to Administrative Agent such assignment documents in
addition to the stamp required in Section 3.6 hereof if reasonably requested by
Administrative Agent from time to time in connection with Administrative Agent’s
ability to transfer ownership of the Consumer Loan Documents to Administrative
Agent or its assigns, and all collateral securing the Consumer Loan Documents
after and during the occurrence of an Event of Default.

          (p)
Provide Administrative Agent with evidence of Related Parties’ insurance
(including, without limitation, property damage and liability insurance) issued
by a reputable carrier, as reasonably required by Administrative Agent (which
insurance shall be in such amounts and cover such risks as is customarily
carried by businesses similarly situated). This insurance shall reflect
Administrative Agent, Additional Collateral Agent, and the Lenders, as the loss
payee or additional insured, as required by Administrative Agent, and contain a
provision that Administrative Agent shall be notified by the carrier thirty (30)
days prior to the termination or cancellation of any such insurance.

          (q)
Maintain at all times as executive officers and principals of the Borrowers,
each of the Validity Guarantors.

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          (r)
At its own cost and expense, cause (and cause each Subsidiary of such Person) to
be promptly and duly taken, executed, acknowledged and delivered all such
further acts, documents and assurances as may from time to time be necessary or
as Administrative Agent or the Required Lenders may from time to time reasonably
request in order to carry out the intent and purposes of the Loan Documents and
the transactions contemplated thereby, including all such actions to establish,
create, preserve, protect and perfect a first priority Lien (subject only to
Liens permitted under Section 6.2(a) hereof) in favor of Administrative Agent
and Additional Collateral Agent, for the benefit of the Lender Parties on the
assets of such Person and its Subsidiaries (including assets acquired after the
date hereof).

          (s)
Concurrently with the acquisition by such Person or any of its Subsidiaries
following the date hereof of any owned real estate, such Person will (or will
cause its Subsidiaries to), within thirty (30) days following written request by
Administrative Agent, deliver or cause to be delivered to Administrative Agent,
with respect to such real estate, (i) a mortgage or deed of trust, as
applicable, in form and substance reasonably satisfactory to Administrative
Agent, executed by the title holder thereof, (ii) an ALTA lender's title
insurance policy issued by a title insurer reasonably satisfactory to
Administrative Agent in form and substance and in amounts reasonably
satisfactory to Administrative Agent insuring Administrative Agent's first
priority Lien on such real estate, free and clear of all defects and
encumbrances except Liens permitted under Section 6.2(a) hereof; (iii) a current
ALTA survey, certified to Administrative Agent by a licensed surveyor, in form
and substance reasonably satisfactory to Administrative Agent, and (iv) a
certificate, in form and substance acceptable to Administrative Agent, to
Administrative Agent from a national certification agency acceptable to
Administrative Agent, certifying that such real estate is not located in a
special flood hazard area; and in the case of any acquisition of real estate
that consists of a leasehold estate, such estoppel letters, consents and waivers
from the landlords and non-disturbance agreements from any holders of mortgages
or deeds of trust on such real estate as may be reasonably requested by
Administrative Agent, all of which shall be in form and substance reasonably
satisfactory to Administrative Agent. 

          (t)
The End of Month Delinquency set forth in Section 12 of the Availability Report
shall be delivered to Administrative Agent by Borrowers hereunder as determined
pursuant to the Aging Procedures and Eligible Receivable Tests.

          (u)
Borrowers shall cause each item of Automobile Inventory financed by the Lenders
hereunder, as well as each item of Automobile Inventory acquired and/or
repossessed as the result of the exercise of remedies by Borrowers against
Account Debtors to be equipped with a SID/GPS Device within ten (10) Business
Days of Borrowers’ acquisition or repossession of such Automobile Inventory.

          (v)
In accordance with the terms of the Texas Asset Purchase Agreement, Houston Auto
shall use its best efforts to (i) cause the OCCC to (A) issue a new Motor
Vehicle Sales Finance License under Chapter 348 of the Texas Finance Code to
Houston Auto or (B) consent to the outright transfer of the OCCC License from
AGM, LLC to Houston Auto and (ii) cause the Texas department of transportation
to issue a dealership license to Houston Auto. Houston Auto shall endeavor to
have such license issuance or transfer approved on or before June 24, 2008.
Houston Auto covenants and agrees with Administrative Agent, Additional 

61




Collateral Agent and the Lenders that Houston Auto shall,
within five (5) Business Days after the date hereof, submit a properly completed
application to the OCCC for (i) the issuance of a Motor Vehicle Sales Finance
License under Chapter 348 of the Texas Finance Code, (ii) the transfer of the
OCCC License from AGM, LLC to Houston Auto pursuant to the Texas Asset Purchase
Agreement and (iii) approval of the Agreement to Operate. Houston Auto shall
provide Administrative Agent with regular updates as to the status and progress
of such licensure efforts, as well as copies of all correspondence received from
the OCCC, the Texas department of transportation or other applicable
governmental authorities in respect of such efforts, promptly after receipt of
same. The failure of Houston Auto to receive a new Motor Vehicle Sales Finance
License, approval of the transfer of the OCCC License from AGM, a dealership
license or approval of the Agreement to Operate shall not affect the obligations
of the Borrowers under this Agreement, provided, so long as Houston Auto
uses its best efforts to obtain such required licenses and approvals, the
failure to obtain same shall not in and of itself constitute an Event of Default
hereunder.

          (w)
On or before January 10, 2008, deliver to Administrative Agent, for the benefit
of the Lender Parties, either (i) one or more Account Control Agreements by and
between Administrative Agent, Branch Banking & Trust and the applicable
Borrowers covering each deposit account of the Borrowers maintained at Branch
Banking & Trust, which Account Control Agreement(s) shall be in form and
substance reasonably satisfactory to Administrative Agent or (ii) evidence of
the closure of any of the Borrowers’ deposit accounts at Branch Banking &
Trust not covered by an Account Control Agreement and the transfer of all funds
on deposit therein to one or more deposit accounts subject to an Account Control
Agreement, which evidence shall be in form and substance reasonably acceptable
to Administrative Agent.

          (x)
On or before January 10, 2008, deliver to Administrative Agent, for the benefit
of the Lender Parties, a fully executed Texas Legacy Custodial Agreement.

          (y)
On or before January 10, 2008, deliver to Administrative Agent, for the benefit
of the Lender Parties, a fully executed joinder agreement to the Existing
Custodial Agreement, pursuant to which Houston Auto shall be added as a party to
the Existing Custodial Agreement as a “Borrower” thereunder, and which joinder
agreement shall be in form and substance reasonably satisfactory to
Administrative Agent.

          (z)
On or before December 27, 2008, deliver to Administrative Agent, original stock
certificate no. 1, representing 1,500 shares of Houston Auto, together with an
Assignment Separate from Certificate duly executed in blank by Carbiz USA with
respect thereto, which stock certificate and assignment separate from
certificate shall be in form and substance reasonably satisfactory to
Administrative Agent.

          (aa)
On or before January 10, 2008, deliver to Administrative Agent, for the benefit
of the Lender Parties, evidence of the Borrowers’ insurance coverage, of such
types, coverages and amounts as may be reasonably satisfactory to Administrative
Agent, and cause the Administrative Agent, Additional Collateral Agent and the
Lenders to be named as an additional insured, assignee and loss payee, as
applicable, on each such insurance policy, in each case pursuant to endorsements
in form and substance reasonably acceptable to the Administrative Agent.

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          (bb)
On or before January 10, 2008, deliver to Administrative Agent, for the benefit
of the Lender Parties, a legal opinion of Harris and Harris LLP (or other
Canadian counsel reasonably satisfactory to Administrative Agent) with respect
to the Loan Documents executed and delivered on or about the Closing Date by
Carbiz Parent, which legal opinion shall be in form and substance reasonably
satisfactory to Administrative Agent.

          (cc)
On or before January 10, 2008, deliver to Administrative Agent, a unanimous
written consent of the board of directors of Carbiz Parent approving the
execution and delivery of this Agreement and the other Loan Documents by Carbiz
Parent, and the transactions contemplated hereby.

          (dd)
On or before January 4, 2008, deliver to Administrative Agent, for the benefit
of the Lender Parties, a legal opinion of Shumaker, Loop & Kendrick, LLP
with respect to the Loan Documents executed and delivered on or about the
Closing Date by the Credit Parties, which legal opinion shall be in form and
substance reasonably satisfactory to Administrative Agent.

          (ee)
On or before January 4, 2008, deliver to Administrative Agent file stamped
copies of amendments to the articles of incorporation or formation, as
applicable, of each of Carbiz USA, Carbiz Auto, Carbiz LLC and Carbiz AQ, which
amendments shall provide for the election of an Outside Director and certain
restrictions on action without the approval of an Outside Director, as
contemplated by Section 6.8 hereof, which amendments shall be in form and
substance satisfactory to Administrative Agent.

          (ff)
On or before January 10, 2008, deliver to Administrative Agent an Ontario
certificate of good standing with respect to Carbiz Parent.

          (gg)
On or before January 10, 2008, deliver to Administrative Agent fully executed
Secretary’s Certificates of the Borrowers, revised in comparison to the
Secretary’s Certificates delivered as of the date hereof to conform the identity
of the incumbent officers signatory thereto with the authorized officers
identified in the resolutions and written consents of the Borrower’s boards of
directors attached thereto.

     As an accommodation to the
Borrowers, Administrative Agent and Initial Lender have agreed to make the
initial Loan Advances hereunder notwithstanding that certain conditions to
closing have not been satisfied. In consideration of such accommodation, the
Borrowers have agreed to the post-closing delivery covenants set forth in
clauses (w) through (gg) above, and acknowledge and agree that their failure to
comply with such covenants within the time periods provided therein (as such
time periods may be extended by Administrative Agent in its sole discretion)
shall constitute and immediate and material Event of Default hereunder.
Notwithstanding anything to the contrary contained herein, including, without
limitation, the terms of Article IV hereof, the Lenders shall not be obligated
to fund any Loan B Advances to the extent the aggregate outstanding principal
balance of Loan B Advances (excluding the initial advance of the Term Loan B
contemplated hereby) exceeds $350,000 unless and until the Borrowers shall have
satisfied the post-closing delivery covenants described in subsections (bb) and
(dd) above. 

63




     Section 6.2.
NEGATIVE COVENANTS. During the term of this Agreement and
until the Indebtedness secured hereby has been paid in full and all of Lenders’
obligations to make advances under this Agreement have terminated, each Borrower
and each Guarantor party hereto jointly and severally covenants and agrees that
they shall not, without Administrative Agent’s and Required Lenders' prior
written consent, do any of the following:

          (a)
Incur or permit to exist any Lien with respect to the Collateral now owned or
hereafter acquired by any Borrower, except (i) Liens in favor of Administrative
Agent and Additional Collateral Agent, for the benefit of the Lender Parties,
(ii) purchase money security interests granted by the Borrowers in connection
with specific capital expenditures permitted pursuant to Section 6.2(f)(iv)
hereof, provided, however, that the amount of the purchase money security
interest shall not exceed one hundred percent (100%) of the purchase price of
the asset being acquired including finance charges and no asset of the Related
Parties other than the acquired asset is used to secure the purchase price
thereof, (iii) Liens imposed by law for taxes not yet due or which are being
contested in good faith by appropriate proceedings and with respect to which
adequate reserves are being maintained in accordance with GAAP, (iv) statutory
Liens of landlords and Liens of carriers, warehousemen, mechanics, materialmen
and other Liens imposed by law created in the ordinary course of business for
amounts not yet due or which are being contested in good faith by appropriate
proceedings and with respect to which adequate reserves are being maintained in
accordance with GAAP, (v) pledges and deposits made in the ordinary course of
business in compliance with workers' compensation, unemployment insurance and
other social security laws or regulations, (vi) deposits to secure the
performance of bids, trade contracts, leases, statutory obligations, surety and
appeal bonds, performance bonds and other obligations of a like nature, in each
case in the ordinary course of business, (vii) easements, zoning restrictions,
rights-of-way and similar encumbrances, including reversionary clauses, on real
property imposed by law or arising in the ordinary course of business that do
not secure any monetary obligations and do not materially detract from the value
of the affected property or materially interfere with the ordinary conduct of
business of the Borrowers and (viii) Liens consisting of deposits of cash
collateral to secure Liabilities permitted by clause (vi) of Section 6.2(f)
hereof, provided that the aggregate amount of cash collateral securing such
Liabilities does not exceed 100% of the undrawn face amount of all letters of
credit constituting such Liabilities and outstanding at any time.

          (b)
Delegate, transfer or assign any of their obligations or liabilities under this
Agreement or any other Loan Document, or any part thereof, to any other
Person.

          (c)
Be a party to or participate in: (i) any merger or consolidation; (ii) any
purchase or other acquisition of all or substantially all of the assets or
properties or shares of any class of, or any partnership or joint venture
interest in, any other Person (other than pursuant to the Asset Purchase
Agreements); (iii) any sale, transfer, conveyance or lease of all or
substantially all of any Related Party’s assets or properties; or (iv) any sale
or assignment with or without recourse of any Receivables. 

          (d)
Cause or take any of the following actions with respect to any Related Party:
(i) redeem, retire, purchase or otherwise acquire, directly or indirectly, any
Related Party’s outstanding securities; or (ii) purchase or acquire, directly or
indirectly, any Related 

64




Party’s shares of capital stock, evidences of indebtedness or
other securities of any person or entity.

          (e)
Amend, supplement or otherwise modify any Asset Purchase Agreement, any
agreement, document or instrument entered into in connection therewith or any
Related Party’s charter documents or bylaws, limited liability company
agreement, operating agreement or partnership agreement, as applicable, (i)
which would, in the case of an Asset Purchase Agreement and any agreement,
document or instrument entered into in connection therewith, be a material
change to any such agreement, document or instrument or be in any way adverse to
any Related Party (including, without limitation, any increase to the purchase
price or other payment obligations thereunder), (ii) have a material adverse
affect on the condition and operations, prospects or financial condition of any
Related Party, (iii) in a manner adverse to the Lender Parties or (iii) without
providing copies of any such amendment, supplement or modification to
Administrative Agent substantially contemporaneously with the adoption
thereof.

          (f)
Incur, assume or suffer to exist any Liabilities (including any contingent
liabilities) or otherwise become liable upon the obligations of any Person by
assumption, endorsement or guaranty thereof or otherwise other than (i) the
Indebtedness, (ii) accounts payable incurred in the ordinary course of business,
(iii) the Trafalgar Subordinated Debt, the Management Subordinated Debt and any
other Subordinated Debt approved by Administrative in writing in its sole
discretion, (iv) purchase money indebtedness in an aggregate outstanding amount
not to exceed $50,000 at any time relating to purchases by Borrowers of office
equipment, shop equipment and similar items, (v) Liabilities in respect of
letters of credit issued for the account of a Related Party in the ordinary
course of business, the aggregate undrawn face amount of which shall not exceed
$100,000 for all such letters of credit, (vi) Liabilities to GVC Financial
Services, LLC, in an original principal amount not to exceed $875,000 in the
aggregate (with $473,958.33 payable on January 8, 2008 and the balance payable
in eleven (11) equal installments of $36,458.33 beginning February 8, 2008 and
continuing on the eighth date of each calendar month thereafter), Liabilities in
respect of the JV Purchase Note in an original principal amount not to exceed
$200,000 or (viii) other Liabilities consented to in writing by Administrative
Agent and Required Lenders.

          (g)
Directly or indirectly make loans to, invest in, extend credit to, or guaranty
the debt of any Person, other than extensions of credit made by Borrowers in the
ordinary course of Borrowers’ business.

          (h)
Amend, modify, or otherwise change in any respect any material agreement,
instrument, or arrangement (written or oral) by which such Related Party, or any
of its assets, are bound.

          (i)
[Reserved].

          (j)
Change its name, convert from one type of entity to another type, change its
principal place of business, or make any material changes in the nature of its
business as carried on as of the date hereof; provided, however, a
Related Party may change its name as long as (i) such Related Party gives Lender
thirty (30) days prior written notice thereof, and (ii) such 

65




Related Party executes and delivers, prior to any such name
change, any and all documents and agreements requested by Administrative Agent
to confirm the continuation and preservation of all Liens granted to
Administrative Agent and Additional Collateral Agent, for the benefit of the
Lender Parties, hereunder.

          (k)
(i) Make any expenditure or commitment or incur any obligation or enter into or
engage in any transaction except in the ordinary course of business (other than
the consummation of the acquisitions under the Asset Purchase Agreements), (ii)
engage directly or indirectly in any business or conduct any operations except
in connection with or incidental to its present business and operations, (iii)
make any acquisitions of or capital contributions to or other investments in any
Person (other than the consummation of the acquisitions under the Asset Purchase
Agreements), (iv) create or acquire any Subsidiary or (v) make any acquisitions
of material properties or assets of another Person unless expressly allowed
hereunder (including, without limitation, the acquisitions under the Asset
Purchase Agreements) or otherwise consented to in writing by Administrative
Agent.

          (l)
Except for transactions that are disclosed to Administrative Agent in advance of
being entered into and which contain terms that are no less favorable to the
applicable Borrower or Related Party, as the case may be, than those which might
be obtained from a third party not an Affiliate of any Related Party, directly
or indirectly, enter into or permit to exist any transaction (including the
purchase, sale, lease or exchange of any property or the rendering of any
service) with any Affiliate of a Related Party.

          (m)
Change its fiscal year, without the prior written consent of Administrative
Agent.

          (n)
Directly or indirectly (a) declare, pay, make or set aside any amount for
payment in respect of any Subordinated Debt, except for regularly scheduled
payments of interest (but no voluntary prepayments) in respect of such
Subordinated Debt made in full compliance with the applicable Subordination
Agreement; or (b) amend or otherwise modify the terms of any Subordinated Debt
if the effect of such amendment or modification is to (i) increase the interest
rate or fees on, or change the manner or timing of payment of, such Subordinated
Debt; (ii) change the dates upon which payments of principal or interest are due
on, or the principal amount of such Subordinated Debt; (iii) change any event of
default or add or make more restrictive any covenant with respect to such
Subordinated Debt; (iv) change the prepayment provisions of such Subordinated
Debt or any of the defined terms related thereto; (v) change the subordination
provisions thereof (or the subordination terms of any guaranty thereof); or (vi)
change or amend any other term if such change or amendment would materially
increase the obligations of the obligor or confer additional material rights on
any holder of such Subordinated Debt in a manner adverse to Borrowers, any other
Related Party or any Lender Party.

          (o)
Will not, and will not permit any Subsidiary of such Person to, directly or
indirectly, declare, order, pay, make or set apart any sum for any Distribution;
provided that the foregoing shall not restrict or prohibit any Borrower
or Subsidiary of a Borrower from making dividends or distributions, directly or
indirectly, to a Borrower and shall not restrict or prohibit 

66




Distributions, directly or indirectly, to Carbiz Parent at such
times and in such amounts as are necessary to permit:

          (i)
purchases of shares of (or options to purchase shares of) equity interests in
Carbiz Parent or options therefor from employees of any Related Party upon their
death, termination of their employment or retirement, so long as (x) before and
after giving effect to any such dividend or distribution for such purpose, (A)
no Event of Default shall have occurred and be continuing, (B) Borrowers and
Guarantors are in compliance on a pro forma basis with the financial covenants
set forth in Section 6.9 (as computed for the most recently ended month for
which information is available) and is in compliance with all other terms and
conditions of this Agreement, (C) (x) Availability on Eligible Receivables A
minus the then outstanding principal balance of the Receivables Loan A is
equal to or greater than $150,000 and (D) (x) Availability on Eligible
Receivables B minus the then outstanding principal balance of the Receivables
Loan B is equal to or greater than $150,000 and (y) such purchases or payments
after the date hereof do not exceed $50,000 in any fiscal year and do not exceed
$150,000 in the aggregate from and after March 23, 2007;

          (ii)
so long as no Event of Default shall have occurred and be continuing both before
and after giving effect to any such Distribution, (a) payment of taxes by Carbiz
Parent and (b) payment of administrative expenses (including without limitation
the payment of reasonable director fees) payable by Carbiz Parent in an
aggregate amount, with respect to all such administrative expenses, not to
exceed $150,000 in any fiscal year; or

          (iii)
reimbursement of any equity contributions made by Carbiz Parent to Carbiz USA or
any of its Subsidiaries, in an amount not to exceed $325,000, the proceeds of
which were used by one or more Borrowers to satisfy obligations owing to Persons
in respect of vehicles “sold but not bought” by the sellers under the Calcott
Asset Purchase Agreement and acquired by Carbiz AQ pursuant to the Calcott Asset
Purchase Agreement and obligations in respect of licensing and related expenses.


          (p)
Establish or maintain any deposit account, securities account or other similar
account with any financial institution unless such Related Person and
Administrative Agent shall have entered into an Account Control Agreement with
such financial institution; provided, that the cash collateral described in
clause (viii) of Section 6.2(a) hereof may be maintained in a deposit account at
the financial institution issuing the applicable letter(s) of credit without
such deposit account being covered by an Account Control Agreement so long as
the amount of funds on deposit at any one time in such deposit account does not
exceed the maximum amount of cash collateral permitted to be deposited into such
deposit account at any one time pursuant to clause (viii) of Section 6.2(a)
hereof.

     Notwithstanding the foregoing
covenants and restrictions, the Borrowers shall be permitted to consummate the
Carbiz JV Purchase on or prior to January 31, 2008, provided that the Borrowers
shall deliver to Administrative Agent, within five (5) Business Days of the
consummation of such Carbiz JV Purchase, (i) a fully executed pledge supplement
and 

67




acknowledgment by Carbiz LLC to that certain Pledge Agreement
dated as of March 23, 2007 between Carbiz USA and Administrative Agent with
respect to the JV Shares and (ii) the original membership interest certificate
evidencing such JV Shares together with an assignment separate from certificate
duly executed in blank with respect thereto, all of the foregoing in form and
substance reasonably satisfactory to Administrative Agent. 

