Document:

Exhibit 10.17

 

CONFIDENTIAL

 

 

ASSET
PURCHASE AGREEMENT

 

by and among

 

WELLS
FARGO FINANCIAL AMERICA, INC.,

WELLS
FARGO FINANCIAL CAR LLC,

WELLS
FARGO FINANCIAL KENTUCKY, INC.,

WELLS
FARGO FINANCIAL NEVADA, INC.,

WELLS
FARGO FINANCIAL NORTH CAROLINA, INC.,

WELLS
FARGO FINANCIAL TEXAS, INC., and

WELLS
FARGO FINANCIAL, INC.

 

and

 

CARS
ACQUISITION LLC, and

COMPUCREDIT
CORPORATION

 

Dated as
of December 10, 2004

 

 

EXECUTION
COPY

 

ASSET
PURCHASE AGREEMENT

 

This ASSET PURCHASE
AGREEMENT (this “Agreement”) dated as of December 10, 2004 by
and among Wells Fargo Financial America, Inc., a Pennsylvania corporation,
Wells Fargo Financial CAR LLC, a Delaware limited liability company, Wells
Fargo Financial Kentucky, Inc., a Kentucky corporation, Wells Fargo
Financial Nevada, Inc., a Nevada corporation, Wells Fargo Financial North
Carolina, Inc., a North Carolina corporation, and Wells Fargo Financial
Texas, Inc., a Texas corporation (each individually a “Seller” and
collectively, the “Sellers”) and each a wholly owned subsidiary of Wells
Fargo Financial, Inc., an Iowa corporation (“Sellers’ Parent”), and
CARS Acquisition LLC, a Georgia limited liability company (the “Buyer”)
and wholly owned subsidiary of CompuCredit Corporation, a Georgia corporation (“Buyer’s
Parent”).

 

RECITALS

 

WHEREAS, the Sellers are
in the business of, among other things, purchasing and servicing motor vehicle
retail installment sales contracts secured by new and used motor vehicles and
light-duty trucks primarily (but not exclusively) from Buy-Here/Pay-Here
Dealers throughout the United States (the “Business”); and

 

WHEREAS, the Sellers now
desire to sell and assign, and the Buyer desires to buy, substantially all of
the assets and assume certain liabilities of the Business.

 

NOW, THEREFORE, in consideration
of the mutual covenants and promises contained herein and for other good and
valuable consideration, the receipt and adequacy of which the parties hereby acknowledge, the parties hereto agree as follows:

 

ARTICLE I.  DEFINITIONS

 

1.1       Defined Terms.  As used in this Agreement, the following
terms and variations thereof shall have the following meanings specified or
referred to in this Section 1.1:

 

“Accounts Receivable”
means (i) all trade accounts receivable and other rights to payment from
customers of the Business, including an account with a Seller that represents
the unpaid principal balance, late fees and other charges incurred in
connection with an Obligor’s Vehicle Contract and the Related Security, (ii) all
other accounts or notes receivable of the Business, (iii) the accrued but
unpaid interest earned on any of the foregoing, and (iv) any claim, remedy
or other right related to any of the foregoing.

 

“Acquisition Date”
shall mean, with respect to a Vehicle Contract, the date on which a Seller
acquired such Vehicle Contract from a Dealer.

 

“Adverse
Claims” means, for any assets or property of a Person, a claim
of ownership or any Lien in, of, or on, such asset or property in favor of any
other Person, except those in favor, or for the benefit, of Buyer.

 

“Affiliate”
of a Person shall mean (i) any Person directly or indirectly owning,
controlling or holding, with power to vote, ten percent (10%) or more of the
outstanding voting securities of such other Person; (ii) any Person ten
percent (10%) or more of whose outstanding voting securities are directly or
indirectly owned, controlled or held with power to vote, by such other Person; (iii) any
Person, directly or indirectly, controlling, controlled by or under common
control with, such other Person; or (iv) any officer, director, partner,
co-partner, or employee of such other Person.

 

“Ancillary
Agreements” shall mean the Bill of Sale, Power of Attorney,
Assignment and Assumption Agreement, Lease Assignment and Assumption
Agreements, Subscriber Agreement, Transition Services Agreement and such other
documents or agreements that the parties deliver in connection with the
consummation of the transactions contemplated hereby.

 

“Ancillary Product”
means, with respect to any Vehicle Contract, any extended vehicle service
contract, vehicle warranty, guaranteed auto protection policies or waivers,
mechanical breakdown contracts or such other products or services sold to an
Obligor in connection with his or her financing of a Vehicle.

 

“Bankruptcy Exception”
shall mean, with respect to the enforceability of any agreement, contract,
obligation or commitment, any limitation thereon imposed by (i) bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws affecting creditors’ rights generally and (ii) the general principles
of equity, regardless of whether asserted in a proceeding in equity or at law.

 

“Best
Efforts” means the efforts a prudent Person desirous of
achieving a result would use in similar circumstances to achieve that result as
expeditiously as possible.

 

 

“Books and Records”
shall mean, to the extent they exist, (i) Records and lists of the Sellers
pertaining to (a) the Purchased Assets, (b) the Business, (c) the
customers (including former customers), Dealers (including any former Dealers),
suppliers or Employees; (ii) all product, business and marketing plans or
materials of Sellers relating to the Business, the Purchased Assets or Assumed
Liabilities; and (iii) operating Records maintained by the Sellers relating
to the Business, the Purchased Assets or the Assumed Liabilities.

 

“Breach”
means any breach of, or any inaccuracy in, any representation or warranty or
any breach of, or failure to perform or comply with, any covenant or
obligation, in or of this Agreement or any other contract, or any event which
with the passing of time or the giving of notice, or both, would constitute
such a breach, inaccuracy or failure.

 

“Business”
shall have the meaning set forth in the Recitals.

 

“Business Day”
means any day other than (i) Saturday or Sunday or (ii) any other day
on which bank institutions are authorized by law to be closed or any day the
New York Stock Exchange is closed.

 

“Buy-Here/Pay-Here
Dealer” means an independent or non-franchise automobile dealer
who provides consumer automobile financing on its own behalf through a captive
finance operation or Related Finance Company (as defined under the Code) for
the purpose of underwriting and servicing motor vehicle retail installment
contracts that were originated directly by such dealer; provided, however,
to the extent a Buy-Here/Pay-Here Dealer arranges for the contemporaneous
purchase of motor vehicle retail installment contracts through one or more
unrelated third parties, for purposes of this Agreement, such dealer shall not
be deemed a Buy-Here/Pay-Here Dealer with respect to such third party financing
transactions.  As used in this
definition, “contemporaneous purchase” shall refer to motor vehicle retail
installment contracts which are approved prior to execution, as well as those
that are approved for purchase within seven (7) days of the date of
execution (i.e., “spot deliveries”), and in each case, purchased or acquired at
par or at a premium to par.

 

“Closing Date”
shall mean the later of (i) March 1, 2005, or (ii) such other
date on which the closing conditions set forth in Article VII are satisfied or waived by the parties
hereto.

 

“Closing
Date Data” shall mean (i) the data file containing the
electronic Record and Accounts Receivable balance of each of the Vehicle
Contracts and (ii) the Excel file containing the electronic Record and
balance of each Dealer’s Dealer Reserve, in each case, as transferred as part
of the Purchased Assets and prepared as of the Closing Date.

 

“Closing
Purchase Price”
shall mean the Purchase Price as determined based on the Closing Balance Sheet.

 

“COBRA”
means the Consolidated Omnibus Budget Reconciliation Act of 1985.

 

“Code” shall
mean the Internal Revenue Code of 1986, as amended.

 

“Collections”
means, with respect to any Vehicle Contract, any and all of the following to
the extent received by a Seller or its Affiliate after the Closing Date or on
or prior to the Closing Date but not applied to such Vehicle Contract (and
reflected on its related Accounts Receivable): (i) all payments; (ii) all
Recoveries, (iii) all proceeds received from the liquidation of the
related Vehicle; (iv) all insurance proceeds received under any Insurance
Policy with respect to such Vehicle Contract or the related Obligor; (v) all
rebates of premiums and other amounts relating to an Insurance Policy or
Ancillary Product financed under the Vehicle Contract; and (vi) all fees
and other receipts.

 

“Computer
Files” shall mean all computer or other electronic files used in
the Business including the archived contact management data used exclusively by
the Business (i.e., “Goldmine data”). 
Notwithstanding the foregoing, this definition shall not include, to the
extent licensed by the Sellers or their Affiliates pursuant to a
non-transferable Third-Party license agreement or which is not used exclusively
or primarily by the Business, any (i) word processing, spreadsheet,
presentation or database programs, (ii) operating systems or system of
record (i.e., “Supreme”) used by the Business or (iii) other computer
programs or systems used in connection with Business.

 

“Consent”
means any approval, consent, ratification, waiver or other authorization.

 

“Contract”
means any agreement, contract, Space Lease, note, loan, evidence of
indebtedness, purchase order, letter of credit, indenture, employment
agreement, instrument, obligation or commitment to which a Seller is a party or
is bound (or otherwise has acquired rights and duties thereunder) and which
relates to the Business, whether oral or written.

 

“Contract Files”
shall mean the Records relating to and evidencing a Contract maintained by a
Seller as of the Closing Date.  With
respect to the Vehicle Contracts, the Contract Files may include:

 

(a)   the fully executed original Vehicle Contract;

 

(b)   the original certificate of title or evidence of ownership
and security interest;

 

2

 

(c)   to the extent they exist, the transaction history for the
Vehicle Contract from the Acquisition Date up to and including the Closing
Date;

 

(d)   to
the extent they exist, electronically stored collection and customer service
notes from the Acquisition Date up to and including the Closing Date; and

 

(e)   to the extent that they exist, all other documentation or
Records held by or on behalf of a Seller, including vehicle theft registration
documents and references.

 

“Damages”
shall mean any loss, Liability, claim, damage, cost or expense (including
reasonable Third-Party costs of investigation and defense and reasonable
Third-Party attorneys’ fees and expenses), whether or not involving a
Third-Party Claim.

 

“Dealer”
means, with respect to any Vehicle Contract and the related Vehicle, the
automobile dealer or its Affiliate that (i) sold the related Vehicle, (ii) originated
the Vehicle Contract, and/or (iii) sold and assigned such Vehicle Contract
to a Seller.

 

“Dealer Agreement”
means the agreement pursuant to which a Dealer has (i) assigned, and a
Seller has acquired, a Vehicle Contract, including any short form purchase
agreement authorized by such agreement to affect subsequent transactions
between the parties thereto or (ii) assigned the right to service and/or
collect any payments payable on a Vehicle Contract owned by such Dealer.

 

“Dealer Reserve”
shall mean the reserve account established for each Dealer pursuant to the
related Dealer Agreement and that is used to effect the Dealer’s repurchase of
any Vehicle Contract: (i) that is determined by the Sellers to be
uncollectible (in a manner consistent with its internal collection and
servicing procedures); (ii) as to which a Breach has occurred or to
Sellers’ Knowledge, is Threatened; or (iii) for any other reason set forth
in such Dealer Agreement.

 

“Disclosure Schedule”
shall mean the schedule attached hereto and delivered by the Sellers to
the Buyer contemporaneously herewith, which sets forth the exceptions to the
representations and warranties contained in Article IV
hereof and certain other information called for by this Agreement.  Unless otherwise specified, each reference in
this Agreement to any numbered schedule is a reference to that numbered schedule which
is included in the Disclosure Schedule.

 

“Effective Time”
shall mean the time at which the parties consummate the transactions
contemplated by this Agreement in compliance with the terms and conditions set
forth herein.

 

“Employee”
means all full- and part-time employees of the Sellers employed exclusively in
the Business as conducted as of the date hereof.

 

“Employee
Plans” means (i) all “employee benefit plans,” as defined
in Section 3(3) of ERISA, and all other material employee benefit
arrangements (including any trusts maintained for such arrangements) relating
to the Employees or the Business, including any such arrangements providing for
severance pay, sick leave, vacation pay, salary continuation for disability,
retirement benefits, deferred compensation, bonus pay, incentive pay, stock
options, hospitalization insurance, medical insurance, life insurance,
scholarships or tuition reimbursements, maintained by the Sellers or their
Affiliates or to which the Sellers or their Affiliates are obligated to
contribute thereunder for current or former Employees, and (ii) all “employee
pension benefit plans,” as defined in Section 3(2) of ERISA,
maintained by the Sellers or any ERISA Affiliate or to which the Sellers or any
ERISA Affiliate have contributed or been obligated to contribute thereunder
during the last six (6) years.

 

“ERISA”
shall mean the Employee Retirement Income Security Act of 1974 or any successor
Law, and regulations and rules issued pursuant to that Act or any
successor Law.

 

“ERISA Affiliate”
shall mean any entity that is (or at any relevant time was) a member of a “controlled
group of corporations” with, under “common control” with, or a member of an “affiliated
service group” with, the Sellers or the Buyer, as applicable, as defined in Section 414(b),
(c), (m) or (o) of the Code or Section 4001(a)(14)
or 4001(b) of ERISA.

 

“Facilities”
shall mean all Leased Real Property (including the Space Leases related
thereto) and related facilities (and any improvements thereto) used in the
operation of the Business, including the Tangible Personal Property used or
operated by the Sellers or their Affiliate.

 

“GAAP” means
generally accepted accounting principles in the United States as in effect from
time to time.

 

“Governing Documents”
shall mean with respect to any Person: (i) if a corporation, the articles
or certificate of incorporation and the bylaws; (ii) if a general
partnership, the partnership agreement and any statement of partnership; (iii) if
a limited partnership, the limited partnership agreement and the certificate of
limited partnership; (iv) if a limited liability company, the articles of
organization and operating agreement or (v) any amendment or supplement to
any of the foregoing.

 

“Governmental
Authorization” shall mean any Consent, license, registration or
permit issued, granted, given or otherwise made available by or under authority
of any Governmental Entity or pursuant to any Law.

 

3

 

“Governmental
Entity” shall mean any court, administrative agency or
commission or other federal, state, provincial, local or foreign governmental
authority, instrumentality, agency or commission.

 

 “Insurance Policy” means (i) any
comprehensive, collision, fire, theft or other insurance policy maintained by
an Obligor that also lists a Seller as loss payee with respect to the related
Vehicle or (ii) any credit life, involuntary unemployment, or accident and
health insurance maintained by an Obligor in connection with any Vehicle
Contract.

 

“Intellectual
Property Rights” shall mean all of the following, owned or used
exclusively by the Sellers or their Affiliates, to the extent they exist: (i) trademarks
and service marks (registered and unregistered), trade dress, trade names and
other names and slogans embodying business goodwill or indications of origin,
all applications or registrations in any jurisdiction pertaining to the
foregoing and all goodwill associated therewith; (ii) patents, patentable
inventions, discoveries, improvements, ideas, know-how, formula methodology,
processes, technology and computer programs, software and databases (including
source code, object code, development documentation, programming tools,
drawings, specifications and data) and all applications or registrations in any
jurisdiction pertaining to any of the foregoing including all re-issues,
continuations, divisions, continuations-in-part, renewals or extensions
thereof; (iii) all trade secrets, including confidential and other
non-public information, and the right in any jurisdiction to limit the use or
disclosure thereof; (iv) copyrights in writings, designs, mask works or
other works, and applications or registrations in any jurisdiction for the
foregoing; (v) database rights; (vi) Internet websites, domain names
and registrations or applications thereof; (vii) licenses, immunities,
covenants not to sue and the like relating to any of the foregoing; (viii) books
and records described or used in connection with any of the foregoing; and (ix) claims
or causes of action arising out of or related to infringement or
misappropriation of any of the foregoing.

 

“IRS”
means the Internal Revenue Service.

 

“Knowledge”
for purposes of this Agreement, an individual will be deemed to have Knowledge
of a particular fact or other matter if that individual is actually aware of
that fact or matter.  A Person (other
than an individual or a Seller) will be deemed to have Knowledge of a
particular fact or other matter if any individual who is serving, or who has at
any time served, as a director or officer of that Person (or in any similar
capacity) has, or at any time had, Knowledge of that fact or other matter.  A Seller will be deemed to have Knowledge of
a particular fact or other matter if any individual who is serving, or who has
at any time served, as a director, officer or Key Employee of that Seller or
legal counsel of Sellers’ Parent that provides legal services to the Business
(or, in each case, in any similar capacity) has, or at any time had, Knowledge
of that fact or other matter.

 

“Law”
shall mean any statute, rule, regulation or other provision of law, or any
order, judgment or other direction of a court or other tribunal, or any other
governmental requirement, permit, registration, license or authorization.

 

“Liability”
means any direct or indirect liability, indebtedness, obligation, commitment,
expense, claim, deficiency, guaranty or endorsement of or by any Person,
whether accrued, absolute, contingent, liquidated or unliquidated.

 

“License”
shall mean all Governmental Authorizations necessary or desirable for the past,
present or anticipated conduct of, or relating to the operation of the
Business.

 

“Lien” shall
mean any claim, pledge, lien, security interest or other encumbrance of any
kind whatsoever.

 

“Material Adverse Change”
or “Material Adverse Effect” shall mean
any change, event or effect that is or could reasonably be expected to be
materially adverse to the business, assets, condition (financial or other),
results of operations or prospects of any party (or the Business, as the case
may be) or which otherwise could reasonably be expected to prevent the
consummation of the transactions contemplated hereby.

 

“Obligor”
shall mean, for a Contract, each Person obligated to pay such Contract.

 

“Order”
means any order, injunction, judgment, decree, ruling, assessment
or arbitration award of any Governmental Entity or arbitrator.

 

“Ordinary Course of
Business” shall mean the ordinary and usual course of the
conduct of the Business as currently conducted and consistent with past
practices and not knowingly in violation of any Law or Order; provided, however,
that a Contract related to the employment of any Active Employee shall not be
deemed to have been entered into in the Ordinary Course of Business.

 

“Person”
shall mean an individual, a partnership, a corporation, business trust, limited liability company, limited liability partnership,
joint stock company, trust, unincorporated association, joint venture or other
entity or a Governmental Entity.

 

“Preliminary
Purchase Price” shall mean the Purchase Price as determined
based on the Interim Balance Sheet prepared as of the month-end immediately
preceding the Closing Date.  For the
avoidance of doubt, an example of the application of the foregoing calculation
is set forth in Exhibit A
using the Initial Balance Sheet.

 

4

 

“Proceeding”
means any action, arbitration, audit, hearing, investigation, litigation or
suit (whether civil, criminal, administrative, judicial or investigative,
whether formal or informal, whether public or private) commenced, brought,
conducted or heard by or before, or otherwise involving, any Governmental
Entity or arbitrator.

 

“Purchased Assets”
shall mean substantially all of the assets of the Business, including the
following:

 

(i)            all
Facilities;

 

(ii)           all
Accounts Receivable;

 

(iii)          all
Contracts and related Contract Files except the Contracts and related Contract
Files set forth on Schedule 2.2(d);

 

(iv)          all
Licenses or renewals thereof, in each case to the extent transferable to Buyer,
including those listed on Schedule 4.1(d);

 

(v)           to the extent they
exist and are in the possession of the Active Employees or located in the Facilities
(or otherwise held by the Sellers’ Representatives in connection with the
Business), copies of all data and Books and Records related to and used
exclusively or primarily in the Business including client customer lists and
Records, current and historical operational data and Records, current and
historical financial data and Records, 
referral sources, operating guides and manuals, all Computer Files,
creative materials, advertising materials, sales and promotional materials,
studies, reports, correspondence and other similar documents and Records and,
subject to applicable Law, copies of personnel Records;

 

(vi)          except as set forth in Section 2.2(g), all rights of Sellers
relating to deposits and prepaid expenses, claims for refunds and rights to offsets
in respect thereof, in each case to the extent related to the Business; and

 

(vii)         all
insurance benefits, including rights and proceeds, arising from or relating to
the Purchased Assets or the Assumed Liabilities prior to the Effective Time,
unless expended in accordance with this Agreement.

