Document:

Filed by Automated Filing Services Inc. (604) 609-0244 - Carbiz Inc. - Exhibit 10.1

Exhibit 10.1

  Execution Draft 

LOAN AND SECURITY AGREEMENT 

CARBIZ USA INC., a Delaware corporation, 

CARBIZ AUTO CREDIT, INC., a Florida corporation, 

and

CARBIZ AUTO CREDIT JV1, LLC, a Florida limited liability
company, 

as Borrowers, 

CARBIZ INC., an Ontario corporation, 

as a Guarantor, 

COLOSSUS CAPITAL FUND, L.P., 
as Initial Lender 

THE OTHER LENDERS FROM TIME TO TIME PARTY HERETO 

and 

SWC SERVICES LLC, 
as Administrative Agent 

$10,000,000 Revolving Loan Facility 

March 23, 2007 

THIS AGREEMENT EVIDENCES A REVOLVING CREDIT FACILITY. IN
ACCORDANCE WITH FLORIDA STATUTES § 201.08(1)(a), BORROWERS HAVE PAID DOCUMENTARY
STAMP TAXES IN THE AMOUNT OF $2,450.00 IN CONNECTION WITH THE EXECUTION OF THIS
AGREEMENT AND HAVE REMITTED SUCH TAXES DIRECTLY TO THE FLORIDA DEPARTMENT OF
REVENUE. 

TABLE OF CONTENTS 

	  	  	                                                                                                                                                               	Page 
	  	  	  	  
	Article 1
      DEFINITIONS 	1
    
	Section
      1.1. 	Definitions 	1 
	Section 1.3. 	EXHIBITS
      AND SCHEDULES; ADDITIONAL DEFINITIONS 	11
      
	Section
      1.4. 	AMENDMENT OF DEFINED
      DOCUMENTS 	11 
	Section 1.5. 	REFERENCES AND TITLES 	11
      
	Article 2 LOAN(S), INTEREST
      RATE AND OTHER CHARGES 	11 
	Section 2.1. 	AMOUNT OF
      LOAN 	11
      
	Section
      2.2. 	INTEREST RATE 	13 
	Section 2.3. 	PAYMENTS 	13
      
	Section
      2.4. 	PAYMENT DUE ON A
      NON-BUSINESS DAY 	14 
	Section 2.5. 	MANDATORY
      PAYMENTS 	14
      
	Section
      2.6. 	TERMINATION OF THE
      COMMITMENTS; VOLUNTARY PREPAYMENTS 	  14
	Section 2.7. 	MAXIMUM
      INTEREST; CONTROLLING AGREEMENT 	15
      
	Section
      2.8. 	INTEREST AFTER
      DEFAULT 	16 
	Section 2.9. 	APPLICATION OF PAYMENTS 	16
      
	Section
      2.10. 	FEES 	17 
	Section 2.11. 	CAPITAL
      REIMBURSEMENT 	17
      
	Section
      2.12. 	Reserved 	17 
	Section 2.13. 	Commitment INCREASE 	18
      
	Section
      2.14. 	Taxes 	18

	Article 3
      SECURITY 	19 
	Section 3.1.
      	SECURITY INTEREST
    	19
    
	Section 3.2. 	Collateral Assignment of CONSUMER Loan Documents
      AND AUTO TITLE	20 
	Section 3.3.
      	FINANCING STATEMENTS AND
      FURTHER ASSURANCES 	20
    
	Section 3.4. 	DELIVERY
      OF RECEIVABLES; INSTRUMENTS, DOCUMENTS, ETC 	21 
	Section 3.5.
      	FAILURE TO DELIVER
      	22
    
	Section 3.6. 	NOTICE OF
      SECURITY INTEREST AND COLLATERAL ASSIGNMENT 	22 
	Section 3.7.
      	RECORDS AND
      INSPECTIONS 	22
    
	Section 3.8. 	COLLECTION 	22 
	Section 3.9.
      	COLLECTION ACCOUNT
      	22
    
	Section 3.10. 	PROTECTION OF RECEIVABLE RECORDS 	23 
	Section
      3.11. 	USE OF PROCEEDS
    	24
    
	Section 3.12. 	RETURN OF
      COLLATERAL 	24 
	Section
      3.13. 	Collateral
      Representations, WarrantIes, and CovenAnts 	24
    
	Section 3.14. 	LENDER'S
      PAYMENT OF CLAIMS 	26 
	Article 4 CONDITIONS OF
      CLOSING; SUBSEQUENT ADVANCES 	26
    
	Section 4.1. 	INITIAL
      ADVANCE 	26
      
	Section
      4.2. 	ALL
      ADVANCES 	29
      
	Section
      4.3. 	ALL
      ADVANCES TO CONSTITUTE ONE LOAN 	29
      
	Section
      4.4. 	ADVANCES
      	30
      
	Article
      5 REPRESENTATIONS AND WARRANTIES OF BORROWERS AND RELATED
      PARTIES 	30
      

ii 

	Section 5.1. 	REPRESENTATIONS AND WARRANTIES 	30 
	Section 5.2.
      	REPRESENTATIONS AND
      WARRANTIES AS TO ELIGIBLE RECEIVABLES 	34 
	Article 6
      COVENANTS AND OTHER AGREEMENTS 	36 
	Section 6.1.
      	AFFIRMATIVE COVENANTS
      	36
    
	Section 6.2. 	NEGATIVE
      COVENANTS 	39 
	Section 6.3.
      	REPORTING REQUIREMENTS
      AND ACCOUNTING PRACTICES 	47 
	Section 6.4. 	ACCOUNT
      DEBTORS ADDRESSES 	47 
	Section 6.5.
      	FINANCIAL REPORTS
    	47
    
	Section 6.6. 	NOTICE OF
      CHANGES 	49 
	Section 6.7.
      	NOTICE OF COMMERCIAL TORT
      CLAIMS 	49
    
	Section 6.8. 	OUTSIDE
      DIRECTOR 	49 
	Article 7 EVENTS OF DEFAULT
      AND REMEDIES 	50
    
	Section 7.1. 	EVENTS OF
      DEFAULT 	50 
	Section 7.2.
      	ACCELERATION OF THE
      INDEBTEDNESS 	53
    
	Section 7.3. 	REMEDIES 	53 
	Section 7.4.
      	NO WAIVER 	55
    
	Section 7.5. 	APPLICATION OF PROCEEDS 	55 
	Section 7.6.
      	APPOINTMENT OF
      ADMINISTRATIVE AGENT AS ATTORNEY-IN-FACT 	55 
	Article
      8 EXPENSES AND INDEMNITIES 	60
      
	Section
      8.1. 	PAYMENT
      FOR EXPENSES 	60
      
	Section
      8.2. 	GENERAL
      INDEMNIFICATION 	61
      
	Article
      9 MISCELLANEOUS 	61
      

iii 

	Section 9.1. 	NOTICES 	61 
	Section 9.2. 	APPOINTMENT OF borrower representative. 	61 
	Section 9.3. 	ASSIGNMENTS AND PARTICIPATIONS 	62 
	Section 9.4. 	SURVIVAL OF AGREEMENTS 	63 
	Section 9.5. 	NO OBLIGATION BEYOND MATURITY 	63 
	Section 9.6. 	PRIOR AGREEMENTS SUPERSEDED 	64 
	Section 9.7. 	PARTIES BOUND 	64 
	Section 9.8. 	NO THIRD PARTY BENEFICIARY 	64 
	Section 9.9. 	EXECUTION IN COUNTERPARTS 	64 
	Section 9.10. 	SEVERABILITY OF PROVISIONS 	64 
	Section 9.11. 	FURTHER INSTRUMENTS 	64 
	Section 9.12. 	GOVERNING LAW 	64 
	Section 9.13. 	JURISDICTION AND VENUE 	65 
	Section 9.14. 	WAIVER 	65 
	Section 9.15. 	ADVICE OF COUNSEL 	65 
	Section 9.16. 	WAIVER OF RIGHT TO TRIAL BY JURY 	66 
	Section 9.17. 	TIME OF ESSENCE 	66 
	Article 10  	JOINT AND SEVERAL LIABILITY; cross guaranty; subordination	66 
	Section 10.1. 	JOINT AND SEVERAL LIABILITY; cROSS gUARANTY. 	66 
	Section 10.2. 	SUBORDINATION. 	68 

Schedules and Exhibits 

Schedule A 

iv 

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 – Form of Promissory
  Note

  Exhibit F – Form of Promissory Note

v 

LOAN AND SECURITY AGREEMENT 

     THIS LOAN AND SECURITY
AGREEMENT (this “Agreement”) dated as of March 23, 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 Credit”), CARBIZ AUTO CREDIT JV1, LLC, a Florida limited liability
company (“Carbiz JV”; Carbiz JV, Carbiz Auto Credit and Carbiz USA, each
individually a “Borrower” and collectively, the “Borrowers”), (b)
CARBIZ INC., an Ontario corporation (“Carbiz Parent”), as a Guarantor,
(c) COLOSSUS CAPITAL FUND, L.P., a Delaware limited partnership (the “Initial
Lender”), the other Lenders from time to time party hereto, and (d) SWC
SERVICES LLC, a Delaware limited liability company, as administrative agent for
the Lenders (in such capacity, the “Administrative 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 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 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 or Persons that are 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 2.7(b) of
this Agreement. 

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

     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 

1 

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 2.1(a)(iii) of
Schedule A attached hereto. 

     AGREEMENT. The term
“Agreement” shall mean this Loan and Security Agreement between the Lenders, the
Administrative Agent, the Borrowers, the Guarantors, and any amendment,
supplement, restatement, modifications or extension hereof. 

     AMOUNT OF REVOLVING CREDIT
LINE. The term “Amount of Revolving Credit Line” shall have the meaning set
forth in Section 2.1(a)(ii) of Schedule A attached hereto.

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

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

     ASSET MANAGEMENT FEE. The
term “Asset Management Fee” shall have the meaning set forth in Section 2.10(c)
of Schedule A attached hereto. 

     ASSIGNEE. The term
“Assignee” shall have the meaning set forth in Section 9.3(b) hereof. 

     ASSIGNMENT AND ACCEPTANCE.
The term “Assignment and Acceptance” shall mean an Assignment and Acceptance
Agreement executed pursuant to the terms of Section 9.3 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. 

     AVAILABILITY ON ELIGIBLE
RECEIVABLES. The term “Availability on Eligible Receivables” shall have the
meaning set forth in Section 2.1(a)(iii) 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. 

     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. 

2 

CLOSING DATE. The term “Closing Date” shall mean March
23, 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 the account described in Section 2.3 held
in the name of Administrative Agent, into which Borrower shall deposit all
payments received from each Account Debtor pursuant to the terms of Section 3.9.

     COMMITMENT INCREASE. The
term “Commitment Increase” shall mean the increase of the aggregate revolving
loan commitments of the Lenders hereunder from $5,000,000 to $10,000,000 in
accordance with Section 2.13 hereof. 

     COMMITMENT INCREASE EFFECTIVE
DATE. The term “Commitment Increase Effective Date” shall mean the date on
which the Borrowers shall satisfy the terms and conditions precedent to the
Commitment Increase as set forth in Section 2.13 hereof. 

     COMMITMENT FEE. The term
“Commitment Fee” shall have the meaning set forth in Section 2.10(a) of Schedule
A attached hereto. 

     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. 

     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 originally 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 Agreement. 

     CUSTODIAN. The term
“Custodian” shall mean LaSalle Bank, NA, and its successors and permitted
assigns.

     CUSTODIAN AGREEMENT. The
term “Custodian Agreement” shall mean that certain Custodial Agreement of even
date herewith between the Borrowers, Administrative Agent and the Custodian, as
the same may be amended, supplemented, restated or otherwise modified in
accordance with the terms thereof. 

     DEBT SERVICE COVERAGE
RATIO. The term “Debt Service Coverage Ratio” shall mean, at any time of
determination, the ratio of Carbiz Parent and its consolidated Subsidiaries’

3 

EBITDA divided by Carbiz Parent and its consolidated
Subsidiaries’ Interest Expense for the immediately preceding twelve (12)
calendar month period.

     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 2.8 of
this Agreement. 

     DISTRIBUTION. The term
“Distributions” 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. 

     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 RECEIVABLES. The
term “Eligible Receivables” shall mean those Receivables of the 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 a Borrower and arise from the extension of credit, the sale and
delivery of goods or the rendering of services in the ordinary course of
Borrowers' business; (ii) 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); (iii) as to which the Account Debtor thereunder is personally liable
pursuant to the applicable Consumer Loan Documents; (iv) 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; (v) as to which
the related Consumer Loan Documents are in form and substance reasonably
satisfactory to Administrative Agent and have been delivered to the Custodian
pursuant to the terms of Section 3.4 and as to which all amounts and information
appearing on such Consumer Loan Documents or otherwise furnished to Lender in
connection therewith are true and correct and undisputed by the Account Debtor
thereon or any guarantor thereof; (vi) as to which the related Account Debtor
and the Borrowers are not engaged in any litigation, including any action
regarding nonpayment thereof; (vii) none of the Receivable, the Account Debtor
thereon or any guarantor thereof is subject to any receivership, insolvency or
bankruptcy proceeding; (viii) the applicable Borrower has good and sufficient
right to pledge, assign and deliver the Receivables free and clear from all
Liens whatsoever; (ix) neither the Account Debtor thereon nor any guarantor
thereof is employed by, related to or affiliated with any Borrower or any
Guarantor (x) 

4 

to the Borrowers’ knowledge, no condition exists that
materially or adversely affects the value of the Receivables or jeopardizes any
security therefor; (xi) 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 Borrower; (xii) is not a
renewal or an extension of any Receivable previously ineligible hereunder;
(xiii) the original principal amount thereof does not exceed the Maximum Amount
of an Eligible Receivable and the original term thereof does not exceed the
Maximum Term of an Eligible Receivable; (xiv) meets the Eligibility Test and has
been reported to Lender in compliance with the Aging Procedures; (xv) is not
evidenced by a judgment or has not been reduced to judgment; (xvi) is not an
open account or a revolving line of credit; (xvii) is evidenced by Consumer Loan
Documents and bearing interest or containing a time price differential, which
have been executed by the Account Debtor; (xviii) the Account Debtor thereunder
is a legal resident of the United States; (xix) payments under the Receivable
are to be made in United States dollars; (xx) the number of days between
contractual payment dates of a Receivable does not exceed thirty (30) days;
(xxi) complies with all Underwriting Guidelines; (xxii) has been originated in
an Approved State; (xxiii) 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) and for which the related Auto Title has been issued in the
applicable Borrower’s name, and (xxiv) is not a previously sold Receivable
repurchased by a Borrower on recourse. 

     ELIGIBILITY TEST. The term
“Eligibility Test” shall have the meaning set forth in Section 1.1(a)(iii) 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.

     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 the date hereof 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 the date hereof by
the JV Partner, (iii) each Validity Guaranty, and (iv) each other guaranty of
all or party 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. 

5 

     INDEBTEDNESS. The term
“Indebtedness” shall mean all amounts advanced hereunder by Lenders to Borrowers
together with all other amounts owing or becoming owing to any Lender Party by
Borrower, any Guarantor, any Validity Guarantor or any other Related Party under
or pursuant to the Loan Documents, whether direct or indirect, absolute or
contingent, now or hereafter existing. 

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

     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 Loan
and all other outstanding Indebtedness, and (b) the Trafalgar Subordinated Debt,
provided, notwithstanding the foregoing, interest on the Trafalgar Subordinated
Debt paid in by the issuance of equity of Carbiz Parent pursuant to the terms of
the Trafalgar Subordinated Debt Documents (and not in cash), shall not be deemed
to constitute interest expense for the purpose hereof.

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

     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 9.3 of this Agreement, and the successors thereof. 

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

     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. 

     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 

6 

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 2.6 of
Schedule A attached hereto. 

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

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

     LOAN DOCUMENTS. The term
“Loan Documents” shall mean this Agreement, the Note, each Guaranty Agreement,
each Pledge Agreement, each Security Agreement, the Trafalgar Subordination
Agreement, the Custodian Agreement, the Account Control Agreements, any Lockbox
Agreement, 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. 

     LOCKBOX. The term
“Lockbox” shall mean any lockbox account set up pursuant to Section 3.9, into
which all Account Debtors are directed to mail all payments in connection with
all Receivables, and from which all cash receipts shall be deposited into the
Collection Account. 

     LOCKBOX AGREEMENT. The
term “Lockbox Agreement” shall mean any agreement governing a Lockbox, in form
and substance reasonably satisfactory to Administrative Agent in its sole
discretion. 

     MATURITY DATE. The term
“Maturity Date” shall have the meaning set forth in Section 1.1(d) of Schedule A
attached hereto. 

     MAXIMUM AMOUNT OF AN ELIGIBLE
RECEIVABLE. The term “Maximum Amount of an Eligible Receivable” shall have
the meaning set forth in Section 1.1(a)(iv) 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 Note and the Indebtedness under Applicable Usury
Law. 

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

7 

Administrative Agent, for the benefit of the Lender Parties, in
form and substance reasonably satisfactory to Administrative Agent. 

     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. 

     NOTE. The term “Note”
shall mean, individually and collectively, any promissory note of Borrowers and
issued to Initial Lender (or subsequently re-issued by the Borrowers to an
assignee of Initial Lender pursuant to Section 9.3 hereof), 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. 