     Section 6.3. REPORTING REQUIREMENTS
  AND ACCOUNTING PRACTICES. During the term of this Agreement
  and so long as any of the Indebtedness remains unpaid, each Related Party agrees
  and covenants, jointly and severally, to maintain (a) a modern system of accounting
  in accordance with GAAP or other systems of accounting acceptable to Administrative
  Agent and (b) standard operating procedures applicable to all of their locations
  with respect to the handling and disposition of cash receipts and other proceeds
  of Collateral on a daily basis, including the depositing thereof, aging of account
  receivables, record keeping and such other matters as Administrative Agent may
  reasonably request. For the purpose of determining compliance with the covenants
  and representations in the Loan Documents, Administrative Agent shall have the
  right to recast any financial statement or report presented to Administrative
  Agent by or on behalf of any Related Party to comply with GAAP. During the term
  of this Agreement and so long as any of the Indebtedness remains unpaid or any
  commitment to lend hereunder is in effect, Borrowers shall keep a set of all
  material records (including, without limitation, all files, books and records
  with respect to all Receivables and Automobile Inventory) at a location with
  respect to which Administrative Agent shall have received a collateral access
  agreement in form and substance satisfactory to Administrative Agent.

     Section 6.4. ACCOUNT
DEBTORS ADDRESSES. Borrowers agree to furnish to Administrative Agent
from time to time, promptly upon request, a list of all Account Debtors' names
and their most current addresses. Borrowers agree that Administrative Agent may
from time to time, consistent with standard or generally accepted auditing
practices, verify the validity, amount and any other matters relating to the
Receivables by means of mail, telephone or otherwise, in the name of a Borrower
and upon the occurrence of an Event of Default in the name of Administrative
Agent or such other name as Administrative Agent may choose.

     Section 6.5.
FINANCIAL REPORTS. Related Parties shall furnish to the
Administrative Agent and its duly authorized representatives such information
respecting the business and financial condition of the Related Parties as the
Administrative Agent may reasonably request, and without any request, the
following financial statements and reports, in a form satisfactory to
Administrative Agent:

          (a) As
soon as available, and in any event within:

          (i)
twenty (20) calendar days of the close of each month, for the period ending as
of the last day of the immediately preceding calendar month: (1) a Loss to
Liquidation Report in the form and substance of Exhibit G attached
hereto, (2) a Compliance Certificate in the form and substance of Exhibit
E attached hereto; (3) a Static Pool Report in the form and substance of
Exhibit H attached hereto; and (4) a report of all sales tax payments
made by Borrowers for all consumer loans originating 

68




in such month in form and substance
reasonably acceptable to Administrative Agent; and

          (ii)
within five (5) calendar days of the close of each month for the period ending
as of the last day of the immediately preceding calendar month: (i) a Schedule
of Receivables and Assignment in form and substance of Exhibit D attached
hereto, (ii) an Availability Report in the form and substance of Exhibit
C attached hereto and (iii) a Statement of Accounts Receivable showing the
detailed aging of each Receivable, specifying the amount of any Receivable Loans
arising as a result of the sale of any Automobile Inventory separated by Lot
Code, and otherwise in a form acceptable to Administrative Agent in its sole
discretion.

          (b)
On the second (2nd) Business Day of each calendar week, for the
period ending as of the last Business Day of the immediately preceding calendar
week, (i) a Schedule of Receivables and Assignment in form and substance of
Exhibit D attached hereto, (ii) an Availability Report in the form and
substance of Exhibit C attached hereto and (iii) a Statement of Accounts
Receivable showing the detailed aging of each Receivable, specifying the amount
of any Receivable Loans arising as a result of the sale of any Automobile
Inventory separated by Lot Code, and otherwise in a form acceptable to
Administrative Agent in its sole discretion.

          (c)
As soon as available, and in any event within twenty (20) calendar days after
the close of each month a copy of the consolidated and consolidating balance
sheet of Carbiz Parent and its consolidated Subsidiaries as of the close of the
preceding month, and the consolidated and consolidating statements of income,
retained earnings and cash flows of Carbiz Parent and its consolidating
Subsidiaries for the preceding month, each in reasonable detail showing in
comparative form the figures for the corresponding date and period in the
previous fiscal year (to the extent available to compare), prepared in
accordance with GAAP, consistently applied, provided that Administrative Agent
hereby agrees to hold such financial statements as confidential in accordance
with such Administrative Agent's customary procedures for handling confidential
information, except that disclosure of such information may be made (i) to its
respective agents, employees, Subsidiaries, Affiliates, attorneys, auditors,
professional consultants, rating agencies, insurance industry associations and
portfolio management services, (ii) to prospective transferees or purchasers of
any interest in the Loans or commitments to lend hereunder in accordance with
applicable securities laws, (iii) as required by law, subpoena, judicial order
or similar order and in connection with any litigation, (iv) as may be required
in connection with the examination, audit or similar investigation of a Related
Party and (v) to a Person that is a trustee, investment advisor, collateral
manager, servicer, noteholder or secured party in a securitization in connection
with the administration, servicing and reporting on the assets serving as
collateral for such securitization.

          (d)
As soon as available, and in any event within ninety (90) calendar days after
the close of each fiscal year of Carbiz Parent and its consolidating
Subsidiaries, a copy of the consolidated and consolidating balance sheets of
Carbiz Parent and its consolidating Subsidiaries as of the close of such period
and the consolidated and consolidating statements of income, retained earnings
and cash flows of Carbiz Parent and its consolidating Subsidiaries for such
period, and all supporting schedules and footnotes thereto, all in detail
reasonably satisfactory to Administrative Agent, prepared in accordance with
GAAP, consistently applied.

69




All such annual financial statements shall be audited by
Christopher, Smith, Leonard, Bristow & Stanell, P.A. or such other firm of
independent public accountants of recognized standing, selected by Carbiz Parent
and reasonably satisfactory to the Administrative Agent, in accordance with
GAAP, and shall be accompanied by the written statement of the accountants who
prepared the audited financial statements, certifying whether such accountants
have obtained knowledge of any Event of Default under the Loan Documents;

          (e)
As soon as available, and in any event within forty-five (45) calendar days
prior to the close of each annual accounting period of the Borrowers, pro forma
balance sheets and statements of income, retained earnings and cash flows of
Carbiz Parent and its consolidating Subsidiaries for the next annual accounting
period (with such detail amongst the individual Borrowers as Administrative
Agent may reasonably request);

          (f)
As soon as available, and in any event within forty-five (45) calendar days
after the end of each calendar year, financial statements of each Validity
Guarantor as of the close of such period, such personal financial statement
shall be in form and detail satisfactory to Administrative Agent;

          (g)
Promptly after receipt thereof, any additional written reports, management
letters or other detailed information contained in writing concerning
significant aspects of any Related Party’s or any of their subsidiary’s
operations or concerning significant aspects of any Related Party’s or any of
their subsidiary’s financial affairs, given to it by its independent public
accountants;

          (h)
Promptly after receipt thereof and in no event more than five (5) Business Days
thereafter, a copy of each audit or other report made by any state or federal
agency of the books and records or assets of any Related Party of their
compliance or non-compliance with applicable laws relating to the underwriting,
origination, servicing and/or collection of loans;

          (i)
Promptly (but never more than five (5) Business Days) after knowledge thereof
shall have come to the attention of any responsible officer of any Borrower,
written notice of (i) any threatened or pending litigation or governmental
proceeding or labor controversy against any Related Party which, if adversely
determined, would have a material adverse effect on the business, operations or
financial condition of any Related Party, or (ii) the occurrence of any Default
or Event of Default hereunder;

          (j)
As soon as available, a copy of all federal and state tax returns filed by each
Related Party during the current fiscal year and each fiscal year hereafter;
and

          (k)
Within ten (10) calendar days of a request therefor from the Administrative
Agent, such other information (whether financial or otherwise) regarding any
Related Party as the Administrative Agent shall reasonably require.

Each of the financial statements furnished to the
Administrative Agent pursuant to subsections (c) and (d) of this Section shall
be accompanied by a written certificate signed by the Chief Financial Officer or
other authorized representative of the Borrowers, as the case may be, to the
effect that to the best of the Chief Financial Officer’s or applicable
authorized representative’s knowledge and belief no Default or Event of Default
has occurred during the period covered by 

70




such statements or, if any such Default or Event of Default has
occurred during such period, setting forth a description of such Default or
Event of Default and specifying the action, if any, taken to remedy the
same.

     Section 6.6. NOTICE
OF CHANGES. Borrowers shall promptly notify Administrative Agent in
writing of any change of their officers, directors or key employees; change of
location of its chief executive office; any acquisition, disposition or
reorganization of any subsidiary, affiliate or parent of any Related Party;
change of any Related Party’s name; death or withdrawal of any partner (if a
Borrower is a partnership); any sale or purchase out of the regular course of
any Related Party’s business; litigation of which any Related Party is a party
or governmental investigations of which any Related Party is a target; and any
other material change in the business or financial affairs of any Related
Party.

     Section 6.7. NOTICE
OF COMMERCIAL TORT CLAIMS. Borrowers shall promptly notify
Administrative Agent in writing of any commercial tort claims Borrowers may
bring against any Person, including the name and address of each defendant, a
summary of the facts, an estimate of the Borrowers’ damages, copies of any
complaint or demand letter submitted by the Borrowers, and such other
information as the Administrative Agent may reasonably request.

     Section 6.8. OUTSIDE
DIRECTOR

          (a)
Without the authorization and direction of its Outside Director (as defined
below), no Borrower shall: institute proceedings for itself to be adjudicated
bankrupt or insolvent; consent to the institution of a bankruptcy or insolvency
proceeding against it; file a petition seeking, or consent to, reorganization or
relief under any applicable federal or state law relating to bankruptcy; consent
to the appointment of a receiver, liquidator, assignee, trustee, sequestration
(or other similar official) for itself or a substantial part of its property;
make any assignment for the benefit of creditors; or admit in writing its
inability to pay its debts generally as they become due; or admit in writing its
ability to pay its debts generally as they become due.

          (b)
Without the affirmative vote of its Outside Director, no Borrower shall: for
itself (i) liquidate or dissolve, in whole or in part; or (ii) amend any
provisions of its certificate/articles of incorporation or by-laws containing
provisions similar to those contained in this Section 6.8.

          (c)
Each Borrower shall, prior to or within ten (10) Business days of the Closing
Date, promptly elect and at all times maintain at least one independent director
(an “Outside Director”), who shall be reasonably satisfactory to the
Administrative Agent and shall not have been at the time of such individual’s
appointment as Outside Director, and may not have been at any time during the
preceding five (5) years, a shareholder of, or an officer, director or employee
of any Borrower or its shareholders, Subsidiaries or Related Parties. Borrower
shall provide director’s and officer’s insurance coverage with respect to the
Outside Director, which coverage shall be reasonably satisfactory to the Outside
Directors. 

     Section 6.9.
FINANCIAL COVENANTS. During the term of this Agreement and so
long as any Indebtedness remains unpaid and until Lender Parties’ obligations to
make Loan 

71




Advances under this Agreement have terminated, each Borrower
and each Guarantor each agree and covenant, respectively, that they shall
not:

          (a)
Permit the Leverage Ratio determined at the end of any calendar month to be more
than the threshold levels determined in accordance with the last paragraph of
this Section 6.9.

          (b)
Permit the Interest Coverage Ratio for Carbiz Parent and its consolidated
Subsidiaries determined at the end of any calendar month set forth below to be
less than the minimum ratio set forth below opposite such date:

	 	  	Minimum Interest 
	 	Date 	Coverage Ratio 
	 	  	  
	 	February 29, 2008 	2.73 
	 	March 31, 2008 	2.59 
	 	April 30, 2008 	2.43 
	 	May 31, 2008 	2.30 
	 	June 30, 2008 	2.19 
	 	July 31, 2008 	2.78 
	 	August 31, 2008 	2.67 
	 	September 30, 2008 	2.57 
	 	October 31, 2008 	2.50 
	 	November 30, 2008 	2.43 
	 	December 31, 2008 	2.33 
	 	January 31, 2009 	2.33 
	 	February 28, 2009 	2.31 
	 	March 31, 2009 	2.28 
	 	April 30, 2009 	2.25 
	 	May 31, 2009 	2.23 
	 	June 30, 2009 	2.20 
	 	July 31, 2009 	2.23 
	 	August 31, 2009 	2.20 
	 	September 30, 2009 	2.20 
	 	October 31, 2009 	2.16 
	 	November 30, 2009 	2.16 
	 	December 31, 2009 	1.95 
	 	January 31, 2010 	2.08 
	 	February 28, 2010 and the
      last 	  
	 	day of each calendar month 	  
	 	thereafter 	2.20 


          (c)
Permit Net Income for Carbiz Parent and its consolidated Subsidiaries determined
for the applicable period set forth below to be less than the amount set forth
below opposite such period (amounts in parenthesis denote negative numbers):

72





	 	Period 	Minimum Net Income 
	 	  	  
	 	Period beginning 	  
	 	February 1, 2008 and ending: 	  
	 	  	  
	 	           
             February 29, 2008 	$470,000 
	 	       
                 March 31, 2008 	$910,000 
	 	           
             April 30, 2008 	$1,310,000 
	 	       
                 May 31, 2008 	$1,680,000 
	 	           
             June 30, 2008 	$2,020,000 
	 	       
                 July 31, 2008 	$2,540,000 
	 	           
             August 31, 2008 	$3,030,000 
	 	       
                 September 30, 2008 	$3,490,000 
	 	           
             October 31, 2008 	$3,930,000 
	 	       
                 November 30, 2008 	$4,350,000 
	 	           
             December 31, 2008 	$4,740,000 
	 	       
                 January 31, 2009 	$5,130,000 
	 	  	  
	 	Period beginning 	  
	 	February 1, 2009 and ending: 	  
	 	  	  
	 	           
             February 28, 2009 	$380,000 
	 	       
                 March 31, 2009 	$750,000 
	 	           
             April 30, 2009 	$1,110,000 
	 	       
                 May 31, 2009 	$1,460,000 
	 	           
             June 30, 2009 	$1,800,000 
	 	       
                 July 31, 2009 	$2,140,000 
	 	           
             August 31, 2009 	$2,470,000 
	 	       
                 September 30, 2009 	$2,800,000 
	 	           
             October 31, 2009 	$3,120,000 
	 	       
                 November 30, 2009 	$3,440,000 
	 	           
             December 31, 2009 	$3,700,000 
	 	       
                 January 31, 2010 	$4,000,000 
	 	  	  
	 	Period beginning 	  
	 	February 1, 2010 and ending: 	  
	 	  	  
	 	           
             February 28, 2010 	$320,000 
	 	       
                 March 31, 2010 	$640,000 
	 	           
             April 30, 2010 	$960,000 
	 	       
                 May 31, 2010 	$1,280,000 
	 	           
             June 30, 2010 	$1,600,000 
	 	       
                 July 31, 2010 	$1,920,000 
	 	           
             August 31, 2010 	$2,240,000 
	 	       
                 September 30, 2010 	$2,560,000 
	 	           
             October 31, 2010 	$2,880,000 
	 	       
                 November 30, 2010 	$3,200,000 


73





	 	       
                 December 31, 2010 	$3,520,000 
	 	           
             January 31, 2011 	$3,840,000 
	 	  	  
	 	Period beginning 	  
	 	February 1, 2011 and ending:
    	  
	 	  	  
	 	       
                 February 28, 2011 	$320,000 
	 	           
             March 31, 2011 	$640,000 
	 	       
                 April 30, 2011 	$960,000 
	 	           
             May 31, 2011 	$1,280,000 
	 	       
                 June 30, 2011 	$1,600,000 
	 	           
             July 31, 2011 	$1,920,000 
	 	       
                 August 31, 2011 	$2,240,000 
	 	           
             September 30, 2011 	$2,560,000 
	 	       
                 October 31, 2011 	$2,880,000 


          (d)
Permit Tangible Net Worth for Carbiz Parent and its consolidated Subsidiaries
determined at the end of any calendar month to be less than the threshold levels
determined in accordance with the last paragraph of this Section 6.9

          (e)
Permit the net loss of the Static Pool of (i) Initial Borrowers, measured for
the three (3) month period ending on the last day of any calendar month to
exceed twenty percent (20%) for the Receivables Loan A, or (ii) Houston Auto,
measured for the three (3) month period ending on the last day of any calendar
month, to exceed thirty percent (30%) for the Receivable Loan B.

          (f)
Permit the monthly total cash collections and monthly net principal collections
percentage minimums of the Initial Borrowers to be less than 8.00% and 4.20% of
the prior month end total Receivables of the Initial Borrowers,
respectively.

          (g)
Permit the monthly total cash collections percentage minimums of Houston Auto to
be less than 4.00% of the prior month end total Receivables of Houston Auto.

          (h)
Permit, at any point in time, the gross balance of all Eligible Receivables
(determined in accordance with the requirements set forth herein, including,
without limitation, the Eligibility Test set forth on Section 1.1(a) of Schedule
A hereto) of the Borrowers to constitute less than ninety-two percent (92%) of
the aggregate gross balance of all Receivables of the Borrowers at any such
point in time.

          (i)
Permit the Loss to Liquidation Ratio of the Initial Borrowers for the most
recently ended three (3) month period to exceed twenty percent (20%),
provided, however, that in the event the Loss to Liquidation Ratio of the
Initial Borrowers exceeds such percentage, the Administrative Agent may decrease
the Receivables A Advance Rate by the corresponding percentage of such excess.
If the Receivables A Advance Rate has been decreased pursuant to the preceding
sentence and the Loss to Liquidation Ratio of the Initial Borrowers for any
subsequent three (3) month period is less than twenty percent (20%), then the
Administrative 

74




Agent shall be required to increase the Receivables A Advance
Rate by a corresponding percentage to a percentage not to exceed sixty percent
(60%).

          (j)
Permit the Loss to Liquidation Ratio of Houston Auto for the most recently ended
three (3) month period to exceed thirty percent (30%), provided, however, that
in the event the Loss to Liquidation Ratio of Houston Auto exceeds such
percentage, the Administrative Agent may decrease the Receivables B Advance Rate
by the corresponding percentage of such excess. If the Receivables B Advance
Rate has been decreased pursuant to the preceding sentence and the Loss to
Liquidation Ratio of Houston Auto for any subsequent three (3) month period is
less than thirty percent (30%), then the Administrative Agent shall be required
to increase the Receivables B Advance Rate by a corresponding percentage to a
percentage not to exceed sixty percent (60%).

     Borrowers acknowledge that
Administrative Agent, Additional Collateral Agent and Initial Lender have agreed
to close the transactions contemplated herein and fund the initial Loan Advances
to be made on the Closing Date even though Borrowers have failed to provide
Administrative Agent and Initial Lender with the relevant financial information
to determine appropriate financial covenant threshold levels for Sections 6.9(a)
and 6.9(d) hereof. In consideration of Administrative Agent, Additional
Collateral Agent and Initial Lender agreeing to close the transactions
contemplated herein and funding the initial Loan Advances to be made on the
Closing Date, Borrowers hereby agree to deliver to Administrative Agent, no
later than January 31, 2008, projected balance sheets for Carbiz Parent and its
consolidated Subsidiaries for the month ended January 31, 2008 through the month
ending December 31, 2011, prepared on a monthly basis in form and detail
reasonably acceptable to Administrative Agent. Borrowers’ failure to timely
deliver such projected balance sheets to Administrative Agent shall result in an
immediate Event of Default. Upon receipt of such projected balance sheets
Administrative Agent and Borrowers shall negotiate in good faith to determine
financial covenant thresholds to be inserted into Sections 6.9(a) and 6.9(d)
hereof; provided that if Administrative Agent and Borrowers have not agreed on
such financial covenant thresholds prior to February 15, 2008, an immediate
Event of Default shall be deemed to have occurred and be continuing. To the
extent Administrative Agent and Borrowers have agreed upon financial covenant
thresholds to be inserted into Sections 6.9(a) and 6.9(d) hereof, each party
hereto hereby agrees to enter into such amendment to this Agreement as
Administrative Agent shall reasonably request to incorporate such financial
covenant thresholds into such Sections. Administrative Agent agrees to, upon
receipt of the projected balance sheets referenced above, negotiate in good
faith with the Borrowers to amend the financial covenant thresholds set forth in
Sections 6.9(b), (c) and (e); provided, that Administrative Agent shall
have no duty or obligation to revise such financial covenant thresholds, and to
the extent Administrative Agent and the Borrowers do not agree on revised
covenant threshholds, the threshholds forth herein as of the date hereof shall
remain in full force and effect. To the extent Administrative Agent and
Borrowers have agreed upon revised financial covenant thresholds for Sections
6.9(b), (c) and (e) hereof, each party hereto hereby agrees to enter into such
amendment to this Agreement as Administrative Agent shall reasonably request to
incorporate such revised financial covenant thresholds into such Sections. 

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ARTICLE 7
EVENTS OF DEFAULT AND REMEDIES

     Section 7.1. EVENTS
OF DEFAULT. The occurrence of any one or more of the following events
shall constitute an “Event of Default”:

          (a)
Any Borrower or any Guarantor fails to pay the principal component of the Loans
or any interest thereon when due and payable, whether at a date for the payment
of a fixed installment or as a contingent or other payment becomes due and
payable or as a result of acceleration or otherwise;

          (b)
Any Borrower or any Guarantor fails to pay any Indebtedness (other than the
Indebtedness in subsection (a) above) when due and payable, whether at a date
for the payment of a fixed installment or as a contingent or other payment
becomes due and payable or as a result of acceleration or otherwise, within five
(5) calendar days after same becomes due and payable.

          (c)
If (i) any Borrower or any Guarantor fails or neglects to perform, keep or
observe any of the covenants set forth in Sections 3.4, 3.9, 6.1, 6.2, 6.8 or
6.9 hereof, (ii) any Borrower, any Guarantor, JV Partner or any Validity
Guarantor fails or neglects to perform, keep or observe any of the other terms,
provisions, conditions or covenants, contained in this Agreement, any of the
other Loan Documents or any other agreement or document executed in connection
with the transactions contemplated hereby and thereby, and the same is not cured
to Administrative Agent's satisfaction within ten (10) days after Administrative
Agent has given written notice to Borrower Representative identifying such
default or (iii) any representation, warranty or certification made by such
Person herein or therein or in any certificate or other writing delivered
pursuant hereto shall prove to be untrue in any material respect as of the date
upon which the same was made or at any time thereafter.