 

“Purchase
Premium” shall equal twenty-three million dollars ($23,000,000).

 

“Purchase
Price” shall mean (i) the Net Assets plus (ii) the Purchase Premium.

 

“Record”
means information that is inscribed on a tangible medium or that is stored in
an electronic or other medium and is retrievable in perceivable form.

 

“Recoveries”
means, with respect to any Vehicle Contract that has been charged-off, all
monies collected by a Person (from whatever source, including proceeds of a
deficiency balance or insurance proceeds recovered after the charge-off) on
such Contract.

 

“Related Person”
means, with respect to (i) a particular individual: (a) each other
member of such individual’s Family; (b) any Person that is directly or
indirectly controlled by any one or more members of such individual’s Family; (c) any
Person in which members of such individual’s Family hold (individually or in
the aggregate) a Material Interest; and (d) any Person with respect to
which one or more members of such individual’s Family serves as a director,
officer, partner, executor or trustee (or in a similar capacity); and (ii) a
specified Person other than an individual: (a) any Affiliate and (b) any
Person with respect to which such specified Person serves as a general partner
or trustee (or in similar capacity).

 

For purposes of this definition: (i) “control”
means the possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise, and shall be
construed as such term is used in the rules promulgated under the
Securities Act of 1933, as amended; (ii) the “Family” of an individual
includes (a) the individual, (b) the individual’s spouse, (c) any
other natural person who is related to the individual or the individual’s
spouse within the second degree and (d) any other natural person who
resides with such individual; and (iii) “Material Interest” means direct
or indirect beneficial ownership (as defined in Rule 13d-3 under the
Securities Exchange Act of 1934, as amended) of voting securities or other
voting interests representing at least ten percent (10%) of the outstanding
voting power of a Person or equity securities or other equity interests
representing at least ten percent (10%) of the outstanding equity securities or
equity interests in a Person.

 

“Related Security”
means, for any Vehicle Contract, all of the Sellers’ right, title and interest
in, to and under (i) the Vehicle related to such Vehicle Contract; (ii) any
Insurance Policies relating to such Vehicle or to the related Obligor, (iii) all
Liens and property subject thereto, if any, purporting to secure payment of
such Vehicle Contract, together with all financing statements describing any
collateral securing such Vehicle Contract, (iv) all guarantees, letters of
credit, insurance and other agreements supporting or securing payment of such
Vehicle Contract, (v) all Ancillary Products related to such Vehicle Contract,
(vi) rights or claims against the applicable Dealer and (vii) all
proceeds of the foregoing.

 

5

 

“Representative”
means, with respect to a particular Person, any director, officer, employee,
agent, consultant, advisor, accountant, financial advisor, legal counsel or
other person acting on behalf of, or with the consent of, that Person.

 

“Space Lease”
shall mean any lease or rental agreement pertaining to the occupancy of any
improved space on any land.

 

“Tangible Personal Property”
shall mean all machinery, equipment, tools, furniture, office equipment,
computer hardware (except for any email or other mainframe computer servers
that are not used exclusively or primarily in the Business), supplies, materials
and other items of tangible personal property of every kind owned or leased by
the Sellers exclusively or primarily for use in the operation of the Business,
together with any express or implied warranty (to the extent such warranty is
transferable) by the manufacturers or sellers or lessors of any item or
component part thereof and all maintenance records and other documents relating
thereto.

 

“Tax” means
any federal, state, local or foreign income, gross receipts, license, payroll,
employment, excise, severance, stamp, occupation, premium, windfall profits,
environmental (including taxes under Code Section 59A), customs duties,
capital stock, franchise, profits, withholding, social security, unemployment,
disability, real property, personal property, sales, use, transfer,
registration, value-added, alternative or add-on minimum, estimated or other
tax, fee, assessment, levy, tariff, charge or duty of any kind whatsoever,
whether computed on a separate or consolidated, unitary or combined basis or in
any other manner, and any interest, penalty, addition or additional amount
thereon imposed, assessed or collected by or under the authority of any
Governmental Entity or payable under any tax-sharing agreement or any other
contract or agreement, whether disputed or not.

 

“Tax
Return” means any return (including any information return),
report, statement, schedule, notice, form, declaration, claim for refund or
other document or information (i) relating to Taxes, or (ii) filed
with or submitted to, or required to be filed with or submitted to, any
Governmental Entity in connection with the determination, assessment,
collection or payment of any Tax or in connection with the administration,
implementation or enforcement of or compliance with any Law relating to any
Tax.

 

“Third Party”
means a Person that is not a party to this Agreement.

 

“Third-Party Claim”
means any claim against either the Buyer or any of the Sellers by a Third Party
whether or not involving a Proceeding.

 

“Threatened”
shall mean, with respect to an action, Proceeding or other matter, that any
demand or statement has been made (in writing or orally, if made to any of the
officers or directors of a Person), or that any other event has occurred or any
other circumstances exist, that would lead a reasonable person to conclude that
such Proceeding or other matter is likely to be asserted, commenced, taken or
otherwise pursued in the future.

 

“Vehicle”
means any new and used motor vehicle, light-duty truck, sports utility vehicle,
van or minivan, together with all accessories thereto, the financing of which
gave rise to a Vehicle Contract.

 

“Vehicle Contract”
shall mean a motor vehicle retail installment sale Contract (including any
written amendments and assumptions thereto) owned or serviced by a Seller
pursuant to a Dealer Agreement pursuant to which the related Obligor has (i) agreed
to pay the amount financed set forth therein for the purchase of the related
Vehicle and the related finance charge thereon and (ii) granted the Dealer
a security interest in the Vehicle to secure the payment of the amount financed
and the finance charge.

 

1.2.          Other Defined Terms.  The following terms shall have the meanings
defined for such terms in the Sections set forth below:

 

	
  Term

  	
   

  	
  Section

  
	
  “Active Employees”

  	
   

  	
  9.1(a)

  
	
  “Adjustment Amount”

  	
   

  	
  2.6

  
	
  “Assignment and Assumption Agreement”

  	
   

  	
  3.2(a)(ii)

  
	
  “Assumed Liabilities”

  	
   

  	
  2.3

  
	
  “Bill of Sale”

  	
   

  	
  3.2(a)(i)

  
	
  “Buyer Indemnified Parties”

  	
   

  	
  10.2

  
	
  “Closing”

  	
   

  	
  3.1

  
	
  “Closing Balance Sheet”

  	
   

  	
  2.7(b)

  
	
  “Closing Net Assets”

  	
   

  	
  2.7(b)

  
	
  “Competing Business”

  	
   

  	
  9.6

  
	
  “Confidential Information”

  	
   

  	
  11.1

  
	
  “Disclosing Party”

  	
   

  	
  11.1

  

 

6

 

	
  “Excluded Assets”

  	
   

  	
  2.2

  
	
  “Excluded
  Liabilities”

  	
   

  	
  2.4

  
	
  “Hired Active Employees”

  	
   

  	
  9.1(b)

  
	
  “Initial Net Assets”

  	
   

  	
  2.7(a)

  
	
  “Initial Balance Sheet”

  	
   

  	
  4.1(f)

  
	
  “Interim Balance Sheet”

  	
   

  	
  6.1(j)

  
	
  “Interim Financial Statements”

  	
   

  	
  6.1(j)

  
	
  “Key Employee”

  	
   

  	
  7.1(h)(ii)

  
	
  “Lease and Novation Agreements”

  	
   

  	
  3.2(a)(iii)

  
	
  “Leased Real Property”

  	
   

  	
  4.1(l)

  
	
  “Net Assets”

  	
   

  	
  2.7(a)

  
	
  “Power of Attorney”

  	
   

  	
  3.4

  
	
  “Receiving Party”

  	
   

  	
  11.1

  
	
  “Seller Indemnified Parties”

  	
   

  	
  10.3

  
	
  “Subscriber Agreement”

  	
   

  	
  3.2(a)(iv)

  
	
  “Termination Fee”

  	
   

  	
  8.2

  
	
  “WARN Act”

  	
   

  	
  4.1(k)

  

 

1.3.          Usage.

 

(a)   Interpretation.  In
this Agreement, unless a clear contrary interpretation appears:

 

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

 

(ii)           reference to any Person
includes such Person’s successors and assigns but, if applicable, only if such
successors and assigns are not prohibited by this Agreement, and reference to a
Person in a particular capacity excludes such Person in any other capacity or
individually;

 

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

 

(iv)          reference to any
agreement, document or instrument means such agreement, document or instrument
as amended or modified and in effect from time to time with the terms thereof;

 

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

 

(vi)          “hereby,”
“hereunder,” “hereof,” and words of similar import shall be deemed references
to this Agreement as a whole and not to any particular Article, Section or
other provision hereof;

 

(vii)         “including”
(and with correlative meaning “include”) means including without limiting the
generality of any description preceding such term;

 

(viii)        “or”
is used in the inclusive sense of “and/or”;

 

(ix)           with
respect to the determination of any period of time, “from” means “from and
including” and “to” means “to but excluding”; and

 

(x)            references
to documents, instruments or agreements shall be deemed to refer as well to all
addenda, exhibits, schedules or amendments thereto.

 

7

 

(b)   Legal Representation. 
The parties negotiated this Agreement with the benefit of legal
representation, and any rule of construction or interpretation otherwise
requiring this Agreement to be construed or interpreted against any party shall
not apply to any construction or interpretation hereof.

 

ARTICLE II.  SALE AND PURCHASE

 

2.1.          Purchased Assets.  Upon the terms and subject to the conditions
set forth in this Agreement, on the Closing Date, but effective as of the
Effective Time, the Sellers shall sell, convey, assign, transfer and deliver to
Buyer, and Buyer shall purchase and acquire from Sellers, free and clear of any
Adverse Claims, all of the Sellers’ rights, title and interest in and to all of
the Purchased Assets without recourse, except as otherwise provided herein.

 

2.2.          Excluded Assets.  Notwithstanding anything to the contrary
contained in Section 2.1 or elsewhere in
this Agreement, the following assets of the Sellers exclusively used in or
relating to the Business (collectively, the “Excluded Assets”) are not
part of the sale and purchase contemplated hereunder, are excluded from the
Purchased Assets and shall remain the property of the Sellers after the
Closing:

 

(a)   all cash, cash equivalents and short-term investments,
including any loan loss allowance related to the Accounts Receivables;

 

(b)   all minute books, stock Records and corporate seals;

 

(c)   all insurance policies of the Sellers and rights thereunder
(except to the extent specified in the definition of Purchased Assets);

 

(d)   all of the Contracts set forth in Schedule 2.2(d);

 

(e)   all Intellectual Property Rights;

 

(f)    all
personnel Records and other Records that the Sellers are required by Law to
retain in their possession; provided, however, subject to
obtaining the Consent of any Employee or other Person, that, to the extent
necessary to the operation of the Business and not in violation of any Law, the
Sellers shall provide copies of such Records to Buyer (at Buyer’s expense);

 

(g)   all claims for refund of Taxes and other governmental
charges of whatever nature;

 

(h)   all
rights to or in any judgment, Orders or awards relating to any Proceeding
commenced by the Sellers against Third Parties prior to the Effective Time;

 

(i)    all Licenses, except to the extent transferred as a
Purchased Asset; and

 

(j)    all rights of the Sellers under this Agreement and any of
the Ancillary Agreements.

 

2.3.          Assumed Liabilities.  On the Closing Date, but effective as of the
Effective Time, Buyer shall assume and agree to discharge only the following
Liabilities of the Sellers (collectively, the “Assumed Liabilities”):

 

(a)   any trade account payable incurred by a Seller in the
Ordinary Course of Business between the date of the Initial Balance Sheet and
the Closing Date that remains unpaid as of the Effective Time;

 

(b)   any
Liability to the Sellers’ customers incurred by the Sellers in the Ordinary
Course of Business outstanding as of the Effective Time (other than any
Liability arising out of or relating to an act or omission that occurred prior
to the Effective Time);

 

(c)   the aggregate Dealer Reserve balance as set forth on the
Closing Balance Sheet;

 

(d)   any
Liability arising after the Effective Time under the Contracts assigned
pursuant to this Agreement (other than any Liability under such Contracts
arising out of or relating to a Breach that occurred prior to the Effective
Time);

 

8

 

(e)   any Liability arising out of or relating to acts or
omissions occurring after the Effective Time relating to any Vehicle Contract
set forth on the Closing Date Data;

 

(f)    any
Liability of the Sellers (solely as such Liability relates to the Business)
arising after the Effective Time under any Contract included in the Purchased
Assets that is entered into by any of the Sellers after the date hereof in the
Ordinary Course of Business (other than any Liability under such Contracts
arising out of or relating to a Breach that occurred prior to the Effective
Time);

 

(g)   any other Liability of the Sellers described in Schedule 2.3(g);

 

(h)   any
Liability arising with respect to the Purchased Assets after the Effective Time
(other than any Liability related to the Purchased Assets arising out of or
relating to an act or omission that occurred prior to the Effective Time);

 

(i)    any Liability arising as a result of the execution and
performance of the transactions contemplated under the Subscriber Agreement;
and

 

(j)    with
respect to any Liability (regardless of whether it is assumed or excluded
pursuant to this Section 2.3
or 2.4, respectively) arising out
of any action or omission by the Sellers prior to the Effective Time, if,
ninety (90) days after the Closing Date, such act or omission is continued by
the Buyer, the proportion of such Liability relating to such acts or omission
after the Effective Time.

 

2.4.          Excluded Liabilities.  Notwithstanding Section 2.3 or any other provision of this Agreement to
the contrary, all Liabilities of the Sellers (other than the Assumed
Liabilities) shall remain the Liabilities of the Sellers and shall not be
assumed by Buyer pursuant hereto (collectively, the “Excluded Liabilities”).  Without limiting the generality of the
foregoing, Excluded Liabilities shall include the following Liabilities:

 

(a)           any Liability for Taxes arising as a result of the Sellers’
operation of the Business or their ownership of the Purchased Assets prior to
the Effective Time, including any deferred Taxes of any nature;

 

(b)           any Liability under any Contract not assumed by Buyer under Section 2.3;

 

(c)           subject
to Article X, any Liability
under any Contract assumed by Buyer that arises out of or relates to any Breach
that occurred prior to the Effective Time;

 

(d)           any
Liability under any Employee Plans or any Liability relating to payroll, bonus,
incentive (including sales commissions), vacation, sick leave, workers’
compensation, unemployment benefits, pension benefits, employee stock option or
profit-sharing plans, health care plans or benefits or any other employee plans
or benefits of any kind applicable to the Employees (or former Employees or both);

 

(e)           any Liability under any employment, severance, retention or
termination agreement with any Employee (or former Employee or both) of the
Sellers or any of their Affiliates;

 

(f)            any Liability arising out of or relating to any Employee
grievance arising out of or relating to events that occurred prior to the
Effective Time whether or not the affected Employees are hired by Buyer;

 

(g)           any
Liability to indemnify, reimburse or advance amounts to any officer, director,
employee or agent of the Sellers arising out of or relating to events occurring
prior to the Effective Time;

 

(h)           any Liability arising out of any Proceeding pending as of
the Effective Time;

 

(i)            any
Liability arising out of any Proceeding commenced after the Effective Time and
arising out of or relating to any occurrence or event happening prior to the
Effective Time;

 

(j)            subject
to Section 2.3(j), any
Liability arising out of or resulting from the Sellers’ compliance or
non-compliance with any applicable Law or Order of any Governmental Entity,
including non-compliance with any applicable environmental or health Law;

 

9

 

(k)           any Liability of the Sellers arising out of or resulting
from the consummation of the transactions contemplated by this Agreement or any
of the Ancillary Agreements;

 

(l)            any Liability of the Sellers based upon the Sellers’ actions
or omissions occurring after the Effective Time; and

 

(m)          any Liability of the Sellers not related to the Purchased
Assets or otherwise unrelated to the Business.

 

2.5.          Consideration.  The consideration for the Purchased Assets
shall be (a) the Preliminary Purchase Price plus
or minus the Adjustment Amount and (b) the
assumption of the Assumed Liabilities. 
At the Closing, Buyer shall deliver to the Sellers the Preliminary
Purchase Price by wire transfer in immediately available funds in accordance
with the wire transfer instructions delivered to Buyer as provided in Section 3.2(b). 
The Adjustment Amount shall be paid in accordance with Section 2.6.

 

2.6.          Adjustment Amount and Payment.  The “Adjustment Amount” (which may be
a positive or negative number) will be equal to the amount determined by
subtracting the Closing Purchase Price from the Preliminary Purchase
Price.  If the Adjustment Amount is
positive, the Sellers shall pay the Adjustment Amount by wire transfer an
account specified by Buyer.  If the
Adjustment is negative, the Buyer shall pay the Adjustment Amount by wire
transfer to the account specified in Section 3.2(b)(i). 
Within three (3) Business days after the calculation of the Closing
Net Assets becomes binding and conclusive on the parties pursuant to Section 2.7, the Sellers or Buyer, as
the case may be, shall make the wire transfer payment provided for in this Section 2.6.

 

2.7.          Adjustment Procedure.

 

(a)   “Net Assets” as of a
given date shall mean the amount calculated by subtracting the book value of
Assumed Liabilities as of that date from the book value of the Purchased Assets
as of that date.  The Net Assets of the
Sellers as of the date of the Initial Balance Sheet (the “Initial Net Assets”)
was one hundred five million four hundred eighty-eight thousand eight hundred
thirty dollars ($105,488,830).

 

(b)   The Sellers shall prepare a
balance sheet of the Business as of the Closing Date on the same basis and
applying the same accounting principles, policies and practices that were used
in preparing the Initial Balance Sheet (“Closing Balance Sheet”).  The Sellers shall then determine the Net
Assets as of the Closing Date based upon the Closing Balance Sheet and using
the same methodology as was used to calculate the Initial Net Assets (“Closing
Net Assets”).  The Sellers shall
deliver the Closing Balance Sheet and its determination of the Closing Net
Assets to the Buyer within ten (10) Business Days after the Closing Date.

 

(c)   If within sixty (60) days
following delivery of the Closing Balance Sheet and the Closing Net Assets
calculation the Buyer has not given the Sellers notice of its objection as to
the Closing Net Assets calculation (clearly identifying the basis of such
objection), then the Closing Net Assets calculation shall be binding and
conclusive on the parties and be used in computing the Adjustment Amount and
the Closing Purchase Price; provided that Buyer shall use its Best
Efforts to notify the Sellers of any such objection within five (5) Business
Days after determining the basis of such objection regardless of whether Buyer
has completed its audit of the Closing Balance Sheet as of the date of such
determination.

 

(d)   If Buyer timely gives the
Sellers such notice of objection, and if Buyer and the Sellers fail to resolve
the issues outstanding with respect to the Closing Net Assets calculation
within sixty (60) days of the Sellers’ receipt of Buyer’s notice of objection,
the parties shall submit any unresolved issues to arbitration before a single
member panel administered by and in accordance with the rules of the
American Arbitration Association.  The
parties shall cooperate with and assist the arbitration panel by providing
materials and information relating to the unresolved issues as requested by the
arbitration panel.  The arbitration panel’s
determination shall be final, binding and conclusive on the parties and shall
be used in the Closing Net Assets calculation. 
The Sellers (collectively) and Buyer shall each bear fifty percent (50%)
of the fees and costs of any such arbitration.

 

2.8           Contracts Not Transferable.  Notwithstanding any provision of this
Agreement to the contrary, nothing in this Agreement shall be deemed to
constitute an agreement to transfer or assign any Contract if an attempted
transfer or assignment, without the Consent of any Person, would constitute a
Breach thereof or in any way adversely affect the rights of Buyer or Sellers
thereunder.  Each Seller and Buyer shall
use its Best Efforts to obtain any Consent or waiver required to assign 

 

10

 

to Buyer all rights, benefits and interests
under each Contract being assumed by Buyer (or make available to Buyer the
practical benefit thereof) in a manner to permit the Business to be conducted
in all material respects as currently conducted following the Effective Time.