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

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

     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 date hereof by each of Carbiz Parent, Carbiz USA, and Carbiz
Auto Credit 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, for the benefit of the Lender
Parties, securing all or any part of the Indebtedness. 

     PRIME RATE. The term
“Prime Rate” shall mean the “Prime” rate of interest published each business day
in The Wall Street Journal as the “Prime Rate”. If more than one “Prime Rate” is
published in The Wall Street Journal for a day, the highest of such “Prime
Rates” shall be used. In the event that The Wall Street Journal is no longer
published or ceases to publish the 

8 

“Prime Rate”, Administrative Agent may substitute another
publication publishing the “Prime Rate”, reasonably acceptable to Administrative
Agent. In the event that “Prime Rates” are no longer generally published or are
limited, regulated or administered by a governmental or quasi-governmental body,
Administrative Agent may substitute another rate approximating the “Prime Rate”
(and which substitute rate may be reasonably adjusted by Administrative Agent to
the effect that such substitute rate will provide for an interest rate
equivalent to the Stated Interest Rate which would have been effective if the
“Prime Rate” were published). 

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

     RELATED PARTY. The term
“Related Party” shall mean, collectively, each Borrower, each Guarantor, each
Subsidiary of a Borrower or Carbiz Parent, and each Subsidiary and Affiliate of
any Borrower or 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
Loans which constitute a majority of the aggregate outstanding principal amount
of all Loans at such time. 

     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. 

     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, for the benefit of
the Lender Parties, securing all or any part of the Indebtedness. 

     STATED INTEREST RATE. The
term “Stated Interest Rate” shall have the meaning set forth in Section
1.1(b)(iii) of Schedule A attached hereto. 

     SUBSIDIARY. The term
“Subsidiary” shall mean, with respect to any Person, (i) any corporation of
which an aggregate of more than 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 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 50% of such capital stock
whether by proxy, 

9 

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 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 the purposes
of the Loan Documents, Carbiz JV 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) Carbiz Parent and its consolidated Subsidiaries shareholder's
equity, determined in accordance with GAAP, minus (b) the aggregate amount 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 Borrower or Guarantor hereunder (other than
Carbiz Parent and its Subsidiaries themselves).

     TERMINATION DATE. The term
“Termination Date” shall have the meaning given to such term in Section 2.6 of
this Agreement. 

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

     TRAFALGAR SUBORDINATED
DEBT. The term “Trafalgar Subordinated Debt” shall mean the Liabilities of
Carbiz Parent to the Trafalgar Subordinated Lenders in an original principal
amount not in excess of $2,500,000 pursuant to the Trafalgar Subordinated Debt
Documents. 

     TRAFALGAR SUBORDINATED DEBT
DOCUMENTS. The term “Trafalgar Subordinated Debt Documents” shall mean that
certain Securities Purchase Agreement dated as of February 28, 2007 between
Carbiz Parent and the Trafalgar Subordination 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 the date hereof by
and among Administrative Agent, the Borrowers, the Guarantors and the Trafalgar
Subordinated Lenders, as the same may 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. 

10 

     UNDERWRITING GUIDELINES.
The term “Underwriting Guidelines” shall mean the Borrower’s 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 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 2.6 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. 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 

11 

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. 

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

Section 2.1. AMOUNT OF LOAN. 

     (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 once per week), until the Maturity Date, to make advances
to the Borrowers (collectively, the “Loan” and each advance thereof a
“Loan Advance”), in an aggregate amount (including accrued but unpaid
interest thereon) not to exceed at any time outstanding the lesser of the
following: (a) the Amount of Revolving Credit Line or (b) the Availability on
Eligible Receivables. In no event shall Initial Lender be required to fund Loan
Advances such that the aggregate amount of the outstanding Loan would exceed the
Amount of Revolving Credit Line then in effect. For any period, the minimum
amount funded under the Loan shall not be less than the amount set forth in
Section 2.1(a)(i) of Schedule A hereto. Within the limits of this Section 2.1,
Borrower may borrow, repay and reborrow the advances. 

     (b) The obligation of the
Borrowers to repay to a Lender the aggregate amount of each Loan 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 Note in
substantially the form of Exhibit F attached hereto and made a part
hereof, issued in the principal amount of such Loan Advance and dated the date
on which the proceeds of such Loan Advance are advanced hereunder to or for the
account of the Borrower. The amount of principal owing on any Note at any given
time shall be the aggregate amount of the Loan Advance evidenced thereby minus
all payments of principal theretofore received by the Administrative Agent on
such Note. Interest on each Note shall accrue and be due and payable as provided
herein and therein. Each Note 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 and Borrowers jointly and severally and unconditionally
promise to pay each Note and all other outstanding Indebtedness in full on the
Maturity Date. 

     (c) The Borrower Representative,
on behalf of itself and the other Borrowers, will make a request for a Loan
Advance to the Administrative Agent in such manner as the Administrative Agent
may from time to time prescribe. Each Loan Advance 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 Borrowers shall
request a Loan Advance by having the Borrower Representative submit such request
in the form of Exhibit A attached hereto (each such request, a
“Request for Advance”) to the Administrative Agent, together with such
other information as the Administrative Agent reasonably requests in 

12 

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
Loan 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 Loan 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 Loan Advance requested pursuant
to such Request for Advance, will exist. Unless otherwise requested in writing
by Borrower and agreed by Administrative Agent and the Required Lenders, each
Loan Advanced shall be funded by the Lenders by wire transfer to the Operating
Account pursuant to the wire transfer instructions set forth on Section 2.1(c)
of Schedule A hereto.

Section 2.2. INTEREST RATE.

     (a) Unless the Default Rate shall
apply, the outstanding principal balance of the Loan shall bear interest at the
Stated Interest Rate on each day outstanding. If any Lender is ever prevented
from charging or collecting interest at the Stated Interest Rate because
interest at such rate would exceed the Maximum Rate, then the interest rate
applicable to the 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 Stated Interest Rate always been lawfully chargeable and
collectible.

     (b) Reserved.

     (c) Reserved.

     (d) The
monthly interest due on the principal balance of the Loan 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 Stated Interest Rate (but shall not exceed the Maximum Rate). 

     Section 2.3.
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 # 071924458
 For: SWC – Carbiz 
Account #: 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 

13 

payable hereunder (such account, the “Collection
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 by Administrative Agent’s
depository bank; provided, however, for purposes of calculating the interest due
on the outstanding principal balance of the Loan, such payment is subject to a
four (4) Business Day clearance period. The Indebtedness shall be due and
payable as follows: 

     (a) 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) Costs, fees and expenses
payable pursuant to this Agreement shall be due and payable by Borrower to
Administrative Agent or to such other Person designated by Administrative Agent
in writing on demand; and 

     (c) The entire outstanding
balance of the Indebtedness shall be due and payable, if not prepaid, on the
Maturity Date. 

     Section 2.4.
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 2.5.
MANDATORY PAYMENTS. Provided that a Default or Event of
Default has not otherwise occurred and be continuing hereunder, if at any time
the aggregate outstanding amount of the Loan advanced hereunder by Lenders to
Borrowers exceeds the maximum amount of the Loan allowed pursuant to Section 2.1
(an “Overadvance”), Borrowers shall immediately and without notice, repay
to Administrative Agent, for the account of Lenders, an amount sufficient to
eliminate such excess. In the event a Borrower sells, transfers, assigns or
otherwise disposes of all or any portion of its Receivables, 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), Borrowers shall apply all proceeds
of any such sale, transfer, assignment or other disposition to reduce the
outstanding balance of the Indebtedness.

     Section 2.6.
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 Maturity Date or the
Termination Date, as applicable. In connection with a Voluntary Termination, the
Indebtedness owing and to be paid by Borrower to Administrative Agent for the

14 

account of Lender Parties on the Termination Date shall include
as liquidated damages, not as a penalty, the amount of liquidated damages
(“Liquidated Damages”) set forth in Section 2.6 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 fully performed and indefeasibly paid in cash in
full. The Liens granted to Administrative 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 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 Borrower
Representative, prepay a portion of the outstanding principal amount of the
Loan; 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 2.09
hereof. 

Section 2.7. MAXIMUM INTEREST; CONTROLLING
AGREEMENT.

     (a) The contracted for rate of
interest of the Loan without limitation, shall consist of the following: (i) the
Stated Interest Rate, calculated and applied to the principal balance of the
Note in accordance with the provisions of the 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 Note in
accordance with the provisions of the 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 Note, 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 

15 

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 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 Loan 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 Loan shall be prepaid, so that under any of such circumstances
the amount of interest contracted for, charged or received in connection with
the Loan, 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 Lender's 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 Loan, all interest at any time contracted for, charged
or received from Borrowers or otherwise in connection with the Loan; and (ii) in
the event that the effective rate of interest on the Loan 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 Loan 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 2.8.
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 Loan at a
rate per annum which is six percent (6%) in excess of the Stated Interest Rate
(the “Default Rate”); provided, however, the Default Rate shall never
exceed the Maximum Rate.

16 

     Section 2.9.
APPLICATION OF PAYMENTS. The amount of all payments or amounts
received by Administrative Agent with respect to the Indebtedness (including
payments received in the Collection Account pursuant to Section 3.9 hereof)
shall be applied to the extent applicable under this Agreement: (a) first, to
any fees and expenses (including, without limitation, the Asset Management Fee)
due to Lender Parties hereunder; (b) then, to any fees and expenses (including,
without limitation, any legal fees and expenses) of the Custodian; (c) then, to
any fees and expenses (including, without limitation, any legal fees and
expenses) of any servicer of the Receivables; (d) then, to accrued and unpaid
interest through the date of such payment, including any interest calculated at
the Default Rate in accordance with Section 2.8 hereof, (e) then, to the unpaid
principal balance of the Loan, in an amount sufficient to cure any
Overadvance, and (f) 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, while a Default or Event of Default exists under the Loan Documents,
each payment received hereunder shall be applied to amounts owed to Lender
Parties by Borrowers as Administrative Agent in its sole discretion may
determine (subject to the right of the Required Lenders to direct Administrative
Agent in such application), including, without limitation, to the outstanding
principal amount of the Indebtedness. In calculating interest and applying
payments as set forth above; (a) interest shall be calculated and collected
through the date a payment is actually applied thereto under the terms of this
Agreement; (b) interest on the outstanding balance shall be charged during any
grace period permitted hereunder; (c) on the sixth 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 Loan; and (d) to the extent
that any Borrower, Related Party, JV Partner or 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 2.10.
FEES. The Borrowers shall pay to the Administrative Agent, for
the account of Initial Lender, a commitment fee (the “Commitment Fee”) as
set forth in Section 2.10(a) of Schedule A attached hereto, which Commitment Fee
shall be fully earned and due and payable upon execution and delivery of this
Agreement. The Borrowers shall pay to the Administrative Agent, for the account
of Initial Lender, an unused line fee (the “Unused Line Fee”) as
set forth in Section 2.10(b) of Schedule A attached hereto, which Unused Line
Fee shall be due and payable in arrears, on the first (1st) day of each calendar
month, beginning on October 1, 2007. The Borrower shall pay to the
Administrative Agent an asset management fee (the “Asset Management Fee”)
as set forth in Section 2.10(c) of Schedule A attached hereto. The Borrowers
shall pay to the Administrative Agent, for the account of Initial Lender, a
second tranche commitment fee (the “Second Tranche Commitment Fee”) as
set forth in Section 2.10(d) of Schedule A attached hereto, which Second Tranche
Commitment Fee shall be fully earned and due and payable upon the effectiveness
of the Commitment Increase on the Commitment Increase Effective Date.

17 

     Section 2.11.
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 2.12. RESERVED.

     Section 2.13.
COMMITMENT INCREASE. Subject to the terms of this Section
2.13, the Borrowers shall have the option to increase the “Amount of Revolving
Credit Line” from $5,000,000 as in effect on the Closing Date to $10,000,000
(the “Commitment Increase”). At any time from the Closing Date to the
Maturity Date, the Borrowers may effect the Commitment Increase by delivering to
Administrative Agent (i) a written request by each Borrower to effect the
Commitment Increase, which written notice shall be in form and substance
reasonably satisfactory to Administrative Agent and (ii) the Second Tranche
Commitment Fee referenced in Section 2.10 hereof. The effectiveness of the
Commitment Increase shall be subject to following conditions precedent: (a)
Administrative Agent’s receipt of the written request and Second Tranche
Commitment Fee referenced in the immediately preceding sentence, and (b) unless
otherwise waived by Administrative Agent and each Lender, no Default or Event of
Default shall have occurred and be continuing. Following the Commitment Increase
Effective Date, in accordance with Section 2.1(a)(ii) of Schedule A, the “Amount
of Revolving Credit Line” for all purposes hereunder shall be deemed to be
$10,000,000 (including for the purposes of determining the amount of the Unused
Line Fee).

     Section 2.14.
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 interest and
penalties thereon) imposed by any taxing authority, excluding taxes imposed on
or measured by Administrative Agent's or any Lender's income by a jurisdiction
under which Administrative Agent or such Lender 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 

18 

other documentation reasonably satisfactory to Administrative
Agent evidencing such payment to such authority; and (iii) pay to Administrative
Agent for the account of Administrative Agent and Lenders such additional amount
or amounts as is necessary to ensure that the net amount actually received by
Administrative Agent and each Lender will equal the full amount Administrative
Agent and such Lender would have received had no such withholding or deduction
been required. If any Taxes are directly asserted against Administrative Agent
or any Lender with respect to any payment received by Administrative Agent or
such Lender hereunder, Administrative Agent or such Lender 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 Person after the payment of such Taxes (including any Taxes on such
additional amount) shall equal the amount such Person 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
Administrative Agent or such Lender first made demand therefor. If Borrower
fails to pay any Taxes when due to the appropriate taxing authority or fails to
remit to Administrative Agent, for the account of Administrative Agent and the
respective Lenders, the required receipts or other required documentary
evidence, Borrower shall indemnify Administrative Agent and Lenders for any
incremental Taxes, interest or penalties that may become payable by
Administrative Agent or any Lender as a result of any such failure.

ARTICLE 3 
SECURITY 

     Section 3.1.
SECURITY INTEREST. To secure the prompt payment to Lender
Parties of the Indebtedness and any and all other obligations owed by Borrowers
to Lender Parties, whether now existing or hereinafter arising, each Borrower
hereby irrevocably grants to Administrative Agent, 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, 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, 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; 

19 

     (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; 

     (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, 

20 

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. 

     Section 3.2.
COLLATERAL ASSIGNMENT OF CONSUMER LOAN DOCUMENTS AND AUTO
TITLE. Each Borrower hereby collaterally assigns to the
Administrative Agent, 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 (collectively, the “Assigned Documents”). Each
Borrower confirms and agrees that the Administrative 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 such Borrower under any such Assigned Document. 

Section 3.3. FINANCING STATEMENTS AND
FURTHER ASSURANCES.

     (a) Each Borrower hereby
authorizes Administrative 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, the Trafalgar Subordinated Lender(s) or
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 (for the
benefit of the Lender Parties). 

     (b) 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 in the Collateral,
or to enable Administrative 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, 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) providing Administrative
Agent with “control” (as such term is defined in any applicable uniform 

21 

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) Borrowers hereby agree to
deliver to the Custodian the original Consumer Loan Documents evidencing each
Receivable, together with all related credit applications, truth-in-lending
disclosures, credit reports and similar information provided by or related to
each Account Debtor for such Receivable, and the original Auto Title reflecting
Borrower as lien holder on the vehicle securing such Receivable, within five (5)
Business Days after the Receivable evidenced by such Consumer Loan Document is
made by the Borrower to the related Account Debtor and in accordance with the
Custodian Agreement. All Receivables shall, regardless of their location, be
deemed to be under Administrative 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 (for the benefit of itself and the Lender Parties’)
possession.

(b) Borrowers shall deliver and pledge to the Administrative
Agent or its agent 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 the applicable Borrower, in such form and substance as the
Administrative Agent may reasonably request. 

     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 (including the Custodian, as custodian and bailee for the
Administrative Agent) shall not invalidate Administrative 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 (for the benefit of the Lender Parties) security
interest, the original chattel paper and instruments representing the
Receivables so held by Borrower shall be deemed to be held by Administrative
Agent, although kept by the Borrower as the custodial agent of Administrative
Agent and Lender. 

     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, FOR THE BENEFIT OF
ITSELF AND CERTAIN LENDERS. THE CREATION OF ANY SUBSEQUENT SECURITY INTEREST IN
THIS DOCUMENT VIOLATES THE RIGHTS OF THE ADMINISTRATIVE 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 

22 

on a daily basis and located only at the locations set forth in
Section 3.7 of Schedule A attached hereto. Administrative Agent, by or through
any of its 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 Administrative 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, 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 Borrower or its agents, and to faithfully account therefor to Administrative
Agent. Upon the occurrence of a Default or an Event of Default, Administrative
Agent expressly retains the unqualified right at any time it so elects to take
over the collection of the Receivables directly (through an agent of
Administrative Agent or otherwise). 