          (d)
If the validity or enforceability of any Lien granted to Administrative Agent or
Additional Collateral Agent, for the benefit of the Lender Parties, to secure
the Indebtedness shall be impaired in any respect or to any degree, for any
reason, or if any other Lien shall be created or imposed upon the Collateral,
unless such Lien is a Lien permitted pursuant to Section 6.2(a) hereof.

          (e)
If any judgment or judgments in the aggregate against any Borrower or any
Related Party (net of any insurance for which the insurance company has admitted
liability) in an amount in excess of Fifty Thousand and No/100 Dollars
($50,000.00), or any attachment or other levy against the properties or assets
of any Borrower or any Related Party with respect to a claim for any amount in
excess of Fifty Thousand and No/100 Dollars ($50,000.00), remains unpaid,
unstayed on appeal, undischarged, unbonded or undismissed for a period of thirty
(30) days.

          (f)
Default in the payment of any sum due under any instrument evidencing
indebtedness for borrowed money in excess of $50,000 (individually or in the
aggregate) owed by any Borrower or any other Related Party to any Person, or any
other default under such instrument of indebtedness for borrowed money that
permits such indebtedness for borrowed 

76




money to become due prior to its stated maturity or permits the
holders of such indebtedness for borrowed money to elect a majority of the board
of directors or manage the business of any Related Party. 

          (g)
If a court or governmental authority of competent jurisdiction shall enter an
order, judgment or decree appointing, with or without a Borrower’s or any
Related Party’s consent or acquiescence, a receiver, custodian, liquidator,
trustee or other officer with similar powers of any Borrower or any Related
Party or of the whole or any substantial part of its properties or assets, or
approving a petition filed against any Borrower or any Related Party seeking
reorganization, arrangement, composition, readjustment, liquidation, dissolution
or similar relief under the federal bankruptcy laws or any other applicable law,
and such order, judgment or decree shall remain unvacated, unstayed or not set
aside for an aggregate of thirty (30) days (whether or not consecutive) from the
date of the entry thereof or if any petition seeking such relief shall be filed
against any Borrower or any Related Party and such petition shall not be
dismissed within thirty (30) days.

          (h)
An event shall occur which shall have a material adverse affect on the condition
and operations or financial condition of any Borrower or any other Related Party
or the enforceability of the material terms of any Loan Document. 

          (i)
If any Borrower or any other Related Party shall: (i) be generally not paying
their respective debts as they become due; (ii) file a petition in bankruptcy or
a petition to take advantage of any insolvency act or other act for the relief
or aid of debtors; (iii) make an assignment for the benefit of their creditors;
(iv) consent to or acquiesce in the appointment of a receiver, custodian,
liquidator, trustee or other officer with similar powers of either of their
properties or assets; (v) file a petition or answer seeking reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief under the federal bankruptcy laws or any other applicable law; (vi) be
adjudicated insolvent or be liquidated; (vii) admit in writing of their
inability to pay debts as they become due; (viii) voluntarily suspend
transaction of usual business; or (ix) take any action, corporate or otherwise,
for the purpose of any of the foregoing.

          (j)
Any of the following shall occur: (i) entry of a court order that enjoins,
restrains or in any way prevents any Related Party from conducting all or any
material part of its business affairs in the ordinary course of business or (ii)
withdrawal or suspension of any license or authority required for the conduct of
any material part of any Borrower’s or any Related Party’s business.

          (k)
If any Related Party, JV Partner or any Validity Guarantor gives notice of
termination or terminates its liability pursuant to its Guaranty Agreement
executed in conjunction with this Agreement.

          (l) The
breach of any terms or conditions of any Custodian Agreement.

          (m)
Any Loan Document securing the Indebtedness shall for any reason (other than
pursuant to the terms hereof and thereof) cease to create a valid and perfected
first priority Lien in the assets having an aggregate value in excess of
$25,000.

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          (n)
(i) Carbiz Parent shall cease to be the legal and beneficial owner of one
hundred percent (100%) of the issued and outstanding capital stock and other
equity interests of Carbiz USA, (ii) Carbiz USA shall cease to be the legal and
beneficial owner of (a) one hundred percent (100%) of the issued and outstanding
capital stock and other equity interests of Carbiz Auto, Carbiz AQ and Houston
Auto and (b) at least fifty percent (50%) of the issued and outstanding
membership interests and other equity interests of Carbiz LLC, or (iii) JV
Partner shall cease to be the legal and beneficial owner of all membership and
other equity interests of Carbiz LLC not owned by Carbiz USA (in each case with
respect to the foregoing (i) through (iii), on a fully diluted basis).

          (o)
Carbiz Parent shall be engaged in any type of business activity other than the
ownership of the capital stock and other equity interests of Carbiz USA,
performance of its obligations under the Loan Documents, Trafalgar Subordinated
Debt Documents and Management Subordinated Debt Documents to which it is a
party, maintenance of its corporate existence and activities ancillary to each
of the foregoing, or Carbiz Parent takes any action which would cause any other
Related Party to violate the provisions of Section 6.2 hereof.

          (p)
Any Validity Guarantor shall die, become mentally incapacitated or otherwise
become unable to fulfill his duties as an executive officer and principal of the
Borrowers or any Guarantor (a “Departing Validity Guarantor”) unless the
Borrowers have hired, within thirty (30) days of any such event, a Person
reasonably acceptable to Administrative Agent to replace such Departing Validity
Guarantor in the same executive officer capacity as the Departing Validity
Guarantor held prior to such event and such replacement executive officer
executes a Validity Guaranty in the same form and substance as the Validity
Guaranty to which such Departing Validity Guarantor was a party.

          (q)
The amount of Borrower's Receivables in excess of a sixty (60) day contractual
delinquency shall exceed six percent (6%).

          (r)
The Loss to Liquidation Ratio of the Initial Borrowers shall exceed twenty-five
percent (25%), or the Loss to Liquidation Ratio of Houston Auto shall exceed
forty percent (40%).

          (s)
The failure of any Borrower to pay any sales tax on consumer loans as and when
due in excess of $10,000 (individually or in the aggregate) and Borrowers have
failed to cure any such breach within five (5) Business Days of obtaining
knowledge thereof. 

          (t)
The failure of any Borrower to deliver to Administrative Agent, Additional
Collateral Agent or a Custodian (for the benefit of Administrative Agent and
Additional Collateral Agent), the Auto Titles as required herein.

     Section 7.2.
ACCELERATION OF THE INDEBTEDNESS. Upon the occurrence of an
Event of Default described in Sections 7.1(g) and (i) above, all of the
Indebtedness shall thereupon be immediately due and payable, without demand,
presentment, notice of demand or dishonor and nonpayment, protest, notice of
protest, notice of intention to accelerate, declaration or notice of
acceleration, or any other notice or declaration of any kind, all of which are
hereby expressly waived by each Borrower and each Guarantor. Upon any such
acceleration, any 

78




obligation of the Lenders to make any additional advances on
the Loans shall be permanently terminated and there shall automatically be added
to the Indebtedness owing by Borrowers to the Lenders, as liquidated damages for
the early termination of the credit facilities contemplated hereby, and not as a
penalty, the Liquidated Damages. During the continuance of any other Event of
Default, the outstanding principal balance together with all accrued but unpaid
interest on the Indebtedness and all other sums due and payable by Borrowers to
any Lender Party may, at the option of Administrative Agent and without demand,
presentment, notice of demand or dishonor and nonpayment, protest, notice of
protest, notice of intention to accelerate, declaration or notice of
acceleration, or any other notice or declaration of any kind, all of which are
hereby expressly waived by each Borrower and each Guarantor, be declared due and
payable, and, if so declared, shall immediately become due and payable. During
the continuance of any Event of Default, in accordance with Section 2.13 hereof,
interest shall accrue on the Indebtedness at the Default Rate, without notice or
demand to any Borrower or any Guarantor.

     Section 7.3.
REMEDIES. If any Default or Event of Default shall occur and
be continuing, Administrative Agent and Additional Collateral Agent may protect
and enforce Lender Parties’ rights under the Loan Documents by any appropriate
proceedings, including proceedings for specific performance of any covenant or
agreement contained in any Loan Document and the following rights and
remedies:

          (a)
All of the rights and remedies of a secured party under the UCC, as amended, or
other applicable Law.

          (b)
The right, to the fullest extent permissible by law, to: (i) enter upon the
premises of any Related Party, or any other place or places where the Collateral
is located and kept, without any obligation to pay rent to any Related Party,
through self-help and without judicial process, without first obtaining a final
judgment or giving any Related Party notice and opportunity for a hearing on the
validity of Administrative Agent's or Additional Collateral Agent’s, for the
benefit of the Lender Parties, claim, and remove the Collateral therefrom to the
premises of Administrative Agent, Additional Collateral Agent or any agent of
any such Person, for such time as Administrative Agent or Additional Collateral
Agent may desire, in order to effectively collect and liquidate the Collateral;
and/or (ii) require any Related Party to assemble the Collateral and make it
available to Administrative Agent or Additional Collateral Agent at a place to
be designated by Administrative Agent or Additional Collateral Agent, as
applicable, in such Person’s reasonable discretion.

          (c)
The right to sell or otherwise dispose of any or all Collateral in its then
condition at public or private sale or sales, in lots or in bulk, for cash or on
credit, all as Administrative Agent or Additional Collateral Agent, as
applicable, in its discretion, may deem advisable; provided that such sales may
be adjourned from time to time with or without notice. The Administrative Agent
and, if applicable, Additional Collateral Agent, shall give reasonable notice to
Related Parties of the time and place of any public sale of the Collateral or of
the time after which any private sale by Administrative Agent, Additional
Collateral Agent or, at their option, a broker, or any other intended
disposition thereof is to be made. Such notice shall be deemed reasonable if
mailed, postage prepaid, to Related Parties at the address of Related Parties
designated herein at least ten (10) Business Days before the date of any public
sale or at least ten 

79




(10) Business Days before the time after which any private sale
or other disposition is to be made unless applicable law requires otherwise.

          (d)
Administrative Agent and Additional Collateral Agent shall have the right to
conduct such sales on Related Parties' premises or elsewhere and shall have the
right to use Related Parties' premises without charge for such sales for such
time or times as Administrative Agent or Additional Collateral Agent may see
fit. Administrative Agent and Additional Collateral Agent are hereby granted a
license or other right to use, without charge, Related Parties’ labels,
copyrights, rights of use of any name, trade secrets, trade names, trademarks
and advertising matter, or any property of a similar nature, as it pertains to
the Collateral, in advertising for sale and selling any Collateral and Related
Parties' rights under all licenses and all franchise agreements shall inure to
Administrative Agent’s and Additional Collateral Agent’s benefit. The Related
Parties agree to hold Administrative Agent and Additional Collateral Agent
harmless from any liability arising out of Administrative Agent's or Additional
Collateral Agent’s use of Related Parties' premises, labels, copyrights, rights
of use of any name, trade secrets, trade names, trademarks and advertising
matter, or any property of a similar nature as it pertains to advertising for
sale, marshaling or selling the Collateral.

          (e)
Administrative Agent and Additional Collateral Agent shall have the right to
sell, lease or otherwise dispose of the Collateral, or any part thereof, for
cash, credit or any combination thereof, and any Lender Party may purchase all
or part of the Collateral at public or, if permitted by law, private sale and,
in lieu of actual payment of such purchase price, may set off the amount of such
price against the Indebtedness owing by Borrowers to such Lender Party. The
proceeds realized from the sale of any Collateral shall be applied first to
reasonable costs and expenses, attorney's fees, expert witness fees incurred by
Administrative Agent and/or Additional Collateral Agent for collection and for
acquisition, completion, protection, removal, storage, sale and delivery of the
Collateral; second to all Indebtedness, other than principal and interest,
outstanding under this Agreement or any other Loan Document; third to interest
due upon any of the Indebtedness; fourth to the principal balance owing on the
Indebtedness; and fifth the remainder, if any, to Borrowers, their successors or
assigns, or to whomsoever may be lawfully entitled to receive the same. If any
deficiency shall arise, Borrowers shall remain liable to Lender Parties
therefor.

          (f)
The right to appoint or seek appointment of a receiver, custodian or trustee of
Borrowers or any of their properties or assets pursuant to court order.

          (g) The
right to cease all advances hereunder.

          (h)
The exercise of Administrative Agent's and Additional Collateral Agent’s rights
under each Pledge Agreement.

          (i)
The exercise of Administrative Agent's and Additional Collateral Agent’s rights
under the Account Control Agreements.

          (j)
All other rights and remedies that Lender Parties may have at law or in
equity.

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Additionally, if any Default or Event of Default shall occur
and be continuing, Administrative Agent and Additional Collateral Agent, on
behalf of Lender Parties, may enforce the payment of any Indebtedness due to
Lender Parties or enforce any other legal or equitable right which Lender
Parties may have. All rights, remedies and powers conferred upon Lender Parties
under the Loan Documents shall be deemed cumulative and not exclusive of any
other rights, remedies or powers available under the Loan Documents or at Law or
in equity.

     Section 7.4. NO
WAIVER. No delay, failure or omission of Administrative Agent or
Additional Collateral Agent to exercise any right upon the occurrence of any
Default or Event of Default shall impair any such right or shall be construed to
be a waiver of any such Default or Event of Default or an acquiescence therein.
Lender Parties may, from time to time, in a writing waive compliance by the
other parties with any of the terms of this Agreement and its rights and
remedies upon any Default or Event of Default, and Borrowers agree that no
waiver by Lender Parties shall ever be legally effective unless such waiver
shall be acknowledged and agreed to in writing by Lender Parties. No waiver of
any Default or Event of Default by Lender Parties shall impair any right or
remedy of Lender Parties not specifically waived. No single, partial or full
exercise of any right of Lender Parties shall preclude any other or further
exercise thereof. No modification or amendment of or supplement to this
Agreement or any other written agreement between the parties hereto shall be
valid or effective (or serve as a basis of reliance by way of estoppel) unless
the same is in writing and signed by the party against whom it is sought to be
enforced. The acceptance by Administrative Agent at any time and from time to
time of a partial payment or partial performance of any Related Party's
obligations set forth herein shall not be deemed a waiver, reduction,
modification or release from any Default or Event of Default then existing. No
waiver by Lender Parties of any Default or Event of Default shall be deemed to
be a waiver of any other existing or any subsequent Default or Event of
Default.

     Section 7.5.
APPLICATION OF PROCEEDS . After an Event of Default shall have
occurred and is continuing, all amounts received by Lender Parties on account of
any Indebtedness and realized by Lender Parties with respect to the Collateral,
including any sums which may be held by Lender Parties, or the proceeds of any
thereof, shall be applied in the same manner as proceeds of Collateral as set
forth in Section 7.3(e) hereof.

     Section 7.6.
APPOINTMENT OF ADMINISTRATIVE AGENT AS ATTORNEY-IN-FACT. Each
Borrower irrevocably designates, makes, constitutes and appoints Administrative
Agent (and all persons reasonably designated by Administrative Agent, including,
without limitation, Additional Collateral Agent), with full power of
substitution, as Borrowers’ true and lawful attorney-in-fact (and not
agent-in-fact) and Administrative Agent, or Administrative Agent's agent, may,
without notice to any Borrower, and at such time or times thereafter as
Administrative Agent or said agent, in its discretion, may determine, in
Borrowers’ or Administrative Agent's name, at no duty or obligation on any
Lender, do the following:

          (a)
Upon the occurrence and during the continuance of any Default or Event of
Default, all acts and things necessary to fulfill Borrowers’ administrative
duties pursuant to this Agreement and the other Loan Documents;

          (b)
Upon the occurrence and during the continuance of any Default or Event of
Default, all acts and things necessary to fulfill Borrowers’ obligations under
this Agreement 

81




and the Loan Documents, except as otherwise set forth herein,
at the cost and expense of Borrowers.

          (c)
In addition to, but not in limitation of the foregoing, at any time or times
upon the occurrence and during the continuance of an Event of Default,
Administrative Agent shall have the right: (i) to enter upon Borrowers’ premises
and to receive and open all mail directed to Borrowers and remove all payments
to Borrowers on the Receivables; however, Administrative Agent shall turn over
to Borrowers all of such mail not relating to Receivables; (ii) in the name of
Borrowers, to notify the Post Office authorities to change the address for the
delivery of mail addressed to Borrowers to such address as Administrative Agent
may designate (notwithstanding the foregoing, for the purposes of notice and
service of process to or upon Borrowers as set forth in this Agreement,
Administrative Agent's rights to change the address for the delivery of mail
shall not give Administrative Agent the right to change the address for notice
and service of process to or upon Borrowers in this Agreement); (iii) demand,
collect, receive for and give renewals, extensions, discharges and releases of
any Receivable; (iv) institute and prosecute legal and equitable proceedings to
realize upon the Receivables; (v) settle, compromise, compound or adjust claims
in respect of any Receivable or any legal proceedings brought in respect
thereof; (vi) generally, sell in whole or in part for cash, credit or property
to others or to itself at any public or private sale, assign, make any agreement
with respect to or otherwise deal with any of the Receivables as fully and
completely as though Administrative Agent were the absolute owner thereof for
all purposes, except to the extent limited by any applicable Laws and subject to
any requirements of notice to Borrowers or other persons under applicable Laws;
(vii) take possession and control in any manner and in any place of any cash or
non-cash items of payment or proceeds of Receivables; (viii) endorse the name of
Borrowers upon any notes, acceptances, checks, drafts, money orders, chattel
paper or other evidences of payment of Receivables that may come into
Administrative Agent's possession; and (ix) sign Borrowers’ names on any
instruments or documents relating to any of the Collateral, or on drafts against
Account Debtors. The appointment of Administrative Agent as attorney-in-fact for
Borrowers is coupled with an interest and is irrevocable.

ARTICLE 8
ADMINISTRATIVE AGENT AND ADDITIONAL
COLLATERAL AGENT; ASSIGNMENTS

     Section 8.1.
APPOINTMENT. The Lenders hereby designate and appoint SWC
SERVICES LLC, a Delaware limited liability company, as their Administrative
Agent on their collective behalf to act as specified herein and in the other
Loan Documents. The Lenders hereby designate and appoint AGM, LLC, a Delaware
limited liability company, as their Additional Collateral Agent on their
collective behalf to act as specified herein and in the other Loan Documents.
Each Lender hereby irrevocably authorizes, and each holder of any Note by the
acceptance of such Note shall be deemed irrevocably to authorize, the
Administrative Agent and Additional Collateral Agent to take such action on its
behalf under the provisions of this Agreement, the other Loan Documents and any
other instruments and agreements referred to herein or therein and to exercise
such powers and to perform such duties hereunder and thereunder as are
specifically delegated to or required of the Administrative Agent or Additional
Collateral Agent, as applicable, by the terms hereof and thereof and such other
powers as are reasonably incidental thereto, including, without limitation, to
execute and deliver the Loan 

82




Agreement, each Subordination Agreement, the Custodian
Agreements and any other Loan Document necessary or useful in connection with
the Indebtedness and Lender Parties’ security interests relating thereto. Each
of the Administrative Agent and the Additional Collateral Agent may perform any
of its duties hereunder by or through its officers, directors, agents, employees
or affiliates.

     Section 8.2. NATURE
OF DUTIES. Neither the Administrative Agent nor the Additional
Collateral Agent shall have any duties or responsibilities except those
expressly set forth in this Agreement and in the other Loan Documents. None of
the Administrative Agent, the Additional Collateral Agent nor any of their
officers, directors, agents, employees or affiliates shall be liable for any
action taken or omitted by any of them hereunder or under any other Loan
Document or in connection herewith or therewith, unless caused by its or their
gross negligence or willful misconduct (as determined by a court of competent
jurisdiction in a final and non-appealable decision). The duties of the
Administrative Agent and Additional Collateral Agent shall be mechanical and
administrative in nature; neither the Administrative Agent nor the Additional
Collateral Agent shall have by reason of this Agreement or any other Loan
Document a fiduciary relationship in respect of any Lender or the holder of any
Note; and nothing in this Agreement or in any other Loan Document, expressed or
implied, is intended to or shall be so construed as to impose upon the
Administrative Agent or the Additional Collateral Agent any obligations in
respect of this Agreement or any other Loan Document except as expressly set
forth herein or therein.

     Section 8.3. LACK OF
RELIANCE ON THE ADMINISTRATIVE AGENT. Independently and without reliance
upon the Administrative Agent or Additional Collateral Agent, each Lender and
the holder of each Note, to the extent it deems appropriate, has made and shall
continue to make (i) its own independent investigation of the financial
condition and affairs of the Borrowers in connection with the making and the
continuance of the Loans and the taking or not taking of any action in
connection herewith and (ii) its own appraisal of the creditworthiness of the
Borrowers and, except as expressly provided in this Agreement, neither the
Administrative Agent nor the Additional Collateral Agent shall have any duty or
responsibility, either initially or on a continuing basis, to provide any Lender
or the holder of any Note with any credit or other information with respect
thereto, whether coming into its possession before the making of the Loans or at
any time or times thereafter. Neither the Administrative Agent nor the
Additional Collateral Agent shall be responsible to any Lender or the holder of
any Note for any recitals, statements, information, representations or
warranties herein or in any document, certificate or other writing delivered in
connection herewith or for the execution, effectiveness, genuineness, validity,
enforceability, perfection, collectibility, priority or sufficiency of this
Agreement or any other Loan Document or the financial condition of the Borrowers
or be required to make any inquiry concerning either the performance or
observance of any of the terms, provisions or conditions of this Agreement or
any other Loan Document, or the financial condition of the Borrowers or the
existence or possible existence of any Default or Event of Default.