 

ARTICLE III. 
CLOSING

 

3.1.          Closing.  The purchase and sale provided for in this
Agreement will take place at Buyer’s offices at 245 Perimeter Center Parkway, Suite 600,
Atlanta, GA 30346 commencing at 9:00 a.m. (Eastern Standard Time) on March 1,
2005 or at such other date, time or location as the parties may agree (the “Closing”).  Notwithstanding the foregoing, the failure to
consummate the transaction contemplated by this Agreement on the date and time
and at the place determined pursuant to this Section 3.1
shall not result in the termination of this Agreement and shall not relieve any
party of any obligation under this Agreement. 
In such situation, the Closing shall occur as soon as practicable,
subject to Article VIII of this Agreement.

 

3.2.          Closing Obligations.  In addition to any other documents to be
delivered under other provisions of this Agreement, at the Closing:

 

(a)   The Sellers shall deliver to
Buyer:

 

(i)    an
executed bill of sale for all of the Tangible Personal Property in the form
attached hereto as Exhibit B
(“Bill of Sale”);

 

(ii)   an
executed copy of the assignment and assumption agreement relating to the
Contracts in the form attached hereto as Exhibit C
(“Assignment and Assumption Agreement”);

 

(iii)  an executed copy of each lease
assignment and assumption agreement in the form attached hereto as Exhibit D (“Lease Assignment and Assumption
Agreements”) or such other appropriate document or instrument of transfer;

 

a.     an executed copy of the
subscriber agreement relating to the Business’ system of record, Supreme, upon
terms and conditions mutually acceptable to the parties (the “Subscriber
Agreement”);

 

b.     an executed copy of the
transition services agreement upon terms and conditions mutually acceptable to
the parties (the “Transition Services Agreement”);

 

(vi)  such other deeds, bills of sale,
assignments, certificates of title, documents and other instruments of transfer
and conveyance as may be reasonably requested by Buyer, each in form and
substance satisfactory to Buyer and its legal counsel and executed by the
Sellers;

 

(vii) a certificate executed by an officer
of each of the Sellers as to the accuracy of their representations and
warranties as of the date of this Agreement and as of the Closing in accordance
with Section 7.1(a) and as to their
compliance with and performance of their covenants and obligations to be
performed or complied with at or before the Closing in accordance with Section 7.1(b); and

 

(viii) a certificate of the secretary of each of the Sellers
certifying, as complete and accurate as of the Closing, attached copies of the
Governing Documents of each Seller, certifying and attaching all requisite
resolutions or actions of each Seller’s board of directors approving (A) the
execution and delivery of this Agreement and the Ancillary Agreements to which
they are parties, (B) the consummation of the transactions contemplated
hereby and (C) certifying to the incumbency and signature of the officer
of the Sellers executing this Agreement and the Ancillary Agreements.

 

(b)   Buyer
shall deliver to the Sellers:

 

(i)    the
Preliminary Purchase Price by wire transfer to an account specified by the
Sellers in a writing delivered to Buyer at least three (3) Business Days
prior to the Closing Date; and

 

(ii)   an executed Assignment and Assumption Agreement;

 

11

 

(iii)  an
executed copy of each Lease Assignment and Assumption Agreement;

 

(iv)  an
executed copy of the Subscriber Agreement;

 

(v)   an
executed copy of the Transition Services Agreement;

 

(vi)          a certificate executed
by an officer of Buyer as to the accuracy of its representations and warranties
as of the date of this Agreement and as of the Closing in accordance with Section 7.2(a) and as to compliance with and
performance of its covenants and obligations to be performed or complied with
at or before the Closing in accordance with Section 7.2(b);
and

 

(vii)         a certificate of the
secretary of Buyer certifying, as complete and accurate as of the Closing,
attached copies of the Governing Documents of Buyer and certifying and
attaching all requisite resolutions or actions of Buyer’s board of directors
approving (A) the executing and delivery of this Agreement and the
Ancillary Agreements to which it is a party, (B) the consummation of the
transactions contemplated hereby, and (C) certifying to the incumbency and
signature of the officer of the Buyer executing this Agreement and the
Ancillary Agreements.

 

3.3.          Closing Costs; Transfer Taxes and Fees. 
The Sellers (collectively) and Buyer shall each be responsible for fifty
percent (50%) of any documentary and transfer Taxes imposed because of the
transfer of the Purchased Assets provided for hereunder, regardless of the
Person on whom applicable Law imposes such Taxes.  Each party shall pay any fees and costs or
use Tax they incur as a result of their recording or filing the applicable
conveyance instruments described in Section 3.2.

 

3.4.          Limited Power of Attorney.  The Sellers hereby appoint Buyer, its agents,
employees, successors and assigns, as their attorney-in-fact, which such
appointment is coupled with an interest, with full power of revocation and
substitution by Buyer in the name and stead of each of the Sellers, but on
behalf of Buyer or its assignees, to do any and all of the following with
respect to the Vehicle Contracts: (a) receive, endorse, and collect all
payments, checks, money orders, drafts, or other instruments or documents made
payable to or owed to a Seller in connection with the Vehicle Contracts; (b) execute
on behalf of a Seller, or enforce, release, modify and transfer the rights,
privileges and interests (including security interests) of such Seller with
respect to the Vehicle Contracts including rights with respect to Ancillary
Products and Insurance Policies, if any, and any claims thereunder, and
certificates of title or other title documents or security documents; (c) enforce
and exercise any rights and remedies of a Seller with respect to the Vehicle
Contracts; and (d) to demand, collect and receive any and all Vehicle
Contracts.  On the Closing Date and from
time to time thereafter, the Sellers shall execute such limited powers of
attorney in the form attached hereto as Exhibit E
(“Power of Attorney”) and additional instruments and take such other
action as Buyer may reasonably request in order to more effectively effectuate
any of the foregoing.

 

3.5.          Obligor
Notices.  The Sellers
consent to permit Buyer to advise each of the Obligors that it has purchased
their applicable Vehicle Contract and that all future payments thereon shall be
made to Buyer.  No later than five (5) Business
Days following the Closing Date, the Sellers shall also have the right to
notify each of the Obligors that it has sold their applicable Vehicle Contract
to Buyer.

 

ARTICLE IV.  REPRESENTATIONS AND WARRANTIES OF THE SELLERS

 

4.1.          Relating to the Sellers.  Except as set forth on the Disclosure
Schedule, the Sellers hereby represent and warrant to Buyer that, solely as it
relates to the Business, as of (i) the date hereof and (ii) the
Closing Date:

 

(a)   Due
Organization and Good Standing. 
Each of the Sellers is a corporation or limited liability company duly
organized, validly existing and in good standing under the laws of its state of
incorporation or organization, as the case may be, with the requisite corporate
power and corporate authority to own or lease and operate its properties and
assets related to the Business, and to carry on the Business as it is now
conducted, and to perform its obligations under the Contracts.  Each Seller is duly qualified to do business
as a foreign corporation or limited liability company, and is in good standing
under the laws of each state or other jurisdiction in which either the
ownership or use of the properties owned or used by it in the Business, or the
nature of the activities conducted by it, requires such qualification, except
where the failure to be so qualified would not have a Material Adverse Effect
on the Business.

 

12

 

(b)   Authority and Capacity. 
Each Seller has the full right, power, authority and capacity to
execute, deliver, and perform its obligations under this Agreement and each of
the Ancillary Agreements to which it is a party, to consummate the transactions
contemplated hereby and thereby, and to perform its respective obligations
hereunder and thereunder.  The execution,
delivery and performance of this Agreement and each of the Ancillary Agreements
by each Seller to which it is a party, and the consummation of the transactions
contemplated hereby and thereby, has been duly authorized by all necessary
corporate action.  Assuming the due
authorization, execution and delivery of this Agreement and each of the
Ancillary Agreements by the other parties hereto and thereto, this Agreement
and each of the Ancillary Agreements to which each Seller is a party, is a valid and binding obligation of each
Seller, enforceable against it in accordance with their respective terms,
subject to the Bankruptcy Exception.

 

(c)   Consent; No
Proceedings.  Except as set
forth on Schedule 4.1(c), none of the Sellers require Governmental Authorization
or Consent from any Person or Governmental Entity in connection with the
execution, delivery, performance, validity or enforceability of this Agreement
and each Ancillary Agreement to which it is a party or the consummation of the
transactions contemplated hereby or thereby.

 

(d)   Licenses.  The Sellers have and maintain all Licenses
necessary for (i) the Business as currently conducted, (ii) the
ownership, use, operation and maintenance of the Facilities used in the
operation of the Business, and (iii) its performance of this Agreement and
the consummation of the transactions contemplated hereby.  Schedule 4.1(d) sets forth a
complete list of all Licenses used in the operation of the Business and the
specific Seller holding such license.

 

(e)   No Violation.  The Sellers’ execution, delivery and
performance of this Agreement and each of the Ancillary Agreements to which
they are a party, and the consummation of the transactions contemplated hereby
and thereby, do not and will not (i) materially contravene or conflict
with any of the Sellers’ Governing Documents, (ii) result in a material
Breach of, or constitute a material default under, any Contract or other
agreement or instrument binding on or affecting the Sellers and the Purchased
Assets, (iii) materially contravene or violate any Law applicable to,
binding on or affecting the Sellers or the Purchased Assets, (iv) cause
Buyer to become subject to, or to become liable for the payment of, any Tax; or
(v) result in the creation of any Adverse Claim on the Purchased Assets.

 

(f)    Financial Statements. 
The Sellers have delivered to Buyer: (i) an unaudited balance sheet
of the Business at May 31, 2004 (the “Initial Balance Sheet”), and
the related unaudited statement of income for the months then ended, and (ii) unaudited
balance sheets of the Business at December 31 in each of the fiscal years
2002 through 2003, and the related unaudited statement of income for each of
the fiscal years then ended.  Except as
set forth on Schedule 4.1(f), these financial statements have been and
will be prepared in accordance with GAAP and fairly present (and the Interim
Financial Statements delivered pursuant to Section 6.1(j)
and the Closing Balance Sheet delivered pursuant to Section 2.7(b) fairly present) the financial condition
and the results of operations of the Business as of the date and for the
periods referred to in such financial statements.  The financial statements referred to in this Section 4.1(f), the Interim Financial
Statements delivered pursuant to Section 6.1(j)
and the Closing Balance Sheet delivered pursuant to Section 2.7(b) reflect and will
reflect the consistent application of the Sellers’ internal accounting
principles throughout the periods involved. 
The financial statements have been and will be prepared from, and are in
accordance with, the accounting Records of the Business.

 

(g)   Litigation.  Except as
set forth in Schedule 4.1(g), solely with respect to the Business, there
are no Proceedings pending, or to Sellers’ Knowledge, Threatened or anticipated
(i) against, related to or affecting the Sellers, the Business or the
Purchased Assets, or (ii) that is seeking to delay, limit or enjoin the
transactions contemplated by this Agreement or the Ancillary Agreements.  To Sellers’ Knowledge, no event has occurred
or circumstances exist that are reasonably likely to give rise to or serve as a
basis for the commencement of any such Proceeding.  The Sellers’ have delivered or made available
to Buyer copies of all pleadings, correspondence and other documents relating
to each Proceeding listed on Schedule 4.1(g).  To Sellers’ Knowledge, none of the
Proceedings listed on Schedule 4.1(g) could have a Material Adverse
Effect on any Seller (as relates to the Business) or the Business.  Solely with respect to the Business, the
Sellers are not in Breach with respect to or subject to any Order, and there
are no unsatisfied judgments against the Sellers, the Business or the Purchased
Assets.

 

(h)   Purchased Assets.  The
Sellers have and will transfer good and marketable title to the Purchased
Assets and upon the consummation of the transactions contemplated hereby, Buyer
will acquire good and marketable title to all of the Purchased Assets, free and
clear from any Adverse Claims.

 

13

 

(i)    Contracts. 
(i)  Schedule 4.1(i) sets forth a true, complete and
correct list of all material Contracts (excluding the Dealer Agreements)
including:

 

A.    any Contract for or relating
to the employment of any Key Employee;

 

B.    any Contract that involves
performance of services or delivery of goods by or to any Seller (solely as
such service or goods relate to or are used in the Business) of an amount in
excess of $50,000; and

 

C.    any
Contract for the lease of personal property used by any Seller in the Business
that obligates such Seller to pay in excess of $50,000 per year.

 

True, complete
and correct copies of the aforementioned Contracts have heretofore been
delivered or otherwise made available by the Sellers to the Buyer.  The Contracts set forth on Schedule 4.1(i) are
in full force and effect, constitute legal, valid and binding obligations of
each of the Sellers or their Affiliates, as the case may be, and are
enforceable in all material respects in accordance with their respective terms,
subject to the Bankruptcy Exception. 
Subject to Section 4.1(c), the
consummation of the transactions contemplated by this Agreement will not cause
any such Contract to be invalid or unenforceable following the Closing.  Each Seller has, in all material respects,
performed all of the obligations required by any such Contract to be performed
by it to date, and there exists no Breach, or any event which upon the giving
of notice or the passage of time, or both, would give rise to a claim of a
material Breach in the performance by any Seller or, to Sellers’ Knowledge, any
other party, of their respective obligations thereunder.  The Sellers have not received any written
notice to the effect that it is in Breach or otherwise not in compliance with
any Contract set forth on Schedule 4.1(i).

 

(ii)   True, complete and correct
copies of the Dealer Agreements related to the top fifty (50) Dealers (as
measured by accounts receivable balance) and copies of each form of Dealer
Agreement currently used in the Business have been provided to or made
available to the Buyer.  Each Dealer
Agreement related to an outstanding Vehicle Contract (and related Accounts
Receivable) is in full force and effect, constitutes the legal, valid and binding
obligation of the Seller and the Dealer, each as set forth therein, and is
enforceable in all material respects in accordance with its terms, subject to
the Bankruptcy Exception.  Subject to Section 4.1(c), the consummation of
the transactions contemplated by this Agreement will not cause any such Dealer
Agreement to be invalid or unenforceable following the Closing.  Each Seller has, in all material respects,
performed all of the obligations required by any such Dealer Agreement to be
performed by it to date, and there exists no Breach, or any event, which upon
the giving of notice or the passage of time, or both, would give rise to a
claim of a material Breach in such Seller’s performance or, to Sellers’
Knowledge, any other party, of their respective obligations thereunder.  The Sellers have not received any written
notice or communication to the effect that it is in Breach or otherwise not in
compliance with the terms of any such Dealer Agreement.

 

(j)    Liabilities.  Other than
Excluded Liabilities, the Sellers (solely with respect to the Business) have no
material Liabilities due or to become due, except (i) Liabilities arising
in the Ordinary Course of Business under the Contracts described in Schedule 4.1(i) and
the Closing Date Data; and (ii) Liabilities incurred in the Ordinary
Course of Business and in accordance with this Agreement (none of which relates
to any material Breach under any Contract, breach of warranty, tort,
infringement or violation of any Law or Order or arose out of any Proceeding)
and none of which, individually or in the aggregate, has or would have a
Material Adverse Effect on the Business or the Purchased Assets.

 

(k)   Employees.

 

(i)            Except as set forth in Schedule 4.1(k):

 

A.    none of the Employees are represented by any
labor union;

 

B.    the Sellers are not subject to any collective
bargaining arrangement with respect to any Employee;

 

14

 

C.    none of the Employee Plans is a “defined benefit
plan” within the meaning of Section 3(35) of ERISA nor do the Sellers
participate in any “multi-employer plan” within the meaning of Section 3(37)
of ERISA;

 

D.    each of the Employee Plans are in compliance in
all material respects with terms of each such Employee Plan and applicable Law;
and

 

E.     no Liabilities exist or are reasonably expected
to exist under any Employee Plan that, individually or in the aggregate, would
have a Material Adverse Effect on the transactions contemplated by this
Agreement.

 

(ii)           the Sellers shall
indemnify and hold Buyer harmless from and against any Damages suffered as a
result of any failure to give any notice to the Employees required by the
Worker Adjustment and Retraining Notification Act (the “WARN Act”),
provided such notice is required as a result of any action by the Sellers on or
prior to the Closing Date.

 

(iii)          A complete list of all
Employees, by name, hire date and position as of the date hereof is set forth
in Schedule 4.1(k).  The Sellers
shall not release any other personnel information without having first obtained
the written consent of the respective Employee.

 

(l)    Leased Real Property.  Schedule 4.1(l)
lists all Space Leases (including the property address, landlord or lessor
name, tenant or lessee name, term, expiration date and rental expense) for all
real property used in connection with and for the operation of the Business to
which a Seller or one of their Affiliates is a party (“Leased Real Property”).  The Sellers have delivered true and complete
copies of the Space Leases related to the Leased Real Property listed in Schedule 4.1(l)
to the Buyer.  The Sellers or their
Affiliates have a valid and existing Space Lease for each Leased Real Property
set forth on Schedule 4.1(l).  All
Space Leases covering any of the Leased Real Property are valid and enforceable
by the Sellers or their Affiliates, as the case may be, in accordance with
their respective terms, are in full force and effect, and have not been
materially modified, supplemented or terminated except as set forth in Schedule 4.1(l)
and there is not a material Breach by the Sellers or their Affiliates, as the
case may be, under any such Space Lease, or to Sellers’ Knowledge, by any
landlord or lessor under any such Space Lease. 
The Leased Real Property represents all of the real property used by the
Sellers in their operation of the Business.

 

(m)  Tax Returns; Taxes.  Solely with respect to the Business, the
Sellers or their Affiliates have filed or caused to be filed on a timely basis
all material Tax Returns and all material reports with respect to Taxes that
are or were required to be filed pursuant to applicable Law.  All Tax Returns and reports filed by the
Sellers or their Affiliates with respect to the Business are true, correct and
complete in all material respects.  There
are no Adverse Claims on any of the Purchased Assets that arose in connection
with any failure (or alleged failure) to pay any Tax, and the Sellers have no
Knowledge of any basis for assertion of any claims attributable to Taxes that,
if adversely determined, would result in any such Adverse Claim.

 

(n)   Compliance with Law. 
The Sellers, in the conduct of the Business, have not violated any and
are in compliance with all applicable Laws and Orders relating to the Purchased
Assets or the Business, except where the violation or failure to comply,
individually or in the aggregate, would not have a Material Adverse Effect on
the Purchased Assets or the Business.  To
Sellers’ Knowledge, no event has occurred or circumstances exist that may
reasonably be thought to constitute or result in a violation by any Seller of
any Law or Order relating to the Purchased Assets or the Business in any
material respect.  The Sellers have not
received any written notice to the effect that they are not in compliance with
any such Laws or Orders.

 

(o)   No Material Adverse Change.  Since May 31, 2004,
there has not been any material adverse change in the business, operations,
prospects, assets, results of operation or condition (financial or other) of
the Sellers (solely as it relates to the Business), and, to Sellers’ Knowledge,
no event has occurred or circumstances exists that could result in a Material
Adverse Change or otherwise affect the Sellers’ ability to perform their
obligations under this Agreement.

 

(p)   Accuracy of Information. 
The representations and warranties set forth in this Article IV and the data contained in
the documents referenced on Schedule 4.1(p) are true, accurate and
complete in all material respects, the 

 

15

 

other
representations and warranties made by the Sellers in this Agreement do not
contain any untrue statement of material fact or omit any material fact
necessary in order to make any statement contained herein, in the light of the
circumstances in which they are being made, not misleading; provided, however,
that the representations in this Section 4.1(p)
shall not apply to any information that constitutes projections, predictions,
pro forma or other forward looking statements of any nature.

 

(q)   Brokers’ or Finders’ Fees.  None of the Sellers have incurred any
obligation or Liability for brokerage or finders’ fees or agents’ commissions
or other similar payment in connection with the transactions contemplated
hereby.