     Section 3.9.
COLLECTION ACCOUNT. Borrower 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, and the proceeds of all
other Collateral are deposited into the Collection Account within one (1)
Business Day of receipt thereof. Until such time as any Receivables collections
or other proceeds of Collateral are deposited by the Borrower into the
Collection Account, such collections and proceeds shall be held in trust for the
benefit of Administrative Agent. The Collection Account shall be swept
automatically on a weekly basis and the depository bank maintaining the
Collection Account will wire, or otherwise transfer, in immediately available
funds, all funds received or deposited into the 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 such bank account as
Administrative Agent may from time to time designate for such purpose. Each
Borrower hereby confirms and agrees that all amounts deposited in the Collection
Account and any other funds received and collected by Administrative 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, on a daily
basis, all funds transferred into the Collection Account and this Section 3.9 as
set forth in Section 2.9 hereof. If a credit balance exists with respect to the
Collection Account 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 Borrower, but shall be
available to Borrower in accordance with the terms of this Agreement. All funds
transferred to the Collection Account shall be applied to reduce the
Indebtedness (or be returned to an Operating Account of the Borrowers in
accordance with Section 2.5 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 Account 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 

23 

Collection Account, the bank maintaining such account, the
amount of that item, or such bank at its discretion may charge any uncollected
item to the Borrower’s commercial account or other account. The Borrowers shall
be liable as an endorser on all items deposited in the Collection Account,
whether or not in fact endorsed by a Borrower. Upon Administrative 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 and to execute with such bank a Lockbox Agreement
acceptable to Lender 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 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. 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. 

     Section 3.11.
USE OF PROCEEDS. Borrowers shall use the proceeds of the Loan
in the ordinary course of business, solely in its operations for working
capital, costs incurred in the purchasing of Receivables and for payments to
Lender Parties hereunder. 

     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 or Custodian, Borrower shall submit a request to the
Administrative Agent 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
Custodian Agreement to the Custodian) and Administrative Agent shall return (or
cause 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 represents and warrants to, and covenants
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 

24 

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 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 its agent (including, the 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, Inventory and Goods of Borrowers are located at the places as
specified on Section 5.1(n) of Schedule A attached hereto. Except for Consumer
Loan Documentation in the possession of the 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 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 applicable 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 Borrower and (iv) to ensure that
  the copyrights, trademarks or any patents used by Borrowers are and remain 

25 

enforceable, to the extent material to
the operations of the business of Borrowers. 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
Administrative Agent or any Lender 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
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 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, written confirmation of Administrative Agent’s control over such
Investment Property. For purposes of this Section 3.13(g), Administrative Agent
shall have exclusive control of investment property if (i) such investment
property consists of certificated securities and the applicable Borrower
delivers such certificated securities to the Administrative Agent (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 (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 without further consent by such Borrower, and (iii) such
investment property consists of security entitlements and either (x)
Administrative Agent becomes the entitlement holder thereof or (y) the
appropriate securities intermediary agrees, pursuant to the documentation in
form and substance reasonably satisfactory to Administrative Agent, that it
shall comply with entitlement orders originated by Administrative Agent without
further consent by any Borrower. 

     Section 3.14.
LENDER'S PAYMENT OF CLAIMS. Administrative Agent may, in its
sole discretion, discharge or obtain the release of any Lien asserted by any
Person against the 

26 

Collateral (other than Liens permitted pursuant to Section 6.2
hereof). All sums paid by Administrative Agent in respect thereof shall be
payable, on demand, by Borrowers to Administrative Agent 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 Advance 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)
each Guaranty Agreement executed by the respective Guarantor, JV Partner or
Validity Guarantor, as applicable; (v) each Pledge Agreement executed by the
applicable Related Party; (vi) the Custodial Agreement executed by Borrower,
Administrative Agent and the Custodian; (vii) the Account Control Agreements
executed by the parties thereto; (viii) the Trafalgar Subordination Agreement
executed by the Trafalgar Subordinated Lenders, the Borrowers, Carbiz Parent and
Administrative Agent, and (ix) 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) Payoff Letter from
Existing Lender. Borrowers' existing lender(s), if any, shall have executed
and delivered a payoff letter (and lien release documentation, as applicable) to
and in favor of Administrative Agent, in form and substance acceptable to
Administrative Agent in its sole discretion; 

     (c) Charter Documents.
Administrative Agent shall have received copies of Borrowers', Carbiz Parent’s
and JV Partner’s charter documents, certified by the appropriate official of
such Person’s jurisdiction of organization and Borrowers’, Carbiz Parent’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 such Borrower, Carbiz Parent or JV Partner,
as applicable; 

     (d) Good Standing.
Administrative Agent shall have received a good standing certificate with
respect to each Borrower, Carbiz Parent 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 certificate shall indicate that Borrower and such Guarantor
are in good standing in such jurisdiction; 

     (e) Foreign Qualification.
Administrative Agent shall have received certificates with respect to each
Borrower and each Guarantor 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 

27 

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; 

     (f) Authorizing Resolutions
and Incumbency. Administrative Agent shall have received a certificate from
the Secretary of each Borrower and each Guarantor 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 such Borrower or such Guarantor are a party, and authorizing
specific officers of such Borrower or such Guarantor to execute same, and (ii)
the authenticity of original specimen signatures of such officers; 

     (g) Initial Availability
Report. Administrative Agent shall have received an initial Availability
Report from Borrower Representative executed by an authorized representative of
Borrower Representative and supporting documentation as the Administrative Agent
may reasonably request, to confirm that after making the initial advance
hereunder, satisfying all trade payables older than sixty (60) days from invoice
date, book overdrafts and closing costs, Availability on Eligible Receivables
shall not be less than $100,000; 

     (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 financing statements and 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, for the
benefit of the Lender Parties, and shall have received other background reports
and information with respect to Borrowers, Guarantors, members of Borrowers’ and
Guarantors’ senior management, the owners of Borrowers and Guarantors, and any
other Person who provides financial or collateral information to the
Administrative Agent, which are satisfactory to Administrative Agent, in
Administrative Agent’s sole discretion; 

     (j) Landlord and Mortgagee
Waivers. Administrative Agent shall have received landlord and mortgagee
waivers from the lessors and mortgagees of all locations where any Collateral is
located; 

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

28 

     (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 Account.
The Collection Account shall have been established to the reasonable
satisfaction of Administrative Agent in its sole discretion; 

     (o) Trafalgar Subordinated
Debt Proceeds. Administrative Agent shall have received evidence, in form
and substance acceptable to Administrative Agent, that Carbiz Parent shall
received and distributed to Borrower Representative, not less than $849,886.20
of cash proceeds of the Trafalgar Subordinated Debt.

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

     (q) No Material Adverse
Effect. No event or condition has occurred since January 31, 2006, 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.

     (r) Cash Management
Systems. Borrowers have established cash management systems acceptable to
the Administrative Agent, in its discretion. 

     (s) 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. 

     (t) 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.

     (u) Investment Banking
Fee. The Administrative Agent shall have received evidence, in form and
substance reasonably satisfactory to Administrative Agent, of (i) the 

29 

payment of all investment banking and similar advisory fees and
expenses to GVC Financial Services, LLC (which fees and expenses Borrowers
hereby represent to Administrative Agent and the Lenders to be an amount not in
excess of $500,000 in the aggregate) or (ii) satisfactory arrangements for the
payment of such fees and expenses from the initial proceeds of the Loan on the
Closing Date.

     (v) 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 Custodian shall have received the Consumer
Loan Documents, all related Auto Titles and other documents, instruments and
writings related to each Receivable 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 Borrower 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 Borrower to
Lender Parties under this Agreement and all other such documents and instruments
shall constitute Indebtedness secured by Administrative Agent's security
interest, for the benefit of the Lender Parties, in all of the Collateral and by
all other Liens heretofore, now, or at any time or times hereafter granted by
Borrower to Administrative Agent, for the benefit of the Lender Parties.
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 Borrower, to make and
use Loan 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 

30 

(and Administrative Agent shall be deemed a Lender hereunder
with respect to any Loan Advance so made). 

ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF
BORROWERS 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 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 applicably 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. 

     (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. 

31 

     (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 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. 

     (l) Each Related Party has good,
indefeasible and merchantable title to and ownership of its respective
Collateral, free and clear of all Liens, except those of Administrative Agent
and except 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. 

32 

     (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 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.

     (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. 

33 

     (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 has a
perfected first priority security interest, for the benefit of the Lender
Parties in favor of Lender 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 (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. 

     Section 5.2.
REPRESENTATIONS AND WARRANTIES AS TO ELIGIBLE
RECEIVABLES . With respect to the Eligible Receivables, the
Borrowers hereby continuously 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 Receivables are “Eligible Receivables,”
Administrative Agent may rely upon all statements or representations made by
Borrowers; and (ii) those Receivables designated as Eligible Receivables meet
the following requirements at the time any Request for Advance is provided to
Administrative Agent: 

     (a) Each Eligible Receivable is
genuine, is in all respects what it purports to be and the Consumer Loan
Documents evidencing such Eligible Receivable has 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 or the Custodian is
in actual or constructive possession of any such original Consumer Loan
Documents; 

34 

     (b) The Eligible Receivables
represent undisputed, bona fide transactions completed in accordance with the
terms and provisions contained in any documents related thereto; 

     (c) 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 Borrowers and are not
contingent for any reason; 

     (d) No set-offs, counterclaims or
disputes as to payments or liability thereon exist or have been asserted with
respect thereto and Borrowers have not made any agreement with any Account
Debtor thereunder for any deduction therefrom, except a discount or allowance
allowed by Borrowers 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; 

     (e) To Borrowers’ knowledge, 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; 

     (f) To Borrowers’ knowledge, all
Account Debtors in connection with Eligible Receivables: (i) had the capacity to
contract at the time any contract or other document giving rise to the
Receivable was executed; and (ii) generally have the ability to pay their debts
as they become due; 

     (g) To Borrowers' knowledge, 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;

     (h) The Eligible Receivables have
not been assigned or pledged to any Person other than Administrative Agent, for
the benefit of the Lender Parties and a second priority assignment and pledge in
favor of the Trafalgar Subordinated Lenders;

     (i) The goods giving rise to the
Eligible Receivables are not, and were not at the time of the sale thereof,
subject to any Lien except those of Administrative Agent, for the benefit of the
Lender Parties, those removed or terminated prior to the date hereof or those
subordinated to Administrative Agent's security interest pursuant to the
Trafalgar Subordination Agreement; 

     (j) To Borrowers’ knowledge, the
Eligible Receivables satisfy the applicable criteria set forth in Section
1.1(a)(i) through (v) of Schedule A attached hereto; 

     (k) All Consumer Loan Documents
represent the legal, valid and binding payment obligation of the applicable
Account Debtors, enforceable in accordance with their terms, subject to
bankruptcy, insolvency and other Laws (including, but not limited to principles
of equity) affecting the rights of creditors; 

35 

     (l) 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 any 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); 

     (m) 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; 

     (n) No Related Party, JV Partner
or Validity 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; and 

     (o) Each Related Party 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. 

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 advances under this Agreement have terminated, each Borrower
and each Guarantor party hereto agrees and covenants, jointly and severally,
that they shall:

     (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. 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 

36 

Collateral in a fire proof cabinet (subject to the delivery
requirements to the Custodian set forth herein and in the Custodian
Agreement).

     (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 and (ii) to
(upon prior written notice to 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. 

     (h) Cause all debt due from
Borrower to any of Borrowers 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 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. 

37 

     (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 Custodian (or
Administrative Agent) the original Consumer Loan Documents and all other
documentation required by Section 3.4 hereof to be governed by the terms of the
Custodial Agreement. 

(m) [ Reserved. ] 

     (n) 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. 

     (o) 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, for the benefit of
the Lender Parties, 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. 

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

     (q) 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 on
Section 6.2(a) hereof) in favor of Administrative Agent, for the benefit of the
Lender parties on the assets of such Person and its Subsidiaries (including
assets acquired after the date hereof), including on any and all assets of each
Credit Party, whether now owned or hereafter acquired. 

     (r) Concurrently with the
acquisition by such Person or any of its Subsidiaries following the Closing Date
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 

38 

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.

     (s) The End of Month Delinquency
set forth in Section 12 of the Availability Report shall be delivered to
Administrative Agent by Borrower hereunder as determined pursuant to the Aging
Procedures and Eligibility Test. 

     (t) Within thirty (30) days of
the date hereof, deliver to Administrative Agent, a fully executed physical and
online data access agreement by the operator of the Borrowers’ back-up server
co-location facility located at 6288 Tower Lane, Sarasota, FL 34240, which
access agreement shall be in form and substance reasonably satisfactory to
Administrative Agent. 

     (u) Within fifteen (15) days of
the date hereof, deliver to Administrative Agent, a fully executed Secretary’s
Certificate in respect of JV Partner, including as certified attachments
thereto, true complete and correct copies of the articles of incorporation,
bylaws, incumbency and resolutions authorizing the execution and delivery of the
Loan Documents to which JV Partner is a party, all of the foregoing inform and
substance satisfactory to Administrative Agent. 

     (v) Within thirty (30) days of
the date hereof, deliver to Administrative Agent, copies of the fully executed
Trafalgar Subordinated Debt Documents, which Trafalgar Subordinated Debt
Documents shall be certified as true, complete and correct by Borrower
Representative. 

     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 (t), (u) and (v), 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. 

     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 

39 

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, for the benefit of
the Lender Parties, (ii) purchase money security interests granted by the
Borrower in connection with specific capital expenditures permitted pursuant to
Section 6.2(f)(iv), provided, however, that the amount of the purchase money
security interest shall not exceed one hundred (100%) percent 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, and (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. 

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

     (e) Amend, supplement or
otherwise modify any Related Party’s charter documents or bylaws, limited
liability company agreement, operating agreement or partnership agreement, as
applicable, (i) which would have a material adverse affect on the condition and
operations, prospects or financial condition of such Related Party, (ii) in a
manner Adverse to the Lender Parties or (iii) without providing copies of any
such amendment, supplement or 

40 

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, (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, or (v) 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 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, for the benefit of the Lender Parties,
hereunder. 

     (k) Make any expenditure or
commitment or incur any obligation or enter into or engage in any transaction
except in the ordinary course of business, (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, (iv) create or
acquire any Subsidiary or (v) make any acquisitions of material properties or
assets of another Person unless expressly allowed hereunder or otherwise
consented to in writing by Administrative Agent. 

(l) Reserved.

     (m) Permit Net Income, determined
as at the end of each calendar month set forth below, to be less than the amount
set forth below for the calendar month ending on such date: 

  	Date 	 Minimum Net Income 
	March 31, 2007 	($110,000) 

41 

  	April 30, 2007 	($80,000) 
	May 31, 2007 	($100,000) 
	June 30, 2007 	($90,000) 
	July 31, 2007 	($95,000) 
	August 31, 2007 	($90,000) 
	September 30, 2007 	($75,000) 
	October 31, 2007 	($65,000) 
	November 30, 2007 	($70,000) 
	December 31, 2007 	($20,000) 
	  	  
	January 31, 2008 	($1,000) 
	February 29, 2008 	($5,000) 
	March 31, 2008 	($5,000) 
	April 30, 2008 	($25,000) 
	May 31, 2008 	($15,000) 
	June 30, 2008 	($40,000) 
	July 31, 2008 	($20,000) 
	August 31, 2008 	($10,000) 
	September 30, 2008 	($5,000) 
	October 31, 2008 	($10,000) 
	November 30, 2008 	($65,000) 
	December 31, 2008 	($5,000) 
	  	  
	January 31, 2009 	($10,000) 

42 

  	February 28, 2009 	$2,000 
	March 31, 2009 	$5,000 
	April 30, 2009 	$20,000 
	May 31, 2009 	$25,000 
	June 30, 2009 	$20,000 
	July 31, 2009 	$40,000 
	August 31, 2009 	$70,000 
	September 30, 2009 	$70,000 
	October 31, 2009 	$75,000 
	November 30, 2009 	$45,000 
	December 31, 2009 	$90,000 
	  	  
	January 31, 2010 	$90,000 
	February 28, 2010 	$150,000 
	March 31, 2010 	$150,000 
	April 30, 2010 	$150,000 
	May 31, 2010 	($150,000) 
	June 30, 2010 	$150,000 
	July 31, 2010 	$150,000 
	August 31, 2010 	$150,000 
	September 30, 2010 	$150,000 
	October 31, 2010 	$150,000 
	November 30, 2010 	$150,000 
	December 31, 2010 	$150,000 

43 

  	January 31, 2011 	$150,000 
	  	  
	February 28, 2011 	$150,000 
	  	  
	March 31, 2011 and the 
last day of each calendar
      
month thereafter 	$150,000 

     (n) Permit Tangible Net Worth, as
of any date set forth below, to be less than the amount set forth below as of
such date: 

  	Date 
	Minimum Tangible Net 
Worth
  
	March 31, 2007 	($4,500,000) 
	April 30, 2007 	($4,600,000) 
	May 31, 2007 	($3,700,000) 
	June 30, 2007 	($3,600,000) 
	July 31, 2007 	($3,000,000) 
	August 31, 2007 	($3,000,000) 
	September 30, 2007 	($3,000,000) 
	October 31, 2007 	($3,000,000) 
	November 30, 2007 	($3,000,000) 
	December 31, 2007 	($3,100,000) 
	  	  
	January 31, 2008 	($3,100,000) 
	February 29, 2008 	($3,100,000) 
	March 31, 2008 	($3,100,000) 
	April 30, 2008 	($3,100,000) 

44 

  	May 31, 2008 	($3,100,000) 
	June 30, 2008 	($3,100,000) 
	July 31, 2008 	($3,100,000) 
	August 31, 2008 	($3,100,000) 
	September 30, 2008 	($3,100,000) 
	October 31, 2008 	($3,100,000) 
	November 30, 2008 	($3,100,000) 
	December 31, 2008 	($3,100,000) 
	  	  
	January 31, 2009 	($3,100,000) 
	February 28, 2009 	($3,100,000) 
	March 31, 2009 	($3,100,000) 
	April 30, 2009 	($3,100,000) 
	May 31, 2009 	($3,100,000) 
	June 30, 2009 	($3,100,000) 
	July 31, 2009 	($3,000,000) 
	August 31, 2009 	($3,000,000) 
	September 30, 2009 	($2,900,000) 
	October 31, 2009 	($2,900,000) 
	November 30, 2009 	($2,800,000) 
	December 31, 2009 	($2,800,000) 
	  	  
	January 31, 2010 	($2,700,000) 
	February 28, 2010 	($2,600,000) 

45 

  	March 31, 2010 	($2,500,000) 
	April 30, 2010 	($2,400,000) 
	May 31, 2010 	($2,500,000) 
	June 30, 2010 	($2,400,000) 
	July 31, 2010 	($23,000,000) 
	August 31, 2010 	($2,200,000) 
	September 30, 2010 	($2,100,000) 
	October 31, 2010 	($2,000,000) 
	November 30, 2010 	($1,900,000) 
	December 31, 2010 	($1,800,000) 
	  	  
	January 31, 2011 	($1,700,000) 
	February 28, 2011 	($1,600,000) 
	March 31, 2011 and the 
last day of each calendar
      
month thereafter 	($1,500,000) 

     (o) 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. 