     Section 8.4. CERTAIN
RIGHTS OF THE AGENTS. If the Administrative Agent or Additional
Collateral Agent requests instructions from the Lenders with respect to any act
or action (including failure to act) in connection with this Agreement or any
other Loan Document, the Person requesting such instructions shall be entitled
to refrain from such act or taking such 

83




action unless and until such Person shall have received
instructions from the Lenders; and such Person shall not incur liability to any
Lender by reason of so refraining. Without limiting the foregoing, neither any
Lender nor the holder of any Note shall have any right of action whatsoever
against the Administrative Agent or Additional Collateral Agent as a result of
the Administrative Agent or Additional Collateral Agent acting or refraining
from acting hereunder or under any other Loan Document in accordance with the
instructions of the Lenders.

     Section 8.5.
RELIANCE. The Administrative Agent and Additional Collateral
Agent shall be entitled to rely, and shall be fully protected in relying, upon
any note, writing, resolution, notice, statement, certificate, telex, teletype
or telecopier message, cablegram, radiogram, order or other document or
telephone message signed, sent or made by any Person that the Administrative
Agent or Additional Collateral Agent, as applicable, believed to be the proper
Person, and, with respect to all legal matters pertaining to this Agreement and
any other Loan Document and its duties hereunder and thereunder, upon advice of
counsel selected by the Administrative Agent and Additional Collateral
Agent.

     Section 8.6.
INDEMNIFICATION. To the extent the Administrative Agent,
Additional Collateral Agent or any affiliate thereof is not reimbursed and
indemnified by the Borrowers, the Lenders will reimburse and indemnify the
Administrative Agent, Additional Collateral Agent and any affiliate thereof in
proportion to their respective percentage of principal amount of Notes held by
them for and against any and all liabilities, obligations, losses, damages,
penalties, claims, actions, judgments, costs, expenses or disbursements of
whatsoever kind or nature which may be imposed on, asserted against or incurred
by the Administrative Agent, Additional Collateral Agent or any affiliate
thereof in performing its duties hereunder or under any other Loan Document or
in any way relating to or arising out of this Agreement or any other Loan
Document; provided, that no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, claims, actions,
judgments, suits, costs, expenses or disbursements resulting from the
Administrative Agent’s, Additional Collateral Agent’s or such affiliate’s gross
negligence or willful misconduct (as determined by a court of competent
jurisdiction in a final and non-appealable decision).

     Section 8.7.
HOLDERS. The Administrative Agent and Additional Collateral
Agent may deem and treat the payee of any Note as the owner thereof for all
purposes hereof unless and until a written notice of the assignment, transfer or
endorsement thereof, as the case may be, shall have been filed with the
Administrative Agent. Any request, authority or consent of any Person who, at
the time of making such request or giving such authority or consent, is the
holder of any Note shall be conclusive and binding on any subsequent holder,
transferee, assignee or endorsee, as the case may be, of such Note or of any
Note or Notes issued in exchange therefor. Notwithstanding anything in this
Section, no Note or interest in any Note may be transferred unless such transfer
complies with Section 10.3 of this Agreement.

     Section 8.8. RESIGNATION BY
THE AGENTS.

          (a)
The Administrative Agent and/or the Additional Collateral Agent may resign from
the performance of all of its functions and duties hereunder and/or under the
other Loan Documents at any time by giving fifteen (15) Business Days prior
written notice to the Lenders. Such resignation shall take effect upon the
appointment of a successor Administrative 

84




Agent or Additional Collateral Agent, as applicable, pursuant
to clause (b) below or as otherwise provided below.

          (b)
Upon any such notice of resignation by the Administrative Agent or Additional
Collateral Agent, the Required Lenders shall appoint a successor Administrative
Agent or Additional Collateral Agent, as applicable, hereunder or thereunder,
which successor Administrative Agent or Additional Collateral Agent, as
applicable, shall be, so long as no Default or Event of Default shall have
occurred and be continuing, reasonably acceptable to the Borrowers, and which
acceptance shall not be unreasonably withheld or delayed. The Borrowers and
other Related Parties shall execute such documents and agreements and take such
action as the Lenders and any such successor Administrative Agent or Additional
Collateral Agent shall reasonably request to maintain the Liens of such
successor Administrative Agent and successor Additional Collateral Agent in the
assets of Borrowers and the other Related Parties to secure the Indebtedness and
otherwise carry out the intent and purposes of this Agreement and the other Loan
Documents.

     Section 8.9. RELEASE
OF COLLATERAL. The Lenders hereby irrevocably authorize Administrative
Agent and Additional Collateral Agent, at their option and in their discretion,
to release any Lien granted to or held by them upon any Collateral (i) upon
payment and satisfaction of all Indebtedness (other than contingent
indemnification Indebtedness to the extent no claims giving rise thereto have
been asserted) and termination of all commitments to lend hereunder; or (ii)
constituting property being sold or disposed of if Borrower Representative
certifies to Administrative Agent and Additional Collateral Agent that the sale
or disposition is made in compliance with the provisions of this Agreement (and
Administrative Agent and Additional Collateral Agent may rely in good faith
conclusively on any such certificate, without further inquiry).

     Section 8.10. CONFIRMATION
  OF AUTHORITY; EXECUTION OF RELEASES. Without in any manner
  limiting Administrative Agent’s and Additional Collateral Agent’s
  authority to act without any specific or further authorization or consent by
  Lenders, each Lender agrees to confirm in writing, upon request by Administrative
  Agent or Additional Collateral Agent, as applicable, the authority to release
  any Collateral conferred upon Administrative Agent and Additional Collateral
  Agent hereunder. Upon receipt by Administrative Agent or Additional Collateral
  Agent of any required confirmation from the Required Lenders of its authority
  to release any particular item or types of Collateral, Administrative Agent
  or Additional Collateral Agent, as applicable, shall (and is hereby irrevocably
  authorized by Lenders to) execute such documents as may be necessary to evidence
  the release of the liens granted to such Person upon such Collateral; provided,
  however, that (i) neither Administrative Agent nor Additional Collateral Agent
  shall be required to execute any such document on terms which, in such Person’s
  opinion, would expose such Person to liability or create any obligation or entail
  any consequence other than the release of such liens without recourse or warranty,
  and (ii) such release shall not in any manner discharge, affect or impair the
  indebtedness evidenced by the Notes or any Liens upon (or Indebtedness of Borrowers,
  in respect of), all interests retained by Borrowers, including (without limitation)
  the proceeds of any sale, all of which shall continue to constitute part of
  the Collateral.

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     Section 8.11.
ABSENCE OF DUTY. Neither Administrative Agent nor Additional
Collateral Agent shall have any obligation whatsoever to any Lender or any other
Person to assure that the Collateral exists or is owned by Borrowers or is cared
for, protected or insured or has been encumbered or that the Liens granted to
Administrative Agent and Additional Collateral Agent have been properly or
sufficiently or lawfully created, perfected, protected or enforced or are
entitled to any particular priority, or to exercise at all or in any particular
manner or under any duty of care, disclosure or fidelity, or to continue
exercising, any of the rights, authorities and powers granted or available to
Administrative Agent and/or Additional Collateral Agent in any of the Loan
Documents, it being understood and agreed that in respect of any Collateral or
any act, omission or event related thereto, Administrative Agent and Additional
Collateral Agent may act in any manner that they may deem appropriate, in their
discretion and provided that Administrative Agent and Additional Collateral
Agent shall exercise the same care which they would in dealing with loans for
their own account.

     Section 8.12. AGENCY
FOR PERFECTION. Each Lender Party hereby appoints each other Lender
Party as agent for the purpose of perfecting such Lender Party’s security
interest in that portion of the Collateral which, in accordance with the Uniform
Commercial Code in any applicable jurisdiction, can be perfected by possession
or control. Each Lender agrees that it will not have any right individually to
enforce or seek to enforce this Agreement or to realize upon any Collateral for
the Notes unless consented to by Administrative Agent and Additional Collateral
Agent, it being understood and agreed that such rights and remedies may be
exercised only by Administrative Agent and Additional Collateral Agent. Nothing
herein is intended or shall be construed to limit any Lender’s rights under its
Note, including the right to enforce, accelerate, amend, compromise or otherwise
administer such Note.

     Section 8.13. AMENDMENTS,
CONSENTS AND WAIVERS.

          (a)
Except as otherwise provided herein and except as to matters set forth in other
subsections hereof or in any other Loan Document as requiring only
Administrative Agent’s or Additional Collateral Agent’s consent, the consent of
Required Lenders (it being understood that consent of the “Lender Parties” shall
be deemed to mean consent of the Administrative Agent and Required Lenders) will
be required to amend, modify, terminate, or waive any provision of this
Agreement or any of the other Loan Documents; provided, however, that if such
amendment, modification, termination or waiver applies only to a certain Loan
Advance or Loan Advances, only the consent of the Lender or Lenders with respect
to such Loan Advance(s) shall be required.

          (b)
In the event Administrative Agent or Additional Collateral Agent requests the
consent of a Lender and does not receive a written consent or denial thereof
within ten (10) Business Days after such Lender's receipt of such request, then
such Lender will be deemed to have given such consent.

ARTICLE 9 
EXPENSES AND INDEMNITIES

     Section 9.1. PAYMENT
FOR EXPENSES. Borrowers shall pay (on the date of the initial funding of
the Loans and, thereafter, within thirty (30) days after any invoice or other


86




statement or notice), all costs and expenses incurred by Lender
Parties or any of their affiliates in connection with the transactions
contemplated by the Loan Documents, including, without limitation, (a) all
documentation and diligence fees and expenses, (b) all search, appraisal,
recording, professional and filing fees and expenses and all other out-of-pocket
charges and expenses (including, without limitation, (i) UCC and judgment and
tax lien searches and UCC filings and fees for post-closing UCC, (ii) judgment
and tax lien searches, (iii) wire transfer fees and (iv) any documentary, filing
or stamp taxes in connection with any grant or perfections of Administrative
Agent’s and Additional Collateral Agent’s Liens on the Collateral), (c) all
audit fees and expenses, (d) all of Lender Parties’ attorneys’ fees and
expenses, but only to the extent incurred by a Lender Party or any of its
affiliates after a Default or Event of Default or incurred by a Lender Party in
connection with (i) any effort to enforce, protect or collect payment of any
Indebtedness or to enforce any Loan Document or any related agreement, document
or instrument, or effect collection hereunder or thereunder, (ii) entering into,
negotiating, preparing, reviewing and executing this Agreement and the other
Loan Documents and all related agreements, documents and instruments, (iii)
instituting, maintaining, preserving, enforcing and foreclosing on
Administrative Agent’s and/or Additional Collateral Agent’s Liens, for the
benefit of the Lender Parties, in any of the Collateral or securities pledged
under the Loan Documents, whether through judicial proceedings or otherwise,
(iv) defending or prosecuting any actions, claims or proceedings arising out of
or relating to Lender Parties’ transactions with any Borrower unless there is a
final judgment by a court which finds such Lender Party to have acted in gross
negligence or willful misconduct in connection therewith, or (v) any
modification, restatement, supplement, amendment, waiver, forbearance or
extension of this Agreement or any other Loan Document or any related agreement,
document or instrument, and all of the same may be charged to Borrowers’ account
and shall be part of the Indebtedness. Each Borrower hereby further agrees to
pay all of each Custodian’s fees and expenses owing under the Custodian
Agreements.

     Section 9.2. GENERAL
INDEMNIFICATION. Each Borrower hereby agrees to indemnify and hold each
Lender Party harmless, on demand, from and against any and all claims,
liabilities, obligations, losses, damages, penalties, fines, actions, judgments,
suits, costs, expenses or disbursements actually incurred (collectively
“Claim” or “Claims”) of any kind or nature whatsoever, asserted by
any party other than a Borrower, or with respect to a Borrower only as otherwise
provided in this Agreement or pursuant to applicable law regarding such Lender'
Party’s obligations to Borrowers, which may be imposed on, incurred by or
asserted against such Lender Party, or any of its officers, directors, employees
or agents (including accountants, attorneys or other professionals hired by such
Lender Party) in any way relating to or arising out of the Loan Documents or any
action taken or omitted by Lender, or any of its officers, directors, employees
or agents (including accountants, attorneys or other professionals hired by such
Lender Party) under the Loan Documents, except to the extent such indemnified
matters are finally found by a court to be caused by such Lender Party's gross
negligence or willful misconduct.

ARTICLE 10 
MISCELLANEOUS

     Section 10.1.
NOTICES. All notices, demands, billings, requests and other
written communications hereunder shall be deemed to have been properly given:
(i) upon personal 

87




delivery; (ii) on the third Business Day following the day
sent, if sent by registered or certified mail; (iii) on the next Business Day
following the day sent, if sent by overnight express courier; or (iv) on the day
sent or if such day is not a Business Day on the next Business Day after the day
sent if sent by telecopy providing the receiving party has acknowledged receipt
by return telecopy, in each case, to each Lender Party and each Related Party or
Guarantor at its address and/or telecopy number as set forth in this Agreement
or Section 10.1 of Schedule A attached hereto, or at such other address and/or
telecopy number as either party may designate for such purpose in a written
notice given to the other party. Administrative Agent and the Lenders shall have
the right, on or after initial funding pursuant to the terms of this Agreement
and after the Borrowers or Carbiz Parent has made such an announcement or
release, to issue a press release or other brochure announcing the consummation
of the Loan Documents and to distribute that information to third parties in the
normal course of such Person’s business, at no cost to Borrowers.

     Section 10.2.
APPOINTMENT OF BORROWER REPRESENTATIVE. Each Borrower
and Related Party hereby designates the Borrower Representative as its
representative and agent on its behalf for the purposes (as applicable) of
issuing Requests for Advances, giving instructions with respect to the
disbursement of the proceeds of the Loan Advances, effecting repayment of the
Loans, and giving and receiving all other notices and consents hereunder or
under any of the other Loan Documents and taking all other actions (including in
respect of compliance with covenants) on behalf of any Borrower or Related Party
under the Loan Documents. Borrower Representative hereby accepts such
appointment. Administrative Agent and each Lender Party may regard any notice or
other communication pursuant to any Loan Document from Borrower Representative
as a notice or communication from all Borrowers and Related Parties, and shall
give any notice or communication required or permitted to be given to any
Borrower or Related Party hereunder to Borrower Representative on behalf of such
Borrower or Related Party. Each Borrower and Related Party agrees that each
notice, election, representation and warranty, covenant, agreement and
undertaking made on its behalf by Borrower Representative shall be deemed for
all purposes to have been made by such Borrower and Related Party and shall be
binding upon and enforceable against such Borrower and Related Party to the same
extent as if the same had been made directly by such Borrower or Related Party.
The Borrowers may, upon fifteen (15) days prior written notice to Administrative
Agent by each of the Borrowers, appoint a substitute Borrower as “Borrower
Representative” to Administrative Agent.

     Section 10.3. ASSIGNMENTS
AND PARTICIPATIONS.

          (a)
Any Lender may sell any participation interest in its commitment hereunder or
any of its rights under its Loans or under the Loan Documents to any Person so
long as the agreement between such Lender and such participant at all times
provides: (i) that such participation exists only as a result of the agreement
between such participant and such Lender and that such transfer does not give
such participant any right to vote as a Lender or any other direct claims or
rights against any Person other than such Lender, (ii) that such participant is
not entitled to payment from Borrowers hereunder of amounts in excess of those
payable to such Lender under such sections (determined without regard to the
sale of such participation), and (iii) unless such participant is an affiliate
of such Lender, that such participant shall not be entitled to require such
Lender to take any action under any Loan Document or to obtain the 

88




consent of such participant prior to taking any action under
any Loan Document, except for actions which would require the consent of all
Lenders hereunder. No Lender selling such a participation shall, as between the
other parties hereto or to any other Loan Document and such Lender, be relieved
of any of its obligations hereunder or thereunder as a result of the sale of
such participation. Each Lender which sells any such participation to any Person
(other than an affiliate of such Lender) shall give prompt notice thereof to
Administrative Agent and Borrower Representative.

          (b)
In addition to sales of participations under the immediately preceding
subsection, any Lender may make any assignment or transfer of any kind of its
commitments or any of its rights under its Loans or under the Loan Documents
(which rights may be limited to a particular Loan Advance) in accordance with
the terms of this Section 10.3; provided, however, that such Lender shall not
offer, sell or otherwise, dispose of all or any part of its commitments or Loans
except under circumstances which will not result in a violation of the Act or
applicable state securities laws. To the extent indicated in any document,
instrument or agreement so selling, assigning, or otherwise transferring to an
assignee (an “Assignee”) such rights and/or duties, (i) the Assignee
shall acquire all of the assigning Lender’s rights under the Agreement and the
other Loan Documents and (ii) the Assignee shall be deemed to be a “Lender”
under this Agreement and the other Loan Documents with the authority to exercise
such rights in the capacity of such Lender. Subject to applicable securities
laws, Related Parties hereby authorize each Lender to disseminate any
information it has pertaining to the Indebtedness, including without limitation,
complete and current credit information on Related Parties and Guarantors and
any of their principals to any Assignee or prospective Assignee. Any assignment
pursuant to this Section 10.3 shall be made pursuant to an Assignment and
Acceptance.

          (c)
Administrative Agent shall maintain at its office a copy of each Assignment and
Acceptance delivered to it and a register for the recordation of the names and
addresses of Lenders, and the commitments of, and principal amount of the
Indebtedness and Loans owing to each Lender pursuant to the terms hereof from
time to time (the “Register”). The entries in the Register shall be
presumptive evidence of the amounts due and owing to Lenders in the absence of
manifest error. Borrowers, Administrative Agent and each Lender may treat each
Person whose name is recorded in the Register pursuant to the terms hereof as a
Lender hereunder for all purposes of this Agreement. The Register shall be
available for inspection by Borrowers and any Lender, at any reasonable time
upon reasonable prior notice.

          (d)
Upon its receipt of a duly completed Assignment and Acceptance executed by an
assigning Lender and its Assignee (together with the Note(s) subject to such
assignment), evidence satisfactory to the Administrative Agent that such
assignment complies with subsection (b) above, Administrative Agent shall (a)
accept such Assignment and Acceptance and (b) record the information contained
therein in the Register. If requested by Administrative Agent, Borrowers shall
promptly execute and deliver to Administrative Agent new Note(s) evidencing the
Indebtedness owed by Borrowers to the assignee and, if applicable, the assigning
Lender, after giving effect to the assignment. Administrative Agent shall cancel
the Notes delivered to it by the assigning Lender and deliver the new Notes to
the Assignee and, unless the assigning Lender has assigned all of its interests
under this Agreement, the assigning Lender.

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          (e)
Any Lender may at any time, following written notice to Administrative Agent,
(a) pledge the Indebtedness held by it or create a security interest in all or
any portion of its rights under this Agreement or the other Loan Documents in
favor of any Person; provided, however, that (i) no such pledge or grant of
security interest to any Person shall release such Lender from its Indebtedness
hereunder or under any other Loan Document and (ii) the acquisition of title to
such Lender’s Indebtedness pursuant to any foreclosure or other exercise of
remedies by such Person shall be subject to the provisions of this Agreement and
the other Loan Documents in all respects; and (b) assign all or any portion of
its funded Loans to an affiliate of such Lender, to one or more other Lenders or
to an affiliate of such other Lender.

          (f)
Except as otherwise provided herein, no Lender shall, as between Borrowers and
that Lender, be relieved of any of its Indebtedness hereunder as a result of any
sale, assignment, transfer or negotiation of, or granting of a participation in,
all or any part of the Loans, the Notes or other Indebtedness owed to such
Lender.

     Section 10.4.
SURVIVAL OF AGREEMENTS. All of the various representations,
warranties, covenants and agreements of Borrowers and Guarantors (including
without limitation, any agreements to pay costs and expenses and to indemnify
any Lender Party) in the Loan Documents shall survive the execution and delivery
of the Loan Documents and the performance under such Loan Documents, and
Administrative Agent and Additional Collateral Agent, for the benefit of the
Lender Parties, shall retain their Liens in the Collateral and all of their
rights and remedies under the Loan Documents notwithstanding any termination of
financing under this Agreement until all Indebtedness is fully performed and
paid in full in cash. All indemnity obligations and all other obligations to pay
costs and expenses of the Borrowers and Guarantors hereunder and under the other
Loan Documents shall survive payment of the Indebtedness in full.

     Section 10.5. NO
OBLIGATION BEYOND MATURITY. Each Borrower and each Guarantor agrees and
acknowledges that upon the Maturity Date with respect to a particular Loan, no
Lender Party shall have any obligation to renew, extend, modify or rearrange
such Loan and Lender Parties shall have the right to require all amounts due and
owing under the applicable Loans to be paid in full upon such date.

     Section 10.6. PRIOR
AGREEMENTS SUPERSEDED. This Agreement, together with the other Loan
Documents, constitute the sole and only agreement of the parties hereto and
supersede any prior understandings or written or oral agreements between the
parties respecting the subject matter of this Agreement and the other Loan
Documents. No provision of this Agreement or other Loan Document may be
modified, waived or terminated except by instrument in writing executed by the
party against whom a modification, waiver or termination is sought to be
enforced.

     Section 10.7.
PARTIES BOUND. This Agreement shall be binding on and inure to
the benefit of the parties hereto and their respective heirs, executors,
administrators, legal representatives, successors and assigns, except as
otherwise expressly provided for herein. No Related Party shall assign any of
its rights or obligations pursuant this Agreement.

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     Section 10.8. NO
THIRD PARTY BENEFICIARY. This Agreement is for the sole benefit of
Administrative Agent, Additional Collateral Agent, the Lenders and Borrowers and
is not for the benefit of any third party.

     Section 10.9.
EXECUTION IN COUNTERPARTS. This Agreement may be executed in
any number of counterparts and by the parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed to be an original,
and all of which taken together shall constitute but one and the same
instrument. Signatures delivered by facsimile, email (in .pdf format) and/or
other similar electronically transmitted format shall bind the parties hereto as
though such signatures were original.

     Section 10.10.
SEVERABILITY OF PROVISIONS. Any provision which is determined
to be unconscionable, against public policy or any provision of this Agreement
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.

     Section 10.11.
FURTHER INSTRUMENTS. Each Borrower and each Guarantor shall
from time to time execute and deliver, and shall cause each of its subsidiaries
to execute and deliver, all such amendments, supplements and other modifications
hereto and to the other Loan Documents and all such financing statements or
continuation statements, instruments of further assurance and any other
instruments, and shall take such other actions, as Administrative Agent or
Additional Collateral Agent reasonably requests and deems necessary or advisable
in furtherance of the agreements contained herein.