 

(r)    Sufficiency of Assets. 
Solely as of the Closing Date, the Purchased Assets and the Assumed
Liabilities, together with the services provided pursuant to the Subscriber
Agreement and Transition Services Agreement, constitute all of the assets
necessary to operate the Business in substantially the same manner operated by
the Sellers prior to the Effective Time.

 

4.2.          Vehicle Contracts.  As of the Closing Date, the Sellers hereby
represent and warrant to Buyer with respect to each Vehicle Contract that:

 

(a)   Good Title. 
Immediately prior to and up until the transfer and assignment herein contemplated,
the Sellers legally own outright and have good and marketable title to all of
the Vehicle Contracts, free and clear of all Adverse Claims.  The Sellers have not sold, assigned or
otherwise transferred any right or interest in or to the Vehicle Contracts and
have not pledged the Vehicle Contracts as collateral for any debt or other
purpose.  Upon payment of the Preliminary
Purchase Price hereunder, Buyer shall acquire good and marketable title to the
Vehicle Contracts.  Except as set forth
on Schedule 4.1(g), there are no judgments against the Sellers or any
pending Proceeding that could become a Lien against the Vehicle Contracts or
could otherwise create or result in an Adverse Claim in, of or on the Vehicle
Contracts in favor of any Person other than Buyer.  The Closing Date Data sets forth all of the
Vehicle Contracts outstanding as of the Closing Date.

 

(b)   Compliance with Law.

 

(i)    Each
Vehicle Contract complies, in all material respects, with all applicable local,
state and federal Laws relating to written disclosures required in motor
vehicle retail installment contracts, including the federal Truth-in-Lending
Act and Regulation Z promulgated thereunder.

 

(ii)   Assuming
the due authorization, execution and delivery by each party to a Vehicle
Contract and the applicable Dealer’s compliance with all Laws applicable to the
sale and origination of motor vehicle retail installment contracts (excluding
the Laws set forth in subsection (a)(i) above from such assumption),
each Vehicle Contract is in full force and effect and, as of the Acquisition
Date, constituted the legal, valid and binding obligation of the applicable
Seller and the related Obligor and is enforceable in all material respects in
accordance with its terms, subject to the Bankruptcy Exception.  The Sellers have not received any written
notice or communication to the effect that any Dealer, prior to the Acquisition
Date, or that any Seller, since the Acquisition Date, is in Breach of or
otherwise not in compliance with the terms of any such Vehicle Contract.

 

(iii)  The
collection and servicing of the Vehicle Contracts have, from the applicable
Acquisition Date, continuously complied with all applicable federal and state
Laws relating to the collection and servicing of motor vehicle retail
installment contracts, including the Fair Credit Reporting Act and the Federal
Trade Commission’s Rule on Credit Practices.

 

(c)   No Amounts Owing.  Except for the Dealer Reserves and the
Liabilities described as “Other Liabilities” set forth on the Closing Balance
Sheet, there are no holdbacks, participations, fees or other monetary
obligations due or owing to and payable by a Seller to a Dealer, insurance
carrier or Third Party service provider, contingent or otherwise, with respect
to any Vehicle Contract.

 

16

 

ARTICLE V.  REPRESENTATIONS AND WARRANTIES OF BUYER

 

5.1           Buyer.  Buyer hereby represents and warrants to the
Sellers that, as of (i) the date hereof and (ii) the Closing Date:

 

(a)   Due
Organization and Good Standing. 
Buyer is a limited liability company duly organized, validly existing
and in good standing under the laws of the state of Georgia, with the requisite
corporate power and corporate authority to carry on its operations as presently
conducted.  Buyer is duly qualified to do
business as a foreign corporation and is in good standing under the laws of
each state or jurisdiction in which either the ownership or servicing of the
Vehicle Contracts requires such qualification, except where the failure to be
so qualified would not have a Material Adverse Effect on the Business.

 

(b)   Authority
and Capacity.  The Buyer has
the full right, power, authority and capacity to execute, deliver, and perform
its obligations under this Agreement and the Ancillary Agreements to which it
is a party and to consummate the transactions contemplated hereby and
thereby.  The execution, delivery and
performance of this Agreement and each of the Ancillary Agreements to which it
is a party by Buyer, and the consummation of the transactions contemplated
hereby and thereby, have been duly authorized by all necessary corporate
action.  Assuming the due authorization,
execution and delivery of this Agreement and the Ancillary Agreements by the
other parties hereto and thereto, this Agreement and each of the Ancillary
Agreements to which Buyer is a party, is a valid and binding obligation of the
Buyer, enforceable against it in accordance with their respective terms, subject to the Bankruptcy Exception.

 

(c)   Consent; No Proceedings. 
Except as set forth on Schedule 5.1(c), Buyer requires neither
Governmental Authorization nor Consent from any Person or Governmental Entity
in connection with the execution, delivery, performance, validity or
enforceability of this Agreement and each Ancillary Agreement to which it is a
party.  There is no pending claim, cause
of action, suit or Proceeding presently pending or, to Buyer’s Knowledge,
Threatened against Buyer that would have a Material Adverse Effect on the
transactions contemplated by, or Buyer’s ability to perform its obligations
under, this Agreement or any of the Ancillary Agreements to which it is a
party.

 

(d)   Brokers’ or Finders’  Fee.  Buyer has not incurred any obligation or
Liability for brokers’ or finders’ fees or agents’ commissions or other similar
payment in connection with the transactions contemplated by this Agreement.

 

ARTICLE VI.  COVENANTS

 

6.1           Covenants of the Sellers.  Between the date of this Agreement and the
Closing Date, the Sellers hereby covenant and agree to the following:

 

(a)   Compliance with Law.  The Sellers
shall at all times comply in all material respects with all federal, state and
local Laws and all Orders applicable to them, the Purchased Assets or
obligations under this Agreement.

 

(b)   Preservation of Existence.  The
Sellers shall use their Best Efforts to preserve and maintain their existence,
rights, franchises and privileges in the jurisdiction of their organization,
and qualify and remain qualified in good standing as a foreign organization in
each jurisdiction where the failure to preserve and maintain such existence,
rights, franchises, privileges and qualification could have a Material Adverse
Effect on the enforceability of the Purchased Assets, the Business or the
ability of the Sellers to perform their obligations under this Agreement.  The Sellers shall provide Buyer with notice
immediately upon any change in their state of organization or any change in
their principal places of business.

 

(c)   Access.  The Sellers
shall permit Buyer and its Representatives to have reasonable access during
regular business hours, with at least three (3) Business Days prior
advance notice, to the Leased Real Property, Books and Records, Contracts and
other Purchased Assets and the Sellers shall, upon Buyer’s reasonable request,
provide to Buyer and its Representatives, to the extent it exists or is
obtainable, operating data regarding the Business consistent with the operating
data it provided to Buyer prior to the date hereof.

 

17

 

(d)   No Adverse Claim.  Except as provided herein, the Sellers shall
not sell, assign (by operation of law or otherwise) or otherwise dispose of, or
create any Adverse Claim upon or with respect to, any Contracts or Purchased
Assets sold to Buyer hereunder or any Collections related to such Contracts.

 

(e)   Post-Closing Payments.  All Collections received by the Sellers after
the Closing Date with respect to any Contract shall be promptly turned over to
Buyer no later than five (5) Business Days from receipt.  After the Closing Date, Buyer shall not
accept any payments on behalf of the Sellers or their Affiliates.  In the event that Buyer collects any
payments, it shall forward them to the Sellers within five (5) Business
Days after receipt.

 

(f)    No
Negotiation.  Until such time
as this Agreement shall be terminated pursuant to Section 8.1,
the Sellers shall not, directly or indirectly, solicit or initiate any
inquiries or proposals from, negotiate with or provide any non-public
information to any Person (other than Buyer) relating to the Business or the
Purchased Assets.

 

(g)   Operations.  The Sellers shall:

 

(i)    continue
to conduct the Business in the Ordinary Course of Business;

 

(ii)   continue
to use their Best Efforts to preserve intact the Business’ current
organization, keep available the services of the Business’ officers, Employees
and agents and maintain its relations and good will with the Business’ Dealers,
suppliers, customers, landlords, creditors, Employees, agents and others having
a relationship with the Business; provided, that, except as set forth in
Section 6.1(g)(iii) and
(iv), nothing in this Section 6.1(g) shall prohibit
the Sellers from hiring, terminating or otherwise making any Employee-related
decisions in the Ordinary Course of Business;

 

(iii)  not terminate any Key Employee unless for cause (other than
for performance);

 

(iv)  not
materially increase the salaries of the Employees, unless such increase was
contemplated prior to the date hereof;

 

(v)   continue
to use their Best Efforts to maintain the Purchased Assets in a state of repair
and condition that complies with all applicable Laws and is consistent with the
requirements and normal conduct of the Business;

 

(vi)  continue
to comply with all applicable Laws, Orders and contractual obligations
applicable to the operations of the Business;

 

(vii) cooperate with Buyer and assist
Buyer in identifying the Licenses required by Buyer to operate the Business
from and after the Closing Date and either transfer the Business’ existing
Licenses to Buyer, where permissible, or provide reasonable assistance in Buyer’s
efforts to obtain new Licenses; and

 

(viii)  continue
to maintain all Books and Records in the Ordinary Course of Business.

 

(h)   Required
Approvals.  As promptly as practicable
after the date of this Agreement, the Sellers shall make all filings required
by Law to be made by them in order to consummate the transactions contemplated
by this Agreement.  The Sellers shall
cooperate with Buyer and its Representatives with respect to all filings Buyer
elects to make or, pursuant to applicable Law, shall be required to make in
connection with the transactions contemplated by this Agreement.

 

(i)    Payment of
Liabilities.  The Sellers
shall continue to pay or otherwise satisfy in the Ordinary Course of Business
all of its Liabilities and obligations. 
Buyer and the Sellers hereby waive compliance with the bulk-transfer
provisions of the Uniform Commercial Code (or other similar law) in connection
with the transactions contemplated in this Agreement.

 

(j)    Interim Financial Statements. 
Until the Closing Date, the Sellers shall deliver to Buyer within ten (10) Business
Days after the end of each month a copy of the unaudited balance sheet (the “Interim
Balance Sheet”) and related unaudited income statement of the Business
(together with the Interim Balance Sheet, the “Interim Financial Statements”),
for such month prepared in accordance with GAAP (except as set forth on Schedule 4.1(f))
and which sets forth a calculation of the Net Assets as of the date of such
Interim Financial Statements.

 

18

 

(k)   Best Efforts.  The Sellers shall use their Best Efforts to
cause the conditions in Section 7.1
to be satisfied.

 

6.2.          Covenants of Buyer.  Between the date of this Agreement and the
Closing Date, Buyer hereby covenants and agrees to the following:

 

(a)   Required Approvals. 
As promptly as practicable after the date of this Agreement, Buyer shall
make all filings required by Law to be made by it in order to consummate the
transactions contemplated by this Agreement. 
The Buyer shall cooperate with the Sellers and their Representatives
with respect to all filings the Sellers elect to make or, pursuant to applicable
Law, shall be required to make in connection with the transactions contemplated
by this Agreement.

 

(b)   Best Efforts.  Buyer
shall use its Best Efforts to cause the conditions in Section 7.2
to be satisfied.

 

ARTICLE VII.  CONDITIONS TO PURCHASE

 

7.1.          Buyer’s Condition Precedent.  Buyer’s obligation to consummate the
transactions contemplated hereby is subject to the satisfaction, at or prior to
the Closing, of each of the following conditions (any of which may be waived in
writing by Buyer, in whole or in part):

 

(a)   Accuracy of
Representations.

 

(i)    All of the Sellers’
representations and warranties in this Agreement (considered collectively), and
each of these representations and warranties (considered individually), shall
have been accurate in all material respects as of the date of this Agreement,
and shall be accurate in all material respects as of the Effective Time as if
then made.

 

(ii)   Each of the representations and
warranties in Sections 4.1(b) and 4.1(e), and each of the representations and warranties in
this Agreement that contains an express materiality qualification, shall have
been accurate in all respects as of the date of this Agreement, and shall be
accurate in all respects as of the Effective Time as if then made, without
giving effect to any supplement to the Disclosure Schedule.

 

(b)   Sellers’
Performance.  All of the
covenants and obligations that the Sellers are required to perform or to comply
with pursuant to this Agreement at or prior to the Closing (considered
collectively), and each of these covenants and obligations (considered
individually), shall have been duly performed and complied with in all material
respects.

 

(c)   Additional
Documents.  The Sellers shall
have caused the documents and instruments required by Section 3.2(a) and
the following documents to be delivered (or tendered subject only to Closing)
to Buyer:

 

(i)    a
good standing certificate or similar certificate for each of the Sellers issued
by their state of incorporation or organization, as the case may be, as of a
recent date acceptable to Buyer;

 

(ii)   the
Governing Documents and all amendments thereto of each Seller, duly certified
as of a recent date by each Seller’s secretary; and

 

(iii)  such
other documents as Buyer may reasonably request for the purpose of:

 

A.    evidencing the accuracy of any
of the Sellers’ representations and warranties;

 

B.    evidencing the performance by
the Sellers of, or the compliance by Sellers with, any covenant or obligation
required to be performed or complied with by them;

 

C.    evidencing the satisfaction of
any condition referred to in this Section 7.1;
or

 

19

 

D.    otherwise facilitating the
consummation or performance of any of the transactions contemplated in this
Agreement and the Ancillary Agreements.

 

(d)   No
Proceedings.  Since the date
of this Agreement, there shall not have been commenced or Threatened against
Buyer, or against any Related Person of Buyer, any material Proceeding (i) involving
any challenge to, or seeking Damages or other relief in connection with, any of
the transactions contemplated hereby or (ii) that may have the effect of
preventing, delaying, making illegal, imposing limitations or conditions on or
otherwise interfering with any of the transactions contemplated hereby.

 

(e)   No Conflict.  Neither the consummation nor the performance
of any of the transactions contemplated hereby will, directly or indirectly
(with or without notice or lapse of time), contravene or conflict with or
result in a material violation of or cause Buyer or any Related Person of Buyer
to suffer any adverse consequence under (a) any applicable Law or Order or
(b) any Law or Order that has been published, introduced or otherwise
proposed by or before any Governmental Entity.

 

(f)    Governmental
Authorizations.  Buyer shall
have received all of the Governmental Authorizations (including any Licenses)
necessary or desirable to allow Buyer to operate the Business from and after
the Effective Time.

 

(g)   Consents.  All Consents
from any Person pursuant to the terms of any Contract or otherwise necessary to
consummate the transactions contemplated by this Agreement shall have been duly
obtained.

 

(h)   Employees.

 

(i)    Except
for the excluded or transferred Employees set forth on Schedule 9.1(a),
substantially all of the Employees shall be available for hiring by Buyer on
and as of the Closing Date.  Subject to Section 9.1, substantially all of the
Employees who are offered employment by Buyer shall have accepted such offer in
accordance with the terms of this Agreement.

 

(ii)   Rick
Potter and four of the remaining five Employees set forth on Schedule 7.1(h)(ii) (each a “Key Employee”) shall have
accepted employment with the Buyer on terms satisfactory to the Buyer and such
Key Employees.

 

(i)    Financing.  Buyer
shall have negotiated and executed an agreement with a Third-Party finance
company or bank in order to pay seventy-five percent (75%) of the
Preliminary Purchase Price to Sellers at the Closing in accordance with Section 2.5 hereof.

 

7.2.          Sellers’ Condition Precedent.  The Sellers’ obligation to consummate the
transactions contemplated hereby is subject to the satisfaction, at or prior to
the Closing, of each of the following conditions (any of which may be waived in
writing by the Sellers in whole or in part):

 

(a)   Accuracy of
Representations.  All of Buyer’s
representations and warranties in this Agreement (considered collectively), and
each of these representations and warranties (considered individually), shall
have been accurate in all material respects as of the date of this Agreement and
shall be accurate in all material respects as of the Effective Time as if then
made.

 

(b)   Buyer’s
Performance.  All of the
covenants and obligations that Buyer is required to perform or to comply with
pursuant to this Agreement at or prior to the Closing (considered
collectively), and each of these covenants and obligations (considered
individually), shall have been duly performed and complied with in all material
respects.

 

(c)   Additional
Documents.  Buyer shall have
caused the documents and instruments required by Section 3.2(b) and
the following documents to be delivered (or tendered subject only to Closing)
to the Sellers:

 

(i)    a good standing certificate or similar certificate for Buyer
issued by the state of organization as of a recent date acceptable to the
Sellers;

 

20

 

(ii)   the Governing Documents and all amendments thereto of Buyer,
duly certified as of a recent date by Buyer’s Secretary; and

 

(iii)  such other documents as the Sellers may request for the
purpose of:

 

A.    evidencing
the accuracy of any representation or warranty of Buyer;

 

B.    evidencing
the performance by Buyer of, or the compliance by Buyer with, any covenant or
obligation required to be performed or complied with by Buyer;

 

C.    evidencing
the satisfaction of any condition referred to in this Section 7.2;
or

 

D.    otherwise
facilitating the consummation or performance of any of the transactions
contemplated by this Agreement and the Ancillary Agreements.

 

(d)   No
Injunction.  There shall not
be in effect any Law or any injunction or other Order that (i) prohibits
the consummation of the transactions contemplated hereby and (ii) has been
adopted or issued, or has otherwise become effective, since the date of this
Agreement.

 

(e)   No Proceedings.  Since the date of this Agreement, there shall
not have been or commenced or Threatened against the Sellers, or against any
Related Person of the Sellers, any material Proceeding (i) involving any
challenge to, or seeking Damages or other relief in connection with, any of the
transactions contemplated hereby or (ii) that may have the effect of
preventing, delaying, making illegal, imposing limitations or conditions on or
otherwise interfering with any of the transactions contemplated hereby.

 

(f)    Licenses.  Buyer shall
have received all of the Licenses or other Government Authorizations necessary
to facilitate the transactions contemplated hereby.

 

ARTICLE VIII.  TERMINATION

 

8.1.          Termination Events.  By notice given prior to or at the Closing,
subject to Section 8.3, this Agreement may be
terminated as follows:

 

(a)   by
Buyer if a material Breach of any provision of this Agreement has been
committed by the Sellers and such Breach has not been waived by Buyer;

 

(b)   by the
Sellers if a material Breach of any provision of this Agreement has been
committed by Buyer and such Breach has not been waived by the Sellers;

 

(c)   by Buyer if any condition in Section 7.1 has not been satisfied as of the date
specified for Closing in the first sentence of Section 3.1
or if satisfaction of such a condition by such date is, or subsequent to such
date becomes, impossible (other than through the failure of Buyer to comply
with its obligations under this Agreement), and Buyer has not waived such
condition on or before such date or such subsequent date;

 

(d)   by the Sellers if any condition
in Section 7.2 has not been satisfied
as of the date specified for Closing in the first sentence of Section 3.1 or if satisfaction of such a condition by
such date is, or subsequent to such date becomes, impossible (other than
through the failure of the Sellers to comply with their obligations under this
Agreement), and the Sellers have not waived such condition on or before such
date or such subsequent date;

 

(e)   by
mutual consent of Buyer and the Sellers;

 

(f)    by Buyer if the Closing has
not occurred on or before April 29, 2005, or such later date as the
parties may agree upon, unless the Buyer is in material Breach of this
Agreement; or

 

(g)   by the
Sellers if the Closing has not occurred on or before April 29, 2005, or
such later date as the parties may agree upon, unless the Sellers are in
material Breach of this Agreement.

 

21

 

8.2.          Termination Fee.  If this Agreement is not consummated as a result
of Buyer’s failure to satisfy the financing condition set forth in Section 7.1(i) and is
subsequently terminated by Buyer pursuant to Section 8.1(c),
Buyer shall immediately pay the Sellers a termination fee equal to two million
dollars ($2,000,000) (the “Termination Fee”).  Notwithstanding anything to the contrary
contained herein, if Buyer becomes obligated to pay the Termination Fee
pursuant to this Section 8.2,
such Termination Fee shall constitute full settlement of any and all of the
Damages of the Sellers under this Agreement in respect of a termination
pursuant to Section 8.1(c) as
a result of the failure to satisfy or waive the condition set forth in Section 7.1(i) and shall be the
sole measure of Damages with respect to such termination.