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

     (q) Directly or indirectly (a)
declare, pay, make or set aside any amount for payment in respect of the
Trafalgar Subordinated Debt, except for regularly scheduled payments of interest
(but no voluntary prepayments) in respect of the Trafalgar Subordinated Debt
made in full compliance with the Trafalgar Subordination Agreement; or (b) amend
or otherwise modify the terms of the Trafalgar Subordinated Debt if the effect
of such amendment or modification is 

46 

to (i) increase the interest rate or fees on, or change the
manner or timing of payment of, the Trafalgar Subordinated Debt; (ii) change the
dates upon which payments of principal or interest are due on, or the principal
amount of the Trafalgar Subordinated Debt; (iii) change any event of default or
add or make more restrictive any covenant with respect to the Trafalgar
Subordinated Debt; (iv) change the prepayment provisions of the Trafalgar
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 the Trafalgar Subordinated Debt in a manner
adverse to Borrowers, any other Related Party, Administrative Agent or Lenders.

     (r) 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 from making
dividends or distributions, directly or indirectly, to a Borrower and shall not
restrict or prohibit 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, (i)
no Event of Default shall have occurred and be continuing, (ii) Borrowers are in
compliance on a pro forma basis with the financial covenants set forth in
Section 6.2 (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 and (iii) (x) Availability on Eligible Receivables
minus outstanding Indebtedness 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 the
Closing Date; or 

(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.

     (s) 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. 

     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 

47 

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 and for so long as the
Borrowers’ shall have failed to deliver to Administrative Agent, a collateral
access agreement in form and substance satisfactory to Administrative Agent with
respect to Borrowers’ principal place of business located at 7405 N. Tamiami
Trail, Sarasota, Florida, Borrowers shall maintain a duplicate set of all
material records (including, without limitation, all files, books and records
with respect to the Borrowers’ Accounts) 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) On the second Business Day of
each calendar week, for the period ending as of the last Business Day of the
immediately preceding calendar week: (i) an Availability Report in the form and
substance of Exhibit C attached hereto, and (ii) a Schedule of
Receivables and Assignment in form and substance of Exhibit D attached
hereto 

     (b) As soon as available, and in
any event within twenty (20) calendar days after the end of each fiscal month, a
Compliance Certificate in form and substance of Exhibit E attached hereto. 

     (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 the 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, 

48 

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 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 the 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. 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 the Borrowers
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, proforma balance sheets and statements of
income, retained earnings and cash flows of Carbiz Parent and its consolidating
Subsidiaries for the next annual accounting period; 

     (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 

49 

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 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; 

     (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; and 

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 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 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 

50 

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 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.

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 Loan 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 the
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 or 6.2 hereof, (ii) any Borrower, Guarantor, JV
Partner or 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 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 

51 

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, 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 (i) 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 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 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
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 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 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 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 

52 

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 Related Party’s business. 

     (k) If any Related Party, JV
Partner or 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 the 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. 

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

     (o) Carbiz Parent 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 and Trafalgar 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 principle of the Borrowers. 

     (q) The Borrowers shall fail to
receive, as a distribution from Carbiz Parent (i) the cash proceeds of an
additional $750,000 of the Trafalgar Subordinated Debt (net of fees and expenses
payable to the Trafalgar Subordinated Lenders pursuant to the terms of the
Trafalgar Subordinated Debt Documents as in effect on the date hereof) on or
before the forty-fifth (45th) day following the date hereof, or (ii)
the cash proceeds of an additional $750,000 of the Trafalgar Subordinated Debt
(exclusive of the cash proceeds referenced in clause (i) of this subsection 

53 

7.1(q)), net of fees and expenses payable to the Trafalgar
Subordinated Lenders pursuant to the terms of the Trafalgar Subordinated Debt
Documents as in effect on the date hereof) on or before the one hundred and
twentieth (120th) day following the date hereof 

     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 obligation of the Lender to make any additional advances on
the Loan 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 Borrower 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, and
immediately shall become due and payable. During the continuance of any Event of
Default, in accordance with Section 2.8 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 shall occur and be continuing,
Administrative 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, for the benefit of the Lender Parties, claim, and remove the Collateral
therefrom to the premises of Administrative Agent or any agent of Administrative
Agent, for such time as Administrative 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 at a place
to be designated by Administrative Agent, in Administrative Agent'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, in its discretion, may deem advisable; provided that such
sales may be 

54 

adjourned from time to time with or without notice. The
requirement of 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 either
by Administrative Agent or at its option, a broker, or any other intended
disposition thereof is to be made, shall be met if such notice is 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 (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 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 may see fit.
Administrative Agent is 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 benefit. The Related
Parties agree to hold Administrative Agent harmless from any liability arising
out of Administrative 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 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 for collection and for acquisition,
completion, protection, removal, storage, sale and delivery of the Collateral;
second to all payments, other than principal and interest, due under this
Agreement; 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) All other rights and remedies
that Lender Parties may have at law or in equity. 

Additionally, if any Default or Event of Default shall occur
and be continuing, Administrative Agent, on behalf of Lender Parties, may
enforce the payment of any Indebtedness due to Lender 

55 

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 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 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), with full
power of substitution, as Borrower's 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 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 

56 

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 8A 
ADMINISTRATIVE AGENT; ASSIGNMENTS 

     Section 8.1A
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. 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 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 by the terms hereof and thereof and such
other powers as are reasonably incidental thereto, including, without
limitation, to execute and deliver the Loan Agreement, the Trafalgar
Subordination Agreement, the Custodian Agreement and any other Loan Document
necessary or useful in connection with the Indebtedness and Lender Parties’
security interests relating thereto.

57 

The Administrative Agent may perform any of its duties
hereunder by or through its officers, directors, agents, employees or
affiliates. 

     Section 8.2A NATURE
OF DUTIES. The Administrative Agent shall not have any duties or
responsibilities except those expressly set forth in this Agreement and in the
other Loan Documents. Neither the Administrative Agent nor any of its 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 shall
be mechanical and administrative in nature; the Administrative Agent shall not
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 any
obligations in respect of this Agreement or any other Loan Document except as
expressly set forth herein or therein. 

     Section 8.3A LACK OF
RELIANCE ON THE ADMINISTRATIVE AGENT. Independently and without reliance
upon the Administrative 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, the Administrative Agent shall not 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. The Administrative Agent shall not 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 8.4A CERTAIN
RIGHTS OF THE ADMINISTRATIVE AGENT. If the Administrative 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 Administrative Agent shall be entitled to refrain from such act or taking
such action unless and until the Administrative Agent shall have received
instructions from the Lenders; and the Administrative Agent 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 as a result of the
Administrative Agent 

58 

acting or refraining from acting hereunder or under any other
Loan Document in accordance with the instructions of the Lenders. 

     Section 8.5A
RELIANCE. The Administrative 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 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. 

     Section 8.6A
INDEMNIFICATION. To the extent the Administrative Agent (or
any affiliate thereof) is not reimbursed and indemnified by the Borrowers, the
Lenders will reimburse and indemnify the Administrative 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 (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 (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 8.7A
HOLDERS. The Administrative 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 9.3 of this
Agreement. 

Section 8.8A RESIGNATION BY THE ADMINISTRATIVE
AGENT.

     (a) The Administrative 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 Agent pursuant to clause (b) below or
as otherwise provided below.

     (b) Upon any such notice of
resignation by the Administrative Agent, the Required Lenders shall appoint a
successor Administrative Agent hereunder or thereunder, which successor
Administrative Agent shall be, so long as no Default or Event of Default shall
have 

59 

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 shall reasonably request to maintain the Liens of such
successor Administrative 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 8.9A RELEASE
OF COLLATERAL. The Lenders hereby irrevocably authorize Administrative
Agent, at its option and in its discretion, to release any Lien granted to or
held by it 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); or (ii) constituting property
being sold or disposed of if a Borrower certifies to Administrative Agent that
the sale or disposition is made in compliance with the provisions of this
Agreement (and Administrative Agent may rely in good faith conclusively on any
such certificate, without further inquiry). 

     Section 8.10A CONFIRMATION OF
AUTHORITY; EXECUTION OF RELEASES. Without in any manner
limiting Administrative 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, the authority to release any Collateral
conferred upon Administrative Agent hereunder. Upon receipt by Administrative
Agent of any required confirmation from the Required Lenders of its authority to
release any particular item or types of Collateral, Administrative Agent 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 Administrative
Agent upon such Collateral; provided, however, that (i) Administrative Agent
shall not be required to execute any such document on terms which, in
Administrative Agent's opinion, would expose Administrative Agent 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. 

     Section 8.11A
Absence of Duty. Administrative Agent shall have no obligation
whatsoever to any Lender or any other Person to assure that the Collateral
exists or is owned by Borrower or is cared for, protected or insured or has been
encumbered or that the Liens granted to Administrative 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
such Administrative 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 may act in any manner it may deem appropriate, in
its discretion and provided that Administrative Agent shall exercise the same
care which it would in dealing with loans for its own account. 

60 

     Section 8.12A Agency
for Perfection. Each Lender hereby appoints Administrative Agent as
agent for the purpose of perfecting such Lender’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, it being understood and agreed that such
rights and remedies may be exercised only by Administrative 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 8.13A 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 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 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 8 
EXPENSES AND INDEMNITIES 

     Section 8.1.
PAYMENT FOR EXPENSES. Borrowers shall pay (on the date of the
initial funding of the Loan, and thereafter, within thirty (30) days after any
invoice or other 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 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 Liens, for the benefit of the Lender
Parties, in any of the Collateral or securities pledged under the Loan 

61 

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 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 (vi) 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. Borrowers hereby further agree to pay all
of the Custodian’s fees and expenses owing under the Custodian Agreement. 

     Section 8.2.
GENERAL INDEMNIFICATION. Borrowers hereby agree 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 9 
MISCELLANEOUS 

     Section 9.1.
NOTICES. All notices, demands, billings, requests and other
written communications hereunder shall be deemed to have been properly given:
(i) upon personal 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 9.1 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 have 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 9.2. APPOINTMENT OF BORROWER
REPRESENTATIVE. 

62 

     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 9.3. 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 Borrower 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 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. 

     (b) In addition to sales of
participations under the immediately preceding subsection, 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 9.3;
provided, however, that 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 

63 

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 9.3 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 Borrower
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. 

     (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 Borrower 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. 

64 

     Section 9.4.
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, for the benefit of the Lender Parties, shall retain its
Liens in the Collateral and all of its 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 9.5.
NO OBLIGATION BEYOND MATURITY. Each of Borrower and each
Guarantor agrees and acknowledges that upon the Maturity Date, no Lender Party
shall have any obligation to renew, extend, modify or rearrange the Loan and
Lender Parties shall have the right to require all amounts due and owing under
the Loan to be paid in full upon such date. 

     Section 9.6.
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 9.7.
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. 

     Section 9.8.
NO THIRD PARTY BENEFICIARY. This Agreement is for the sole
benefit of Administrative Agent, the Lenders and Borrowers and is not for the
benefit of any third party. 

     Section 9.9.
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, .pdf and/or other similar
electronically transmitted format shall bind the parties hereto as though such
signatures were original. 

     Section 9.10.
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. 

65 

     Section 9.11.
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
reasonably requests and deems necessary or advisable in furtherance of the
agreements contained herein. 

     Section 9.12.
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 9.13.
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 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 9.14.
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 

66 

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 9.15.
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 9.16.
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 WRITTEN EVIDENCE OF
THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

     Section 9.17.
TIME OF ESSENCE. Time is of the essence for the performance of
the obligations set forth in this Agreement and the Loan Documents. 

ARTICLE 10
JOINT AND SEVERAL LIABILITY; CROSS
GUARANTY; SUBORDINATION 

Section 10.1. 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 

67 

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 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; 

     (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 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, for
the benefit of the Lender Parties, a security interest in or lien upon any
Collateral, whether 

68 

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 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 10 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 Borrower, 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 10.1, 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 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. 

69 

Section 10.2. 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 10.2,
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. 

     (b) Each Borrower executing this
Agreement hereby (i) authorizes the Lender Parties to demand specific
performance of the terms of this Section 10.2, 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 10.2 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 10.2(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 10.2(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. 

70 

     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 - 

71 

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

	 	BORROWERS: 
	 	  	  
	 	CARBIZ USA INC., a Delaware
      corporation 
	 	  	  
	 	By: 	/s/
      Stanton Heintz 
	 	Name: 	Stanton Heintz 
	 	Its: 	CFO
  
	 	  	  
	 	CARBIZ AUTO CREDIT, INC., a
      Florida 
	 	corporation 
	 	  	  
	 	By: 	/s/
      Stanton Heintz 
	 	Name: 	Stanton Heintz 
	 	Its: 	CFO
  
	 	  	  
	 	CARBIZ AUTO CREDIT JV1, LLC, a
      Florida 
	 	limited liability company 
	 	  	  
	 	By: 	/s/
      Carl Ritter 
	 	Name: 	Carl
      Ritter 
	 	Its: 	CEO
  
	 	  	  
	 	  	  
	 	  	  
	 	GUARANTORS: 
	 	  	  
	 	CARBIZ INC., an Ontario
      corporation 
	 	  	  
	 	By: 	/s/
      Stanton Heintz 
	 	Name: 	Stanton Heintz 
	 	Its: 	CFO
  

SIGNATURE PAGE – LOAN AND SECURITY AGREEMENT 

	 	ADMINISTRATIVE AGENT: 
	 	  	  
	 	SWC SERVICES LLC, a Delaware
      limited 
	 	liability company, as Administrative
      Agent 
	 	  	  
	 	By: 	/s/
      Greg Bell 
	 	Name: 	Greg Bell 
	 	Its: 	Manager 
	 	  	  
	 	  	  
	 	  	  
	 	INITIAL LENDER: 
	 	  	  
	 	COLOSSUS CAPITAL FUND, L.P., a
      Delaware 
	 	limited partnership 
	 	  	  
	 	By: 	Colossus Capital Management, L.L.C. 
	 	Its: 	General Partner 
	 	  	  
	 	By: 	/s/
      Greg Bell 
	 	Name: 	Greg Bell 
	 	Its: 	Manager 

SIGNATURE PAGE – LOAN AND SECURITY AGREEMENT 

SCHEDULE A TO
LOAN AND SECURITY AGREEMENT 

     This Schedule A to the Loan and
Security Agreement is executed in conjunction with that certain Loan and
Security Agreement (“Loan Agreement”), dated as of March __, 2007, by and
among (a) CARBIZ USA INC., a Delaware corporation (“Carbiz USA”), CARBIZ
AUTO CREDIT, INC., a Florida corporation (“Carbiz Auto Credit”), CARBIZ
AUTO CREDIT JV1, LLC, a Florida limited liability company (“Carbiz JV”;
Carbiz JV, Carbiz Auto Credit and Carbiz USA, each individually a
“Borrower” and collectively, the “Borrowers”), (b) CARBIZ INC., an
Ontario corporation, as a Guarantor, (c) COLOSSUS CAPITAL FUND, L.P., a Delaware
limited partnership (the “Initial Lender”), the other Lenders from time
to time party thereto, and (d) SWC SERVICES LLC, a Delaware limited liability
company, as administrative agent (in such capacity, the “Administrative
Agent”) for the Lenders. 

	 
	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. 

	SECTION 1.1(a)(iii) 	ELIGIBILITY TEST 

The term “Eligibility Test” shall mean
satisfaction of the following additional tests to determine the eligibility of a
Receivable for purposes of being an Eligible Receivable:

	 	1. 	
      Such Receivable is not sixty (60) days or more
      contractually past the due date set forth in the underlying Consumer Loan
      Documents.