     Section 10.12.
GOVERNING LAW. EXCEPT TO THE EXTENT THAT THE LAW OF ANOTHER
JURISDICTION IS EXPRESSLY ELECTED IN A LOAN DOCUMENT, THE LOAN DOCUMENTS SHALL
BE DEEMED CONTRACTS AND INSTRUMENTS MADE UNDER THE LAWS OF THE STATE OF ILLINOIS
AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS
OF THE STATE OF ILLINOIS AND THE LAWS OF THE UNITED STATES OF AMERICA, WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAW.

     Section 10.13.
JURISDICTION AND VENUE. TO INDUCE THE LENDER PARTIES TO ENTER
INTO THIS AGREEMENT, EACH PARTY HERETO IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE
JURISDICTION OF ANY FEDERAL COURT OR ILLINOIS STATE COURT SITTING IN CHICAGO,
ILLINOIS, AND EACH PARTY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY HAVE AT
ANY TIME TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF
OR RELATING HERETO BROUGHT IN ANY SUCH COURT. EACH PARTY IRREVOCABLY WAIVES ANY
CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS
BEEN BROUGHT IN ANY INCONVENIENT FORUM AND FURTHER IRREVOCABLY WAIVES THE RIGHT
TO OBJECT, WITH RESPECT TO SUCH CLAIM, SUIT, ACTION OR PROCEEDING BROUGHT IN ANY
SUCH COURT, THAT SUCH COURT DOES NOT HAVE JURISDICTION OVER SUCH PARTY, PROVIDED
THAT SERVICE OF PROCESS IS MADE BY ANY LAWFUL MEANS. THE RELATED PARTIES HEREBY
WAIVE 

91




PERSONAL SERVICE OF ANY AND ALL PROCESS AND AGREES THAT ALL
SUCH SERVICE OF PROCESS MAY BE MADE UPON SUCH RELATED PARTY BY CERTIFIED OR
REGISTERED MAIL, RETURN RECEIPT REQUESTED, AND SERVICE SO MADE SHALL BE COMPLETE
TEN (10) DAYS AFTER THE SAME HAS BEEN POSTED.

     Section 10.14.
WAIVER. EXCEPT AS OTHERWISE PROVIDED FOR IN THIS AGREEMENT AND
TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW, EACH BORROWER AND EACH GUARANTOR
HEREBY WAIVE (i) PRESENTMENT, DEMAND AND PROTEST AND NOTICE OF PRESENTMENT,
PROTEST, DEFAULT, NON-PAYMENT, MATURITY, RELEASE, COMPROMISE, SETTLEMENT, AND
ONE OR MORE EXTENSIONS OR RENEWALS OF ANY OR ALL ACCOUNTS, CONTRACT RIGHTS,
DOCUMENTS, INSTRUMENTS, CHATTEL PAPER AND GUARANTIES AT ANY TIME HELD BY THE
ADMINISTRATIVE AGENT AND/OR THE LENDER ON WHICH ANY BORROWER OR ANY GUARANTOR
MAY IN ANY WAY BE LIABLE AND HEREBY RATIFIES AND CONFIRMS WHATEVER THE
ADMINISTRATIVE AGENT AND/OR THE LENDERS MAY DO IN THIS REGARD; (ii) ALL RIGHTS
TO NOTICE AND HEARING PRIOR TO THE ADMINISTRATIVE AGENT'S TAKING POSSESSION OR
CONTROL OF, OR THE ADMINISTRATIVE AGENT'S REPLEVIN, ATTACHMENT OR LEVY ON OR OF
THE COLLATERAL OR ANY BOND OR SECURITY WHICH MIGHT BE REQUIRED BY ANY COURT
PRIOR TO ALLOWING THE LENDER TO EXERCISE ANY OF THE LENDER PARTIES' REMEDIES;
AND (iii) THE BENEFIT OF ALL VALUATION, APPRAISEMENT OR EXEMPTION LAWS.

     Section 10.15.
ADVICE OF COUNSEL. EACH BORROWER AND EACH GUARANTOR
ACKNOWLEDGES THAT THEY HAVE BEEN REPRESENTED AND ADVISED BY INDEPENDENT LEGAL
COUNSEL WITH RESPECT TO THE NEGOTIATION, EXECUTION AND ACCEPTANCE OF THIS
AGREEMENT AND THE TRANSACTIONS GOVERNED BY THIS AGREEMENT AND HAVE RELIED UPON
THE ADVICE OF ITS INDEPENDENT LEGAL COUNSEL IN AGREEING TO THE TERMS AND
CONDITIONS HEREIN AND IN EXECUTING AND DELIVERING THIS AGREEMENT, AND THAT THEY
HAVE FREELY AND VOLUNTARILY ENTERED INTO THIS AGREEMENT AS THE PRODUCT OF ARMS'
LENGTH NEGOTIATIONS.

     Section 10.16.
WAIVER OF RIGHT TO TRIAL BY JURY. EACH LENDER PARTY, EACH
BORROWER AND EACH GUARANTOR HEREBY COVENANT AND AGREE THAT IN ANY SUIT, ACTION
OR PROCEEDING IN RESPECT OF ANY MATTER ARISING OUT OF THIS AGREEMENT, THE
DOCUMENTS EXECUTED IN CONNECTION HEREWITH, ANY WRITTEN AGREEMENT BETWEEN THE
PARTIES HERETO, WHETHER NOW EXISTING OR HEREAFTER ARISING OR IN ANY WAY RELATED
TO, CONNECTED WITH OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY WHETHER SOUNDING IN CONTRACT OR TORT
OR OTHERWISE, TRIAL SHALL BE TO A COURT OF COMPETENT JURISDICTION AND NOT TO A
JURY; EACH LENDER PARTY, EACH BORROWER AND EACH GUARANTOR HEREBY EXPRESSLY WAIVE
ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY. ANY PARTY MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT AS 

92




WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE
WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

     Section 10.17. TIME
OF ESSENCE. Time is of the essence for the performance of the
obligations set forth in this Agreement and the Loan Documents.

     Section 10.18. PUBLICATION;
ADVERTISEMENT.

          (a)
No Related Party will, directly or indirectly publish, disclose or otherwise use
in any public disclosure, advertising material, promotional material, press
release or interview, any reference to the name, logo or any trademark of
Administrative Agent, Additional Collateral Agent, any Lender or any of their
respective Affiliates or any reference to this Agreement or the financing
evidenced hereby, in any case except (i) as required by Law, subpoena or
judicial or similar order, in which case the applicable Related Party shall give
Administrative Agent prior written notice of such publication or other
disclosure or (ii) with Administrative Agent’s prior written consent, such
consent not to be unreasonably withheld.

          (b)
Each Lender and each Related Party hereby authorizes Administrative Agent,
Additional Collateral Agent and Initial Lender to publish the name of the
Lenders, Administrative Agent, Additional Collateral Agent and the Related
Parties, the existence of the financing arrangements referenced under this
Agreement, the primary purpose and/or structure of those arrangements, the
amount of credit extended under each facility, the title and role of each party
to this Agreement, and the total amount of the financing evidenced hereby in any
"tombstone", comparable advertisement or press release which Administrative
Agent or Initial Lender elects to submit for publication.

     Section 10.19. Amendment
and Restatement.

          (a)
This Agreement, among other things, (i) amends and restated in its entirety the
Existing Carbiz Loan Agreement and (ii) evidences Houston Auto’s agreement to
become a co-Borrower with the other Borrowers under this facility, all on the
terms and conditions contained herein.

          (b)
Any “Indebtedness” as defined in and which is outstanding under the Existing
Carbiz Loan Agreement immediately prior to the effectiveness of this Agreement
shall be deemed refinanced pursuant to the terms of this Agreement and
constitute outstanding Indebtedness hereunder.

          (c)
Anything contained herein to the contrary notwithstanding, this Agreement is not
intended to and shall not serve to effect a novation of the “Indebtedness”
defined in and outstanding under the Existing Carbiz Loan Agreement. Instead, it
is the express intention of the parties hereto to reaffirm the indebtedness,
obligations and liabilities created under the Existing Carbiz Loan Agreement
which is evidenced by the promissory notes provided for therein and secured by
the Collateral. Each Related Party acknowledges and confirms that the liens and
security interests granted pursuant to the Loan Documents secure the
indebtedness, liabilities and obligations of the Related Parties to the Lender
Parties under the Existing Carbiz Loan Agreement, as amended and restated hereby
(except that the grants of Liens under and pursuant to the Loan Documents shall
continue unaltered, and each other Loan Document shall 

93




continue in full force and effect in accordance with its terms
unless otherwise amended by the parties thereto, and the parties hereto hereby
ratify and confirm the terms thereof as being in full force and effect and
unaltered by this Agreement), and that the term “Indebtedness” as used in the
Loan Documents (or any other term used therein to describe or refer to the
indebtedness, liabilities and obligations of the Borrowers to the Lender
Parties) includes, without limitation, the indebtedness, liabilities and
obligations of the Borrowers under this Agreement and the Notes to be delivered
hereunder, and under the Existing Carbiz Loan Agreement, as amended and restated
hereby, as the same further may be amended, modified, supplemented and/or
restated from time to time. The Loan Documents and all agreements, instruments
and documents executed or delivered in connection with any of the foregoing
shall each be deemed to be amended to the extent necessary to give effect to the
provisions of this Agreement. Each reference to the “Loan Agreement” or “Loan
and Security Agreement” (or any other term used to describe the Existing Carbiz
Loan Agreement) in any Loan Document shall mean and be a reference to this
Agreement (as further amended, restated, supplemented or otherwise modified from
time to time) and each reference to “Borrower” or “Borrowers” in any Loan
Document shall mean and be a reference to all Borrowers hereunder, individually
and collectively. Cross-references in the Loan Documents to particular section
numbers in the Existing Carbiz Loan Agreement shall be deemed to be
cross-references to the corresponding sections, as applicable, of this
Agreement. 

ARTICLE 11
JOINT AND SEVERAL LIABILITY; CROSS
GUARANTY; SUBORDINATION

     Section 11.1. JOINT AND
SEVERAL LIABILITY; CROSS GUARANTY.

          (a)
Each Borrower hereby acknowledges and agrees that such Borrower is jointly and
severally liable for all of the Indebtedness, and hereby absolutely and
unconditionally guarantees to the Administrative Agent, for the benefit of the
Lender Parties, the full and prompt payment (whether at stated maturity, by
acceleration or otherwise) and performance of, all Indebtedness and other
obligations and amounts owed or hereafter owing to the Lender Parties under this
Agreement by each other Borrower. Each Borrower agrees that its guaranty
obligation hereunder is a continuing guaranty of payment and performance and not
of collection, that its obligations under this Section shall not be discharged
until payment and performance, in full, of the Indebtedness and other amounts
owed or hereafter owing under this Agreement has occurred and termination of all
commitments to lend under this Agreement, and that its obligations under this
Section shall be absolute and unconditional, irrespective of, and unaffected
by:

          (i)
the genuineness, validity, regularity, enforceability or any future amendment
of, or change in, this Agreement, any other Loan Document or any other
agreement, document or instrument to which any Borrower is or may become a
party;

          (ii)
the absence of any action to enforce this Agreement (including this Section) or
any other Loan Document or the waiver or consent by Lender Parties with respect
to any of the provisions thereof;

94




          (iii)
the existence, value or condition of, or failure to perfect its security
interest in or lien against, any security for the Indebtedness or any action, or
the absence of any action, by Lender Parties in respect thereof (including the
release of any such security); 

          (iv) the
insolvency of any Borrower or Guarantor; or

          (v)
any other action or circumstances that might otherwise constitute a legal or
equitable discharge or defense of a surety or guarantor.

     Each Borrower shall be regarded,
and shall be in the same position, as principal debtor with respect to the
Indebtedness and other amounts guaranteed hereunder.

          (b)
Waivers by Borrowers. Each Borrower expressly waives all rights it may
have now or in the future under any statute, or at common law, or at law or in
equity, or otherwise, to subrogation, to compel Administrative Agent, Additional
Collateral Agent or any Lender to marshal assets or to proceed in respect of the
Indebtedness and other amounts guaranteed hereunder against any other Borrower
or Guarantor, any other party or against any security for the payment and
performance of the Indebtedness and other amounts before proceeding against, or
as a condition to proceeding against, such Borrower. It is agreed among each
Borrower and the Lender Parties that the foregoing waivers are of the essence of
the transaction contemplated by this Agreement and the other Loan Documents and
that, but for the provisions of this Section and such waivers, the Lender
Parties would decline to enter into this Agreement.

          (c)
Benefit of Guaranty. Each Borrower agrees that the provisions of this
Section are for the benefit of the Lender Parties and their successors,
transferees, endorsees and assigns, and nothing herein contained shall impair,
as between any other Borrower and the Lender Parties, the obligations of such
other Borrower under the Loan Documents. 

          (d)
Election of Remedies. If the Lender Parties may, under applicable law,
proceed to realize their benefits under any of the Loan Documents giving the
Administrative Agent or Additional Collateral Agent, for the benefit of the
Lender Parties, a security interest in or lien upon any Collateral, whether
owned by any Borrower or by any Guarantor, either by judicial foreclosure or by
non-judicial sale or enforcement, the Lender Parties may, at their sole option,
determine which of their remedies or rights they may pursue without affecting
any of the rights and remedies under this Section. If, in the exercise of any of
their rights and remedies, the Lender Parties shall forfeit any of their rights
or remedies, including their right to enter a deficiency judgment against any
Borrower or any other Guarantor, whether because of any applicable laws
pertaining to “election of remedies” or the like, each Borrower hereby consents
to such action by the Lender Parties and waives any claim based upon such
action. Any election of remedies that results in the denial or impairment of the
right of the Lender Parties to seek a deficiency judgment against any Borrower
shall not impair any other Borrower’s obligation to pay the full amount of the
Indebtedness and other amounts owed or hereafter owing under this Agreement. In
the event the Lender Parties shall bid at any foreclosure or trustee’s sale or
at any private sale permitted by law or the Loan Documents, the Lender Parties
may bid all or less than the amount of the Indebtedness and other amounts owed
or hereafter owing under this 

95




Agreement and the amount of such bid need not be paid by the
Lender Parties but shall be credited against such Indebtedness and other
amounts. The amount of the successful bid at any such sale, whether the Lender
Parties or any other party is the successful bidder, shall be conclusively
deemed to be the fair market value of the Collateral and the difference between
such bid amount and the remaining balance of the Indebtedness and other amounts
owed or hereafter owing under this Agreement shall be conclusively deemed to be
the amount of the Indebtedness and other amounts guaranteed under this Section,
notwithstanding that any present or future law or court decision or ruling may
have the effect of reducing the amount of any deficiency claim to which the
Lender Parties might otherwise be entitled but for such bidding at any such
sale.

          (e)
Liability Cumulative. The liability of Borrowers under this Article 11 is
in addition to and shall be cumulative with all liabilities of each Borrower to
the Lender Parties under this Agreement and the other Loan Documents to which
such Borrower is a party or in respect of any Indebtedness or obligation of the
other Borrowers, without any limitation as to amount, unless the instrument or
agreement evidencing or creating such other liability specifically provides to
the contrary.

          (f)
Fraudulent Conveyance. Notwithstanding anything to the contrary set forth
in this Section 11.1, it is the intent of the parties hereto that the liability
incurred by each Borrower in respect of the Indebtedness of the other Borrowers
(and any Lien granted by each Borrower to secure such Indebtedness), not
constitute a fraudulent conveyance under Section 548 of the United States
Bankruptcy Code or a fraudulent conveyance or fraudulent transfer under the
provisions of any applicable law of any state or other governmental unit
("Fraudulent Conveyance"). Consequently, each Borrower,
Administrative Agent, Additional Collateral Agent and each Lender hereby agree
that if a court of competent jurisdiction determines that the incurrence of
liability by any Borrower in respect of the Indebtedness of any other Borrower
(or any Liens granted by such Borrower to secure such Indebtedness) would, but
for the application of this sentence, constitute a Fraudulent Conveyance, such
liability (and such Liens) shall be valid and enforceable only to the maximum
extent that would not cause the same to constitute a Fraudulent Conveyance, and
this Agreement and the other Loan Documents shall automatically be deemed to
have been amended accordingly.

     Section 11.2.
SUBORDINATION.

          (a)
Each Borrower covenants and agrees that the payment of all indebtedness,
principal, interest (including interest which accrues after the commencement of
any case or proceeding in bankruptcy, or for the reorganization of any
Borrower), fees, charges, expenses, attorneys’ fees and any other sum,
obligation or liability owing by any other Borrower to such Borrower, including
any intercompany loans or trade payables or royalty or licensing fees
(collectively, the “Intercompany Obligations”), is subordinated, to the
extent and in the manner provided in this Section 11.2, to the prior payment in
full of all Indebtedness and other amounts owed or hereafter owing under this
Agreement (herein, the “Senior Obligations”) and that the subordination
is for the benefit of the Lender Parties, and the Lender Parties may enforce
such provisions directly.

96




          (b)
Each Borrower executing this Agreement hereby (i) authorizes the Lender Parties
to demand specific performance of the terms of this Section 11.2, whether or not
any other Borrower shall have complied with any of the provisions hereof
applicable to it, at any time when such Borrower shall have failed to comply
with any provisions of this Section 11.2 which are applicable to it and (ii)
irrevocably waives any defense based on the adequacy of a remedy at law, which
might be asserted as a bar to such remedy of specific performance.

          (c)
Upon any distribution of assets of any Borrower in any dissolution, winding up,
liquidation or reorganization (whether in bankruptcy, insolvency or receivership
proceedings or upon an assignment for the benefit of creditors or
otherwise):

          (i)
The Lender Parties shall first be entitled to receive payment in full in cash of
the Senior Obligations before any Borrower is entitled to receive any payment on
account of the Intercompany Obligations.

          (ii)
Any payment or distribution of assets of any Borrower of any kind or character,
whether in cash, property or securities, to which any other Borrower would be
entitled except for the provisions of this Section 11.2(c), shall be paid by the
liquidating trustee or agent or other person making such payment or distribution
directly to the Administrative Agent, for the benefit of the Lender Parties, to
the extent necessary to make payment in full of all Senior Obligations remaining
unpaid after giving effect to any concurrent payment or distribution or
provisions therefor to the Lender Parties.

          (iii)
In the event that notwithstanding the foregoing provisions of this Section
11.2(c), any payment or distribution of assets of any Borrower of any kind or
character, whether in cash, property or securities, shall be received by any
other Borrower on account of the Intercompany Obligations before all Senior
Obligations are paid in full, such payment or distribution shall be received and
held in trust for and shall be paid over to the Administrative Agent for
application to the payment of the Senior Obligations until all of the Senior
Obligations shall have been paid in full, after giving effect to any concurrent
payment or distribution or provision therefor to the Lender Parties.

     No right of the Lender Parties or
any other present or future holders of any Senior Obligations to enforce the
subordination provisions herein shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of any Borrower or by any act
or failure to act, in good faith, by any such holder, or by any noncompliance by
any Borrower with the terms hereof, regardless of any knowledge thereof which
any such holder may have or be otherwise charged with.

- Remainder of Page Intentionally Left Blank; Signature
Pages Follow -

97




     IN WITNESS WHEREOF, the parties
have executed this Agreement on the day and year first set forth above.

	 	BORROWERS: 
	 	 
	 	CARBIZ AUTO CREDIT AQ, INC.,
    
	 	a Florida corporation 
	 	 	  
	 	By: 	
	 	Name: 	 
	 	Its: 	 
	 	 
	 	CARBIZ USA INC., 
	 	a Delaware corporation 
	 	 	  
	 	By: 	
	 	Name: 	 
	 	Its: 	 
	 	 	  
	 	CARBIZ AUTO CREDIT, INC.,
  
	 	a Florida corporation 
	 	 	  
	 	By: 	
	 	Name: 	 
	 	Its: 	 
	 	 	  
	 	CARBIZ AUTO CREDIT JV1, LLC,
    
	 	a Florida limited liability company
    
	 	 	  
	 	By: 	
	 	Name: 	 
	 	Its: 	 
	 	 	  
	 	 	  
	 	TEXAS AUTO CREDIT, INC., a
      Florida 
	 	corporation 
	 	 	  
	 	By: 	
	 	Name: 	 
	 	Its: 	 


SIGNATURE PAGE – SECOND AMENDED AND RESTATED LOAN AND SECURITY
AGREEMENT





	 	GUARANTORS: 
	 	 
	 	CARBIZ INC., 
	 	an Ontario corporation 
	 	 	  
	 	By: 	
	 	Name: 	 
	 	Its: 	 


SIGNATURE PAGE – SECOND AMENDED AND RESTATED LOAN AND SECURITY
AGREEMENT





	 	ADMINISTRATIVE AGENT: 
	 	  	  
	 	SWC SERVICES LLC, a Delaware
      limited 
	 	liability company, as Administrative
      Agent 
	 	  	  
	 	By: 	 
    
	 	Name: 	Gregory Bell 
	 	Its: 	Manager 
	 	  	  
	 	  	  
	 	  	  
	 	ADDITIONAL COLLATERAL AGENT:
    
	 	  	  
	 	AGM, LLC, a Delaware limited
      liability company, 
	 	as Additional Collateral Agent 
	 	  	  
	 	By: 	 
    
	 	Name: 	Gregory Bell 
	 	Its: 	Manager 
	 	  	  
	 	  	  
	 	  	  
	 	INITIAL LENDER: 
	 	  	  
	 	SWC SERVICES LLC, a Delaware
      limited 
	 	liability company, as Initial Lender
    
	 	  	  
	 	By: 	 
    
	 	Name: 	Gregory Bell 
	 	Its: 	Manager 


SIGNATURE PAGE – SECOND AMENDED AND RESTATED LOAN AND SECURITY
AGREEMENT




SCHEDULE A TO
SECOND AMENDED AND RESTATED LOAN AND SECURITY
AGREEMENT

     This Schedule A to the Second
Amended and Restated Loan and Security Agreement is executed in conjunction with
that certain Amended and Restated Loan and Security Agreement dated as of
December 24, 2007 (as amended, restated, supplemented or otherwise modified from
time to time, the “Loan Agreement”), by and among (a) CARBIZ AUTO CREDIT
AQ, INC., a Florida corporation, CARBIZ USA INC., a Delaware corporation, CARBIZ
AUTO CREDIT, INC., a Florida corporation, CARBIZ AUTO CREDIT JV1, LLC, a Florida
limited liability company, and TEXAS AUTO CREDIT, INC., a Florida corporation,
as Borrowers, (b) CARBIZ INC., an Ontario corporation, as a Guarantor, (c) SWC
SERVICES LLC, a Delaware limited liability company, as Initial Lender, (d) the
other Lenders from time to time party hereto, (e) SWC SERVICES LLC, a Delaware
limited liability company, as Administrative Agent for the Lenders, and (f) AGM,
LLC, a Delaware limited liability company, as Additional Collateral Agent for
the Lenders. Capitalized terms used but not defined herein shall have the
meanings given such terms in the Loan Agreement.