 

8.3.          Effect of Termination.  Each party’s right of termination under Section 8.1 is in addition to any other rights it may
have under this Agreement or otherwise, and the exercise of such right of
termination will not be an election of remedies.  If this Agreement is terminated pursuant to Section 8.1, all obligations of the parties under this
Agreement will terminate, except that the obligations of the parties in Sections 8.2 and 8.3 and Articles X and XI will survive, provided, however, that, if
this Agreement is terminated because of a Breach of this Agreement by the
non-terminating party or because one or more of the conditions to the
terminating party’s obligations under this Agreement is not satisfied as a
result of the party’s failure to comply with its obligations under this
Agreement, the terminating party’s right to pursue all legal remedies shall
survive such termination unimpaired.

 

ARTICLE IX.  ADDITIONAL COVENANTS

 

9.1.          Employees and Employee Benefits.

 

(a)   Information on Active Employees.  For purpose of this Agreement, the term “Active
Employees” shall mean all Employees employed immediately prior to the
Closing Date, but excluding Employees on temporary leave of absence, including
family or medical leave, military leave, personal, short-term disability,
workers’ compensation, pregnancy leave or any other Employees the Sellers
designate as excluded or inactive Employees. 
Notwithstanding the foregoing, any Employees excluded in the preceding
sentence shall be deemed Active Employees if and when they return to work
within ninety (90) days after the Closing Date. 
Schedule 9.1(a) sets forth a complete list of all Active
Employees and a list of all excluded or inactive Employees.

 

(b)   Employment of Active Employees by Buyer.

 

(i)            Prior to the Closing
Date, to be effective as of the Effective Time, Buyer shall offer employment to
all of the Active Employees upon the terms and conditions described below.  Buyer shall provide the Sellers with a list
of Active Employees to whom Buyer has made an offer of employment that has been
accepted and which shall be effective at the Effective Time (the “Hired
Active Employees”). Subject to the provisions of this Section 9.1, Hired Active Employees
shall be subject to the employment terms, conditions and rules applicable
to other similarly-situated employees of Buyer. 
Nothing contained in this Agreement shall be construed as an employment
contract between the Buyer and any Active Employee or Hired Active Employee.

 

(ii)                           After the date hereof until the Closing
Date, Buyer may speak with Employees (including Key Employees and other members
of the management team of the Business) during normal working hours. 
Buyer shall be solely responsible for any activity in connection with such
discussions. Buyer shall indemnify and hold the Sellers and their Affiliates
harmless from and against any Damages, resulting or arising from Buyer’s acts
or omissions in connection with such discussions.

 

(iii)                          Seller agrees that Buyer shall have the
right to conduct orientation sessions with Hired Active Employees as soon as
reasonably practicable and in any event within thirty (30) days after execution
of this Agreement; provided that Sellers shall have the right to have
their Representatives present at any such sessions. The orientation sessions
may include personal appearances by Buyer’s senior management and will cover
subjects such as Buyer’s employee benefit plans, including any business
retention, sales incentive or other program specifically designed for Active
Employees (or any Employee who subsequently becomes an Active Employee who
become Hired Active Employees after the Effective Time.  Buyer shall indemnify and hold the Sellers
and their Affiliates harmless from and against any Damages, resulting or
arising from Buyer’s acts or omissions in connection with such orientation
sessions.

 

22

 

(iv)                          For a period of one (1) year
following the Closing Date, the Sellers and their Affiliates will not directly
solicit any Hired Active Employee to again become an employee of the Sellers; provided, however,
that the Sellers shall not be prohibited from hiring a Hired Active Employee
terminated by Buyer or if such Hired Active Employee contacts the Sellers or
one of their Affiliates to seek hiring or retention, whether in response to
general advertising or otherwise.

 

(c)   Salaries and Benefits.  Each Hired Active Employee shall be provided
employment with the Buyer subject to the following initial terms and
conditions:

 

(i)    Base salary or hourly wage shall be at least
equivalent to the base salary or hourly wage paid by the Sellers to such Hired
Active Employee as of the close of business on the Business Day prior to the
Closing Date.

 

(ii)   Except as otherwise specifically provided
herein, Hired Active Employees shall be provided employee benefits that are no
less favorable in the aggregate than those provided to similarly situated
employees of Buyer. Buyer shall provide each Hired Active Employee with credit
for such Hired Active Employee’s period of service with the Sellers towards the
calculation of eligibility and vesting for such purposes as vacation,
severance, medical, dental or other welfare plans and other benefits, and
participation and vesting in Buyer’s qualified profit-sharing and 401(k) plans,
as such plans may exist.

 

(iii)  Each Hired Active Employee who otherwise
satisfies the eligibility criteria of Buyer’s employee benefit plans shall be
eligible to participate in the medical, dental, or other welfare plans of
Buyer, as such plans may exist, as of the Effective Time and any pre-existing
conditions provisions of such plans shall be administered in accordance with
the Health Insurance Portability and Accountability Act of 1996 with respect to
any such Hired Active Employees.

 

(iv)  With respect to any Employee on temporary leave
of absence who is not an Active Employee as of the Effective Time, upon
conclusion of his or her temporary leave of absence within ninety (90) days of
the Closing Date, such Employee shall be deemed to be an Active Employee and
shall be offered employment by Buyer, subject to the terms and conditions of
this Section 9.1 and the
Buyer’s plans and policies and applicable Law, at a base salary or hourly wage
at least equivalent to the base salary or hourly wage paid by the Seller to
such Employee when he or she went on leave and shall otherwise be treated as a
Hired Active Employee.

 

(v)   Buyer shall be responsible for all severance
obligations arising out of the termination of any Hired Active Employee’s
employment after the Closing Date in accordance with Buyer’s severance plan,
policies and procedures with credit for the period of years of credited service
towards the calculation of benefits determined in accordance with Section 9.1(c)(ii) of this
Agreement; provided, however, if,
before the one (1) year anniversary of the Closing Date, any Hired Active
Employee experiences a reduction in base salary, a work site relocation of more
than thirty (30) miles or a termination of employment by Buyer for any reason
other than cause (as defined by Buyer’s personnel policies and procedures),
such Hired Active Employee shall be entitled to severance pay in an amount at
least equivalent to the severance pay the Hired Active Employee would have
received under the Sellers’ (or their Affiliates’) Employee Plans had such
employee been eligible for payments under such plans.

 

(vi)  Except
as provided herein, the Sellers shall pay, discharge, and be responsible for (A) all
salary and wages, bonus and incentive plans arising out of employment of the
Hired Active Employees through the Closing Date (and any payroll Tax and
reporting obligations thereon), and (B) any employee benefits (including,
but not limited to, accrued vacation) arising under the Sellers’ Employee Plans
and employee programs prior to the Closing Date (but not including medical
benefits, if any, to Hired Active Employees who retire after the Closing Date),
including benefits with respect to claims incurred prior to the Closing Date
but reported after the Closing Date. From and after the Closing Date, Buyer
shall pay, discharge, and be responsible for all salary, wages, and benefits
arising out of or relating to the employment of the Hired Active Employees by
Buyer from and after the Closing Date (and any payroll Tax and reporting obligations
thereon), including all claims for welfare benefits plans incurred after the
Closing Date. Claims are 

 

23

 

incurred as of
the date services are provided or disability payments are accrued, notwithstanding
when the injury or illness may have occurred.

 

(d)   Sellers’ Retirement Plans.  All Hired Active Employees who are vested
participants in the Sellers’ retirement plans shall retain their accrued
benefits under such retirement plans as of the Closing Date, and the Sellers
(or their retirement plans) shall retain sole Liability for the payment of such
benefits as and when such Hired Active Employees become eligible therefore
under such plans.

 

(e)   No Transfer of Assets.  The Sellers shall not make any transfer of
pension or other employee benefit plan assets to Buyer.

 

(f)    General Employee Provisions.

 

(i)    The
Sellers and Buyer shall give any notices required by applicable Law and take
whatever other actions with respect to the plans, programs and policies
described in this Section 9.1
as may be necessary to carry out the arrangements described in this Section 9.1.

 

(ii)   The
Sellers and Buyer shall give notice to all Hired Active Employees that, except
as otherwise provided for herein, all benefits and/or accruals previously
provided under the Employee Plans shall terminate on the Closing Date and all
future benefits and/or accruals thereafter shall be provided under Buyer’s
employee plans.

 

(iii)  The
Sellers and Buyer shall provide each other with such plan documents and summary
plan descriptions, employee data or other information as may be reasonably
required to carry out the arrangements described in this Section 9.1.

 

(iv)  If
any of the arrangements described in this Section 9.1
are determined by the IRS or other Governmental Entity to be prohibited by Law,
the Sellers and Buyer shall modify such arrangements to as closely as possible
reflect their expressed intent and retain the allocation of economic benefits
and burdens to the parties contemplated herein in a manner that is not
prohibited by Law.

 

(v)   Buyers
shall not have any responsibility, Liability or obligation, whether to Active
Employees, former Employees, their beneficiaries or to any other Person, with
respect to any Employee Plans, practices, programs or arrangements (including
the establishment, operation or termination thereof and the notification and
provision of COBRA coverage extension) maintained by the Sellers.

 

9.2.          Dealer
Reserves.  After the
Effective Time, Buyer or its Affiliate shall manage and administer the Dealer
Reserves in a manner consistent with the terms and conditions of the Dealer
Agreements and in the Ordinary Course of Business as conducted by the Sellers
prior to the Effective Time.  Buyer shall
hold the Sellers and their Affiliates harmless from and against any Damages
resulting or arising from Buyer’s acts or omissions in connection with the
management and administration of the Dealer Reserves after the Effective
Time.  The Sellers, jointly and
severally, shall hold the Buyer and its Affiliates harmless from and against
any Damages resulting or arising from the Sellers’ acts or omissions in
connection with the management and administration of the Dealer Reserves prior
to the Effective Time.

 

9.3.          Assistance in Proceedings.  (a)                Buyer shall
cooperate with the Sellers and their counsel (including their experts or other
agents) in the contest or defense of, and make available any Hired Active
Employee (to the extent such Hired Active Employee is still employed by the
Buyer at the time of any request for assistance) to be interviewed, provide any
testimony (including depositions, trial testimony and responding to
interrogatories) and access to the Books and Records, if any, transferred in
connection with the transactions contemplated hereby in connection with, any
Proceeding involving or relating to the Vehicle Contracts, Dealer Reserves or
Purchased Assets arising out of a transaction or event that occurred prior to
the Effective Time.

 

(b)   The
Sellers shall cooperate with Buyer and its counsel (including its experts or
other agents) in the contest or defense of, and make available its
Representatives engaged in the Business prior to the Effective Time (who do not
become Hired Active Employees) to be interviewed, provide any testimony
(including depositions, trial testimony and responding to interrogatories) and
access to Books and Records in connection with, any Proceeding involving or
relating to the Vehicle Contracts, Dealer Reserves or other Purchased Assets
arising out of a transaction that occurred 

 

24

 

prior
to the Effective Time.

 

9.4.          Further
Assurances.  The parties
shall cooperate reasonably with each other and with their respective
Representatives in connection with any steps required to be taken as part of
their respective obligations under this Agreement, and shall (a) furnish
upon request to each other such further information; (b) execute and
deliver to each other such other documents; and (c) do such other acts and
things, all as the other party may reasonably request for the purpose of
carrying out the intent of this Agreement and the transactions contemplated
hereby.  Notwithstanding anything in this
Agreement to the contrary, nothing in this Agreement shall be construed as the
Sellers’ guarantee or assurance to the Buyer that (i) the Business shall
operate and perform in the same manner and produce the same results as set
forth in the financial statements provided hereunder; (ii) the Dealers
shall continue to sell Vehicle Contracts at the same volume, terms or similar
quality as they sold to the Sellers prior to the Effective Time or (iii) that
the Leased Real Property will be transferred on terms similar to or more
favorable than the Sellers’ current Space Leases.

 

9.5.          Retention
of and access to Records. 
After the Closing Date and to the extent not transferred as part of the
Purchased Assets, the Sellers shall retain the Records of the Business for a
period of time consistent with the Sellers’ record retention policies and
practices, but in no event shall the Sellers retain the documents for less than
five (5) years after the Closing Date. 
The Seller shall also provide the Buyer or its Affiliate and their
respective Representatives reasonable access thereto, during normal business
hours and on at least five (5) days notice, to enable them to prepare
financial statements or Tax Return or respond to a Tax audit.  Buyer shall retain any Records of the
Business transferred as part of the Purchased Assets for a period of time
consistent with Buyer’s record retention policies and practices, but in no
event shall Buyer retain the documents for less than five (5) years after
the Closing Date.

 

9.6.          Non-competition.  For a period of two (2) years after the
Closing Date, the Sellers’ Parent (either directly or through its subsidiaries)
shall not, anywhere in the United States (a) engage in the business of
soliciting, originating, purchasing or acquiring motor vehicle retail
installment contracts from any Buy Here/Pay Here Dealers; or (b) directly
or indirectly invest in, own or acquire a controlling interest in, any Person
engaged in an operation substantially similar to the Business (“Competing
Business”); provided, however, that the Sellers’ Parent
(either directly or through its subsidiaries) may purchase or otherwise acquire
(i) up to (but not more than) twenty-five percent (25%) of any class of
equity securities of any Person (but may not otherwise participate in the
activities of such Person) or (ii) all of the assets or otherwise merge
with another Person, so long as the portion of such Person’s operations
dedicated to the Competing Business constitutes no more than twenty-five
percent (25%) of such Person’s total assets or net revenues, whichever is
greater.

 

ARTICLE X.  INDEMNIFICATION; REMEDIES

 

10.1.        Survival of Representations and Warranties.  All representations, warranties,
covenants and obligations in this Agreement, the Disclosure Schedule (and
any supplements thereto), the certificates delivered pursuant to Section 3.2 and any other certificate
or document delivered pursuant to this Agreement shall survive the Closing and
the consummation of the transactions contemplated by this Agreement, subject to
Section 10.5.

 

10.2.        Indemnification by the Sellers.  The Sellers,
jointly and severally, will indemnify and hold harmless Buyer and its
Affiliates and any of their respective Representatives (collectively referred
to herein as the “Buyer Indemnified
Parties”), and will reimburse the Buyer Indemnified Parties for any Damages
arising from or in connection with:

 

(a)                                   any Breach of any representation or warranty made
by the Sellers in (i) this Agreement, (ii) the Disclosure Schedules, (iii) any
Ancillary Agreements, (iv) any transfer instrument or (v) any other
certificate, document, writing or instrument delivered by the Sellers pursuant
to this Agreement;

 

(b)                                   any Breach of any covenant or obligation of the
Sellers in this Agreement, any Ancillary Agreement or in any other certificate,
document, writing or instrument delivered by the Sellers pursuant to this
Agreement;

 

(c)                                   any Liability arising out of the ownership or
operation of the Purchased Assets or the Business prior to the Effective Time
other than the Assumed Liabilities; provided, however, the Sellers’ indemnification
obligation for any Liabilities that arise as a result of any Dealer act or
omission related to a Vehicle Contract or Dealer Agreement that occurred prior
to the applicable Acquisition Date shall be subject to Section 10.4(d);

 

25

 

(d)   any
act or omission by the Sellers, any of their Affiliates or any of their
delegees, agents or assigns (including any of their respective employees) in
connection with the servicing, billing, processing, recovery or collection of
any Vehicle Contract occurring prior to the Closing Date;

 

(e)   subject
to Section 2.3(j), any act or omission
by the Sellers with respect to the management, accounting or administration of
the Dealer Reserves prior to the Closing Date; or

 

(f)    any Excluded Liabilities.

 

Notwithstanding
the foregoing, no Buyer Indemnified Party shall be indemnified or held harmless
for Damages to the extent such Damages resulted, in whole or in part, directly
or indirectly, from any action or omission by any Buyer Indemnified Party.

 

10.3.        Indemnification by Buyer. 
Buyer will indemnify and hold harmless the Sellers and their Affiliates
and any of their respective Representatives (collectively referred to herein as
the “Seller Indemnified Parties”), and will reimburse the Seller
Indemnified Parties for any Damages arising from or in connection with:

 

(a)   any
Breach of any representation or warranty made by Buyer in this Agreement, any
Ancillary Agreement or any in any certificate, document, writing or instrument
delivered by Buyer pursuant to this Agreement;

 

(b)   any Breach of any covenant or obligation of Buyer in this
Agreement, Ancillary Agreement or in any other certificate, document, writing
or instrument delivered by Buyer pursuant to this Agreement;

 

(c)   any Liability arising out of the ownership or operation of
the Purchased Assets or the Business after the Closing Date;

 

(d)   any
act or omission by the Buyer, any of its Affiliates or any of their delegees,
agents or assigns (including any of their respective employees) in connection
with the servicing, billing, processing, recovery, collection of any Vehicle
Contract occurring after the Closing Date, or any Dealer act or omission
relating to any Vehicle Contract acquired after the Effective Time (regardless
of whether such Dealer act or omission also relates to Vehicle Contracts
transferred pursuant to this Agreement);

 

(e)   any act or omission by the Buyer with respect to the
management, accounting or administration of the Dealer Reserves after the
Closing Date; or

 

(f)    any Assumed Liabilities.

 

Notwithstanding the foregoing, no Seller
Indemnified Party shall be indemnified or held harmless for Damages to the
extent such Damages resulted, in whole or in part, directly or indirectly, from
any action or omission by any Seller Indemnified Party.

 

10.4.        Limitations
on Amount.

 

(a)   Buyer’s Deductible.  The
Sellers shall have no Liability (for indemnification or otherwise) with respect
to claims under Section 10.2(a) until
the total of all Damages with respect to such matters exceeds two hundred fifty
thousand dollars ($250,000) and then only for the amount which such Damages
exceed two hundred fifty thousand dollars ($250,000) (exclusive of any amounts
charged to the Dealer Reserve). 
Notwithstanding the foregoing, this Section 10.4(a) shall
not apply to:  (i) claims under Section 10.2(c) through (f) (except as provided in Section 10.4(d)), (ii) claims
arising in respect of Sections 4.1(g),
4.1(m), 4.1(q) or 4.2(a) (except as provided in Section 10.4(d)), (iii) any Breach of the
Sellers’ representations and warranties of which the Sellers’ had Knowledge at
any time prior to the date such representation or warranty is made, or (iv) any
intentional Breach by the Sellers of any covenant or obligation under this
Agreement or the Ancillary Agreements, and the Sellers will be jointly and
severally liable for all Damages with respect to any such Breaches.

 

(b)   Sellers’ Deductible. 
Buyer shall have no Liability (for indemnification or otherwise) with
respect to claims under Section 10.3(a) until
the total of all Damages with respect to such matters exceeds two hundred fifty
thousand dollars ($250,000) and then only for the amount by which such Damages
exceed two hundred fifty thousand dollars ($250,000).  Notwithstanding the foregoing, this Section 10.4(b) shall not apply
to: (i) claims under Section 10.3(c) through
(f), (ii) claims arising in
respect of Section 5.1(d), (iii) any
Breach of any of Buyer’s representations and 

 

26

 

warranties of
which the Buyer’s or its Affiliates had Knowledge at any time prior to the date
on which such representation and warranty is made, or (iv) any intentional
Breach by Buyer of any covenant or obligation under this Agreement or the
Ancillary Agreements, and Buyer will be liable for all Damages with respect to
any such Breaches.