	 	 	 
	 	2. 	
      The minimum interest rate on the Consumer Loan Documents
      underlying such Receivable is at least fourteen percent (14.0%) per annum
      payable monthly.

1 

	 	3. 	
      The underlying automobile securing such Receivable on
      average shall not have been more than fifteen (15) model years old at the
      time of sale.

	 	 	 
	 	4. 	
      The mileage on the underlying automobile securing such
      Receivable on average shall not be more than one hundred and seventy
      thousand (170,000) miles at the time of sale.

	 	 	 
	 	5. 	
      Payment on any Receivable shall not be extended by
      Borrower more than one time in any year and, notwithstanding, the maturity
      date on any Receivable shall not exceed ninety (90) weeks from the date of
      sale of the underlying Motor Vehicle.

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

The maximum principal balance of an
Eligible Receivable (the “Maximum Amount of an Eligible Receivable”), for any
date of determination, on average shall not exceed six thousand five hundred
dollars ($6,500), as of such determination date.

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

The maximum term of an Eligible
Receivable (the “Maximum Term of an Eligible Receivable”), for any
date of determination, shall not have more than ninety (90) weeks remaining
until the due date of such Eligible Receivable, as of such determination date.

	 
	INTEREST RATE DEFINITIONS

	SECTION 1.1(b)(iii) 	STATED INTEREST RATE

The term “Stated Interest Rate” shall
mean fifteen percent (15.00%) per annum.

	 	 
	SECTION 1.1(d) 	MATURITY DATE 

The term “Maturity Date” shall mean
March 23, 2011. 

	 	 
	SECTION 2.1(a)(i) 	MINIMUM AMOUNT FUNDED UNDER A LOAN
  

For any period, the minimum amount
funded under the Loan shall not be less than $100,000. 

2 

	SECTION 2.1(a)(ii) 	AMOUNT OF REVOLVING CREDIT LINE
  

Prior to the Commitment Increase
Effective Date, $5,000,000, and following the Commitment Increase Effective
Date, $10,000,000. 

	 	 
	SECTION 2.1(a)(iii) 	AVAILABILITY ON ELIGIBLE RECEIVABLES
  

The “Availability on Eligible
Receivables” shall be an amount equal to the lesser of (i) fifty-eight percent
(58%) (the “Advance Rate”) of the sum of (a) the outstanding principal
balance of all Eligible Receivables plus (b) all other unmatured and unpaid
amounts due to the Borrower relating to the Eligible Receivables (including,
without limitation, unearned finance charges, time price differentials,
insurance fees and other fees and charges related thereto) and (ii) the
Borrowers’ cost basis with respect to the automobiles sold with respect to such
Eligible Receivables. 

	 	 
	SECTION 2.1(c) 	OPERATING ACCOUNT

	 	Branch Banking & Trust 
	 	                  
      1718 Main Street 
	 	           
             Sarasota, FL 34237 
	 	ABA No. 263191387 
	 	Account No. 0000146360017

	 	 
	SECTION 2.6 	LIQUIDATED DAMAGES 

The term “Liquidated Damages” shall
mean: 

(a) For the period from the date hereof
through and including March 22, 2008, an amount equal to $400,000; 

(b) For the period from March 23, 2008
through March 22, 2009, an amount equal to $300,000 

(c) For the period from March 23, 2009
through March 22, 2010, an amount equal to $200,000; and 

(d) Thereafter, an amount equal to
$100,000. 

3 

	SECTION 2.10 	FEES 

(a) The term “Commitment Fee” shall
mean an amount equal to $75,000. 

(b) The term “Unused Line Fee” shall
mean, an amount equal to (x) the Amount of Revolving Credit Line less the
average daily balance of the sum of outstanding Loans during the preceding month
multiplied by (z) one half of one percent (0.50%) per annum. 

(c) The term “Asset Management Fee”
shall mean, prior to the Commitment Increase Effective Date, an amount equal to
$5,000 per calendar quarter, and on and after the Commitment Increase Effective
Date, an amount equal to $10,000 per calendar quarter. The Asset Management fee
shall be due and payable on the Closing Date (such initial Asset Management Fee
payment being payable on a pro rated basis to reflect that portion of the
initial calendar quarter remaining) and thereafter quarterly in advance
beginning April 1, 2007, and on the first Business Day of each calendar quarter
thereafter. 

(d) The term “Second Tranche Commitment
Fee” shall mean an amount equal to $75,000. 

	 	 
	SECTION 3.1 	COMMERCIAL TORT CLAIMS

None. 

	 	 
	SECTION 3.7 	LOCATION OF RECORDS 

Auto Loan Contract & Title Physical Records 

Carbiz Auto Credit 
314
8th Ave W 
Palmetto, FL 34221 

Carbiz Auto Credit
 2324 Central
Ave. 
St. Petersburg, FL 33712 

Carbiz Auto Credit JV1 

  4102 N Florida Ave 

  Tampa, FL 33603 

4 

Corporate Accounting Physical Records 

7405 N Tamiami Trail 
Sarasota, FL
34243 

Corporate Accounting Electronic Records 
Car Lot Electronic
Records 
Scanned Backup of Physical Documents 

System Co-location Bunker 
6288
Tower Lane 
Sarasota, FL 34240 

	 	 
	SECTION 3.13(b) 	UNIFORM COMMERCIAL CODE FINANCING
      STATEMENTS 

	 	Carbiz USA Inc. 	Delaware, Secretary of State 
	 	Carbiz Auto Credit, Inc. 	Florida Secured Transaction Registry 
	 	Carbiz Auto Credit JV1, LLC 	Florida Secured Transaction Registry
  

	 	 
	SECTION 3.13(d) 	INTELLECTUAL PROPERTY

Trademarks: 

	Owner 
	Trademark 
	Serial No. 
	Application /
      
Filing Date 	Registra 
tion
      No. 	Registration
      
Date 
	Carbiz.com Inc. 
(n/k/a Carbiz Inc.) 	CARBIZ.COM 
	76029693 
	04/18/2000 
	2887892 
	09/21/2004 

Application Software Source Code

Management System Plus – Dealer
Management Software 
VisualCAT – Dealer F&I Software 
Independent
Dealer Accounting – Dealer Accounting Software 

Buy Here Pay Here Consulting Products 

DCF/ACP Business Model 

Training Materials 
Consulting
Methods 
Policy & Procedure Documents 

5 

Various Data Tracking and Analysis Programs 

	 	 
	SECTION 3.13(f) 	DEPOSIT ACCOUNT, SECURITY ACCOUNT AND
      OTHER SIMILAR ACCOUNTS 

	 	All accounts with Branch Banking & Trust
      (BB&T) Routing# 263191387 
	 	  	 
	 	Carbiz USA, Inc. 	Acct# 0000146360009 
	 	Carbiz USA, Inc. LOC Account 	Acct# 0000146360017 
	 	Carbiz Auto Credit, Inc. 	 
	 	               
         Palmetto 	Acct# 0000146360025 
	 	               
         St. Petersburg 	Acct# 0000146360033 
	 	               
         Inventory Control Center 	Acct# 0000146360041 
	 	Carbiz Auto Credit JV1, LLC 	Acct# 0000146360068 

	 	 
	SECTION 5.1(b) 	ASSUMED NAMES; PRIOR LEGAL NAMES
  

  	Current Name 
Party 	Prior Legal 
Names 
	Carbiz Inc. 

	Data Gathering 
Service Inc.
      
Carbiz.com Inc. 
	Carbiz USA Inc. 
	Carbiz.com (USA) 
Inc.

	 	 
	SECTION 5.1(n) 	BUSINESS LOCATIONS 

Carbiz Inc & Carbiz USA Inc

7405 N Tamiami Trail 
Sarasota, FL 34243 

Carbiz Auto Credit 
314
8th Ave W 
Palmetto, FL 34221 

6 

Carbiz Auto Credit 
2324 Central
Ave.
St. Petersburg, FL 33712 

Carbiz Auto Credit JV1 
4102 N
Florida Ave 
Tampa, FL 33603 

	 	 
	SECTION 5.1(x) 	RELATED PARTY INFORMATION

	Exact Name of 
Related
      Party 
	Jurisdiction 
of 
Organization
    	Federal Tax 
I.D. No. 
	Chief 
Executive
      
Office 	Prior Names 

	Charter / 
Organizationa
      
l ID No. 
	Carbiz Inc. 

	Ontario, CA 

	

	Carl Ritter 

	Data Gathering 
Service Inc.
      
Carbiz.com 
Inc. 	001288339 

	Carbiz USA Inc. 
	Delaware 
	98-0231408 
	Carl Ritter 
	Carbiz.com 
(USA) Inc. 	3270818 

	Carbiz Auto 
Credit, Inc. 	Florida 
	20-0922152 
	Carl Ritter 
	
	P04000052299 

	Carbiz Auto 
Credit JV1, LLC 	Florida 
	33-1113864 
	Carl Ritter 
	
	L05000026755

	 	 
	SECTION 9.1. 	NOTICES 

	 	Administrative Agent: 	SWC Services LLC 
	 	  	1033 Skokie Boulevard 
	 	  	Suite 620 
	 	  	Northbrook, Illinois 60062 
	 	  	Attn: Greg Bell 
	 	  	Facsimile: (847) 504-1554 
	 	  	  
	 	  	  
	 	Borrowers: 	Carbiz USA Inc. 
	 	  	Carbiz Auto Credit, Inc. 
	 	  	Carbiz Auto Credit JV1, LLC 
	 	  	7405 N. Tamiami Trail 
	 	  	Sarasota, FL 34243 
	 	  	Attn: Stanton C. Heintz 
	 	  	Facsimile: (941) 308-2718 
	 	  	  
	 	Guarantors: 	c/o Carbiz USA Inc. 
	 	  	7405 N. Tamiami Trail 

7 

	 	 	Sarasota, FL 34243 
	 	 	Attn: Stanton C. Heintz 
	 	 	Facsimile: (941) 308-2718 

8 

EXHIBIT A 

REQUEST FOR ADVANCE 

	To: 	SWC Services LLC, as Administrative Agent

	  	1033 Skokie Boulevard 
	  	Suite 620 
	  	Northbrook, Illinois 60062 
	 	 
	Re: 	
      Loan and Security Agreement (“Loan Agreement”),
      dated as of March 23, 2007, by and among (a) CARBIZ USA INC., a Delaware
      corporation (“Carbiz USA”), CARBIZ AUTO CREDIT, INC., a Florida
      corporation (“Carbiz Auto Credit”), CARBIZ AUTO CREDIT JV1, LLC, a
      Florida limited liability company (“Carbiz JV”; Carbiz JV,
      Carbiz Auto Credit and Carbiz USA, each individually a “Borrower”
      and collectively, the “Borrowers”), (b) CARBIZ INC., an Ontario
      corporation, as a Guarantor, (c) COLOSSUS CAPITAL FUND, L.P., a Delaware
      limited partnership (the “Initial Lender”), the other Lenders from
      time to time party thereto, and (d) SWC SERVICES LLC, a Delaware limited
      liability company, as administrative agent (in such capacity, the
      “Administrative Agent”) for the Lenders. 

Date of Request:______________, 200__ 

     This Request for Advance is
delivered pursuant to Section 2.1 of the Loan Agreement. All terms
defined in the Loan Agreement shall have the same meaning herein, except as
expressly stipulated otherwise herein. 

	 	I. 	(i) 	       Total Receivables at
      Request Date: 	 
	 	  	(ii) 	       Less 	 
	 	  	  	       (A) Unearned finance
      charges/insurance/fees 	(                   
      ) 
	 	  	  	       (B) Net ineligible
      Receivables 	(                   
      ) 
	 	  	  	       Total Eligible
      Receivables ((I)(i) minus 	 
	 	  	  	       I(ii)(A) and (B)) 	 
	 	II. 	(i) Gross Availability: 	 
	 	  	     Advance Rate
      58.00% x Total Eligible Receivables 	 
	 	  	(ii) 	Less Current Outstanding Balance of
      Indebtedness 	(                  
       ) 
	 	  	(iii) Net Availability (II)(i) minus
      II(ii)) 	 

9 

	 	(iv) Request for Advance 	 
	 	Availability after Advance (II)(iii) minus
      II(iv)) 	 

     To induce the Lenders to make the
Loan Advance requested herein, Borrower Representative, on behalf of itself and
the other Borrowers, hereby represents, warrants, acknowledges and agrees to and
with the Administrative Agent and each Lender that: 

	 	a. 	
      upon making the requested Loan Advance, the aggregate
      principal balance of the outstanding Loan made by the Lender shall be
      equal to or less than the lesser of (i) the Amount of Revolving Credit
      Line or (ii) the Availability on Eligible Receivables;

	 	 	 
	 	b. 	
      the representations and warranties of Borrowers and other
      Related Parties made in the Loan Agreement and the other Loan Documents
      are true and correct in all material respects as of the date hereof
      (except to the extent any such representation or warranty speaks
      specifically as of an earlier date, in which case such representation or
      warranty is true and correct as of such earlier date), with the same
      effect as though such representations and warranties had been made on and
      as of the date hereof;

	 	 	 
	 	c. 	
      no Default or Event of Default has occurred and is
      continuing or would be caused by the Loan Advance requested
  hereby;

	 	 	 
	 	d. 	
      Borrowers and the other Related Parties have performed
      and complied with all agreements and conditions required to be performed
      or complied with by them under the Loan Documents.

	 	 	 
	 	e. 	
      all necessary authorizations and approvals contemplated
      by the Loan Documents have been duly obtained and are in full force and
      effect; and

	 	 	 
	 	f. 	
      the proceeds of the requested advance shall be used for
      the purposes set forth in Section 3.11 of the Loan Agreement;

	 	 	 
	 	g. 	
      there are no past due payroll taxes owing by any
      Borrower;

	 	 	 
	 	h. 	
      each Borrower hereby acknowledges and reaffirms its
      respective grant of a Lien and security interest on the Collateral
      pursuant to Section 3.1 of the Loan Agreement, and agrees that such Lien
      and security interest is valid and enforceable; and

	 	 	 
	 	i. 	
      the officer of Borrower Representative signing this
      Request for Advance is the duly elected, qualified and acting officer of
      Borrower Representative as indicated below such officer’s signature hereto
      having all necessary authority to act for Borrower Representative in
      making the request herein contained.

10 

IN WITNESS WHEREOF, this Request for Advance is executed as of
______, 200_. 

	 	CARBIZ USA INC., a Delaware corporation,
    
	 	as Borrower Representative 
	 	  
	 	By:
  
	 	Name:
    
	 	Title:
    

11 

EXHIBIT B 

REQUEST FOR RETURN OF COLLATERAL 

	To: 	SWC Services LLC, as Administrative Agent

	  	1033 Skokie Boulevard 
	  	Suite 620 
	  	Northbrook, Illinois 60062 
	  	  
	From: 	Carbiz USA Inc. 
	  	7405 N. Tamiami Trail 
	  	Sarasota, FL 34243 

Please return the collateral you are holding on the following
accounts which have been paid-out or renewed during the period from
_______________________________ to _____________________; 

INSTRUCTIONS: Please list accounts in NUMERICAL
ORDER and designate the reason for request (P/O - Paid Out;
R - Renewed; L - Legal; C/O - Charge-off). Send this form
to [___________________]; a copy shall be returned to you along with collateral
requested. 

  	Borrower 
Branch 
Office 	Loan/Account 
Number 
	Date of 
Loan 
	Reason for 
Request 
	Name of Account Debtor 

	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 

The Collateral for the above loans and/or accounts is being
returned to you. 