	 
	 
	ELIGIBLE RECEIVABLES TESTS




	SECTION 1.1(a)(i) 	AGING PROCEDURES 


     The term “Aging Procedures” shall
mean, with respect to a Receivable, such Receivable has been reported to the
Lender in compliance with the following aging procedures:

	 	No payment
      missed or due 	=
      	Current
  
	 	1 to 30 days past due 	= 	“30 day Account” 
	 	31 to 60 days
      past due 	=
      	“60 day Account”
      
	 	61 or more days past due
    	= 	“60+ day Account”
  



	SECTION 1.1(a)(ii) 	APPROVED STATES 


     The term “Approved State” shall
mean Florida, Illinois, Indiana, Iowa, Kentucky, Nebraska, Ohio, Oklahoma and
Texas. 

	SECTION 1.1(a)(iii) 	ELIGIBLE RECEIVABLES A



     The term "Eligibility Receivables
A" shall mean those Receivables of the Initial Borrowers that are acceptable to
Administrative Agent, in its reasonable discretion, and, in each case, that
meet, at a minimum, all of the following requirements:

     (i) are originated by an Initial
Borrower (and that do not constitute Calcott Receivables) and arise from the
extension of credit, the sale and delivery of goods, including automobiles,
light trucks and other vehicles, or the rendering of services in the ordinary
course of an Initial Borrower’s business;

1




     (ii) is genuine, is in all
respects what it purports to be and the Consumer Loan Documents evidencing such
Eligible Receivable have only one original counterpart and include only one
original promissory note which constitutes an instrument under the UCC and no
Person other than Administrative Agent, Additional Collateral Agent or a
Custodian is in actual or constructive possession of any such original Consumer
Loan Documents.

     (iii) represent a valid and
binding obligation of the related Account Debtor enforceable in accordance with
its terms for the amount outstanding thereof without offset, counterclaim or
defense (whether actual or alleged);

     (iv) as to which the Account
Debtor thereunder is personally liable pursuant to the applicable Consumer Loan
Documents;

     (v) comply, and as to which the
related Consumer Loan Documents comply, in all respects with all applicable
Laws, including, but not limited to, truth in lending and credit disclosure laws
and regulations and all applicable state and federal usury laws;

     (vi) as to which (x) the related
Consumer Loan Documents are in form and substance satisfactory to Administrative
Agent and have been delivered to the applicable Custodian pursuant to the terms
of Section 3.4 of the Loan Agreement, but provided, however, that if the
Auto Title has not been delivered to the applicable Custodian within sixty (60)
days after execution of the Consumer Loan Documents, any such Receivable shall
not be an Eligible Receivable A until such Auto Title is so delivered and all
other requirements hereunder are met, and (y) all amounts and information
appearing on such Consumer Loan Documents or otherwise furnished to Lenders in
connection therewith are true and correct and undisputed by the Account Debtor
thereon or any guarantor thereof;

     (vii) as to which the related
Account Debtor and Borrowers are not engaged in any litigation, including any
action regarding nonpayment thereof;

     (viii) as to which no set-offs,
counterclaims, defenses or disputes as to payments or liability thereon exist or
have been asserted with respect thereto and no Borrower has made any agreement
with any Account Debtor thereunder for any deduction therefrom, except a
discount or allowance allowed by a Borrower in the ordinary course of its
business for prompt payment, all of which discounts or allowances are reflected
in the calculation of the outstanding amount of such Eligible Receivable;

     (ix) none of the Receivable, the
Account Debtor thereon or any guarantor thereof is subject to any receivership,
insolvency or bankruptcy proceeding, nor is any Account Debtor thereon or any
guarantor thereof insolvent or has failed to meet its debts as they mature;

     (x) no facts, events or
occurrences exist that, in any way, impair the validity or enforcement thereof
or tend to reduce the amount payable thereunder from the amount of the
Receivable shown on any schedule, or on all contracts, invoices or statements
delivered to Administrative Agent with respect thereto.

     (xi) no proceedings or actions
are threatened or pending against any Account Debtor that might result in any
material adverse change in the Account Debtor's financial condition.

2




     (xii) no instrument of release or
waiver has been executed in connection with any Consumer Loan Document, and no
Account Debtor has been released from its obligations thereunder, in whole or in
part, and no action has been taken by a Borrower to release any collateral under
the Consumer Loan Documents (other than releases of collateral in respect of
Receivables that have been paid in full).

     (xiii) except as disclosed in
writing to Administrative Agent, no Consumer Loan Document has been amended
after the date on which such contract is pledged to the Administrative Agent,
for the benefit of the Lender Parties, hereunder in any material respect or such
that the amount of any monthly payment or the total number of the monthly
payments is increased or such that the amount of any monthly payment or the
total number of monthly payments is decreased.

     (xiv) the Borrowers have good and
sufficient right to pledge, assign and deliver the Receivables free and clear
from all Liens whatsoever (other than any Liens in favor of the Administrative
Agent and Additional Collateral Agent);

     (xv) neither the Account Debtor
thereon nor any guarantor thereof is employed by, related to, a principal of or
affiliated with any Borrower or any Guarantor;

     (xvi) to the Borrowers’
knowledge, no condition exists that materially or adversely affects the value of
the Receivables or jeopardizes any security therefor;

     (xvii) if the Receivables arise
from the sale of goods, such goods have been delivered and accepted by the
Account Debtor and are still subject to the lawful possession and control of the
Account Debtor and have not been otherwise returned to or repossessed by any
Initial Borrower;

     (xviii) the original principal
amount thereof does not exceed the Maximum Amount of an Eligible Receivable A
and the original term thereof does not exceed the Maximum Term of an Eligible
Receivable A;

     (xix) has been reported to
Administrative Agent and Lenders in compliance with the Aging Procedures;

     (xx) is not evidenced by a judgment
  or has not been reduced to judgment; 

     (xxi) is not an open account or a revolving
  line of credit;

      (xxii) the Account Debtor thereunder
  is a legal resident of the United States; 

     (xxiii) payments under the Receivable
  are to be made in United States dollars;

     (xxiv) the number of days between
contractual payment dates of a Receivable does not exceed thirty (30) days based
on a three hundred sixty (360) day year (or if a Tier 2 Eligible Receivable A,
sixty (60) days);

     (xxv) complies with all Underwriting
Guidelines;

3




     (xxvi) has been originated in an
Approved State;

     (xxvii) payment thereof is
secured by a first priority Lien in the related Account Debtor’s automobile or
other vehicle financed by such Receivable, free and clear of any Liens of other
Persons (including without limitation any mechanic’s lien or claim for work,
labor or material affecting such vehicle but excluding any Liens in favor of the
Administrative Agent or Additional Collateral Agent), for which the related Auto
Title has been issued in an Initial Borrower’s name and which automobile or
other vehicle is equipped with a SID/GPS Device (provided that such vehicle need
not be equipped with a SID/GPS Device to the extent such Receivable is a
Receivable acquired by Carbiz AQ pursuant to the Calcott Asset Purchase
Agreement and in existence on the Restatement Closing Date);

     (xxviii) is not a previously sold
Receivable repurchased by an Initial Borrower on recourse;

     (xxix) (a) is thirty (30)
days or less contractually past due under the due date set forth in the
underlying Consumer Loan Documents (provided Receivables that otherwise would
constitute Eligible Receivables because they satisfy all of the other
eligibility criteria set forth herein may continue to be treated as Eligible
Receivables if they are more than thirty (30) days contractually past due so
long as such Receivables are no more than sixty (60) days contractually past due
and the amount of such Receivables that are deemed eligible due to this
parenthetical do not exceed at any time six percent (6%) of the aggregate amount
of Eligible Receivables A that are not Tier 2 Eligible Receivables A) and, with
respect to a particular Consumer Loan Document, has not been extended more than
two (2) times in any three hundred and sixty (360) day period (with any such
extension limited to thirty (30) days or less and permitted only after three
months of consecutive payments), excluding any extensions in effect as of the
Restatement Closing Date and one additional one time extension of not more than
fourteen calendar days over the life of such Consumer Loan Document, or
(b), if a Tier 2 Eligible Receivable A, is sixty (60) days or less
contractually past due under the due date set forth in the underlying Consumer
Loan Documents and, with respect to a particular Consumer Loan Document, has not
been extended more than two (2) times in any three hundred and sixty (360) day
period (with any such extension limited to thirty (30) days or less and
permitted only after three months of consecutive payments), excluding any
extensions in effect as of the Restatement Closing Date and one additional one
time extension of not more than fourteen calendar days over the life of such
Consumer Loan Document.

     (xxx) carries a minimum interest
rate of 15.99% (provided (i) such minimum interest rate shall be 14% in Florida
and, until such time as a Borrower is properly licensed in Nebraska so that it
is permitted to charge a rate higher than 15.95%, 15.95% in Nebraska and (ii)
with respect to a Tier 2 Eligible Receivable A, such minimum interest rate shall
be at least 19.99%);

     (xxxi) at the time of origination
of the Receivable, has maximum mileage on the underlying vehicle securing the
Consumer Loan Documents that is not greater than 170,000 miles, or with respect
to a Tier 2 Eligible Receivable A, the applicable lesser amount required
pursuant to the Tier 2 Guidelines applicable thereto; and

4




     (xxxii) the automobiles and light
trucks that are subject of the Receivable shall not exceed fifteen (15) model
years in age as of the date of the Receivable, or with respect to a Tier 2
Eligible Receivable A, the applicable lesser amount required pursuant to the
Tier 2 Guidelines applicable thereto.

	 	 
	 	 
	SECTION 1.1(a)(iv) 	MAXIMUM AMOUNT OF AN ELIGIBLE
      RECEIVABLE A 


The maximum principal balance of an
Eligible Receivable A (the “Maximum Amount of an Eligible Receivable
A”), for any date of determination, shall not exceed Six Thousand Five
Hundred and No/100 Dollars ($6,500.00) as of such determination date,
provided that, if (i) an Eligible Receivable A satisfies the Tier
2 Guidelines (without an exception thereto unless approved by Administrative
Agent) and (ii) Administrative Agent shall have provided its written
consent to the Initial Borrowers therefor (which consent shall be applicable to
the sale of Automobile Inventory and the generation of Tier 2 Eligible
Receivables A and inclusion of same in the calculation of Maximum Amount of
Eligible Receivables A in excess of $6,500 on a location by location basis), the
maximum principal balance of an Eligible Receivable A for any date of
determination shall not exceed $10,000, $15,000 or $20,000, as applicable, based
upon the criteria for minimum credit score, maximum mileage of the financed
Automobile Inventory, maximum model year age of the financed Automobile
Inventory and minimum down payment set forth on the Tier 2 Guidelines. 

	 	 
	 	 
	SECTION 1.1(a)(v) 	MAXIMUM TERM OF AN ELIGIBLE RECEIVABLE A
    



	 	
      The maximum term of an Eligible Receivable A (the
      “Maximum Term of an Eligible Receivable A”), for any date of
      determination, shall not have more than one hundred and twenty (120) weeks
      remaining until the due date of such Eligible Receivable A, as of such
      determination date, provided, that, if (i) an
      Eligible Receivable A satisfies the Tier 2 Guidelines (without an
      exception thereto unless approved by Administrative Agent) and (ii)
      Administrative Agent shall have provided its written consent to the
      Initial Borrowers therefor (which consent shall be applicable to the sale
      of Automobile Inventory and the generation of Tier 2 Eligible Receivables
      A and inclusion of same in the calculation of Maximum Amount of Eligible
      Receivables A in excess of $6,500 on a location by location basis), the
      maximum term of an Eligible Receivable A shall not exceed 36 months, 48
      months or 60 months, as applicable, based upon the criteria for minimum,
      credit score, maximum mileage of the financed Automobile Inventory,
      maximum model year age of the financed Automobile Inventory and minimum
      down payment set forth on the Tier 2 Guidelines. 

	 	 
	 	 


5





	SECTION 1.1(a)(vi) 	ELIGIBLE RECEIVABLES B



     The term "Eligibility Receivables
B" shall mean those Receivables of Houston Auto that are acceptable to
Administrative Agent, in its reasonable discretion, and, in each case, that
meet, at a minimum, all of the following requirements:

     (i) are originated by Houston
Auto (and that do not constitute Texas Legacy Receivables) and arise from the
extension of credit, the sale and delivery of goods, including automobiles,
light trucks and other vehicles, or the rendering of services in the ordinary
course of Houston Auto’s business;

     (ii) is genuine, is in all
respects what it purports to be and the Consumer Loan Documents evidencing such
Eligible Receivable have only one original counterpart and include only one
original promissory note which constitutes an instrument under the UCC and no
Person other than Administrative Agent, Additional Collateral Agent or a
Custodian is in actual or constructive possession of any such original Consumer
Loan Documents.

     (iii) represent a valid and
binding obligation of the related Account Debtor enforceable in accordance with
its terms for the amount outstanding thereof without offset, counterclaim or
defense (whether actual or alleged);

     (iv) as to which the Account
Debtor thereunder is personally liable pursuant to the applicable Consumer Loan
Documents;

     (v) comply, and as to which the
related Consumer Loan Documents comply, in all respects with all applicable
Laws, including, but not limited to, truth in lending and credit disclosure laws
and regulations and all applicable state and federal usury laws;

     (vi) as to which (x) the related
Consumer Loan Documents are in form and substance satisfactory to Administrative
Agent and have been delivered to the applicable Custodian pursuant to the terms
of Section 3.4 of the Loan Agreement, but provided, however, that if the
Auto Title has not been delivered to the applicable Custodian within sixty (60)
days after execution of the Consumer Loan Documents, any such Receivable shall
not be an Eligible Receivable B until such Auto Title is so delivered and all
other requirements hereunder are met, and (y) all amounts and information
appearing on such Consumer Loan Documents or otherwise furnished to Lenders in
connection therewith are true and correct and undisputed by the Account Debtor
thereon or any guarantor thereof;

     (vii) as to which the related
Account Debtor and Borrowers are not engaged in any litigation, including any
action regarding nonpayment thereof;

     (viii) as to which no set-offs,
counterclaims, defenses or disputes as to payments or liability thereon exist or
have been asserted with respect thereto and Houston Auto has not made any
agreement with any Account Debtor thereunder for any deduction therefrom, except
a discount or allowance allowed by Houston Auto in the ordinary course of its
business for prompt payment, all of which discounts or allowances are reflected
in the calculation of the outstanding amount of such Eligible Receivable;

6




     (ix) none of the Receivable, the
Account Debtor thereon or any guarantor thereof is subject to any receivership,
insolvency or bankruptcy proceeding, nor is any Account Debtor thereon or any
guarantor thereof insolvent or has failed to meet its debts as they mature;

     (x) no facts, events or
occurrences exist that, in any way, impair the validity or enforcement thereof
or tend to reduce the amount payable thereunder from the amount of the
Receivable shown on any schedule, or on all contracts, invoices or statements
delivered to Administrative Agent with respect thereto.

     (xi) no proceedings or actions
are threatened or pending against any Account Debtor that might result in any
material adverse change in the Account Debtor's financial condition.

     (xii) no instrument of release or
waiver has been executed in connection with any Consumer Loan Document, and no
Account Debtor has been released from its obligations thereunder, in whole or in
part, and no action has been taken by Houston Auto to release any collateral
under the Consumer Loan Documents (other than releases of collateral in respect
of Receivables that have been paid in full).

     (xiii) except as disclosed in
writing to Administrative Agent, no Consumer Loan Document has been amended
after the date on which such contract is pledged to the Administrative Agent,
for the benefit of the Lender Parties, hereunder in any material respect or such
that the amount of any monthly payment or the total number of the monthly
payments is increased or such that the amount of any monthly payment or the
total number of monthly payments is decreased.

     (xiv) Houston Auto has good and
sufficient right to pledge, assign and deliver the Receivables free and clear
from all Liens whatsoever (other than any Liens in favor of the Administrative
Agent and Additional Collateral Agent);

     (xv) neither the Account Debtor
thereon nor any guarantor thereof is employed by, related to, a principal of or
affiliated with any Borrower or any Guarantor;

     (xvi) to the Borrowers’
knowledge, no condition exists that materially or adversely affects the value of
the Receivables or jeopardizes any security therefor;

     (xvii) if the Receivables arise
from the sale of goods, such goods have been delivered and accepted by the
Account Debtor and are still subject to the lawful possession and control of the
Account Debtor and have not been otherwise returned to or repossessed by Houston
Auto;

     (xviii) the original principal
amount thereof does not exceed the Maximum Amount of an Eligible Receivable B
and the original term thereof does not exceed the Maximum Term of an Eligible
Receivable B;

     (xix) has been reported to
Administrative Agent and Lenders in compliance with the Aging Procedures;

     (xx) is not evidenced by a judgment or
has not been reduced to judgment;

7




     (xxi) is not an open account or a
revolving line of credit;

     (xxii) the Account Debtor thereunder
is a legal resident of the United States;

     (xxiii) payments under the Receivable
are to be made in United States dollars;

     (xxiv) the number of days between
contractual payment dates of a Receivable does not exceed sixty (60) days based
on a three hundred sixty (360) day year;

     (xxv) complies with all Underwriting
Guidelines;

     (xxvi) has been originated in an
Approved State;

     (xxvii) payment thereof is
secured by a first priority Lien in the related Account Debtor’s automobile or
other vehicle financed by such Receivable, free and clear of any Liens of other
Persons (including without limitation any mechanic’s lien or claim for work,
labor or material affecting such vehicle but excluding any Liens in favor of the
Administrative Agent or Additional Collateral Agent), for which the related Auto
Title has been issued in Houston Auto’s name and which automobile or other
vehicle is equipped with a SID/GPS Device (provided that such vehicle need not
be equipped with a SID/GPS Device to the extent such Receivable is a Receivable
acquired by Houston Auto pursuant to the AGM Asset Purchase Agreement and in
existence on the Closing Date);

     (xxviii)is not a previously sold
Receivable repurchased by Houston Auto on recourse;

     (xxix) is sixty (60) days or less
contractually past due under the due date set forth in the underlying Consumer
Loan Documents and, with respect to a particular Consumer Loan Document, has not
been extended more than two (2) times in any three hundred and sixty (360) day
period (with any such extension limited to thirty (30) days or less and
permitted only after three months of consecutive payments), excluding any
extensions in effect as of the Restatement Closing Date and one additional one
time extension of not more than fourteen calendar days over the life of such
Consumer Loan Document.

     (xxx) carries a minimum interest
rate of 17.99%, or, with respect to a Tier 2 Eligible Receivable B, 19.99%;

     (xxxi) at the time of origination
of the Receivable, has maximum mileage on the underlying vehicle securing the
Consumer Loan Documents that is not greater than 170,000 miles, or with respect
to a Tier 2 Eligible Receivable B, the applicable lesser amount required
pursuant to the Tier 2 Guidelines applicable thereto; and

     (xxxii) the automobiles and light
trucks that are subject of the Receivable shall not exceed fifteen (15) model
years in age as of the date of the Receivable, or with respect to a Tier 2
Eligible Receivable B, the applicable lesser amount required pursuant to the
Tier 2 Guidelines applicable thereto.

8





	 	 
	 	 
	SECTION 1.1(a)(vii) 	MAXIMUM AMOUNT OF AN ELIGIBLE
      RECEIVABLE B 


The maximum principal balance of an
Eligible Receivable B (the “Maximum Amount of an Eligible Receivable
B”), for any date of determination, shall not exceed Six Thousand Five
Hundred and No/100 Dollars ($6,500.00) as of such determination date, provided,
that in the event such Eligible Receivable B satisfies the Tier 2 Guidelines
(without an exception thereto unless approved by Administrative Agent), the
maximum principal balance of an Eligible Receivable B for any date of
determination shall not exceed $10,000, $15,000 or $20,000, as applicable, based
upon the criteria for minimum credit score, maximum mileage of the financed
Automobile Inventory, maximum model year age of the financed Automobile
Inventory and minimum down payment set forth on the Tier 2 Guidelines. 

	 	 
	 	 
	SECTION 1.1(a)(viii) 	MAXIMUM TERM OF AN ELIGIBLE RECEIVABLE B
    


The maximum term of an Eligible
Receivable B (the “Maximum Term of an Eligible Receivable B”), for
any date of determination, shall not have more than one hundred and twenty (120)
weeks remaining until the due date of such Eligible Receivable B, as of such
determination date, provided, that in the event such Eligible Receivable B
satisfies the Tier 2 Guidelines (without an exception thereto unless approved by
Administrative Agent), the maximum term of an Eligible Receivable B shall not
exceed 36 months, 48 months or 60 months, as applicable, based upon the criteria
for minimum, credit score, maximum mileage of the financed Automobile Inventory,
maximum model year age of the financed Automobile Inventory and minimum down
payment set forth on the Tier 2 Guidelines.