 

(c)   Limitation.  Except as
set forth in subsection (i) and (ii) of this Section 10.4(c) and in Section 10.4(e),
no party’s aggregate Liability under this Article X
and this Agreement shall exceed fifty percent (50%) of the Closing Purchase
Price.  Notwithstanding the limitation
set forth in the immediately preceding sentence, there shall be no limitation
on the aggregate Liability:

 

(i)    of Sellers with respect to (A) claims arising under Section 10.2(c) through (f), (B) claims arising in respect of
Sections 4.1(g), 4.1(m) or 4.1(q),
(C) any Breach of the Sellers’ representations and warranties of
which the Sellers’ had Knowledge at any time prior to the date such
representation or warranty is made, or (D) any intentional Breach by the
Sellers of any covenant or obligation under this Agreement or the Ancillary
Agreements; and

 

(ii)   of Buyer with respect to (A) claims
under Section 10.3(c) through
(f), (B) claims arising in
respect of Section 5.1(d), (C) any
Breach of any of Buyer’s representations and warranties of which the Buyer’s or
its Affiliates had Knowledge at any time prior to the date on which such
representation and warranty is made, or (D) any intentional Breach by
Buyer of any covenant or obligation under this Agreement or the Ancillary
Agreements.

 

(d)   Liability Arising Out of Dealer Acts or Omissions.  Notwithstanding any provisions of this Article X to the contrary, the Sellers shall have no
Liability (for indemnification or otherwise) with respect to claims arising
under Sections 4.2(a), 4.2(b)(i) or (ii) or 10.2(c) to the extent such claims relate to or arise out of any Dealer act,
omission or Breach of any Vehicle Contract or Dealer Agreement until:

 

(i)            Buyer
has exhausted its remedies under the applicable Dealer Agreement, including (A) reassigning
any Vehicle Contract giving rise to such Liability to the applicable Dealer to
the extent of the applicable Dealer Reserve and (B) pursuing and
exhausting, in good faith, any and all legal remedies against the applicable
Dealer and its Representatives; and

 

(ii)           the total of all Damages with respect to such matters
(exclusive of any amounts charged to the applicable Dealer Reserve) exceeds
five million dollars ($5,000,000) and then only for the amount which such
Damages exceed five million dollars ($5,000,000).

 

(e)   Limitations on Liability
Relating to Title to Vehicle Contracts.  Notwithstanding any provisions of this Article X to the contrary, Sellers’ aggregate Liability
relating to a Breach of Section 4.2(a) shall
not exceed the Closing Purchase Price; provided, however, any
Liability of Seller for a Breach of Section 4.2(a) relating to or arising out of any Dealer act,
omission or Breach of any Vehicle Contract or Dealer Agreement shall
also be subject to the provisions of Section 10.4(d) hereof.

 

10.5.        Time
Limitations.

 

(a)   If the Closing occurs, the Sellers shall have
Liability (for indemnification or otherwise) with respect to any Breach of (i) a
covenant or obligation to be performed or complied with prior to the Closing
Date (other than those in Sections 2.1,
2.4 and 11.1, and Article IX,
as to which a claim may be made at any time) or (ii) a representation or
warranty, only if such Breach occurs within eighteen (18) months after the
Closing Date, Buyer notifies the Sellers of a claim specifying the factual
basis of the claim in reasonable detail to the extent then known by Buyer.  Notwithstanding the foregoing or anything in this
Agreement to the contrary, a claim for indemnification arising under (x) Section 10.2(c) through
(e) may be made at anytime
prior to six (6) years after the Closing Date or the expiration of the
applicable statute of limitations relating to such claim, whichever occurs
first, (y) Section 4.2(a) may be made at
anytime prior to thirty (30) months after the Closing Date, or (z)
Sections 10.2(f), 4.1(g), 4.1(m)
or 4.1(q) may be made at anytime.

 

(b)   If
the Closing occurs, Buyer shall have Liability (for indemnification or
otherwise) with respect to any Breach of (i) a covenant or obligation to
be performed or complied with prior to the Closing Date (other than in Sections 2.3 and 11.1, and Article IX as 

 

27

 

to which a
claim may be made at any time) or (ii) a representation or warranty, only
if such Breach occurs within eighteen
(18) months after the Closing Date, the Sellers notify Buyer of a claim
specifying the factual basis of the claim in reasonable detail to the extent
then known by the Sellers. 
Notwithstanding the foregoing or anything in this Agreement to the
contrary, a claim for indemnification under (x)
Section 10.3(c) through
(e) may be made at anytime
prior to six (6) years after the Closing Date or the expiration of the
applicable statute of limitations relating to such claim, whichever occurs
first or (y) Sections 10.3(f) or 5.1(d) may
be made at anytime.

 

10.6.        Third-Party
Claims.

 

(a)   Promptly
after receipt by an indemnified party of notice of any Proceeding brought or
asserted by a Third Party for which such party is entitled to indemnification
under Sections 10.2 or 10.3, such indemnified
party shall give prompt notice to the indemnifying party of such Proceeding,
but the failure to notify the indemnifying party will not relieve the
indemnifying party of any Liability that it may have to any indemnified party,
except to the extent that the indemnifying party demonstrates that the defense
of such Proceeding is prejudiced by the indemnifying party’s failure to give
such notice.

 

(b)   If
any Proceeding is brought against an indemnified party and it gives notice to
the indemnifying party of the commencement of such Proceeding, the indemnifying
party will be entitled to participate in such Proceeding and, to the extent
that it wishes (unless (i) the indemnifying party is also a party to such
Proceeding and the indemnified party determines in good faith that joint
representation would be inappropriate, or (ii) the indemnifying party
fails to provide reasonable assurance to the indemnified party of its financial
capacity to defend such Proceeding) to assume the defense of such Proceeding
with counsel satisfactory to the indemnified party, which counsel shall keep
the indemnified party closely informed and shall consult with the indemnified
party regarding the defense, and, after notice from the indemnifying party to
the indemnified party of its election to assume the defense of the Proceeding,
the indemnifying party will not, as long as it diligently conducts such defense
and keeps the indemnified party closely informed and consults with the
indemnified party regarding the defense, be liable to the indemnified party for
any fees of other counsel or any other expenses with respect to the defense of
such Proceeding, in each case subsequently incurred by the indemnified party in
connection with the defense of such Proceeding, other than reasonable costs of
investigation and settlement administration. 
If the indemnifying party assumes the defense of a Proceeding, no
compromise or settlement of such claims may be affected by the indemnifying
party without the indemnified party’s consent. 
If notice is given to an indemnifying party of the commencement of any
Proceeding and the indemnifying party does not within ten (10) days after
the indemnified party’s notice is given, give notice to the indemnified party
of its election to assume the defense of such Proceeding, the indemnifying
party will be bound by any determination made in such Proceeding or any
compromise or settlement effected by the indemnified party, provided it is
ultimately determined to be a matter for which an indemnity is owed to the
indemnified party and further provided that the indemnified party has continued
to keep the indemnifying party reasonably informed of the Proceedings and acts
in defending or compromising the matter.

 

(c)   Notwithstanding the foregoing, if an indemnified
party reasonably and in good faith determines that a Proceeding may materially
affect it or its Affiliates, other than as a result of monetary damages for
which it would be entitled to indemnification under this Agreement, the
indemnified party may, by notice to the indemnifying party, assume the
exclusive right to defend, compromise, or settle such Proceeding, without
prejudice to its right to be indemnified hereunder except that the indemnifying
party shall only be responsible for the attorney’s fees and costs and expenses
of one law firm (as well as one local counsel) retained by the indemnified
party to represent it in such Proceeding, provided it is ultimately determined
to be a matter for which an indemnity is owed to the indemnified party and
further provided that the indemnified party has continued to keep the
indemnifying party reasonably informed of the proceedings and acts in defending
or compromising the matter.

 

(d)   The indemnifying party agrees to confer with and
obtain the consent of the indemnified party prior to initiating any contact
with any Obligors whose Vehicle Contract may be the subject of an indemnified
claim (this includes obtaining prior approval of any court ordered
communication such as a class action), and further, the indemnifying party
agrees to obtain the consent of the indemnified party and to coordinate through
the indemnified party’s legal department any contact with the indemnified party’s
employees regarding the defense of any Proceeding.

 

10.7.        Other
Claims.  A claim for
indemnification for any matter not involving a Third-Party Claim may be
asserted by notice to the party from whom indemnification is sought and shall
be paid promptly after such notice.

 

28

 

10.8         Parent Guaranty. The Sellers’ Parent
and Buyer’s Parent hereby unconditionally guarantee and promise to pay any and
all indemnification obligations the Sellers and Buyer, respectively, become
obligated to pay pursuant to this Article X.  The Sellers’ Parent and Buyer’s Parent’s
obligation under this Section 10.8
shall (i) expire with Sellers’ or Buyer’s obligations as provided in Section 10.5 and (ii) their
respective Liability for a claim shall not exceed the amounts set forth in Section 10.4.

 

ARTICLE XI.  MISCELLANEOUS

 

11.1.        Confidentiality
of Information.  Unless
otherwise agreed to in writing by the party disclosing (or whose
Representatives disclosed) the same (a “Disclosing Party”), each party
(a “Receiving Party”) shall, and shall cause its Representatives to, (i) keep
all Confidential Information of the Disclosing Party confidential and not
disclose or reveal any such Confidential Information, (ii) use such
Confidential Information only in connection with consummating the transactions
contemplated hereby and enforcing the Receiving Party’s rights hereunder, and (iii) not
use Confidential Information in any manner detrimental to the Disclosing
Party.  In the event that a Receiving
Party is requested pursuant to, or required by, applicable Law or by legal
process to disclose any Confidential Information of the Disclosing Party, the
Receiving Party shall provide the Disclosing Party with a copy of such request
or proof of service of process so the Disclosing Party can seek an appropriate
protective order.  A party’s obligations
hereunder with respect to Confidential Information that (i) is disclosed
to a Third Party with the Disclosing Party’s written approval, (ii) is
required to be produced under order of a Governmental Entity of competent
jurisdiction, or (iii) is required to be disclosed by applicable Law,
will, subject in the case of clauses (ii) and (iii) above to the
Receiving Party’s compliance with the preceding sentence, cease to the extent
of the disclosure so consented to or required, except to the extent otherwise
provided by the terms of such consent or covered by a protective order.  If a Receiving Party uses a degree of care to
prevent disclosure of the Confidential Information that is at least as great as
the care it normally takes to preserve its own information of a similar nature,
it shall not be liable for any disclosure that occurs despite the exercise of
that degree of care, and in no event shall a Receiving Party be liable for any
indirect, punitive, special or consequential damages unless such disclosure
resulted from its willful misconduct or gross negligence in which event it
shall be liable in damages for the Disclosing Party’s lost profits resulting
directly and solely from such disclosure. 
In the event this Agreement is terminated, each party shall, if so
requested by any other party, promptly return or destroy all of the
Confidential Information of such other party, including all copies, reproductions,
summaries, analyses or extracts thereof or based thereon in the possession of
the Receiving Party or its Representatives; provided, however,
that the Receiving Party shall not be required to return or cause to be
returned summaries, analyses or extracts prepared by it or its Representatives,
but shall destroy (or cause to be destroyed) the same upon request of the
Disclosing Party.

 

For purposes
of this Section 11.1, “Confidential
Information” of a party means all confidential or proprietary information
about such party that is furnished by it or its Representatives to the other
party or the other party’s Representatives, in connection with this Agreement
and the Ancillary Agreements and the transactions contemplated hereby and
thereby, regardless of the manner in which it is furnished.  “Confidential Information” does not
include, however, information which (a) has been or in the future is
published or is now or in the future is otherwise in the public domain through
no fault of the Receiving Party or its Representatives, (b) was available
to the Receiving Party or its Representatives on a non-confidential basis prior
to its disclosure by the Disclosing Party, (c) becomes available to the
Receiving Party or its Representatives on a non-confidential basis from a
Person other than the Disclosing Party or its Representatives who is not
otherwise bound by a confidentiality agreement with the Disclosing Party or its
Representatives, or is not otherwise prohibited from transmitting the
information to the Receiving Party or its Representatives, or (d) is
independently developed by the Receiving Party or its Representatives through
Persons who have not, either directly or indirectly, had access to or knowledge
of such information.

 

11.2.        Public Announcement.  Buyer
and the Sellers shall consult with each other and obtain each other’s approval
before issuing any press release or otherwise making any public statements with
respect to this Agreement or the transactions contemplated hereby; provided,
however, that nothing contained herein shall prohibit either party from
making a communication directed to its employees or the employees of any of its
Affiliates, or from making such disclosure as required by applicable Law.

 

11.3.        Assignment; Successors.  Neither party may assign this Agreement
without the prior written consent of the other party, which consent may be
withheld in the other party’s discretion; provided, that either party
may assign this Agreement or parts thereof to its parent, an Affiliate or a
subsidiary by providing at least thirty (30) days written notice to the other
party and Buyer may and shall be entitled to assign its rights under this
Agreement to any Person providing financing to Buyer in connection with this
Agreement.  This Agreement shall be binding
upon and inure to the benefits of the parties hereto and their respective
successors.

 

11.4.        No Agency Relationship.  The relationship between the Sellers and
Buyer shall not be construed as a joint venture, partnership or principal-agent
relationship, and under no circumstances shall any of the employees of one
party be 

 

29

 

deemed
to be employees of the other party for any purpose.  This Agreement shall not be construed as
authority for either party to act for the other in any agency or any other
capacity, except as expressly set forth in this Agreement.

 

11.5.        Third Party Beneficiaries.  Except as expressly provided in Article X, this Agreement is not
intended and shall not be construed to create any rights or benefits upon any
person not a party to this Agreement. 
Without limiting the generality of the foregoing, no Employee shall have
any rights under this Agreement as a result of Section 9.1
hereof.  Buyer may and shall be entitled
to assign its rights under this Agreement to any Person providing financing to
Buyer in connection with this Agreement.

 

11.6.        Costs and Expenses.  Unless specifically provided for elsewhere in
this Agreement, each party will bear its own costs and expenses, including legal
fees, accounting fees and taxes incurred in connection with the negotiation and performance of this
Agreement.

 

11.7.        Notices.  All notices and other communications required
or permitted to be given under this Agreement shall be in writing and shall be
deemed given (a) three (3) Business Days after being deposited in the
U.S. mail, first class, postage prepaid, (b) upon transmission, if sent by
facsimile transmission, or (c) upon delivery, if served personally or sent
by any generally recognized overnight delivery service, to the following
addresses:

 

If to the
Sellers:

 

Wells Fargo Financial, Inc.

800 Walnut St.

Des Moines, IA 50309

Facsimile: (515) 557-7602

Attn.: General Counsel

 

And if to
Buyer:

 

CARS Acquisition LLC

c/o CompuCredit Corporation

245 Perimeter Center Parkway, Suite 600

Atlanta, Georgia 30346

Facsimile: (770) 206-6187

Attn.: General Counsel

 

with
a copy to:

 

Troutman Sanders LLP

600 Peachtree Street, N.E.

Suite 5200

Atlanta, GA  30308-2216

Facsimile:  (404) 885-3995

Attn.:  W. Brinkley Dickerson, Jr.

 

11.8.        Entire Agreement.  This Agreement, including any exhibits or
other documents attached hereto or referenced herein, each of which is hereby
incorporated into this Agreement and made an integral part hereof, constitutes
the entire agreement between the parties relating to the subject matter hereof
and there are no representations, warranties or commitments except as set forth
herein.  This Agreement supersedes all
prior understandings, negotiations and discussions, written or oral, of the
parties relating to the transactions contemplated by this Agreement.

 

11.9.        Modification.  This
Agreement may not be changed orally but only by an agreement in writing, signed
by the party against whom enforcement of any waiver, change, modification, or discharge
is sought.

 

11.10.      Governing Law.  This Agreement shall be governed by and
construed in accordance with the laws of the State of Iowa (without reference
to conflicts of laws rules thereof). 
Matters of law regarding the Vehicle Contracts shall be governed by and
construed in accordance with the terms of such Vehicle Contracts or federal
law, as the case may be.

 

30

 

11.11.      Severability.  If any provision of this Agreement shall be
or become wholly or partially invalid, illegal or unenforceable, such provision
shall be enforced to the extent that its legal and valid and the validity,
legality and enforceability of the remaining provisions shall in no way be
affected or impaired. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors, legal
representatives and permitted assigns.

 

11.12.      Waivers; Cumulative Remedies.  No failure or delay by a party to insist upon
the strict performance of any term or condition under this Agreement or to
exercise any right or remedy available under this Agreement at law or in
equity, shall imply or otherwise constitute a waiver of such right or remedy,
and no single or partial exercise of any right or remedy by any party will
preclude exercise of any other right or remedy. 
All rights and remedies provided in this Agreement are cumulative and
not alternative; and are in addition to all other available remedies at law or
in equity.

 

11.13.      Waiver of Jury Trial.  EACH PARTY HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, THE RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.

 

11.14.      Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original copy of this
Agreement and all of which, when taken together, shall be deemed to constitute
one and the same agreement.  The exchange
of copies of this Agreement and of signature pages by facsimile
transmission shall constitute effective execution and delivery of this
Agreement as to the parties and may be used in lieu of the original Agreement
for all purposes.  Signatures of the parties
transmitted by facsimile shall be deemed to be their original signature for all
purposes.

 

11.15.      Right of Offset.  Any payment required under the terms of this
Agreement to be made by one party to the other party may be offset by any
payment required under the terms of this Agreement to be made by the second
party to the first party.

 

11.16.      Construction.  The headings of Articles and Sections in this
Agreement are provided for convenience only and will not effect its
construction or interpretation.

 

11.17       Time of Essence.  With regard to all dates and time periods set
forth or referred to in this Agreement, time is of the essence.

 

(Signature Page Follows)

 

31

 

EXECUTION
COPY

 

IN WITNESS WHEREOF, the parties have duly
executed this Asset Purchase Agreement, effective as of the date first written
above.

 

	
   

  	
  CARS ACQUISITION LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  COMPUCREDIT CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WELLS FARGO FINANCIAL AMERICA, INC.

  
	
   

  	
  WELLS FARGO FINANCIAL CAR LLC

  
	
   

  	
  WELLS FARGO FINANCIAL KENTUCKY, INC

  
	
   

  	
  WELLS FARGO FINANCIAL NEVADA, INC.

  
	
   

  	
  WELLS FARGO FINANCIAL NORTH CAROLINA, INC.

  
	
   

  	
  WELLS FARGO FINANCIAL TEXAS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Reed Ramsay

  	
   

  
	
   

  	
   

  	
  President

  	
   

  
	
   

  	
   

  
	
   

  	
  WELLS FARGO FINANCIAL, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Greg M. Janasko

  	
   

  
	
   

  	
   

  	
  Senior Vice President

  	
   

  
								

 

S-1Exhibit 10.18

 

EXECUTION COPY

 

RECEIVABLES FINANCING AGREEMENT

 

dated as of April 1, 2005

 

among

 

CAR FUNDING, INC.,

as Borrower

 

CAR FINANCIAL SERVICES, INC.,

individually and as Seller and
Custodian

 

CONSUMER AUTO RECEIVABLES
SERVICING, LLC,

individually and as Servicer

 

COMPUCREDIT CORPORATION,

as Guarantor

 

THE LENDERS PARTIES HERETO,

 

DEUTSCHE BANK AG, NEW YORK
BRANCH,

as Agent

 

THE OTHER AGENTS PARTIES
HERETO,

 

WELLS FARGO BANK, NATIONAL
ASSOCIATION,

as Backup Servicer

 

DEUTSCHE BANK AG, NEW YORK BRANCH,

as Administrative Agent

 

and

 

U.S. BANK NATIONAL ASSOCIATION,

as Collateral Agent

 

***Represents material deleted per the Company's request for
Confidential Treatment and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.