1 

	Date Collateral Requested: 
	Date Collateral Mailed: 
	 
	 
	[___________________] Representative Responsible
      for Return of Collateral: 
	 
	 	 
	(Signature) 	 (Date) 
	 
	 
	 
	[___________________] Managing Account Executive
      Authorization for Return: 
	 
	 	 
	(Signature) 	 (Date) 

2 

	 EXHIBIT C 
	 
	AVAILABILITY REPORT 
	 
	( Day [Type of] Aging) 

	Date: 
	Report No.: 
	Reporting Period: From __________ To ___________:
  

	1. 	       Receivables pledged
      at previous report date 
	  	  
	(Line 5 of previous report) 
	  	  
	2. 	       Plus accounts
      pledged since previous reporting period 
	  	  
	  	A. Amount Financed 
	  	B. Finance charges 
	  	C. Insurance 
	  	D. Miscellaneous 
	  	Total of Line 2 
	  	  
	3. 	       Sub-Total of Lines 1
      and 2 
	  	  
	4. 	       Less deductions from
      receivables pledged (received since previous reporting period): 
	  	  
	  	A. Collections on Account 
	  	or paid in full 
	  	B. Rebates 
	  	C. Charge offs 
	  	D. Miscellaneous 
	  	Total of Line 4 
	  	  
	5. 	       Total receivables
      pledged (Line 3 minus Line 4) 
	  	  
	6. 	       Deduct: 
	  	  
	  	A. Unearned finance charges/insurance/fees
  
	  	B. Net ineligible balances pledged
  

1 

	7. 	Eligible collateral pledged 
	  	(Line 5 minus Line 6 A. and 6.B.) 
	8. 	           
           % x Line 7 less (Net Eligible Availability) 
	  	 
	9. 	Advances: 
	  	 
	  	Per previous report 
	  	 
	  	Plus: Advances since previous 
	  	report date 
	  	Less: Principal Payments since previous 
	  	report date ( ) 
	  	 
	 	 Total Outstanding Advances
      as of report date 
	  	 
	10. 	Net Availability (Line 8 minus Line 9) 
	  	 
	11. 	       Percentage of cash
      collections to Receivables assigned 
	  	(Line 4.A divided by Line 1) 
	  	 
	12. 	Delinquency as of report date 
	  	 
	  	Current Account 
	  	30 Day Account 
	  	60 Day Account 
	  	90 Day Account 
	  	90 + Day Account 
	  	Other ineligibles 
	  	 
	  	TOTAL 

Borrower Representative hereby represents, warrants, certifies
and agrees that the warranties and representations contained in that certain
Loan and Security Agreement (“Loan Agreement”), dated as of March 23,
2007, by and among (a) CARBIZ USA INC., a Delaware corporation (“Carbiz
USA”), CARBIZ AUTO CREDIT, INC., a Florida corporation (“Carbiz Auto
Credit”), CARBIZ AUTO CREDIT JV1, LLC, a Florida limited liability company
(“Carbiz JV”; Carbiz JV, Carbiz Auto Credit and Carbiz USA, each
individually a “Borrower” and collectively, the “Borrowers”), (b)
CARBIZ INC., an Ontario corporation, as a Guarantor, (c) COLOSSUS CAPITAL FUND,
L.P., a Delaware limited partnership (the “Initial Lender”), the other
Lenders from time to time party thereto, and (d) SWC SERVICES LLC, a Delaware
limited liability company, as administrative agent (in such capacity, the
“Administrative Agent”) for the Lenders, are true and correct as of the
date hereof (except to the extent any such representation or warranty speaks
specifically as of an earlier date, in which case such representation or
warranty is true and correct as of such earlier date); no Default or Event of
Default has occurred under the terms and conditions of the Loan Agreement and
the Receivables described on Line 7 above 

2 

constitute Eligible Receivables, as defined in the Loan
Agreement. The above is a true and correct description of the status of
Borrowers’ account with Lender Parties as of the above Report Date. 

	 	CARBIZ USA INC., a Delaware corporation,
    
	 	as Borrower Representative 
	 	  
	 	By:
  
	 	Name:
    
	 	Title:
    

3 

EXHIBIT D 

SCHEDULE OF RECEIVABLES AND ASSIGNMENT 

ASSIGNMENT 

     FOR VALUE RECEIVED, the
undersigned assignor hereby assigns, transfers, sets over, and delivers in
pledge to [ __________], in its capacity as Administrative Agent for the Lenders
under the Loan Agreement, (hereinafter called the “Assignee”), its
successors or assigns, each and every of the accounts, notes, security
agreements, conditional sale contracts, lease agreements, chattel paper, retail
installment contracts, chattel mortgages, deeds of trust, contracts, drafts,
acceptances, and other lien instruments, obligations, claims, choses-in-action
and receivables (hereinafter collectively designated as the
“Receivables”) identified by account no. through no. , inclusive,
made/purchased during the period from through , inclusive, and totaling $ as
evidenced by the individual notes/instruments and listing of the receivables
assigned herein which is attached hereto with the same force and effect as if
each account was individually listed and set forth hereon in detail, together
with all right, title and interest of the undersigned in and to the same and in
and to the merchandise, equipment and property described in the Receivables or
thereto appertaining, and together with all monies owing or to become due
thereon, and any and all notes, drafts, acceptances, evidences of indebtedness,
contracts, mortgages, deeds of trust, liens, security, collateral, guaranties,
rights, remedies and powers thereto relating or appertaining, and all proceeds
of any of the foregoing, with full right and irrevocable power and authority in
said assignee, and its assigns for sole benefit and use of said assignee and its
assigns, at any and all times to collect, enforce, sue on, sell, transfer,
assign, pledge, compromise and discharge the same, or otherwise deal therewith
as the absolute property of the Assignee and its assigns. The term
“Receivables” wherever used herein shall be deemed to also include any
other receivables assigned to or acquired by Assignee in substitution or
replacement of any of the original receivables or in addition thereto. All
capitalized terms used, but not defined herein, shall have the respective
meanings ascribed to such terms in that certain Loan and Security Agreement by
and among the lenders from time to time party thereto, the Assignee, the
undersigned assignor and certain of its affiliates, dated March 23, 2007 (the
“Loan Agreement”). Reference is made to the Loan Agreement for a
statement of additional terms, conditions and provisions with respect to the
Receivables. 

     And for value received, the
undersigned hereby represents, covenants, and warrants to Assignee, it
successors and assigns, that said receivables are genuine and in all respects
what they purport to be; that the undersigned has no knowledge of any fact which
would impair the validity of any said receivable; that said receivables are
valid and subsisting and that the undersigned has good right to pledge and
transfer the same; that the amounts owing thereon are not disputed by the
Account Debtor; that the payment thereof is not contingent on the fulfillment of
any warranties or conditions past or future; and that there is now owing by the
Account Debtor named in each such receivable the total amount of unpaid balance
as shown above and that the amount thereof is not subject to any dispute or
counterclaims; and that the undersigned hereby warrants and represents that the
Eligible Receivables assigned hereunder are Eligible 

1 

Receivables as of the date hereof, as defined in the Loan
Agreement. The undersigned further covenants and warrants that no prior transfer
or assignment of any said receivables has been made. 

	Date: 	[ APPLICABLE BORROWER(S) ] 
	  	  
	  	By:
  
	  	Name:
    

2 

LISTING OF ASSIGNED RECEIVABLES
 (Attachment to Schedule
of Receivables and Assignment) 

	ACCOUNT 
NAME 	ADDRESS 
	TELEPHONE 
NUMBER 	RENEWAL(R) 
NEW LOAN(N) 	TOTAL OF 
PAYMENTS 	TERM 
	PAYMENT 

	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 

	Date: 	By:
  
	  	Name:
    
	  	Title:
    

1 

EXHIBIT E 

COMPLIANCE CERTIFICATE 

	To: 	SWC Services LLC, as Administrative Agent

	  	1033 Skokie Boulevard 
	  	Suite 620 
	  	Northbrook, Illinois 60062 
	  	Attention: Gregory Bell

	Re: 	Loan and Security Agreement (“Loan
      Agreement”), dated as of March 23, 2007, by and among (a) CARBIZ USA
      INC., a Delaware corporation (“Carbiz USA”), CARBIZ AUTO CREDIT,
      INC., a Florida corporation (“Carbiz Auto Credit”), CARBIZ AUTO
      CREDIT JV1, LLC, a Florida limited liability company (“Carbiz
      JV”; Carbiz JV, Carbiz Auto Credit and Carbiz USA, each
      individually a “Borrower” and collectively, the
      “Borrowers”), (b) CARBIZ INC., an Ontario corporation, as a
      Guarantor, (c) COLOSSUS CAPITAL FUND, L.P., a Delaware limited partnership
      (the “Initial Lender”), the other Lenders from time to time party
      thereto, and (d) SWC SERVICES LLC, a Delaware limited liability company,
      as administrative agent (in such capacity, the “Administrative
      Agent”) for the Lenders. 

Reference is hereby made to the Loan Agreement. Terms used and
not otherwise defined herein shall have the meaning given to them in the Loan
Agreement. This Compliance Certificate (this “Certificate”) is being
delivered to you pursuant to Section 6.5(a) of the Loan Agreement. Borrower
hereby represents, warrants, acknowledges and agrees to and with Administrative
Agent and each Lender that: 

(a) The representations and warranties of Borrowers and other
Related Parties made in the Loan Agreement and the other Loan Documents are true
and correct in all material respects on and as of the date hereof (except to the
extent any such representation or warranty speaks specifically as of an earlier
date, in which case such representation or warranty is true and correct as of
such earlier date), with the same effect as though such representations and
warranties had been made on and as of the date hereof; 

(b) The Borrowers’ Net Income for the month ending ______,
20___ was $______________; [ NOTE: Items (b) and (c) of each Compliance
Certificate shall be completed as of the last day of the month for which
financial statements of Carbiz Parent and its consolidated Subsidiaries are
required to have been delivered to Administrative Agent pursuant to Section
6.5(c) of the Loan Agreement. ] 

1 

(c) The Borrowers’ Tangible Net Worth as of _______, 20___ was
$___________; 

(d) There does not exist on the date hereof any condition or
event which constitutes a Default or Event of Default; and 

(e) The officer of Borrower Representative signing this
Certificate is the duly elected, qualified and acting officer of Borrower
Representative as indicated below such officer’s signature hereto. 

IN WITNESS WHEREOF, this Certificate is executed as of
____________, 20__. 

	 	CARBIZ USA INC., a Delaware corporation,
      as 
	 	Borrower Representative 
	 	  
	 	By:
  
	 	Name:
    
	 	Its:
    

2 

EXHIBIT F 

THIS PROMISSORY NOTE IS EVIDENCE OF AN ADVANCE UNDER A
REVOLVING CREDIT FACILITY EVIDENCED BY THE LOAN AND SECURITY AGREEMENT
REFERENCED BELOW. NO ADDITIONAL DOCUMENTARY STAMP TAXES ARE DUE ON THE EXECUTION
OF THIS NOTE BECAUSE DOCUMENTARY STAMP TAXES IN THE AMOUNT OF $2,450.00 WERE
PAID DIRECTLY TO THE FLORIDA DEPARTMENT OF REVENUE UPON THE EXECUTION OF THE
LOAN AND SECURITY AGREEMENT. 

PROMISSORY NOTE 

	$ ______________________	___________ , 20__
  

     FOR VALUE RECEIVED, the
undersigned, CARBIZ USA INC., a Delaware corporation (“Carbiz USA”),
CARBIZ AUTO CREDIT, INC., a Florida corporation (“Carbiz Auto
Credit”) and CARBIZ AUTO CREDIT JV1, LLC, a Florida limited liability
company (“Carbiz JV”; Carbiz JV, Carbiz Auto Credit and Carbiz USA, each
individually a “Borrower” and collectively, the “Borrowers”),
hereby promise to pay to the order of COLOSSUS CAPITAL FUND, L.P., a Delaware
limited partnership (the “Lender”), the principal sum of
_____________Dollars ($_________), or, if greater or less, the aggregate unpaid
principal amount of the Loan Advance made by Lender to Borrowers on the date
hereof 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 Note. 

     This Note (a) is issued and
delivered under that certain Loan and Security Agreement dated as of March 23,
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, and SWC Services LLC, a Delaware limited liability company,
as administrative agent (in such capacity, “Administrative Agent”) for
the Lenders, 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 

3 

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. 

     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 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 - 

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. 

	 	BORROWERS: 
	 	  
	 	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:
    

5Filed by Automated Filing Services Inc. (604) 609-0244 - Carbiz Inc. - Exhibit 10.2

 Exhibit 10.2 

GUARANTY AND SECURITY
AGREEMENT
(Continuing/Unlimited)

     THIS GUARANTY AND SECURITY
AGREEMENT (this “Guaranty”) is made effective as of March 23, 2007 by
CARBIZ INC., a corporation incorporated under the laws of the Province of
Ontario (“Guarantor”) and SWC SERVICES LLC, a Delaware limited liability
company, as administrative agent (in such capacity, “Administrative
Agent”) for the Lenders (as defined in the Loan Agreement described
below).

     WHEREAS, (a) Carbiz USA Inc., a
Delaware corporation (“Carbiz USA”), Carbiz Auto Credit, Inc., a Florida
corporation (“Carbiz Auto Credit”), Carbiz Auto Credit JV1, LLC, a
Florida limited liability company (“Carbiz JV”; Carbiz JV, Carbiz USA and
Carbiz Auto Credit, each a “Borrower” and collectively, the
“Borrowers’), (b) Guarantor, as a guarantor, (c) the Lenders from time to
time party thereto and (d) Administrative Agent have entered into that certain
Loan and Security Agreement of even date herewith (as amended, restated,
supplemented or otherwise modified from time to time, the “Loan
Agreement”), pursuant to which the Borrowers have agreed to borrow from
Lenders, and Lenders have agreed to lend to Borrowers, certain amounts, all in
accordance with and subject to the terms and conditions set forth in the Loan
Agreement;

     WHEREAS, it is a condition
precedent to Lenders’ obligation to make the Loan and advances pursuant to the
Loan Agreement, that Guarantor, among other things, shall execute and deliver
this Guaranty;

     WHEREAS, Guarantor owns, directly
or indirectly, an equity interest in each Borrower and therefore Guarantor will
benefit from the Loan and advances to Borrowers from Lenders and, Guarantor
further acknowledges and agrees that (a) the Loan constitutes valuable
consideration to Guarantor, (b) this Guaranty is intended to be an inducement to
Administrative Agent and the Lenders to execute, deliver and perform the Loan
Agreement and the other Loan Documents and to extend credit and the Loan to
Borrowers, and (c) Administrative Agent and the Lenders are relying upon this
Guaranty and the security interests granted hereby in making and advancing the
Loan to Borrowers;

     NOW, THEREFORE, in
consideration of the foregoing and of the covenants and agreements hereinafter
set forth, the receipt and sufficiency of which are hereby acknowledged, and as
an inducement for Lender Parties to enter into the Loan Agreement and the other
Loan Documents, Guarantor and Administrative Agent agree as follows:

	1. 	
      DEFINED TERMS.

                 (a)
All capitalized terms used in this Guaranty and not defined herein shall have
the meanings given to such terms in the Loan Agreement. Whenever the context so
requires, each reference to gender includes the masculine and feminine, the
singular number includes the plural and vice versa. References to section,
article, annex, schedule, exhibit and like references are references to this
Guaranty unless otherwise specified. A Default or Event of Default shall
“continue” or be “continuing” until such Default or Event of Default has been
cured or waived by Administrative Agent and Required Lenders, as provided in the
Loan 

Agreement. References in this Guaranty to any Person shall
include such Person and its successors and permitted assigns.

                 (b)
  For purposes herein, the following terms shall have the following meanings:

                 “Obligations”
  means collectively all of the indebtedness, obligations, and undertakings of
  the Borrowers and the other Obligors that are guaranteed by the Guarantor and
  described in subsections (a), (b) and (c) of Section 2 of this Guaranty.

                “Obligor”
  means any of the Borrowers, the Guarantor and any other endorsers, guarantors
  or obligors, primary or secondary, of any or all of the Indebtedness.

                “Security”
  means any rights, properties, or interests of the Administrative Agent or Lenders
  under the Loan Documents or otherwise (including, without limitation, the security
  interest in the Collateral granted by Guarantor pursuant to Section 3.1 hereof),
  which provide recourse or other benefits to the Administrative Agent or Lenders
  in connection with the Obligations or the non payment or non performance thereof,
  including collateral (whether real or personal, tangible or intangible) in which
  the Administrative Agent or Lenders have rights under or pursuant to any Loan
  Documents, guaranties of the payment or performance of any Obligation, bonds,
  surety agreements, keep well agreements, letters of credit, rights of subrogation,
  rights of offset, and rights pursuant to which other claims are subordinated
  to the Obligations.

	2. 	
      THE GUARANTEED
DEBT.

                 (a)
The Guarantor hereby irrevocably, absolutely, and unconditionally guarantees to
the Administrative Agent and each Lender the prompt, complete, and full payment
when due, and no matter how the same shall become due, of: (i) the Loan,
including the Notes and any other note that may be issued from time to time to
evidence the Loan and all principal thereof, all interest thereon and all other
sums payable thereunder; (ii) all Indebtedness, obligations, liabilities or
indemnities of any Obligor owing to Administrative Agent or any Lender under the
Loan Agreement or any other Loan Document; (iii) all other sums payable under
the other Loan Documents, whether for principal, interest, fees or otherwise;
and (iv) any and all other indebtedness, obligations or liabilities which may at
any time be owed to the Administrative Agent or any Lender, whether incurred
heretofore or hereafter or concurrently herewith, under or pursuant to any of
the Loan Documents. Without limiting the generality of the foregoing, the
Guarantor's liability hereunder shall extend to and include all post-petition
interest, expenses, and other duties and liabilities of the Borrowers described
above in this subsection (a), or below in the following subsection (b), which
would be owed by the Borrowers but for the fact that they are unenforceable or
not allowable due to the existence of a bankruptcy, reorganization, or similar
proceeding involving a Borrower.

                 (b)
The Guarantor hereby irrevocably, absolutely, and unconditionally guarantees to
the Administrative Agent and each Lender the prompt, complete and full
performance, when due, and no matter how the same shall become due, of all
obligations and undertakings of the 

2

Borrowers to Administrative Agent or such Lender under, by
reason of, or pursuant to any of the Loan Documents.

                 (c)
If the Borrowers shall for any reason fail to pay any Obligation, as and when
such Obligation shall become due and payable, whether at its stated maturity, as
a result of the exercise of any power to accelerate, or otherwise, the Guarantor
will forthwith, upon demand by Administrative Agent, pay such Obligation in full
to the Administrative Agent for the benefit of Lender Parties. If the Borrowers
shall for any reason fail to perform promptly any Obligation, the Guarantor will
forthwith, upon demand by Administrative Agent, cause such Obligation to be
performed or, if specified by Administrative Agent, provide sufficient funds, in
such amount and manner as Administrative Agent shall in good faith determine,
for the prompt, full and faithful performance of such Obligation by
Administrative Agent or such other Person as Administrative Agent shall
designate.