	 	 
	 	 
	SECTION 1.1(b)(i) 	ELIGIBLE INVENTORY A



The term “Eligible Inventory A” shall
mean Automobile Inventory of the Initial Borrowers that is acceptable to
Administrative Agent, in its reasonable discretion, and, in each case, that
meet, at a minimum, all of the following requirements:

     (i) such
Automobile Inventory is the full control and possession of an Initial Borrower
and located at an Initial Borrower’s place of business identified on Schedule


9




5.1(n) hereto with respect to which
Administrative Agent has received a collateral access agreement from the
applicable lessors and/or mortgagees, in form and substance reasonably
acceptable to Administrative Agent;

     (ii) such
Automobile Inventory is subject to a first priority perfected Lien in favor of
Administrative Agent or Additional Collateral Agent;

     (iii)
such Automobile Inventory is owned by an Initial Borrower free and clear of the
Lien of any Person other than the Lien of Administrative Agent and Additional
Collateral Agent;

     (iv) such
Automobile Inventory has been owned by Borrowers for a period of one hundred and
eighty (180) days or less;

     (v) such
Automobile Inventory has not been damaged, the repair cost of which exceeds ten
percent (10%) of the average Black Book wholesale value of such Automobile
Inventory;

     (vi) such
Automobile Inventory is not subject to litigation (or threatened litigation) by
or involving a Borrower;

     (vii)
such Automobile Inventory is a type of vehicle that has been manufactured in
accordance with all applicable Laws and of a type that may be registered for
road use under the laws of the Approved State in which such Automobile Inventory
is located;

     (viii)
such Automobile Inventory is not Inventory that Administrative Agent has
determined, in the exercise of its reasonable determination, or in the
determination of Borrowers’ management, is excess, obsolete, unsaleable or unfit
for sale;

     (ix) such
Automobile Inventory is not otherwise unacceptable to Administrative Agent in
its reasonable credit judgment due to age, quality, type, category and/or
quantity;

     (x) such
Automobile Inventory shall have been purchased at average Black Book wholesale
value plus or minus mileage credits or deductions;

     (xi) such
Automobile Inventory shall have a maximum mileage of 170,000 at the time of
purchase by a Borrower and shall not exceed fifteen (15) model years in age at
the time of purchase by a Borrower (provided that the restriction set forth in
this clause (xi) shall not apply to Calcott Automobile Inventory); and

     (xii) if
replacing Title Guaranties, Title Applications or Title Receipts, the Auto Title
with respect to such Automobile Inventory shall have been delivered to the
applicable Custodian within thirty (30) calendar days of the purchase of such
Automobile Inventory by a Borrower.

10





	 	 
	 	 
	SECTION 1.1(b)(ii) 	ELIGIBLE INVENTORY B



The term “Eligible Inventory B” shall
mean Automobile Inventory of Houston Auto that is acceptable to Administrative
Agent, in its reasonable discretion, and, in each case, that meet, at a minimum,
all of the following requirements:

     (i) such
Automobile Inventory is the full control and possession of Houston Auto and
located at Houston Auto’s place of business identified on Schedule 5.1(n) hereto
with respect to which Administrative Agent has received a collateral access
agreement from the applicable lessors and/or mortgagees, in form and substance
reasonably acceptable to Administrative Agent;

     (ii) such
Automobile Inventory is subject to a first priority perfected Lien in favor of
Administrative Agent or Additional Collateral Agent;

     (iii)
such Automobile Inventory is owned by Houston Auto free and clear of the Lien of
any Person other than the Lien of Administrative Agent and Additional Collateral
Agent;

     (iv) such
Automobile Inventory has been owned by Houston Auto for a period of one hundred
and eighty (180) days or less (provided that such one hundred and eighty day
period shall not commence with respect to Texas Legacy Automobile Inventory
until such time as Houston Auto shall have received its dealer license from the
Texas department of transportation);

     (v) such
Automobile Inventory has not been damaged, the repair cost of which exceeds ten
percent (10%) of the average Black Book wholesale value of such Automobile
Inventory;

     (vi) such
Automobile Inventory is not subject to litigation (or threatened litigation) by
or involving a Borrower;

     (vii)
such Automobile Inventory is a type of vehicle that has been manufactured in
accordance with all applicable Laws and of a type that may be registered for
road use under the laws of the Approved State in which such Automobile Inventory
is located;

     (viii)
such Automobile Inventory is not Inventory that Administrative Agent has
determined, in the exercise of its reasonable determination, or in the
determination of Borrowers’ management, is excess, obsolete, unsaleable or unfit
for sale;

     (ix) such
Automobile Inventory is not otherwise unacceptable to Administrative Agent in
its reasonable credit judgment due to age, quality, type, category and/or
quantity;

11




     (x) such
Automobile Inventory shall have been purchased at average Black Book wholesale
value plus or minus mileage credits or deductions;

     (xi) such
Automobile Inventory shall have a maximum mileage of 170,000 at the time of
purchase by Houston Auto and shall not exceed fifteen (15) model years in age at
the time of purchase by Houston Auto (provided that the restriction set forth in
this clause (xi) shall not apply to Texas Legacy Automobile Inventory); and

     (xii) if
replacing Title Guaranties, Title Applications or Title Receipts, the Auto Title
with respect to such Automobile Inventory shall have been delivered to the
applicable Custodian within thirty (30) calendar days of the purchase of such
Automobile Inventory by Houston Auto.

	 	 
	 	 
	SECTION 2.1(b)(i) 	AVAILABILITY ON ELIGIBLE RECEIVABLES A
    


The “Availability on Eligible
Receivables A” shall be an amount equal to the lesser of (i) the Amount of
Receivables Credit Line A in effect from time to time, (ii) sixty percent (60%)
(the “Receivables A Advance Rate”) of the outstanding principal balance
of all Eligible Receivables A, (iii) one hundred percent (100%) of the
Borrowers’ cost basis (defined as invoice cost, make ready costs and commissions
of sale) with respect to the automobiles sold with respect to such Eligible
Receivables A and (iv) 100% of the Black Book average wholesale of the vehicles
collateralizing such Receivables.

If the Loss to Liquidation Ratio of the
Initial Borrowers for the most recently ended three month period exceeds twenty
percent (20%), the Receivables A Advance Rate shall be reduced by the
corresponding percentage of such excess. Thereafter, should the Loss to
Liquidation Ratio of the Initial Borrowers for any subsequent three month period
improve such that it is twenty percent (20%) or less, the Administrative Agent
shall increase Receivables A Advance Rate by a corresponding percentage to a
percentage not to exceed sixty percent (60%).

	SECTION 2.1(b)(ii) 	AVAILABILITY ON ELIGIBLE RECEIVABLES B
    


The “Availability on Eligible
Receivables B” shall be an amount equal to the lesser of (i) the Amount of
Receivables Credit Line B in effect from time to time, (ii) sixty percent (60%)
(the “Receivables B Advance Rate”) of the outstanding principal balance
of all Eligible Receivables B, (iii) one hundred percent (100%) of the
Borrowers’ cost basis (defined as invoice cost, make ready costs and commissions
of sale) with respect to the automobiles sold with respect to such Eligible
Receivables B and (iv) 100% of the Black Book average wholesale of the vehicles
collateralizing such Receivables.

If the Loss to Liquidation Ratio of
Houston Auto for the most recently ended three month period exceeds thirty
percent (30%), the Receivables B Advance Rate 

12




shall be reduced by the corresponding
percentage of such excess. Thereafter, should the Loss to Liquidation Ratio of
Houston Auto for any subsequent three month period improve such that it is
thirty percent (30%) or less, the Administrative Agent shall increase
Receivables B Advance Rate by a corresponding percentage to a percentage not to
exceed sixty percent (60%).

	 	 
	 	 
	SECTION 2.2(a)(i) 	AVAILABILITY ON ELIGIBLE INVENTORY A
  


The “Availability on Eligible
Inventory A” shall be the lesser of (A) the Amount of Inventory Credit Line
A and (B) the sum of (i) for vehicles owned by Initial Borrowers 0 – 120 days,
an amount equal to the lesser of (x) one hundred percent (100%) of the Initial
Borrowers’ Acquisition Cost and (y) one hundred percent (100%) of the Black Book
wholesale value of the vehicle; plus (ii) for vehicles owned 121 to 180 days,
the lesser of (x) eighty percent (80%) of the Initial Borrowers’ Acquisition
Cost and (y) 100% of wholesale value of vehicle; plus (iii) for vehicles owned
by the Initial Borrowers 181 days or more, 0% of the Initial Borrowers’
Acquisition Cost (such applicable percentage, the “Inventory A Advance
Rate”).

“Initial Borrower’s Acquisition
Cost” shall mean (i) the actual purchase price paid by Initial Borrowers in
respect of Eligible Inventory A (including trade-in credit given by Initial
Borrowers to the seller of any vehicle) plus (ii) actual repair and “make ready”
costs per vehicle constituting Eligible Inventory A (the foregoing clauses (i)
and (ii) in the aggregate not to exceed average Black Book wholesale value for
such vehicle plus $400), plus (iii) up to $250 for installation of a GPS/SIDS
Device per vehicle constituting Eligible Inventory A. 

	SECTION 2.2(a)(ii) 	AVAILABILITY ON ELIGIBLE INVENTORY B
  


The “Availability on Eligible
Inventory B” shall be the lesser of (A) the Amount of Inventory Credit Line
B and (B) the sum of (i) for vehicles owned by Houston Auto 0 – 120 days, an
amount equal to the lesser of (x) one hundred percent (100%) of the Houston Auto
Acquisition Cost and (y) one hundred percent (100%) of the Black Book wholesale
value of the vehicle; plus (ii) for vehicles owned 121 to 180 days, the lesser
of (x) eighty percent (80%) of the Houston Auto Acquisition Cost and (y) 100% of
wholesale value of vehicle; plus (iii) for vehicles owned by Houston Auto 181
days or more, 0% of the Houston Auto Acquisition Cost (such applicable
percentage, the “Inventory B Advance Rate”). With respect to the Texas
Legacy Automobile Inventory, the 120 and 180 day periods set forth above shall
be deemed to commence on the date Houston Auto acquires its dealer license from
the Texas department of transportation, and not the date of Houston Auto’s
acquisition of such Texas Legacy Automobile Inventory.

13




“Houston Auto Acquisition Cost”
shall mean (i) the actual purchase price paid by Houston Auto in respect of
Eligible Inventory B (including trade-in credit given by Houston Auto to the
seller of any vehicle) plus (ii) actual repair and “make ready” costs per
vehicle constituting Eligible Inventory B (the foregoing clauses (i) and (ii) in
the aggregate not to exceed average Black Book wholesale value for such vehicle
plus $400) plus (iii) up to $250 for installation of a GPS/SIDS Device per
vehicle constituting Eligible Inventory B. 

	 	 
	 	 
	SECTION 2.11 	LIQUIDATED DAMAGES 


The term “Liquidated Damages”
shall mean:

     (a) for
the period from the Restatement Closing Date through and including September 30,
2008, an amount equal to (i) 4.0% of the then applicable Amount of Receivables
Credit Line A plus (ii) 4.0% of the then applicable Amount of Inventory
Credit Line A;

     (b) for
the period from October 1, 2008 through and including September 30, 2009, an
amount equal to (i) 3.0% of the then applicable Amount of Receivables Credit
Line A plus (ii) 3.0% of the then applicable Amount of Inventory Credit
Line A; 

     (c) for
the period from October 1, 2009 through and including September 30, 2010, an
amount equal to (i) 2.0% of the then applicable Amount of Receivables Credit
Line A plus (ii) 2.0% of the then applicable Amount of Inventory Credit
Line A;

     (d) for
the period from October 1, 2010 through and including September 30, 2011, an
amount equal to (i) 1.0% of the then applicable Amount of Receivables Credit
Line A plus (ii) 1.0% of the then applicable Amount of Inventory Credit
Line A;

     (e) for
the period from the Closing Date through and including December 31, 2008, an
amount equal to (i) 3.0% of the then applicable Amount of Receivables Credit
Line B plus (ii) 3.0% of the then applicable Amount of Inventory Credit
Line B;

     (f) for
the period from January 1, 2009 through and including December 31, 2009, an
amount equal to (i) 2.0% of the then applicable Amount of Receivables Credit
Line B plus (ii) 2.0% of the then applicable Amount of Inventory Credit
Line B; and

     (g) for
the period from January 1, 2010 through and including December 24, 2010, an
amount equal to (i) 1.0% of the then applicable Amount of Receivables Credit
Line B plus (ii) 1.0% of the then applicable Amount of Inventory Credit
Line B.

14





	 	 
	 	 
	SECTION 2.15 	FEES 


     The
Borrowers shall pay the Initial Lender a commitment fee of $150,000 due and
payable by Borrowers on the Restatement Closing Date.

	 	 
	 	 
	SECTION 3.11 	USE OF PROCEEDS 


     Proceeds of the Term Loan A
funded on the Restatement Closing Date shall first be used by Carbiz AQ to
finance the acquisition of the Purchased Assets (as defined in the Calcott Asset
Purchase Agreement) pursuant to the terms of the Calcott Asset Purchase
Agreement and pay related transaction fees, costs and expenses in respect
thereof, and the remainder of any proceeds of the Term Loan A funded on the
Restatement Closing Date or thereafter, if any, shall be used by the Initial
Borrowers for working capital purposes in the ordinary course of business.

     Proceeds of the Term Loan B
funded on the Closing Date shall first be used by Houston Auto to finance the
acquisition of the Transferred Assets (as defined in the Texas Asset Purchase
Agreement) pursuant to the terms of the Texas Asset Purchase Agreement and pay
related transaction fees, costs and expenses in respect thereof, and the
remainder of any proceeds of the Term Loan B funded on the Closing Date or
thereafter, if any, shall be used by Houston Auto for working capital purposes
in the ordinary course of business (provided, that the January 10 Term B Advance
shall only be used to fund the purchase price under the Subsequent Texas Asset
Purchase Agreement).

     IN WITNESS WHEREOF, the Borrowers
have executed this Schedule A effective as of the Closing Date.

	 	CARBIZ AUTO CREDIT AQ, INC.,
    
	 	a Florida corporation 
	 	 	  
	 	By: 	
	 	Name: 	 
	 	Its: 	 
	 	 
	 	CARBIZ USA INC., 
	 	a Delaware corporation 
	 	 
	 	By:	 
	 	Name: 	 
	 	Its: 	 


15





	 	CARBIZ AUTO CREDIT, INC.,
  
	 	a Florida corporation 
	 	 	  
	 	By: 	
	 	Name: 	 
	 	Its: 	 
	 	 
	 	CARBIZ AUTO CREDIT JV1, LLC,
    
	 	a Florida limited liability company
    
	 	 	  
	 	By: 	
	 	Name: 	 
	 	Its: 	 
	 	 
	 	 
	 	TEXAS AUTO CREDIT, INC., a
      Florida 
	 	corporation 
	 	 	  
	 	By: 	
	 	Name: 	 
	 	Its: 	 


16




EXHIBIT F-1

RECEIVABLES NOTE A

	$____________________	_________, 20__ 
	                                                                                      	 Chicago, Illinois
  


     FOR VALUE RECEIVED, the
undersigned, CARBIZ USA INC., a Delaware corporation (“Carbiz USA”),
CARBIZ AUTO CREDIT, INC., a Florida corporation (“Carbiz Auto”),
CARBIZ AUTO CREDIT JV1, LLC, a Florida limited liability company (“Carbiz
LLC”), and CARBIZ AUTO CREDIT AQ, INC., a Florida corporation (“Carbiz
AQ”; Carbiz USA, Carbiz Auto, Carbiz LLC and Carbiz AQ are sometimes
referred to herein individually as a “Borrower” and, collectively, as the
“Borrowers”), hereby jointly and severally promise to pay to the order of
SWC SERVICES LLC, a Delaware limited liability company (the “Lender”),
the principal sum of _____________ and No/100 Dollars ($_________), or, if
greater or less, the aggregate unpaid principal amount of the Receivables Loan A
Advances made by Lender to Borrowers pursuant to the terms of the Loan and
Security Agreement (as hereinafter defined), together with interest on the
unpaid principal balance thereof as set forth in the Loan and Security
Agreement, both principal and interest payable as herein provided in lawful
money of the United States of America at the offices of Administrative Agent
under the Loan and Security Agreement, or at such other place as from time to
time may be designated by the holder of this Receivables Note A (this
“Note”).

     This Note (a) is issued and
delivered under that certain Second Amended and Restated Loan and Security
Agreement dated as of December 24, 2007 (as amended, restated, supplemented or
otherwise modified from time to time, the “Loan and Security Agreement”)
among the Borrowers, [ _____________], certain guarantors party thereto, the
Initial Lender, certain other Lenders from time to time party thereto, SWC
SERVICES LLC, a Delaware limited liability company, as administrative agent (in
such capacity, “Administrative Agent”) for the Lenders, and the
Additional Collateral Agent party thereto, and is a “Note” as defined therein,
(b) is subject to the terms and provisions of the Loan and Security Agreement,
which contains provisions for payments and prepayments hereunder and
acceleration of the maturity hereof upon the happening of certain stated events,
and (c) is secured by and entitled to the benefits of the Loan and Security
Agreement and certain other Loan Documents (as identified and defined in the
Loan and Security Agreement). Payments on this Note shall be made and applied as
provided in the Loan and Security Agreement. Reference is hereby made to the
Loan and Security Agreement for a description of certain rights, limitations of
rights, obligations and duties of the parties hereto and for the meanings
assigned to capitalized terms used and not defined herein and to the Loan
Documents for a description of the nature and extent of the security thereby
provided and the rights of the parties thereto.

     The principal amount of this
Note, together with all interest accrued hereon, shall be due and payable as set
forth in the Loan and Security Agreement and is due and payable in full on the
Maturity Date applicable to the Revolving Loan.

1

EXHIBIT F-1




     Notwithstanding the foregoing
paragraph and all other provisions of this Note, in no event shall the interest
payable hereon, whether before or after maturity, exceed the maximum interest
which, under applicable Law, may be contracted for, charged, or received on this
Note, and this Note is expressly made subject to the provisions of the Loan and
Security Agreement which more fully set out the limitations on how interest
accrues hereon.

     Without limiting the terms of the
Loan and Security Agreement, if this Note is placed in the hands of an attorney
for collection after default, or if all or any part of the indebtedness
represented hereby is proved, established or collected in any court or in any
bankruptcy, receivership, debtor relief, probate or other court proceedings,
Borrowers and all endorsers, sureties and guarantors of this Note jointly and
severally agree to pay attorneys’ fees and collection costs to the holder hereof
in addition to the principal and interest payable hereunder.

     Borrowers and all endorsers,
sureties and guarantors of this Note hereby severally waive demand, presentment,
notice of demand and of dishonor and nonpayment of this Note, protest, notice of
protest, notice of intention to accelerate the maturity of this Note,
declaration or notice of acceleration of the maturity of this Note, diligence in
collecting, the bringing of any suit against any party and any notice of or
defense on account of any extensions, renewals, partial payments or changes in
any manner of or in this Note or in any of its terms, provisions and covenants,
or any releases or substitutions of any security, or any delay, indulgence or
other act of any trustee or any holder hereof, whether before or after
maturity.

- Remainder of Page Intentionally Left Blank; Signature
Page Follows -

2

EXHIBIT F-1




     This Note and the rights and
duties of the parties hereto shall be governed by the Laws of the State of
Illinois (without regard to principles of conflicts of law), except to the
extent the same are governed by applicable federal Law.

	 	BORROWERS: 
	 	 
	 	CARBIZ AUTO CREDIT AQ, INC.,
    
	 	a Florida corporation 
	 	 	  
	 	By: 	
	 	Name: 	 
	 	Its: 	 
	 	 
	 	CARBIZ USA INC., 
	 	a Delaware corporation 
	 	 	  
	 	By: 	
	 	Name: 	 
	 	Its: 	 
	 	 
	 	CARBIZ AUTO CREDIT, INC.,
  
	 	a Florida corporation 
	 	 	  
	 	By: 	
	 	Name: 	 
	 	Its: 	 
	 	 
	 	CARBIZ AUTO CREDIT JV1, LLC,
    
	 	a Florida limited liability company
    
	 	 	  
	 	By: 	
	 	Name: 	 
	 	Its: 	 


3

EXHIBIT F-1




EXHIBIT F-2

INVENTORY NOTE A

	$________________________	  ______________, 20__
  
		 Chicago, Illinois
  


     FOR VALUE RECEIVED, the
undersigned, CARBIZ USA INC., a Delaware corporation (“Carbiz USA”),
CARBIZ AUTO CREDIT, INC., a Florida corporation (“Carbiz Auto”),
CARBIZ AUTO CREDIT JV1, LLC, a Florida limited liability company (“Carbiz
LLC”), and CARBIZ AUTO CREDIT AQ, INC., a Florida corporation (“Carbiz
AQ”; Carbiz USA, Carbiz Auto, Carbiz LLC and Carbiz AQ are sometimes
referred to herein individually as a “Borrower” and, collectively, as the
“Borrowers”), hereby jointly and severally promise to pay to the order of
SWC SERVICES LLC, a Delaware limited liability company (the “Lender”),
the principal sum of _____________and No/100 Dollars ($_________), or, if
greater or less, the aggregate unpaid principal amount of the Inventory Loan A
Advances made by Lender to Borrowers pursuant to the terms of the Loan and
Security Agreement (as hereinafter defined), together with interest on the
unpaid principal balance thereof as set forth in the Loan and Security
Agreement, both principal and interest payable as herein provided in lawful
money of the United States of America at the offices of Administrative Agent
under the Loan and Security Agreement, or at such other place as from time to
time may be designated by the holder of this Inventory Note A (this
“Note”).

     This Note (a) is issued and
delivered under that certain Second Amended and Restated Loan and Security
Agreement dated as of December 24, 2007 (as amended, restated, supplemented or
otherwise modified from time to time, the “Loan and Security Agreement”)
among the Borrowers, [ _________________] , certain guarantors party thereto,
the Initial Lender, certain other Lenders from time to time party thereto, SWC
SERVICES LLC, a Delaware limited liability company, as administrative agent (in
such capacity, “Administrative Agent”) for the Lenders, and the
Additional Collateral Agent party thereto, and is a “Note” as defined therein,
(b) is subject to the terms and provisions of the Loan and Security Agreement,
which contains provisions for payments and prepayments hereunder and
acceleration of the maturity hereof upon the happening of certain stated events,
and (c) is secured by and entitled to the benefits of the Loan and Security
Agreement and certain other Loan Documents (as identified and defined in the
Loan and Security Agreement). Payments on this Note shall be made and applied as
provided in the Loan and Security Agreement. Reference is hereby made to the
Loan and Security Agreement for a description of certain rights, limitations of
rights, obligations and duties of the parties hereto and for the meanings
assigned to capitalized terms used and not defined herein and to the Loan
Documents for a description of the nature and extent of the security thereby
provided and the rights of the parties thereto.