 

 

RECEIVABLES FINANCING AGREEMENT

 

THIS RECEIVABLES FINANCING AGREEMENT is made and
entered into as of April 1, 2005, among CAR FUNDING, INC., a Nevada
corporation (the “Borrower”), CAR FINANCIAL SERVICES, INC., a Georgia
corporation, in its individual capacity (“CAR”) and as the seller (in
such capacity, the “Seller”), CONSUMER AUTO RECEIVABLES SERVICING, LLC,
a Georgia limited liability company, in its individual capacity (“CAR
Servicing”) and as servicer (in such capacity, the “Servicer”) and
as custodian (in such capacity, the “Custodian”), COMPUCREDIT
CORPORATION, a Georgia corporation, in its individual capacity (“CCRT”)
and as guarantor (in such capacity, the “Guarantor”), each NONCOMMITTED
LENDER (as hereinafter defined) from time to time party hereto, each COMMITTED
LENDER (as hereinafter defined) from time to time party hereto, the AGENTS for
the Lender Groups from time to time parties hereto (each such party, together
with their respective successors in such capacity, an “Agent”), WELLS
FARGO BANK, NATIONAL ASSOCIATION, a national banking association, as backup
servicer (in such capacity, the “Backup Servicer”), DEUTSCHE BANK AG,
NEW YORK BRANCH, the New York Branch of a German bank, as administrative agent
(together with its successors in such capacity, the “Administrative Agent”),
and U.S. BANK NATIONAL ASSOCIATION, a national banking association, as
collateral agent (together with its successors in such capacity, the “Collateral
Agent”).

 

BACKGROUND

 

1.                                       The Borrower desires that the Lenders (as
hereinafter defined) extend financing to the Borrower on the terms and
conditions set forth herein.

 

2.                                       The Lenders are willing to provide such
financing on the terms and conditions set forth in this Agreement.

 

NOW, THEREFORE, in consideration of the premises and
the mutual agreements herein contained, the parties hereto agree as follows:

 

 

DEFINITIONS

Defined Terms.  Terms used
in this Agreement which are defined in Annex I hereto shall have the meanings
specified in such Annex I (unless otherwise defined herein).

Other Definitional Provisions.  6.  Unless
otherwise specified therein, all terms defined in Annex I shall have the
meanings as so defined when used in the Notes or in any other Transaction
Document, certificate, report or other document made or delivered pursuant
hereto.

Each term defined in the singular form in Annex I or elsewhere in
this Agreement shall mean the plural thereof when the plural form of such term
is used in this Agreement, the Notes or any other Transaction Document,
certificate, report or other document made or delivered pursuant hereto, and
each term defined in the plural form in Annex I shall mean the singular
thereof when the singular form of such term is used herein or therein.

The words “hereof,” “herein,” “hereunder” and similar terms when used in
this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement, and article, section, subsection, schedule and
exhibit references herein are references to articles, sections, subsections,
schedules and exhibits to this Agreement unless otherwise specified.

The following terms which are defined in the Uniform Commercial Code in
effect in the State of New York on the date hereof are used herein as so
defined:  Accounts, Chattel Paper,
Documents, Equipment, General Intangibles, Instruments, Inventory, Investment
Property and Proceeds.

For the avoidance of doubt, on each date on which the Aggregate Eligible
Receivables Balance or the Borrowing Base is required to be calculated by the
Borrower, the Servicer, the Lenders or the Agents hereunder, the eligibility of
each of the Transferred Receivables shall be redetermined as of such
calculation date and, as a consequence thereof, Contracts that were Eligible
Receivables on the related Closing Date may be excluded from the Aggregate
Eligible Receivables Balance or the Borrowing Base on the date of calculation.

 

THE
FACILITY, ADVANCE PROCEDURES AND NOTE

 

Facility.  On the
terms and subject to the conditions set forth in this Agreement, each
Noncommitted Lender may, in its sole discretion, make Advances (to the extent
of its Available Commitment Amount) to the Borrower on a revolving basis from
time to time during the period commencing on the Effective Date and ending on
the Facility Termination Date, in each case in such amounts as may be requested
by the Borrower pursuant to Section 2.2.  If on any day there shall be more than one
Noncommitted Lender, any Advance requested by the Borrower on such day shall be
allocated among the Noncommitted Lenders pro  rata on the basis of
their respective Noncommitted Percentages and each Noncommitted Lender may, in
its sole and absolute discretion, determine whether to make an Advance in its
allocated amount.  If a Noncommitted
Lender elects not to make a requested Advance, each of the Committed Lenders
with respect to such Noncommitted Lender shall make Advances (in an aggregate
amount equal to the requested Advance) to the Borrower (to the extent of the unutilized
Commitment of each such Committed Lender and pro  rata among such
Committed Lenders in accordance with their respective Adjusted Commitment
Percentages) on a revolving basis from time to time during the period
commencing on the Effective Date and ending on the Facility Termination
Date.  The lending arrangement made
available to the Borrower pursuant to the preceding sentences of this Section 2.1
is herein called the “Facility”. 
The aggregate principal amount of all Advances from time to time outstanding
hereunder shall not exceed the lesser of (a) the Facility Limit and (b) the
Borrowing Base.  In addition, under no
circumstances shall any Lender make any Advance if after giving effect thereto
the aggregate outstanding principal balance of all Advances owing to such
Lender would exceed (i) if such Lender is a Noncommitted Lender, its
Maximum Loan Amount or (ii) if such Lender is a Committed Lender, its
applicable Commitment less its Adjusted Commitment Percentage of the
outstanding principal balance of all Advances owing to its Noncommitted
Lender.  The Committed Lenders may not
reduce their respective Commitments during the term of this Agreement other
than as expressly provided under Section 2.5.  Within the limits of the Facility, the
Borrower may borrow, prepay and reborrow under this Section 2.1.  No additional Advances may be made if the
Backup Servicer shall be acting as Servicer.

 

Advance Procedures.  The
Borrower may request an Advance hereunder by giving notice to the
Administrative Agent of a proposed Advance not later than 1:00 P.M., New
York time, two Business Days prior to the proposed date of such Advance.  Each such notice (herein called an “Advance
Request”) shall be in the form of Exhibit A and shall include
the date and amount of such proposed Advance and the Schedule of
Receivables setting forth the information required therein with respect to the
Receivables, if any, to be acquired by the Borrower on the date such Advance is
requested to be made.  No more than three
Advance Requests may be made in any calendar week.  Any Advance Request given by the Borrower
pursuant to this Section 2.2 shall be irrevocable and binding on
the

 

2

 

Borrower. 
The Administrative Agent shall promptly forward a copy of each Advance
Request received by it to each Agent and each Lender.  The Administrative Agent, in its capacity as
such, shall have no obligation to lend funds hereunder.

 

Each Noncommitted Lender shall notify the Agent for
its Lender Group by 10:00 a.m., New York City time, on the applicable
requested date of Advance whether it has elected to make the Advance requested
of it pursuant to the preceding paragraph. 
In the event that a Noncommitted Lender shall not have timely provided
such notice, such Noncommitted Lender shall be deemed to have elected not to
make such Advance.  Such Agent shall
notify each Committed Lender for such Noncommitted Lender on or prior to 11:00 a.m.,
New York City time, on the applicable requested date of Advance if such
Noncommitted Lender has not elected to advance its entire Noncommitted
Percentage of the Advance requested, which notice shall specify (i) the
identity of such Noncommitted Lender, (ii) the portion of the Advance
which such Noncommitted Lender has not elected to advance as provided above,
and (iii) the respective Adjusted Commitment Percentages of such Committed
Lenders on such requested date of Advance (as determined by such Agent in good
faith; for purposes of such determination, such Agent shall be entitled to rely
conclusively on the most recent information provided by such Noncommitted
Lender).  Subject to receiving such
notice and to the satisfaction of the applicable conditions set forth in Article VII
hereof, each of such Noncommitted Lender’s Committed Lenders shall make an
Advance on the applicable requested date of Advance in an amount equal to its
Adjusted Commitment Percentage of the portion of the Advance which such
Noncommitted Lender has not elected to advance.

 

Funding.  Subject to
the satisfaction, in the reasonable determination of the Lenders, of the
conditions precedent set forth in Article VII with respect to such
Advance, each Lender’s portion of the requested Advance payable pursuant to Section 2.2
of this Agreement shall be made available to the Administrative Agent at or
prior to 2:00 p.m., New York City time, on the requested date of Advance,
by deposit of immediately available funds to the Administrative Agent’s
Account.  Subject to the satisfaction, in
the reasonable determination of the Lenders, of the conditions precedent set
forth in Article VII with respect to such Advance (as evidenced by
the advancing of such funds by the Lenders) and the Administrative Agent’s
receipt of such funds, the Administrative Agent shall make the proceeds of such
requested Advance available as follows: first, to the extent Borrower is
required pursuant to Section 11.6 hereof to fund the Cap Funding Reserve
Account and the amount on deposit in the Cap Funding Reserve Account is less
than the Cap Funding Reserve Account Requirement (computed after giving effect
to the proposed Advance and to the transfer to the Borrower of any Receivables
and Dealer Transaction Rights to be transferred to it by the Seller on such
date) on the proposed date of the Advance, an amount equal to such deficiency
shall be deposited in the Cap Funding Reserve Account; second, to pay
any upfront cost of acquiring any Interest Rate Cap; third, to pay any
fees and expenses due to the Lenders or the Agents on the date of such Advance;
and fourth, all amounts of the proposed Advance in excess of the amounts
distributed pursuant to first, second and third above
shall be made available to the Borrower by deposit to such account as may be
designated by the Borrower (in a written notice received by the Administrative
Agent at least one Business Day prior to the date of such Advance) in
immediately available funds no later than 3:00 p.m., New York City time,
on the date of such Advance.

 

In the event that notwithstanding the fulfillment of
the applicable conditions set forth in Article VII hereof with respect to
an Advance, a Noncommitted Lender elected to make an Advance but failed to make
its portion thereof available to the Administrative Agent when required
pursuant to the preceding paragraph, such Noncommitted Lender shall be deemed
to have rescinded its election to make such Advance, and neither the Borrower
nor any other party shall have any claim against such Noncommitted Lender by
reason of its failure to timely make such Advance.  In any such case, the Administrative Agent
shall give notice of such failure not later than 2:30 p.m., New York
City time, on the requested date of Advance to each Committed Lender for
such Noncommitted Lender and to the Agent for its Lender Group, the Borrower
and the Servicer, which notice shall specify (i) the identity of such
Noncommitted Lender, (ii) the

 

3

 

amount of the Advance which it had elected but failed
to make and (iii) the respective Adjusted Commitment Percentages of such
Committed Lenders on such date (as determined by the related Agent).  Subject to receiving such notice, each of
such Noncommitted Lender’s Committed Lenders shall lend a portion of the
requested Advance in an amount equal to its Adjusted Commitment Percentage of
the amount described in clause (ii) above at or before 4:00 p.m., New
York City time, on such date and otherwise in accordance with this Section 2.3.  Subject to the Administrative Agent’s receipt
of such funds, the Administrative Agent will not later than 5:00 p.m., New
York City time, on such date make such funds available by depositing same
in the appropriate account in accordance with the provisions of the preceding
paragraph.

 

4

 

Notes.  All
Advances by the Lenders in a Lender Group shall be further evidenced by a Note,
executed by the Borrower, with appropriate insertions, payable to the order of
the Agent for such Lender Group.  The
Borrower hereby irrevocably authorizes each Agent to make (or cause to be made)
appropriate notations on the grid attached to the Notes (or on any continuation
of such grid, or at such Agent’s option, in its records), which notations, if
made, shall evidence, inter  alia, the date of the outstanding
principal of the Advances evidenced thereby and each payment of principal
thereon; provided, however, that the failure to make any such
notations shall not limit or otherwise affect any of the Obligations or any
payment thereon.

 

Reductions of Commitments.

 

At any time the Borrower may, upon at least
five Business Days’ prior written notice to the Administrative Agent, reduce
the Facility Limit in whole or in part. 
Each partial reduction shall be in an aggregate amount of $5,000,000 or
integral multiples of $5,000,000 in excess thereof (or such other amount
requested by the Borrower to which the Administrative Agent consents).  Reductions of the aggregate Commitments
pursuant to this subsection 2.5(a) of this Agreement shall be
allocated (i) to the Maximum Loan Amount of each Noncommitted Lender, pro
rata based on the Noncommitted Percentage represented by such Maximum
Loan Amount, and (ii) to the aggregate Commitments of Committed Lenders
for each Noncommitted Lender pro  rata based on their respective
Adjusted Commitment Percentages.  The
Administrative Agent shall promptly deliver a copy of any such notice to each
Agent and each Lender.  The Borrower
shall repay the unpaid principal amount of the Advances to the extent they
exceed the Facility Limit after giving effect to such reduction.

 

On the Facility Termination Date, the
Commitment of each Lender shall be automatically reduced to zero.

 

The Borrower will give the Collateral Agent
written notice of any termination of the Commitments or reduction of the
Commitments to zero pursuant to Section 2.5(a) or as a result of the
occurrence of the Facility Termination Date within two Business Days of such
termination, reduction or occurrence.

 

Repayments and Prepayments.  The
Borrower shall repay in full the unpaid principal amount of each Advance on the
Scheduled Facility Termination Date. 
Prior thereto, the Borrower:

 

may, from
time to time on any Business Day, make a prepayment, in whole or in part, of
the outstanding principal amount of any Advance; provided, however, that

 

all
such voluntary prepayments shall require at least three Business Days’ prior
written notice to the Administrative Agent; and all such voluntary partial
prepayments shall be in a minimum amount of $5,000,000 and an integral multiple
of $1,000,000 in excess thereof or, if less than $5,000,000, the entire
outstanding principal amount of any Advances;

 

shall, on
any Distribution Date, any date an Advance is made or any date upon which the
Collateral Agent distributes Excess Funds from the Collection Account on which
the outstanding amount of Advances exceeds the Borrowing Base, make a
prepayment of the Advances in an amount equal to such excess;

 

shall,
immediately upon any acceleration of the maturity date of any Advance pursuant
to Section 14.3, repay all Advances, unless, pursuant to Section 14.3(a),
only a portion of all Advances is so accelerated, in which event the Borrower
shall repay the accelerated portion of the Advances; and

 

shall, on
the date the Borrower receives any net proceeds from any Take-Out
Securitization, make a prepayment of the Advances in an amount substantially
equal to such net proceeds or, if less, the total outstanding amount of
Advances.

 

Each such prepayment shall be subject to the payment
of any amounts required by Section 6.2 resulting from a prepayment
or payment of an Advance prior to the end of the Fixed Period with respect
thereto.

 

5

 

Extension of Facility.  The
Borrower may request (in a written notice delivered to the Administrative
Agent, on or prior to the 30th calendar day, but not earlier than
the 90th calendar day, prior to each Scheduled Facility Termination
Date) that the Lenders extend the Scheduled Facility Termination Date for
successive periods of 364 days.  The
Scheduled Facility Termination Date shall be extended accordingly if the
Administrative Agent (acting pursuant to the instructions of all the Lenders,
which instructions may be given or withheld in their sole and absolute
discretion) notifies the Borrower that the then-current Scheduled Facility
Termination Date shall be so extended for a period of 364 days.  If any Lender instructs the Administrative
Agent not to extend such date, or fails to give the Administrative Agent any
instruction with respect to any such request, the Administrative Agent shall
notify the Borrower that the Lenders have declined the request of the Borrower
and the Scheduled Facility Termination Date shall not be so extended.  If no such notice is received by the Borrower
by the close of business on the 15th calendar day prior to the
then-current Scheduled Facility Termination Date, the Lenders shall be deemed
to have declined the request of the Borrower. 
If the request is declined, the Borrower may request that the
Administrative Agent promptly advise the Borrower of the Lenders that agreed to
the extension request and may, by the close of business on or before the 10th
calendar day prior to the then-current Scheduled Facility Termination Date,
request that one or more of the Lenders consenting to the extension request or
any Investor acquire and assume all or a ratable part of each non-consenting
Lender Commitment.  Upon notice from the
Administrative Agent that each non-consenting Lender has assigned its interest
in its Advances and its Commitment to another Lender or Investor, on or before
the close of business on the 5th calendar day prior to the
then-current Scheduled Facility Termination Date, the Lenders shall be deemed
to have accepted the request of the Borrower that the Scheduled Facility
Termination Date be so extended.  If no
such notice is received, or if the Borrower does not timely request that the
Administrative Agent solicit replacement of each the non-consenting Lender, the
Lenders shall be deemed to have declined the request and the Scheduled Facility
Termination Date shall not be so extended. 
The Borrower will give the Collateral Agent written notice of any
extension of Scheduled Facility Termination Date within two Business Days of
such extension.

 

YIELD, FEES, ETC.

 

Yield.  The
Borrower hereby promises to pay Yield on the unpaid principal amount of each
Advance (or each portion thereof) for the period commencing on the date of such
Advance until such Advance is paid in full. 
No provision of this Agreement or the Notes shall require the payment or
permit the collection of Yield in excess of the maximum permitted by applicable
law.

 

Yield Payment Dates.  Yield
accrued on Advances shall be payable, without duplication:

 

as to each
Advance on the Facility Termination Date;

 

as to any
payment or prepayment, on the date of any payment or prepayment, in whole or in
part, of principal outstanding on such Advance, but only on the portion of the
Advance so paid or prepaid; and

 

as to each
Advance, on each Distribution Date; provided that Yield relating to such
Advance may also be payable, at the option of the Borrower, on an Interim
Distribution Date selected (upon not less than three Business Days’ prior
written notice to the Administrative Agent) by the Borrower.

 

Yield Calculation.  (a) Interest
shall accrue on the Advances during each Accrual Period at the following rates:

 

Each
Noncommitted Lender’s portion of each Advance shall bear interest on each day
during each Accrual Period at a rate per annum equal to such Noncommitted
Lender’s Commercial Paper Rate for such day, except as otherwise provided in
clause (ii) below. 

 

If and to the
extent that, and only for so long as, a Noncommitted Lender at any time
determines in good faith that it is unable to raise or is precluded or
prohibited from raising, or that it is not advisable to raise, funds through
the issuance of commercial paper notes in the commercial paper market of the
United States to finance its making or maintenance of its portion of any Advance
or any portion thereof (which determination may be based on any allocation
method employed in good faith by such Noncommitted Lender), including by reason
of market conditions or by reason of insufficient availability under any of its
Support Facilities or the downgrading of any of its Support Parties, upon
notice from such Noncommitted 

 

6

 

Lender to the
Agent for its Lender Group and the Administrative Agent, such Noncommitted
Lender’s portion of such Advance shall bear interest at a rate per annum equal
to the Alternative Rate, rather than as otherwise determined pursuant to clause
(i) above.  

 

Each Committed
Lender’s portion of each Advance shall bear interest for each Accrual Period at
a rate per annum equal to the Alternative Rate. 

 

Notwithstanding clauses (i), (ii) and (iii) above,
during the period any principal amount of any Advance is due and payable
(whether on the Facility Termination Date, upon acceleration or otherwise) or
during the period any other monetary obligation of the Borrower or the Servicer
(only if CAR, CAR Servicing or an Affiliate of CAR is the Servicer) arising
under this Agreement shall become due and payable, the Borrower or the Servicer
(only if CAR, CAR Servicing or an Affiliate of CAR is the Servicer), as the
case may be, shall pay (to the extent permitted by law, if in respect of any
unpaid amounts representing Yield) Yield (after as well as before judgment) on
such amounts, payable on demand, at a rate per  annum equal to the
Default Rate.

 

If (A) the consolidation of the assets
and liabilities of a Noncommitted Lender which is a Structured Lender on the
balance sheet of an administrator, manager, credit or liquidity enhancer or
similar party with respect to such Lender or any Affiliate of such
administrator, manager, credit or liquidity enhancer or similar party (each, an
“SL Affected Party”) shall be required, or capital shall be required to
be maintained with respect thereto under any capital requirements as if such
assets were owned by such SL Affected Party, by the Securities and Exchange
Commission, any banking regulatory authority or any other domestic or foreign
governmental authority having jurisdiction over such SL Affected Party, or (B) the
independent auditors for a SL Affected Party shall have advised such SL
Affected Party in writing that in their opinion such consolidation is required
under GAAP or applicable law, rule or regulations, then, upon notice by
such Lender to the Borrower and the related Agent, such Lender’s Advances shall
bear interest at a rate per annum equal to the Alternative Rate, rather than as
otherwise determined pursuant to clause (a) above.