                 (d)
If either Borrower or the Guarantor fails to pay or perform any Obligation as
described in the immediately preceding subsections (a), (b), or (c), the
Guarantor will incur the additional obligation to pay to the Administrative
Agent, and the Guarantor will forthwith upon demand by the Administrative Agent
pay to the Administrative Agent, the amount of any and all expenses, including
reasonable fees and disbursements of Administrative Agent's counsel and of any
experts or agents retained by the Administrative Agent, which the Administrative
Agent may incur as a result of such failure.

                 (e)
As between the Guarantor, Administrative Agent and Lenders, this Guaranty shall
be considered a primary and liquidated liability of the Guarantor.

                 (f)
Notwithstanding anything to the contrary set forth in this Guaranty, it is the
intent of the parties hereto that the liability incurred by Guarantor in respect
of the Obligations of the Borrowers and other Obligators (and any Lien granted
by Guarantor to secure such Obligations), 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, Guarantor and Administrative Agent hereby agree that if a court of
competent jurisdiction determines that the incurrence of liability by Guarantor
in respect of the Obligations of any Borrower or other Obligor (or any Liens
granted by Guarantor to secure such Obligations) 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 Guaranty and the
other Loan Documents shall automatically be deemed to have been amended
accordingly.

	3. 	
      SECURITY INTEREST.

                             3.1
GRANT OF SECURITY INTEREST. To secure the prompt payment to
Administrative Agent and the Lender Parties of the Obligations, whether now
existing or hereinafter arising, Guarantor hereby irrevocably grants to
Administrative Agent, for the benefit of the Lender Parties, a first and
continuing security interest in all of the following property of Guarantor,
whether now owned or existing or hereafter acquired: all assets of Guarantor,

3

including all Accounts, chattel paper, commercial tort claims
set forth on Schedule 3.1 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, insurance proceeds 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 Guarantor or another other
Related Party shall grant a security interest to Administrative Agent, for the
benefit of the Lender Parties, to secure the Obligations, collectively, the
“Collateral”). Guarantor will supplement this Guaranty 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 Guarantor may at any time have against any Person.

                        3.2
FINANCING STATEMENTS AND FURTHER ASSURANCES.

                 (a)
Guarantor hereby authorizes Administrative Agent to file UCC-1 Financing
Statements and Personal Property Security Act filings (“PPSA Filings”)
with respect to the Collateral, and any amendments or continuations relating
thereto, which UCC-1 Financing Statements and PPSA Filings 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 or the
applicable Canadian Personal Property Security Act. Borrowers shall not allow
any financing statement or PPSA Filing, other than those filed in favor of
Administrative Agent, the Trafalgar Subordinated Lender(s) or the holders of
Liens permitted pursuant to Section 6.2(a) of the Loan Agreement, 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 (for the
benefit of the Lender Parties).

                 (b)
Guarantor 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 in the
Collateral, or to enable Administrative 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, 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) providing Administrative
Agent with “control” (as such term is defined in any applicable uniform

4

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. Guarantor shall
deliver and pledge to the Administrative Agent or its agent 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 the applicable Borrower, in
such form and substance as the Administrative Agent may request.

                 (c)
Guarantor 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 Schedule 3.3 attached hereto. Administrative
Agent, by or through any of its 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 and, so long as no Event of Default
shall have occurred and be continuing, upon reasonable advance notice to
Guarantor, for so long as Administrative Agent may reasonably 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.

                             3.3
GUARANTOR REPRESENTS AND WARRANTS TO, AND COVENANTS WITH,
ADMINISTRATIVE AGENT, FOR THE BENEFIT OF THE LENDER PARTIES, AS
FOLLOWS:

                 (a)
Guarantor has good and marketable title to all of the Collateral and Guarantor
has rights in and the power to transfer the Collateral in which it purports to
grant a security interest pursuant to Section 3.1 hereof (subject, with respect
to after acquired Collateral, to Guarantor’s acquiring the same) and no Lien
other than Liens permitted under Section 6.2(a) of the Loan Agreement exist or
shall exist upon such Collateral at any time;

                 (b)
This Guaranty is effective to create in favor of Administrative Agent for the
benefit of the Lender Parties, a valid security interest in and Lien upon all of
the Guarantor’s right, title and interest in and to the Collateral, and, upon
the filing of appropriate Uniform Commercial Code financing statements and PPSA
Filings in the jurisdictions listed on Schedule 3.3(b) attached hereto and, with
respect to patents, trademarks and copyrights (if any) of Guarantor, 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 its
agent, duly endorsed by Guarantor or accompanied by appropriate instruments of
transfer duly executed by Guarantor, the security interest and Liens in the
Instruments shall be duly perfected;

                 (c)
All of the Equipment, Inventory and Goods of Guarantor are located at the places
as specified on Schedule 3.3(c) attached hereto. None of the Collateral is in
the possession of any bailee, warehousemen, processor or consignee;

                 (d)
Guarantor does not own any registered copyrights, patents or trademarks except
for those copyrights, patents and trademarks described on Schedule 3.3(d), none
of which have 

5

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. Guarantor is the
sole 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 Guarantor not to sue third persons.
Guarantor has no 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 Guarantor or its Subsidiaries in the operation of their respective
businesses. If Guarantor 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 Guarantor shall give Administrative Agent
prompt written notice thereof. Guarantor shall have the duty, subject to the
exercise of its 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 Guarantor and its Subsidiaries and
(iv) to ensure that the copyrights, trademarks or any patents used by Guarantor
and its Subsidiaries are and remain enforceable, to the extent material to the
operations of the business of Guarantor and its Subsidiaries. Subject to the
exercise of Guarantors reasonable business judgment, Guarantor shall not 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)
Guarantor shall deliver to the Administrative Agent an updated Schedule 3.3(b),
3.3(c), 3.3(d) and 3.3(f) 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 Administrative Agent or any Lender 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 Guarantor are described on
Schedule 3.3(f) hereto, which description includes for each 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. Guarantor shall not open any new accounts unless Guarantor
shall have given Administrative Agent at least ten (10) Business Days’ prior
written notice of its intention to open any such new accounts.

                 (g)
Guarantor shall take any and all actions necessary or reasonably requested by
the Administrative Agent, from time to time, to (i) cause the Administrative
Agent to obtain exclusive control of any investment property owned by Guarantor
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, written confirmation of Administrative Agent’s control over such
investment property. For purposes of this Section 3.3(g), Administrative

6

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

                             3.5
ADMINISTRATIVE AGENT’S PAYMENT OF CLAIMS. Administrative Agent may, in
its 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 of the Loan Agreement). All sums paid by Administrative Agent in respect
thereof shall be payable, on demand, by Guarantor to Administrative Agent and
shall be a part of the Obligations.

 4.               DURATION.
  This Guaranty shall be irrevocable until all of the Obligations have been completely
  and finally paid and performed and no Lender has any obligation to make any
  loans or other advances to the Borrowers, and all obligations and undertakings
  of the Borrowers under, by reason of, or pursuant to the Loan Documents have
  been completely performed, and this Guaranty is thereafter subject to reinstatement
  as provided in Section 5(d). All extensions of credit and financial accommodations
  heretofore or hereafter made by any Lender Party to any Borrower pursuant to
  the Loan Agreement shall be conclusively presumed to have been made in acceptance
  hereof and in reliance hereon. This Guaranty shall be binding upon the undersigned
  Guarantor and its respective successors and assigns, jointly and severally,
  and shall inure to the benefit of Administrative Agent and each Lender and their
  successors and assigns.

	5. 	
      UNCONDITIONAL
GUARANTY.

                     (a)
This is an unconditional Guaranty; it is unlimited as to time, until
termination. The Guarantor warrants that there are no conditions, oral or
otherwise, on the effectiveness of this Guaranty. This is a continuing guaranty
and shall apply to and cover all Obligations and renewals and extensions thereof
and substitutions therefor from time to time. No action which the Administrative
Agent or any Lender may take or omit to take in connection with any of the Loan
Documents, any of the Obligations (or any other indebtedness owing by the
Borrowers to the Lender Parties), or any Security, and no course of dealing of
the Administrative Agent or any Lender with any Obligor or any other Person,
shall release or diminish the Guarantor's obligations, liabilities, agreements
or duties hereunder, affect this Guaranty in any way, or afford the Guarantor
any recourse against the Administrative Agent or any Lender, regardless of
whether any such action or inaction may increase any risks to or liabilities of
the Administrative Agent or any Lender or any Obligor or increase any risk to or
diminish any safeguard of any Security. Without limiting the foregoing, the
Guarantor hereby expressly agrees that the Administrative Agent and the Lenders
may, from time to 

7

time, without notice to or the consent of the Guarantor, do any
or all of the following: (i) amend, change or modify, in whole or in part, any
one or more of the other Loan Documents and give or refuse to give any waivers
or other indulgences with respect thereto; (ii) neglect, delay, fail, or refuse
to take or prosecute any action for the collection or enforcement of any of the
Obligations, to foreclose or take or prosecute any action in connection with any
Security or Loan Document, to bring suit against any Obligor or any other
Person, or to take any other action concerning the Obligations or the Loan
Documents; (iii) accelerate, change, rearrange, extend, or renew the time, rate,
terms, or manner for payment or performance of any one or more of the
Obligations (whether for principal, interest, fees, expenses, indemnifications,
affirmative or negative covenants, or otherwise); (iv) compromise or settle any
unpaid or unperformed Obligation or any other obligation or amount due or owing,
or claimed to be due or owing, under any one or more of the Loan Documents; (v)
take, exchange, amend, eliminate, surrender, release, or subordinate any or all
Security for any or all of the Obligations, accept additional or substituted
Security therefor, and perfect or fail to perfect the Administrative Agent’s or
any Lender's rights in any or all Security; (vi) discharge, release, substitute
or add Obligors; (vii) apply all monies received from Obligors or others, or
from any Security for any of the Obligations, as the Administrative Agent or
Lenders may determine to be in their best interest, without in any way being
required to marshall Security or assets or to apply all or any part of such
monies upon any particular Obligations; 

                 (b)
No action or inaction of any Obligor or any other Person, and no change of law
or circumstances, shall release or diminish the Guarantor's obligations,
liabilities, agreements, or duties hereunder, affect this Guaranty in any way,
or afford the Guarantor any recourse against the Administrative Agent or any
Lender. Without limiting the foregoing, the obligations, liabilities,
agreements, and duties of the Guarantor under this Guaranty shall not be
released, diminished, impaired, reduced, or affected by the occurrence of any or
all of the following from time to time, even if occurring without notice to or
without the consent of the Guarantor: (i) any voluntary or involuntary
liquidation, dissolution, sale of all or substantially all assets, marshalling
of assets or liabilities, receivership, conservatorship, assignment for the
benefit of creditors, insolvency, bankruptcy, reorganization, arrangement, or
composition of any other Obligor or any other proceedings involving any other
Obligor or any of the assets of any other Obligor under laws for the protection
of debtors, or any discharge, impairment, modification, release, or limitation
of the liability of, or stay of actions or lien enforcement proceedings against,
any other Obligor, any properties of any other Obligor, or the estate in
bankruptcy of any other Obligor in the course of or resulting from any such
proceedings; (ii) the failure by the Administrative Agent or any Lender to file
or enforce a claim in any proceeding described in the immediately preceding
subsection (i) or to take any other action in any proceeding to which any other
Obligor is a party; (iii) the release by operation of law of any other Obligor
from any of the Obligations or any other obligations to the Administrative Agent
or any Lender; (iv) the invalidity, deficiency, illegality, or unenforceability
of any of the Obligations of any other Obligor or any other Loan Document, in
whole or in part, any bar by any statute of limitations or other law of recovery
on any of the Obligations of any other Obligor, or any defense or excuse of any
other Obligor for failure to perform on account of force majeure, act of God,
casualty, impossibility, impracticability, or other defense or excuse
whatsoever; (v) the failure of any other Obligor

8

or any other Person to sign any guaranty or other instrument or
agreement within the contemplation of any other Obligor, Administrative Agent or
any Lender; (vi) the fact that the Guarantor may have incurred directly part of
the Obligations or is otherwise primarily liable therefor; (vii) without
limiting any of the foregoing, any fact or event (whether or not similar to any
of the foregoing) which in the absence of this provision would or might
constitute or afford a legal or equitable discharge or release of or defense to
a guarantor or surety other than the actual payment and performance by the
Guarantor under this Guaranty.

                 (c)
The Administrative Agent and the Lenders may invoke the benefits of this
Guaranty before pursuing any remedies against any Obligor or any other Person
and before proceeding against any Security now or hereafter existing for the
payment or performance of any of the Obligations. The Administrative Agent and
the Lenders may maintain an action against the Guarantor on this Guaranty
without joining any other Obligor therein and without bringing a separate action
against any other Obligor.

                 (d)
If any payment to the Administrative Agent or any Lender by any Obligor is held
to constitute a preference or a voidable transfer under applicable state or
federal laws, or if for any other reason the Administrative Agent or any Lender
is required to refund such payment to the payor thereof or to pay the amount
thereof to any other Person, such payment to the Administrative Agent or such
Lender shall not constitute a release of the Guarantor from any liability
hereunder, and the Guarantor agrees to pay such amount to the Administrative
Agent or such Lender on demand and agrees and acknowledges that this Guaranty
shall continue to be effective or shall be reinstated, as the case may be, to
the extent of any such payment or payments. Any transfer by subrogation which is
made as contemplated in Section 9 prior to any such payment or payments shall
(regardless of the terms of such transfer) be automatically voided upon the
making of any such payment or payments, and all rights so transferred shall
thereupon revert to and be vested in the Administrative Agent and Lenders.

6.             
  DISCLOSURE OF CONDITION OF BORROWERS. The Guarantor warrants and
  represents to Administrative Agent and Lenders that: (a) this Guaranty is executed
  at the Borrowers' request; (b) the Guarantor has established adequate means
  of obtaining from the Borrowers on a continuing basis financial and other information
  pertaining to the Borrowers' affairs or business; and (c) the Guarantor is now
  and will be familiar with the affairs, business, operation and condition of
  the Borrowers and their assets. The Guarantor hereby waives any duty on the
  part of Administrative Agent or any Lender to disclose to the Guarantor any
  matter relating to the affairs, business, operation or condition of the Borrowers
  and their assets now known or hereafter known to Administrative Agent or any
  Lender. With respect to any debt of the Borrowers to Administrative Agent or
  any Lender, none of Administrative Agent or any Lender need inquire into the
  powers of the Borrowers or the officers, directors or agents acting or purporting
  to act on its behalf, and any debt created in reliance upon the professed exercise
  of such powers shall be guaranteed hereunder.

7.             
  WAIVERS REGARDING THE GUARANTEED DEBT. The Guarantor hereby waives,
  with respect to the Obligations, this Guaranty, and the other Loan Documents:

9

                 (a)
notice of the incurrence of any Obligation by the Borrowers, and notice of any
kind concerning the assets, liabilities, financial condition, creditworthiness,
businesses, prospects, or other affairs of the Borrowers (it being understood
and agreed that: (i) the Guarantor shall take full responsibility for informing
itself of such matters, (ii) none of Administrative Agent or any Lender shall
have any responsibility of any kind to inform the Guarantor of such matters, and
(iii) the Administrative Agent and Lenders are hereby authorized to assume that
the Guarantor, by virtue of its relationship with the Borrowers which are
independent of this Guaranty, has full and complete knowledge of such matters
whenever the Administrative Agent and/or Lenders extend credit to the Borrowers
or take any other action which may change or increase the Guarantor's
liabilities or losses hereunder);

                 (b)
notice that Administrative Agent, any Lender, any Obligor, or any other Person
has taken or omitted to take any action under any Loan Document or any other
agreement or instrument relating thereto or relating to any Obligation;

                 (c)
notice of acceptance of this Guaranty and all rights of the Guarantor under any
statute or law discharging the Guarantor from liability hereunder for failure to
sue on this Guaranty;

                 (d)
default, demand, presentment for payment, and notice of default, demand,
dishonor, nonpayment, or nonperformance;

                 (e)
notice of intention to accelerate, notice of acceleration, protest, notice of
protest, notice of any exercise of remedies (as described in this Guaranty or
otherwise), and all other notices of any kind whatsoever;

     The Guarantor hereby consents and
agrees that renewals and extensions of time of payment (including interest rate
adjustments), surrender, release, exchange, substitution, dealing with or taking
of additional collateral, modifying any obligations of, taking or releasing any
other Obligors, abstaining from taking advantage of or realizing upon any
Security and any and all other forbearances or indulgences granted by
Administrative Agent and any Lenders to any Borrower or any other Obligor or
other Person may be made, granted or effected by Administrative Agent and any
Lenders without notice to the Guarantor and without affecting in any manner
Guarantor’s liability hereunder. The Guarantor hereby expressly consents to any
impairment of Security including, but not limited to, failure to perfect a
security interest and release of Security.

     Any adjustment or compromise may
be made by Administrative Agent (with appropriate consents of the Lenders under
the Loan Agreement) with any Borrower or any other party to the Indebtedness,
and a lesser sum than the face amount thereof may be accepted in full payment
and discharge. Any of the Security granted by the Borrowers or any other Obligor
or other Person which Administrative Agent or any Lender may hold or which may
come to it or its possession may be released or otherwise dealt with by
Administrative Agent or such Lender in all respects as if this Guaranty were not
in existence and the obligation of the Guarantor shall in no way be

10

affected thereby. The Guarantor hereby waives and foregoes any
right in respect of any such action by Administrative Agent or any Lender.