     The principal amount of this
Note, together with all interest accrued hereon, shall be due and payable as set
forth in the Loan and Security Agreement and is due and payable in full on the
Maturity Date applicable to the Inventory Loan.

1

EXHIBIT F-2




     Notwithstanding the foregoing
paragraph and all other provisions of this Note, in no event shall the interest
payable hereon, whether before or after maturity, exceed the maximum interest
which, under applicable Law, may be contracted for, charged, or received on this
Note, and this Note is expressly made subject to the provisions of the Loan and
Security Agreement which more fully set out the limitations on how interest
accrues hereon.

     Without limiting the terms of the
Loan and Security Agreement, if this Note is placed in the hands of an attorney
for collection after default, or if all or any part of the indebtedness
represented hereby is proved, established or collected in any court or in any
bankruptcy, receivership, debtor relief, probate or other court proceedings,
Borrowers and all endorsers, sureties and guarantors of this Note jointly and
severally agree to pay attorneys’ fees and collection costs to the holder hereof
in addition to the principal and interest payable hereunder.

     Borrowers and all endorsers,
sureties and guarantors of this Note hereby severally waive demand, presentment,
notice of demand and of dishonor and nonpayment of this Note, protest, notice of
protest, notice of intention to accelerate the maturity of this Note,
declaration or notice of acceleration of the maturity of this Note, diligence in
collecting, the bringing of any suit against any party and any notice of or
defense on account of any extensions, renewals, partial payments or changes in
any manner of or in this Note or in any of its terms, provisions and covenants,
or any releases or substitutions of any security, or any delay, indulgence or
other act of any trustee or any holder hereof, whether before or after
maturity.

- Remainder of Page Intentionally Left Blank; Signature
Page Follows -

2

EXHIBIT F-2




     This Note and the rights and
duties of the parties hereto shall be governed by the Laws of the State of
Illinois (without regard to principles of conflicts of law), except to the
extent the same are governed by applicable federal Law.

	 	BORROWERS: 
	 	 
	 	CARBIZ AUTO CREDIT AQ, INC.,
    
	 	a Florida corporation 
	 	 	  
	 	By: 	
	 	Name: 	 
	 	Its: 	 
	 	 
	 	CARBIZ USA INC., 
	 	a Delaware corporation 
	 	 	  
	 	By: 	
	 	Name: 	 
	 	Its: 	 
	 	 
	 	CARBIZ AUTO CREDIT, INC.,
  
	 	a Florida corporation 
	 	 	  
	 	By: 	
	 	Name: 	 
	 	Its: 	 
	 	 
	 	CARBIZ AUTO CREDIT JV1, LLC,
    
	 	a Florida limited liability company
    
	 	 	  
	 	By: 	
	 	Name: 	 
	 	Its: 	 


3

EXHIBIT F-2




EXHIBIT F-3

TERM NOTE A

	$____________ 	           
                       
       ______________, 2007 
	  	Chicago, Illinois 


     FOR VALUE RECEIVED, the
undersigned, CARBIZ USA INC., a Delaware corporation (“Carbiz USA”),
CARBIZ AUTO CREDIT, INC., a Florida corporation (“Carbiz Auto”),
CARBIZ AUTO CREDIT JV1, LLC, a Florida limited liability company (“Carbiz
LLC”), and CARBIZ AUTO CREDIT AQ, INC., a Florida corporation (“Carbiz
AQ”; Carbiz USA, Carbiz Auto, Carbiz LLC and Carbiz AQ are sometimes
referred to herein individually as a “Borrower” and, collectively, as the
“Borrowers”), hereby jointly and severally promise to pay to the order of
SWC SERVICES LLC, a Delaware limited liability company (the “Lender”),
the principal sum of __________________and No/100 Dollars ($______________), or,
if greater or less, the aggregate unpaid principal amount of the Term Loan A
made by Lender to Borrowers pursuant to the terms of the Loan and Security
Agreement (as hereinafter defined), together with interest on the unpaid
principal balance thereof as set forth in the Loan and Security Agreement, both
principal and interest payable as herein provided in lawful money of the United
States of America at the offices of Administrative Agent under the Loan and
Security Agreement, or at such other place as from time to time may be
designated by the holder of this Term Note A (this “Note”).

     This Note (a) is issued and
delivered under that certain Second Amended and Restated Loan and Security
Agreement dated as of December 24, 2007 (as amended, restated, supplemented or
otherwise modified from time to time, the “Loan and Security Agreement”)
among the Borrowers, certain guarantors party thereto, the Initial Lender,
certain other Lenders from time to time party thereto, SWC SERVICES LLC, a
Delaware limited liability company, as administrative agent (in such capacity,
“Administrative Agent”) for the Lenders, and the Additional Collateral
Agent party thereto, and is a “Note” as defined therein, (b) is subject to the
terms and provisions of the Loan and Security Agreement, which contains
provisions for payments and prepayments hereunder and acceleration of the
maturity hereof upon the happening of certain stated events, and (c) is secured
by and entitled to the benefits of the Loan and Security Agreement and certain
other Loan Documents (as identified and defined in the Loan and Security
Agreement). Payments on this Note shall be made and applied as provided in the
Loan and Security Agreement. Reference is hereby made to the Loan and Security
Agreement for a description of certain rights, limitations of rights,
obligations and duties of the parties hereto and for the meanings assigned to
capitalized terms used and not defined herein and to the Loan Documents for a
description of the nature and extent of the security thereby provided and the
rights of the parties thereto.

     The principal amount of this
Note, together with all interest accrued hereon, shall be due and payable as set
forth in the Loan and Security Agreement and is due and payable in full on the
Maturity Date applicable to the Term Loan.

1

EXHIBIT F-3




     Notwithstanding the foregoing
paragraph and all other provisions of this Note, in no event shall the interest
payable hereon, whether before or after maturity, exceed the maximum interest
which, under applicable Law, may be contracted for, charged, or received on this
Note, and this Note is expressly made subject to the provisions of the Loan and
Security Agreement which more fully set out the limitations on how interest
accrues hereon.

     Without limiting the terms of the
Loan and Security Agreement, if this Note is placed in the hands of an attorney
for collection after default, or if all or any part of the indebtedness
represented hereby is proved, established or collected in any court or in any
bankruptcy, receivership, debtor relief, probate or other court proceedings,
Borrowers and all endorsers, sureties and guarantors of this Note jointly and
severally agree to pay attorneys’ fees and collection costs to the holder hereof
in addition to the principal and interest payable hereunder.

     Borrowers and all endorsers,
sureties and guarantors of this Note hereby severally waive demand, presentment,
notice of demand and of dishonor and nonpayment of this Note, protest, notice of
protest, notice of intention to accelerate the maturity of this Note,
declaration or notice of acceleration of the maturity of this Note, diligence in
collecting, the bringing of any suit against any party and any notice of or
defense on account of any extensions, renewals, partial payments or changes in
any manner of or in this Note or in any of its terms, provisions and covenants,
or any releases or substitutions of any security, or any delay, indulgence or
other act of any trustee or any holder hereof, whether before or after
maturity.

- Remainder of Page Intentionally Left Blank; Signature
Page Follows -

2

EXHIBIT F-3




     This Note and the rights and
duties of the parties hereto shall be governed by the Laws of the State of
Illinois (without regard to principles of conflicts of law), except to the
extent the same are governed by applicable federal Law.

	 	BORROWERS: 
	 	 
	 	 
	 	CARBIZ AUTO CREDIT AQ, INC.,
    
	 	a Florida corporation 
	 	 	  
	 	By: 	
	 	Name: 	 
	 	Its: 	 
	 	 	  
	 	CARBIZ USA INC., 
	 	a Delaware corporation 
	 	 	  
	 	By: 	
	 	Name: 	 
	 	Its: 	 
	 	 
	 	CARBIZ AUTO CREDIT, INC.,
  
	 	a Florida corporation 
	 	 
	 	By: 	
	 	Name: 	 
	 	Its: 	 
	 	 
	 	CARBIZ AUTO CREDIT JV1, LLC,
    
	 	a Florida limited liability company
    
	 	 	  
	 	By: 	
	 	Name: 	 
	 	Its: 	 


3

EXHIBIT F-3




EXHIBIT F-4

RECEIVABLES NOTE B

	$ __________________	 _______________, 20__
  
		 Chicago, Illinois
  


     FOR VALUE RECEIVED, the
undersigned, TEXAS AUTO CREDIT, INC., a Florida corporation (“Borrower”)
hereby promises to pay to the order of SWC SERVICES LLC, a Delaware limited
liability company (the “Lender”), the principal sum of _____________and
No/100 Dollars ($_________), or, if greater or less, the aggregate unpaid
principal amount of the Receivables Loan B Advances made by Lender to Borrower
pursuant to the terms of the Loan and Security Agreement (as hereinafter
defined), together with interest on the unpaid principal balance thereof as set
forth in the Loan and Security Agreement, both principal and interest payable as
herein provided in lawful money of the United States of America at the offices
of Administrative Agent under the Loan and Security Agreement, or at such other
place as from time to time may be designated by the holder of this Receivables
Note B (this “Note”).

     This Note (a) is issued and
delivered under that certain Second Amended and Restated Loan and Security
Agreement dated as of December 24, 2007 (as amended, restated, supplemented or
otherwise modified from time to time, the “Loan and Security Agreement”)
among the Borrower, Carbiz USA Inc., a Delaware corporation, Carbiz Auto Credit,
Inc., a Florida corporation, Carbiz Auto Credit JV1, LLC, a Florida limited
liability company, and Carbiz Auto Credit AQ, Inc., a Florida corporation,
certain guarantors party thereto, the Initial Lender, certain other Lenders from
time to time party thereto, SWC SERVICES LLC, a Delaware limited liability
company, as administrative agent (in such capacity, “Administrative
Agent”) for the Lenders, and the Additional Collateral Agent party
thereto, and is a “Note” as defined therein, (b) is subject to the terms and
provisions of the Loan and Security Agreement, which contains provisions for
payments and prepayments hereunder and acceleration of the maturity hereof upon
the happening of certain stated events, and (c) is secured by and entitled to
the benefits of the Loan and Security Agreement and certain other Loan Documents
(as identified and defined in the Loan and Security Agreement). Payments on this
Note shall be made and applied as provided in the Loan and Security Agreement.
Reference is hereby made to the Loan and Security Agreement for a description of
certain rights, limitations of rights, obligations and duties of the parties
hereto and for the meanings assigned to capitalized terms used and not defined
herein and to the Loan Documents for a description of the nature and extent of
the security thereby provided and the rights of the parties thereto.

     The principal amount of this
Note, together with all interest accrued hereon, shall be due and payable as set
forth in the Loan and Security Agreement and is due and payable in full on the
Maturity Date applicable to the Revolving Loan.

     Notwithstanding the foregoing
paragraph and all other provisions of this Note, in no event shall the interest
payable hereon, whether before or after maturity, exceed the maximum interest
which, under applicable Law, may be contracted for, charged, or received on this
Note, 

1

EXHIBIT F-4




and this Note is expressly made subject to the provisions of
the Loan and Security Agreement which more fully set out the limitations on how
interest accrues hereon.

     Without limiting the terms of the
Loan and Security Agreement, if this Note is placed in the hands of an attorney
for collection after default, or if all or any part of the indebtedness
represented hereby is proved, established or collected in any court or in any
bankruptcy, receivership, debtor relief, probate or other court proceedings,
Borrower and all endorsers, sureties and guarantors of this Note jointly and
severally agree to pay attorneys’ fees and collection costs to the holder hereof
in addition to the principal and interest payable hereunder.

     Borrower and all endorsers,
sureties and guarantors of this Note hereby severally waive demand, presentment,
notice of demand and of dishonor and nonpayment of this Note, protest, notice of
protest, notice of intention to accelerate the maturity of this Note,
declaration or notice of acceleration of the maturity of this Note, diligence in
collecting, the bringing of any suit against any party and any notice of or
defense on account of any extensions, renewals, partial payments or changes in
any manner of or in this Note or in any of its terms, provisions and covenants,
or any releases or substitutions of any security, or any delay, indulgence or
other act of any trustee or any holder hereof, whether before or after
maturity.

- Remainder of Page Intentionally Left Blank; Signature
Page Follows -

2

EXHIBIT F-4




     This Note and the rights and
duties of the parties hereto shall be governed by the Laws of the State of
Illinois (without regard to principles of conflicts of law), except to the
extent the same are governed by applicable federal Law.

	 	BORROWER: 
	 	 
	 	TEXAS AUTO CREDIT, INC., a
      Florida 
	 	corporation 
	 	  	 
	 	By: 	 
	 	Name: 	 
	 	Its: 	 


3

EXHIBIT F-4




EXHIBIT F-5

INVENTORY NOTE B

	$____________	 _____________ , 20__

	                    	  Chicago, Illinois
  


     FOR VALUE RECEIVED, the
undersigned TEXAS AUTO CREDIT, INC., a Florida corporation (“Borrower”)
hereby promises to pay to the order of SWC SERVICES LLC, a Delaware limited
liability company (the “Lender”), the principal sum of _____________and
No/100 Dollars ($_________), or, if greater or less, the aggregate unpaid
principal amount of the Inventory Loan B Advances made by Lender to Borrower
pursuant to the terms of the Loan and Security Agreement (as hereinafter
defined), together with interest on the unpaid principal balance thereof as set
forth in the Loan and Security Agreement, both principal and interest payable as
herein provided in lawful money of the United States of America at the offices
of Administrative Agent under the Loan and Security Agreement, or at such other
place as from time to time may be designated by the holder of this Inventory
Note B (this “Note”).

     This Note (a) is issued and
delivered under that certain Second Amended and Restated Loan and Security
Agreement dated as of December 24, 2007 (as amended, restated, supplemented or
otherwise modified from time to time, the “Loan and Security Agreement”)
among the Borrower, Carbiz USA Inc., a Delaware corporation, Carbiz Auto Credit,
Inc., a Florida corporation, Carbiz Auto Credit JV1, LLC, a Florida limited
liability company, and Carbiz Auto Credit AQ, Inc., a Florida corporation,
certain guarantors party thereto, the Initial Lender, certain other Lenders from
time to time party thereto, SWC SERVICES LLC, a Delaware limited liability
company, as administrative agent (in such capacity, “Administrative
Agent”) for the Lenders, and the Additional Collateral Agent party
thereto, and is a “Note” as defined therein, (b) is subject to the terms and
provisions of the Loan and Security Agreement, which contains provisions for
payments and prepayments hereunder and acceleration of the maturity hereof upon
the happening of certain stated events, and (c) is secured by and entitled to
the benefits of the Loan and Security Agreement and certain other Loan Documents
(as identified and defined in the Loan and Security Agreement). Payments on this
Note shall be made and applied as provided in the Loan and Security Agreement.
Reference is hereby made to the Loan and Security Agreement for a description of
certain rights, limitations of rights, obligations and duties of the parties
hereto and for the meanings assigned to capitalized terms used and not defined
herein and to the Loan Documents for a description of the nature and extent of
the security thereby provided and the rights of the parties thereto.

     The principal amount of this
Note, together with all interest accrued hereon, shall be due and payable as set
forth in the Loan and Security Agreement and is due and payable in full on the
Maturity Date applicable to the Inventory Loan.

     Notwithstanding the foregoing
paragraph and all other provisions of this Note, in no event shall the interest
payable hereon, whether before or after maturity, exceed the maximum interest
which, under applicable Law, may be contracted for, charged, or received on this
Note, 

1

EXHIBIT F-5




and this Note is expressly made subject to the provisions of
the Loan and Security Agreement which more fully set out the limitations on how
interest accrues hereon.

     Without limiting the terms of the
Loan and Security Agreement, if this Note is placed in the hands of an attorney
for collection after default, or if all or any part of the indebtedness
represented hereby is proved, established or collected in any court or in any
bankruptcy, receivership, debtor relief, probate or other court proceedings,
Borrower and all endorsers, sureties and guarantors of this Note jointly and
severally agree to pay attorneys’ fees and collection costs to the holder hereof
in addition to the principal and interest payable hereunder.

     Borrower and all endorsers,
sureties and guarantors of this Note hereby severally waive demand, presentment,
notice of demand and of dishonor and nonpayment of this Note, protest, notice of
protest, notice of intention to accelerate the maturity of this Note,
declaration or notice of acceleration of the maturity of this Note, diligence in
collecting, the bringing of any suit against any party and any notice of or
defense on account of any extensions, renewals, partial payments or changes in
any manner of or in this Note or in any of its terms, provisions and covenants,
or any releases or substitutions of any security, or any delay, indulgence or
other act of any trustee or any holder hereof, whether before or after
maturity.

- Remainder of Page Intentionally Left Blank; Signature
Page Follows -

2

EXHIBIT F-5




     This Note and the rights and
duties of the parties hereto shall be governed by the Laws of the State of
Illinois (without regard to principles of conflicts of law), except to the
extent the same are governed by applicable federal Law.

	 	BORROWER: 
	 	 
	 	TEXAS AUTO CREDIT, INC., a
      Florida 
	 	corporation 
	 	  	 
	 	By: 	 
	 	Name: 	 
	 	Its: 	 


3

EXHIBIT F-5




EXHIBIT F-6

TERM NOTE B

	$____________ 	           
                       
      _________ __, 2007 
	  	Chicago, Illinois 


     FOR VALUE RECEIVED, the
undersigned, TEXAS AUTO CREDIT, INC., a Florida corporation (“Borrower”),
hereby promises to pay to the order of SWC SERVICES LLC, a Delaware limited
liability company (the “Lender”), the principal sum of
__________________and No/100 Dollars ($______________), or, if greater or less,
the aggregate unpaid principal amount of the Term Loan B made by Lender to
Borrower pursuant to the terms of the Loan and Security Agreement (as
hereinafter defined), together with interest on the unpaid principal balance
thereof as set forth in the Loan and Security Agreement, both principal and
interest payable as herein provided in lawful money of the United States of
America at the offices of Administrative Agent under the Loan and Security
Agreement, or at such other place as from time to time may be designated by the
holder of this Term Note B (this “Note”).

     This Note (a) is issued and
delivered under that certain Second Amended and Restated Loan and Security
Agreement dated as of December 24, 2007 (as amended, restated, supplemented or
otherwise modified from time to time, the “Loan and Security Agreement”)
among the Borrower, Carbiz USA Inc., a Delaware corporation, Carbiz Auto Credit,
Inc., a Florida corporation, Carbiz Auto Credit JV1, LLC, a Florida limited
liability company, and Carbiz Auto Credit AQ, Inc., a Florida corporation,
certain guarantors party thereto, the Initial Lender, certain other Lenders from
time to time party thereto, SWC SERVICES LLC, a Delaware limited liability
company, as administrative agent (in such capacity, “Administrative
Agent”) for the Lenders, and the Additional Collateral Agent party
thereto, and is a “Note” as defined therein, (b) is subject to the terms and
provisions of the Loan and Security Agreement, which contains provisions for
payments and prepayments hereunder and acceleration of the maturity hereof upon
the happening of certain stated events, and (c) is secured by and entitled to
the benefits of the Loan and Security Agreement and certain other Loan Documents
(as identified and defined in the Loan and Security Agreement). Payments on this
Note shall be made and applied as provided in the Loan and Security Agreement.
Reference is hereby made to the Loan and Security Agreement for a description of
certain rights, limitations of rights, obligations and duties of the parties
hereto and for the meanings assigned to capitalized terms used and not defined
herein and to the Loan Documents for a description of the nature and extent of
the security thereby provided and the rights of the parties thereto.

     The principal amount of this
Note, together with all interest accrued hereon, shall be due and payable as set
forth in the Loan and Security Agreement and is due and payable in full on the
Maturity Date applicable to the Term Loan.

     Notwithstanding the foregoing
paragraph and all other provisions of this Note, in no event shall the interest
payable hereon, whether before or after maturity, exceed the maximum 

1

EXHIBIT F-6




interest which, under applicable Law, may be contracted for,
charged, or received on this Note, and this Note is expressly made subject to
the provisions of the Loan and Security Agreement which more fully set out the
limitations on how interest accrues hereon.

     Without limiting the terms of the
Loan and Security Agreement, if this Note is placed in the hands of an attorney
for collection after default, or if all or any part of the indebtedness
represented hereby is proved, established or collected in any court or in any
bankruptcy, receivership, debtor relief, probate or other court proceedings,
Borrower and all endorsers, sureties and guarantors of this Note jointly and
severally agree to pay attorneys’ fees and collection costs to the holder hereof
in addition to the principal and interest payable hereunder.

     Borrower and all endorsers,
sureties and guarantors of this Note hereby severally waive demand, presentment,
notice of demand and of dishonor and nonpayment of this Note, protest, notice of
protest, notice of intention to accelerate the maturity of this Note,
declaration or notice of acceleration of the maturity of this Note, diligence in
collecting, the bringing of any suit against any party and any notice of or
defense on account of any extensions, renewals, partial payments or changes in
any manner of or in this Note or in any of its terms, provisions and covenants,
or any releases or substitutions of any security, or any delay, indulgence or
other act of any trustee or any holder hereof, whether before or after
maturity.

- Remainder of Page Intentionally Left Blank; Signature
Page Follows -

2

EXHIBIT F-6




     This Note and the rights and
duties of the parties hereto shall be governed by the Laws of the State of
Illinois (without regard to principles of conflicts of law), except to the
extent the same are governed by applicable federal Law.

	 	BORROWER: 
	 	 
	 	TEXAS AUTO CREDIT, INC., a
      Florida 
	 	corporation 
	 	  	 
	 	By: 	 
	 	Name: 	 
	 	Its: 	 


3

EXHIBIT F-6