	8. 	
      EXERCISE OF
REMEDIES.

                     (a)
The Administrative Agent and Lenders shall have the right to enforce, from time
to time, in any order and at the Administrative Agent’s and Lender's sole
discretion, any rights, powers and remedies which the Administrative Agent and
Lenders may have under the Loan Documents or otherwise, including judicial
foreclosure, the exercise of rights of power of sale, the taking of a deed or
assignment in lieu of foreclosure, the appointment of a receiver to collect
rents, issues and profits, the exercise of remedies against personal property,
or the enforcement of any assignment of leases, rentals, or other properties or
rights, whether real or personal, tangible or intangible; and the Guarantor
shall be liable to the Administrative Agent and Lenders hereunder for any
deficiency resulting from the exercise by the Administrative Agent and Lenders
of any such right or remedy even though any rights that the Guarantor may have
against the Borrowers or others may be destroyed or diminished by exercise of
any such right or remedy. No failure on the part of the Administrative Agent and
Lenders to exercise, and no delay in exercising, any right hereunder or under
any other Loan Document shall operate as a waiver thereof; nor shall any single
or partial exercise of any right preclude any other or further exercise thereof
or the exercise of any other right. The rights, powers and remedies of the
Administrative Agent and Lenders provided herein and in the other Loan Documents
are cumulative and are in addition to, and not exclusive of, any other rights,
powers or remedies provided by law or in equity. The rights of the
Administrative Agent and Lenders hereunder are not conditional or contingent on
any attempt by the Administrative Agent and Lenders to exercise any of its
rights under any other Loan Document against any Obligor or any other
Person.

                      (b) If any Event of Default shall occur and be continuing,
  Administrative Agent may protect and enforce the Lender Parties’ rights
  under this Guaranty and the other 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:

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

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

11

                             (iii)
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, in its discretion, may deem advisable;
provided that such sales may be adjourned from time to time with or without
notice. The requirement of reasonable notice to Guarantor of the time and place
of any public sale of the Collateral or of the time after which any private sale
either by Administrative Agent or at its option, a broker, or any other intended
disposition thereof is to be made, shall be met if such notice is mailed,
postage prepaid, to Guarantor at the address of Guarantor designated herein at
least ten (10) Business Days before the date of any public sale or at least ten
(10) Business Days before the time after which any private sale or other
disposition is to be made unless applicable law requires otherwise.

                             (iv)
Administrative Agent shall have the right to conduct such sales on Guarantor’s
premises or elsewhere and shall have the right to use Guarantor's premises
without charge for such sales for such time or times as Administrative Agent may
see fit. Administrative Agent is hereby granted a license or other right to use,
without charge, Guarantor’s 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 Guarantor's rights under all licenses and all
franchise agreements shall inure to Administrative Agent’s benefit. Guarantor
agrees to hold Administrative Agent harmless from any liability arising out of
Administrative Agent's use of Guarantor’s 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.

                             (v)
Administrative 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
Obligations owing by Guarantor 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
for collection and for acquisition, completion, protection, removal, storage,
sale and delivery of the Collateral; second to all payments, other than
principal and interest, due under this Guaranty; third to interest due upon any
of the Obligations; fourth to the principal balance owing on the Indebtedness;
and fifth the remainder, if any, to Guarantor, its successors or assigns, or to
whomsoever may be lawfully entitled to receive the same. If any deficiency shall
arise, Guarantor shall remain liable to Lender Parties therefor.

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

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

     Additionally, if any Event of
Default shall occur and be continuing, Administrative Agent, on behalf of Lender
Parties, may enforce the payment of any Obligations due to Lender

12

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.

	9. 	
      LIMITED
SUBROGATION.

                     (a)
Until all of the Obligations have been paid and performed in full, Guarantor
shall have no right to exercise any right of subrogation, reimbursement,
indemnity, exoneration, contribution or any other claim which it may now or
hereafter have against or to any Obligor or any Security in connection with this
Guaranty (including any right of subrogation under any Law, as amended), and the
Guarantor hereby waives any rights to enforce any remedy which the Guarantor may
have against the other Obligors and any right to participate in any Security
until such time. If any amount shall be paid to the Guarantor on account of any
such subrogation or other rights, any such other remedy, or any Security at any
time when all of the Obligations and all other expenses guaranteed pursuant
hereto shall not have been paid in full, such amount shall be held in trust for
the benefit of the Administrative Agent, shall be segregated from the other
funds of the Guarantor and shall forthwith be paid over to Administrative Agent
to be held by the Administrative Agent as collateral for, or then or at any time
thereafter applied in whole or in part by the Administrative Agent against, all
or any portion of the Obligations, whether matured or unmatured, in such order
as the Administrative Agent shall elect.

                     (b)
If the Guarantor shall make payment to the Administrative Agent of all or any
portion of the Obligations and if all of the Obligations shall be finally paid
in full, the Administrative Agent will, at the Guarantor's request and expense,
execute and deliver to the Guarantor (without recourse, representation or
warranty) appropriate documents necessary to evidence the transfer by
subrogation to the Guarantor of an interest in the Obligations resulting from
such payment by the Guarantor; provided that such transfer shall be subject to
Section 5(d) above and that without the consent of the Administrative Agent
(which Administrative Agent may withhold in its discretion) the Guarantor shall
not have the right to be subrogated to any claim or right against any Obligor
if: (i) such Obligor has become owned by the Administrative Agent or any Lender,
or (ii) the ownership of such Obligor has otherwise changed in the course of
enforcement of the Loan Documents.

10.             SUCCESSORS
AND ASSIGNS. None of the Guarantor's rights or obligations hereunder may
be assigned or delegated, but this Guaranty and such obligations shall pass to
and be fully binding upon the successors of the Guarantor, as well as the
Guarantor. This Guaranty shall apply to and inure to the benefit of the
Administrative Agent and each Lender and their successors or assigns. Without
limiting the generality of the immediately preceding sentence, the
Administrative Agent and each Lender may, to the extent and in the manner
provided for in the Loan Agreement, assign, grant a participation in, or
otherwise transfer any Obligation held by it or any portion thereof, and the
Administrative Agent and each Lender may, to the extent and in the manner
provided for in the Loan Agreement, assign or otherwise transfer its rights or
any portion thereof under any Loan Document, to any other Person, and such other
Person shall thereupon become entitled to all of the benefits in respect thereof
granted to the Administrative 

13

Agent or such Lender hereunder unless otherwise expressly
provided by the Administrative Agent or such Lender in connection with such
assignment or transfer.

11.             SUBORDINATION
AND OFFSET. The Guarantor hereby subordinates and makes inferior to the
Obligations any and all indebtedness now or at any time hereafter owed by the
Borrowers to the Guarantor. The Guarantor agrees that upon the occurrence and
during the continuation of any Event of Default it will neither permit the
Borrowers to repay such indebtedness or any part thereof nor accept payment from
the Borrowers of such indebtedness or any part thereof without the prior written
consent of the Administrative Agent and Required Lenders. If the Guarantor
receives any such payment without the prior written consent of the
Administrative Agent and Required Lenders, the amount so paid shall be held in
trust for the benefit of the Lenders, shall be segregated from the other funds
of the Guarantor, and shall forthwith be paid over to the Administrative Agent
to be held by the Administrative Agent as collateral for, or then or at any time
thereafter applied in whole or in part by the Administrative Agent against, all
or any portions of the Obligations, whether matured or unmatured, in such order
as the Administrative Agent and Lenders shall elect. The Guarantor hereby grants
to the Administrative Agent and Lenders a right of offset to secure the payment
of the Obligations and the Guarantor's obligations and liabilities hereunder,
which right of offset shall be upon any and all monies, securities and other
property (and the proceeds therefrom) of the Guarantor now or hereafter held or
received by or in transit to the Administrative Agent and Lenders from or for
the account of the Guarantor, whether for safekeeping, custody, pledge,
transmission, collection or otherwise, and also upon any and all deposits
(general or special), credits and claims of the Guarantor at any time existing
against the Administrative Agent or Lenders. Upon the occurrence and during the
continuation of any Default or Event of Default, the Administrative Agent and
each Lender is hereby authorized at any time and from time to time, without
notice to the Guarantor, to offset, appropriate and apply any and all items
hereinabove referred to against the Obligations and the Guarantor's obligations
and liabilities hereunder irrespective of whether or not the Administrative
Agent or any Lender shall have made any demand under this Guaranty and although
such obligations and liabilities may be contingent or unmatured, the
Administrative Agent and each Lender agrees promptly to notify the Guarantor
after any such offset and application made by the Administrative Agent or such
Lender, provided that the failure to give such notice shall not affect the
validity of such offset and application. The rights of the Administrative Agent
and Lenders under this section are in addition to, and shall not be limited by,
any other rights and remedies (including other rights of offset) which the
Administrative Agent or any Lender may have.

12.             REPRESENTATIONS
AND WARRANTIES. The Guarantor hereby represents and warrants to the
Administrative Agent and each Lender as follows:

                 (a)
The Recitals at the beginning of this Guaranty are true and correct in all
respects.

                 (b)
The execution, delivery and performance by the Guarantor of this Guaranty does
not and will not contravene any law or governmental regulation or any
contractual restriction binding on or affecting the Guarantor or any of its
properties, and does not and will not result in or require the creation of any
Lien upon or with respect to any of its properties (other than Liens in favor of
Administrative Agent for the benefit of the Lender Parties).

14

                 (c)
No authorization or approval or other action by, and no notice to or filing
with, any governmental authority or other regulatory body or third party is
required for the due execution, delivery and performance by the Guarantor of
this Guaranty.

                 (d)
This Guaranty is a legal, valid and binding obligation of the Guarantor,
enforceable against the Guarantor in accordance with its terms except as limited
by bankruptcy, insolvency or similar laws of general application relating to the
enforcement of creditors' rights.

                 (e)
There is no action, suit or proceeding pending or, to the knowledge of the
Guarantor, threatened against or otherwise affecting the Guarantor before any
court, arbitrator or governmental department, commission, board, bureau, agency
or instrumentality which may materially and adversely affect the Guarantor's
financial condition or its ability to perform its obligations hereunder.

13.             COVENANTS.
The Guarantor hereby agrees to observe and comply with each of the covenants and
agreements made in the Loan Agreement, insofar as they refer to the Guarantor,
or the assets, obligations, conditions, agreements, business, or actions of the
Guarantor, or to the Loan Documents to which the Guarantor is a party.

14.             NO
ORAL CHANGE; AMENDMENTS. No amendment of any provision of this Guaranty
shall be effective unless it is in writing and signed by the Guarantor and the
Administrative Agent (with the consent of the requisite Lenders pursuant to the
Loan Agreement to the extent required by the terms thereof), and no waiver of
any provision of this Guaranty, and no consent to any departure by the Guarantor
therefrom, shall be effective unless it is in writing and signed by the
Administrative Agent (with the consent of the requisite Lenders pursuant to the
Loan Agreement to the extent required by the terms thereof), and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given. 

15.             INVALIDITY
OF PARTICULAR PROVISIONS. If any term or provision of this Guaranty
shall be determined to be illegal or unenforceable all other terms and
provisions hereof shall nevertheless remain effective and shall be enforced to
the fullest extent permitted by applicable law.

16.             HEADINGS
AND REFERENCES. The headings used herein are for purposes of convenience
only and shall not be used in construing the provisions hereof. The words "this
Guaranty," "this instrument," "herein," "hereof," "hereby" and words of similar
import refer to this Guaranty 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 subdivisions hereof in which such phrases
occur. The word "or" is not exclusive, and the word "including" (in its various
forms) means "including without limitation." Pronouns in masculine, feminine and
neuter genders shall be construed to include any other gender, and words in the
singular form shall be construed to include the plural and vice versa, unless
the context otherwise requires.

15

17.             NOTICES.
Any notice or communication required or permitted hereunder shall be given in
the manner as provided in the Loan Agreement, addressed (a) to the
Administrative Agent and Lenders at the address listed in the Loan Agreement and
(b) to the Guarantor at the address listed in Section 9.1 of Schedule A to the
Loan Agreement or to such other address or to the attention of such other
individual as hereafter shall be designated in writing by Guarantor sent in
accordance herewith.

18.             LIMITATION
ON INTEREST. The Administrative Agent and the Guarantor intend to
contract in strict compliance with applicable usury law from time to time in
effect, and the provisions of the Loan Agreement limiting the interest for which
the Guarantor is obligated are expressly incorporated herein by reference.

19.             LOAN
DOCUMENT. This Guaranty is a Loan Document, as defined in the Loan
Agreement, and is subject to the provisions of the Loan Agreement governing Loan
Documents.

20.             COUNTERPARTS;
FAX. This Guaranty may be executed in any number of counterparts, each
of which when so executed shall be deemed to constitute one and the same
Guaranty. This Guaranty may be validly executed and delivered by facsimile or
other electronic transmission.

21.             GOVERNING
LAW; SUBMISSION TO PROCESS. THIS GUARANTY SHALL BE DEEMED A CONTRACT AND
INSTRUMENT 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. WITH RESPECT TO ANY CLAIM ARISING OUT OF 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 AS SET FORTH IN THIS SECTION 21, OR BY ANY OTHER
LAWFUL MEANS. TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY IRREVOCABLY
WAIVES ALL RIGHT OF TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY MATTER ARISING
HEREUNDER. THE GUARANTOR HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS
UPON IT, AND AGREES THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY REGISTERED
MAIL DIRECTED TO IT AT THE ADDRESS SET FORTH IN

16

SECTION 9.1 OF SCHEDULE A TO THE LOAN AGREEMENT AND SERVICE SO
MADE SHALL BE DEEMED TO BE COMPLETED UPON ACTUAL RECEIPT THEREOF.

22.             WAIVER
OF JURY TRIAL. EACH PARTY HEREBY COVENANTS AND AGREES THAT IN ANY SUIT,
ACTION OR PROCEEDING IN RESPECT OF ANY MATTER ARISING OUT OF THIS GUARANTY, 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 BY THE LOAN AGREEMENT OR OTHER LOAN
DOCUMENTS, WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE, TRIAL SHALL BE TO
A COURT OF COMPETENT JURISDICTION AND NOT TO A JURY; THE GUARANTOR HEREBY
EXPRESSLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY. ANY PARTY MAY FILE AN
ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO
TRIAL BY JURY.

23.             ADVICE
OF COUNSEL. Guarantor acknowledges that it has been advised by counsel
with respect to this Guaranty and the transactions governed hereby.

24.             FINAL
AGREEMENT. THIS WRITTEN AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT
THE FINAL AGREEMENT BETWEEN THE PARTIES HERETO AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR OR CONTEMPORANEOUS ORAL AGREEMENTS OF THE PARTIES HERETO.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES HERETO.

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

17

     IN WITNESS WHEREOF, the parties
hereto have executed and delivered this Guaranty as of the date first written
above.

	 	GUARANTOR: 
	 	 
	 	CARBIZ INC., an Ontario
    
	 	corporation 
	 	  	 
	 	By: 	/s/ Stanton Heintz
	 	Name: 	Stanton Heintz
	 	Its: 	CFO

	 	ADMINISTRATIVE AGENT: 
	 	 
	 	SWC SERVICES INC., a Delaware
    
	 	limited liability company, as 
	 	Administrative Agent 
	 	  	  
	 	By: 	/s/
      Greg Bell 
	 	Name: 	Greg Bell 
	 	Its: 	Manager 

Carbiz Inc. Guaranty and Security Agreement

     Schedules to Guaranty and
Security Agreement

Schedule 3.1 Commercial Tort Claims

None

Carbiz Inc. Guaranty and Security Agreement

Schedule 3.3 Locations of Books and Records

Corporate Accounting Physical Records

7405 N Tamiami Trail
Sarasota, FL
34243

Corporate Accounting Electronic Records
Scanned Backup of
Physical Documents

System Co-location Bunker
6288 Tower
Lane
Sarasota, FL 34240

Carbiz Inc. Guaranty and Security Agreement

	Schedule 3.3(b) 	UCC/PPSA Filing Jurisdictions 
	 	 
	Carbiz Inc. 	                        
      Ontario, Canada 

Carbiz Inc. Guaranty and Security Agreement

Schedule 3.3(c)   Locations of Inventory,
Goods & Equipment

System Servers, Office Equipment & Software Source Code

7405 N Tamiami Trail
Sarasota, FL
34243

System Servers

System Co-location Bunker
6288 Tower
Lane
Sarasota, FL 34240

Carbiz Inc. Guaranty and Security Agreement

Schedule 3.3(d) Intellectual Property

	Application Software Source Code 
	               
         Management System Plus – Dealer Management Software 
	               
         VisualCAT – Dealer F&I Software 
	               
         Independent Dealer Accounting – Dealer Accounting Software
  
	  
	Buy Here Pay Here Consulting Products 
	               
         DCF/ACP Business Model 
	               
                         
         Training Materials 
	               
                         
         Consulting Methods 
	               
                         
         Policy & Procedure Documents 
	               
         Various Data Tracking and Analysis Programs

Carbiz Inc. Guaranty and Security Agreement

	Schedule 3.3(f)    Deposit Accounts
    
	None. 

Carbiz Inc. Guaranty and Security Agreement

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