 

Fees.  The
Borrower agrees to pay to the Administrative Agent, on behalf of itself, the
Agents, the Support Parties and the Lenders, certain fees in the amounts and on
the dates set forth in the letter agreement among the Administrative Agent, the
Borrower and CAR, dated as of the date hereof (as the same may be amended,
supplemented or otherwise modified, the “Fee Letter”).  Fees accrued on each Advance shall be
payable, without duplication, on the date of any payment or prepayment, in
whole or in part, of principal outstanding on such Advance.

 

Computation of Yield and Fees.  All Yield
and Fees shall be computed on the basis of the actual number of days (including
the first day but excluding the last day) occurring during the period for which
such Yield or fee is payable over a year comprised of 360 days (or, in the case
of Yield on an Advance bearing Yield on the basis of the Alternate Base Rate,
365 days or, if appropriate, 366 days). 
The Agent for each Lender Group shall notify the Administrative Agent,
the Borrower and the Servicer of the Yield and Fees accrued one Business Day
prior to each Distribution Date and from time to time upon request of the
Administrative Agent, the Borrower or Servicer.

 

GUARANTY

 

Guaranty of Payment.  The
Guarantor hereby guarantees to the Administrative Agent (on behalf of itself,
the Collateral Agent, the Agents and the Lenders) the payment of all payment
and performance obligations of the Servicer (so long as the Servicer is CAR,
CAR Servicing or an Affiliate thereof) to the Administrative Agent, the
Collateral Agent, each Agent, and each of the Lenders under the Sale and Servicing
Agreement or this Agreement, whether direct or indirect, absolute or
contingent, due or to become due, secured or unsecured, now existing or
hereafter arising or acquired (collectively, the “Guaranteed Obligations”).  The guaranty provided hereunder is an
absolute, unconditional and irrevocable guaranty of the full and punctual
payment and performance of the Guaranteed Obligations (and not of their
collectibility only) and is in no way conditioned upon any requirement that the
Administrative Agent, any Agent or any Lender first attempt to collect or
enforce any of the Guaranteed Obligations from or against the Servicer or
resort to any security or other means of obtaining their payment or

 

7

 

performance. 
Should the Servicer default in the payment or performance of any of the
Guaranteed Obligations, the obligations of the Guarantor hereunder with respect
to such default shall become immediately due and payable, without demand or
notice by the Administrative Agent. 
Payments by the Guarantor hereunder may be required by the
Administrative Agent (on behalf of itself, the Collateral Agent, the Agents and
the Lenders), acting at the direction of the Required Lenders, on any number of
occasions.

 

Agreement to Pay Expenses.  The
Guarantor agrees, as the principal obligor and not as a guarantor only, to pay
to the Administrative Agent, on demand, all reasonable costs and expenses
(including court costs and reasonable legal expenses) incurred or expended by
the Administrative Agent in connection with enforcement of the obligations of
the Guarantor under this Article IV together with interest accrued thereon
from the time such amounts become due until payment, at the Default Rate in
effect from time to time; provided that, if such interest exceeds the
maximum amount permitted to be paid under applicable law, then such interest
shall be reduced to such maximum permitted amount.

 

Unenforceability of Guaranteed Obligations
Against the Servicer.  If for any reason the Servicer
has no legal existence or is under no legal obligation to discharge any of the
Guaranteed Obligations, or if any of the Guaranteed Obligations have become
irrecoverable from the Servicer by operation of law or for any other reason,
the guaranty and the primary obligation provided under this Article IV
shall nevertheless be binding on the Guarantor to the same extent as if the
Guarantor at all times had been the principal obligor on all such Guaranteed
Obligations.  In the event that
acceleration of the time for payment of any of the Guaranteed Obligations is
stayed upon the insolvency, bankruptcy or reorganization of the Servicer, or
for any other reason, all such amounts otherwise subject to acceleration under
the terms of any agreement evidencing, securing or otherwise executed in
connection with any Guaranteed Obligation (including this Agreement) shall be
immediately due and payable by the Guarantor.

 

Waiver of Subrogation.  Until the
termination hereof and the payment in full of all Guaranteed Obligations and
payment in full of the principal of, and interest on, the Advances, the
Guarantor (a) shall not exercise any rights against the Servicer arising
as a result of payment or performance by the Guarantor under this Article IV,
by way of subrogation or otherwise; (b) will not prove any claim in
competition with the Administrative Agent, the Collateral Agent, the Agents or
the Lenders in respect of any payment or performance hereunder in bankruptcy or
insolvency proceedings of any nature; (c) will not claim any set-off or
counterclaim against the Servicer in respect of any liability of the Guarantor
to such Person; and (d) waives any benefit of and any right to participate
in any collateral which may be held by the Administrative Agent, the Collateral
Agent, the Agents or the Lenders.

 

Subordination.  The payment
of any amounts due with respect to any Indebtedness of the Servicer now or
hereafter held by the Guarantor is hereby subordinated to the prior payment in
full of the Guaranteed Obligations, provided
that so long as no default in the payment of the Guaranteed Obligations has
occurred and is continuing and no Facility Termination Event or Unmatured
Facility Termination Event has occurred and is continuing, and no undisputed
demand for payment of any of the Guaranteed Obligations has been made that
remains unsatisfied, the Servicer may make, and the Guarantor may demand and
accept, any payments of principal of and interest on such subordinated
Indebtedness in the amounts, at the rates and on the dates as specified in such
instruments, securities or other writings as shall evidence such subordinated
Indebtedness.  The Guarantor agrees that
after the occurrence and during the continuation of any default in the payment
of the Guaranteed Obligations or a Facility Termination Event or Unmatured
Facility Termination Event, the Guarantor will not demand, sue for or otherwise
attempt to collect any such Indebtedness of the Servicer to the Guarantor until
the Guaranteed Obligations shall have been paid in full.  If, notwithstanding the foregoing sentence,
the Guarantor shall in breach of this Section, collect, enforce or receive any
amounts in respect of such Indebtedness, such amounts shall be collected,
enforced and received by the Guarantor as trustee for the Administrative Agent,
the Collateral Agent, the Agents and the Lenders and be paid over to
Administrative Agent on account of the Guaranteed Obligations without affecting
in any manner the liability of the Guarantor under this Article IV.

 

Waivers by Guarantor.  The
Guarantor agrees that the Guaranteed Obligations will be paid strictly in
accordance with their respective terms. 
To the extent permitted by applicable law, the Guarantor waives
presentment, demand, protest, notice of acceptance, notice of Guaranteed
Obligations incurred and all other notices of any kind, all defenses which may
be available by virtue of any valuation, stay, moratorium law or other similar
law now or hereafter in effect, any right to require the marshaling of assets
of the Servicer, and all suretyship defenses generally.  Without limiting the generality of the
foregoing, the Guarantor agrees to the provisions of any instrument evidencing,
securing or otherwise executed in connection with any of the Guaranteed
Obligations and agrees that the Guaranteed Obligations shall not be released or
discharged, in whole or in part, or otherwise affected by (i) the failure
of the Administrative Agent, the Collateral Agent, any Agent or any of the
Lenders to assert any claim or demand or to enforce any right or remedy against
the Servicer; (ii) any extensions or renewals of

 

8

 

any of the Guaranteed Obligations; (iii) any
rescissions, waivers, amendments or modifications of any of the terms or provisions
of any agreement evidencing, securing or otherwise executed in connection with
the Guaranteed Obligations, including, without limitation, the Transaction
Documents; (iv) the substitution or release of any entity primarily or
secondarily liable for any obligation of the Servicer under this Agreement or
the other Transaction Documents; (v) the adequacy of any rights the
Agents, the Lenders, the Administrative Agent or the Collateral Agent may have
against any collateral or other means of obtaining repayment of the Guaranteed
Obligations; (vi) the impairment of any collateral securing the Guaranteed
Obligations, including without limitation the failure to perfect or preserve
any rights the Administrative Agent, the Collateral Agent, the Agents or the
Lenders might have in such collateral or the substitution, exchange, surrender,
release, loss or destruction of any such collateral; or (vii) any other
act or omission which might in any manner or to any extent vary the risk of the
Guarantor or otherwise operate as a release or discharge of the Guarantor, all
of which may be done without notice to the Guarantor.

 

PAYMENTS; TAXES

 

Making of Payments; Taxes.  7.  Subject to, and in accordance with, the
provisions hereof, all payments of principal of, or Yield on, the Advances and
of all Fees and other amounts shall be made by the Borrower no later than 2:00 p.m.,
New York time, on the day when due in lawful money of the United States of
America in immediately available funds to the Administrative Agent, at its
account (account number –10-598524-0008 (account name – Nantucket Funding
Corp., LLC) maintained at the office of Deutsche Bank AG, New York Branch, New
York, New York (ABA # 026-003-780), reference:  CAR Funding Inc., with telephone notice
(including wire number) to the Administrative Agent (telephone number 212-474-7737)),
or such other account as the Administrative Agent shall designate in writing to
the Borrower (the “Administrative Agent’s Account”).  Payments received by the Administrative Agent
after 2:00 p.m., New York time, on any day will be deemed to have been
received by the Administrative Agent on its next following Business Day.  The Administrative Agent shall, upon receipt
of such payments, promptly remit such payments (in the same type of funds
received by the Administrative Agent) to the Agent for each Lender Group pro
rata among the Lender Groups on the basis of the respective amounts
owing to such Lender Groups of the Obligations to which such payments
relate.  Each Agent shall allocate to the
Lenders in its Lender Group each payment in respect of the Advances received by
such Agent as provided herein.  Payments
in reduction of the principal amount of the Advances shall be allocated and
applied to Lenders pro  rata based on their respective portions of
such Advances.  Payments of Yield shall
be allocated and applied to Lenders pro  rata based upon the
respective amounts of interest due and payable to them, determined as provided
above in Section 3.3(a). 
Payments of the “Usage Fee” (as defined in the Fee Letter) shall be
allocated and paid to Lenders pro  rata based upon their
respective principal interests in the Advances for the applicable Accrual
Period.  Payments of the “Program Fee”
(as defined in the Fee Letter) shall be allocated and paid to the Agent for
each Lender Group pro  rata based on the aggregate Commitments of
the Lenders in such Lender Group.  Each
Lender in a Lender Group shall be entitled to receive the share of the Program
Fee allocated to such Lender Group as may be agreed upon from time to time
between such Lender and the Agent for such Lender Group.

 

All payments described in Section 5.1(a) and all other
payments made by or on behalf of the Borrower, the Seller, CAR, the Guarantor
or the Servicer (so long as CAR, CAR Servicing or an Affiliate of CAR is the
Servicer) to the Administrative Agent for the benefit of itself or any Affected
Person or the Lenders or to any Affected Person directly under this Agreement
and any other Transaction Document shall be made free and clear of, and without
deduction or withholding for or on account of, any present or future income,
stamp or other taxes, levies, imposts, duties, charges, fees, deductions or
withholdings, now or hereafter imposed, levied, collected, withheld or assessed
by any Official Body (excluding (i) taxes imposed on the net income
of the Administrative Agent or Affected Person, however denominated, and (ii) franchise
taxes imposed on the net income of the Administrative Agent or Affected Person
in each case imposed: (1) by the United States or any political
subdivision or taxing authority thereof or therein; (2) by any
jurisdiction under the laws of which the Administrative Agent or such Affected
Person or its applicable lending office is organized or located, managed or controlled
or in which its principal office is located or any political subdivision or
taxing authority thereof or therein; or (3) by reason of any connection
between the jurisdiction imposing such tax and the Administrative Agent, such
Affected Person or such lending office other than a connection arising solely
from this Agreement or any other Transaction Document or any transaction
hereunder or thereunder) (all such non-excluded taxes, levies, imposts, duties,
charges, fees, deductions or withholdings, collectively or individually, “Taxes”).  If any such Taxes are required to be withheld
from any amounts payable to the Administrative Agent or any Affected Person
hereunder or under any other Transaction Document, the amounts so payable to
the Administrative Agent or such Affected Person shall be increased to the
extent necessary to yield to the Administrative Agent or such Affected Person
(after payment of all Taxes) all amounts payable hereunder or thereunder at the
rates or in the amounts specified in this Agreement and the other Transaction
Documents.  The Borrower (or the party
required to “gross-up” the applicable payment) shall indemnify the
Administrative Agent or such Affected Person for the full amount of any such
Taxes on the first Settlement Date 

 

9

 

occurring at least 10 Business Days after the date of written demand
therefor by the Administrative Agent or Affected Person and delivery to the
Borrower (or the party required to “gross-up” the applicable payment) of the
written statement setting forth the legal basis for the Taxes, the amount of
the Taxes and the calculation thereof; provided that no Person shall be
indemnified pursuant to this Section 5.1(b) to the extent the
reason for such indemnification relates to, or arises from, the failure by such
Person to comply with the provisions of Section 5.1(c).

 

Each Affected Person that is not incorporated under the laws of the
United States of America or a state thereof or the District of Columbia shall:

 

prior
to becoming a party to, or acquiring an interest in, any Transaction Document
or Support Facility (if not a party to a Transaction Document), deliver to the
Borrower and the Administrative Agent (A) two duly completed copies of Form W-8ECI,
Form W-8BEN or Form W-8IMY, or successor applicable forms, as the
case may be, and (B) an IRS Form W-9, or successor applicable form,
as the case may be; and

deliver
to the Borrower and the Administrative Agent two (2) further copies of any
such form or certification on or before the date that any such form or
certification expires or becomes obsolete and after the occurrence of any event
requiring a change in the most recent form previously delivered by it to the
Borrower and the Administrative Agent;

 

Each such Affected Person so organized shall certify (a) in
the case of a Form W-8ECI, Form W-8BEN or Form W-8IMY, that it
is entitled to receive payments under the this Agreement and the other
Transaction Documents without deduction or withholding of any United States
federal income taxes and (b) in the case of an IRS Form W-9, that it
is entitled to a complete exemption from United States backup withholding
tax.  Each Person that desires to become
an additional party to a Support Facility, shall, prior to the effectiveness of
such addition, be required to provide all of the forms and certifications
required pursuant to this Section 5.1(c) unless such Person
has previously delivered such forms in its capacity as a party to a Transaction
Document and such forms have not expired or become obsolete.  Failure of any Affected Person to comply with
this clause (c) shall result in the Borrower having no obligation to
gross-up for Taxes pursuant to clause (b) of this Section.

 

Application of Certain Payments.  Each
payment of principal of the Advances shall be applied to such Advances as the
Borrower shall direct or, in the absence of such direction or during the
existence of a Facility Termination Event or after the Facility Termination
Date, as the Required Lenders shall determine, in their discretion.

 

Due Date Extension.  If any
payment of principal or Yield with respect to any Advance falls due on a day
which is not a Business Day, then such due date shall be extended to the next
following Business Day, and additional Yield and Fees shall accrue and be
payable for the period of such extension at the rate applicable to such
Advance.

 

INCREASED COSTS, ETC.

 

Increased Costs.  If due to
the introduction of or any change in or in the interpretation of any law or
regulation occurring or issued after the date hereof, any Lender or other
Investor, any Support Party, or any Person controlling any thereof (each an “Affected
Person”) determines that compliance with any law or regulation or any
guideline or request from any central bank or other Official Body (whether or
not having the force of law) shall impose, modify or deem applicable any
reserve requirement imposed by the Board of Governors of the Federal Reserve
System (but excluding any reserve requirement, if any, included on the determination
of Yield), special deposit or similar requirements against assets of, deposits
with or for the account of, or credit extended by such Affected Party, and the
result of any of the foregoing is to increase the amount of capital required or
expected to be maintained by such Affected Person and such Affected Person
determines that the amount of such capital is increased by or based upon the
existence of its obligations or Commitments hereunder or with respect hereto or
to the funding thereof (other than any increase in cost resulting solely from a
consolidation event described in Section 3.3(b)

 

10

 

but only if the Borrower is liable for the
payment of the increased rate of interest under such Section 3.3(b)),
then, upon demand by such Affected Person (with a copy to the
Administrative Agent) (which demand shall be accompanied by a statement setting
forth in reasonable detail the basis for the determination that the increase in
capital is allocable to the existence of its obligations or Commitments
hereunder and, in reasonable detail, the calculations of the amount being
claimed), the Borrower agrees to pay to the Administrative Agent, for the
account of such Affected Person (as a third-party beneficiary), on the
Distribution Date following the date on which such Affected Person provides
notice of such event to the Borrower and the Servicer (provided that such
notice is accompanied by the statement described above in this Section 6.1
and is delivered on or prior to the fifth Business Day prior to such
Distribution Date and otherwise on the Distribution Date following such
Distribution Date), subject to and in accordance with the priorities set forth
in Section 9.5, additional amounts sufficient to compensate such
Affected Person in the light of such circumstances, to the extent that such
Affected Person reasonably determines such increase in capital to be allocable
to the existence of any of such obligations, commitments or fundings.  The calculations set forth in such written
statement shall, in the absence of manifest error, be rebuttably presumptive
evidence of the subject matter thereof. 
Any Affected Person claiming any additional amounts payable pursuant to
this Section 6.1 agrees to use reasonable efforts (consistent with
legal and regulatory restrictions) to designate a different office or branch of
such Affected Person as its lending office or take such other actions if the
making of such a designation or taking of such other actions would avoid the
need for, or reduce the amount of, any such additional amounts and would not,
in the reasonable judgment of such Affected Person, be otherwise
disadvantageous to such Affected Person.

 

Funding Losses.  The
Borrower hereby agrees that upon demand by any Affected Person (which demand
shall be accompanied by a statement setting forth in reasonable detail the
basis for the calculations of the amount being claimed) it will indemnify such
Affected Person against any net loss or expense which such Affected Person or
incurs (including, without limitation, any net loss or expense incurred by
reason of or resulting from interest to accrue on the related commercial paper
after the date of any failed borrowing, payment or prepayment of an Advance or
from the termination of related hedging arrangements, the liquidation or
reemployment of deposits or other funds acquired by such Affected Person to
fund or maintain any Advance to the Borrower), as reasonably determined by such
Affected Person, as a result of any failure by the Borrower to borrow an
Advance on the date specified therefor in an Advance Request (other than due to
a default by a Lender) or as a result of any payment or prepayment (including
any mandatory prepayment) of any Advance on a date other than the last day of
the Fixed Period for such Advance.  The
calculations set forth in such written statement shall, in the absence of
manifest error, be rebuttably presumptive evidence of the subject matter
thereof.

 

Replacement of Affected Person.  Upon the
receipt by the Borrower of a claim for reimbursement or compensation under Section 6.1
hereof by an Affected Person, if payment thereof shall not be waived by such
Affected Person, or upon receipt of notice pursuant to Section 3.3(a)(ii) from
any Noncommitted Lender or upon receipt by the Borrower of any notice by a
Lender pursuant to Section 3.3(b), the Borrower may (a) request such
Affected Person or the Lender that has assigned an interest in its Advances to
such Affected Person to use reasonable efforts to assist the Borrower in its
attempt to obtain a replacement bank, financial institution or Structured
Lender, as applicable, satisfactory to the Borrower (in the case of a
replacement Lender), to acquire and assume all or a ratable part of such
Affected Person’s Commitment, or (b) request one or more of the other
Lenders or Investors to acquire and assume all or a part of such Affected
Person’s Commitment.  Upon notice from
the Borrower, such Affected Person shall, or the Lender that has assigned an
interest in its Advances to such Affected Person shall cause such Affected
Person to, assign, without recourse, its commitment to make Advances, its
outstanding Advances or interests therein and its other rights and obligations
(if any) hereunder, or a ratable share thereof, to the replacement bank,
financial institution or Structured Lender designated by the Borrower and
consented to by the Administrative Agent (such consent not to be unreasonably
withheld or delayed) for a purchase price equal to the sum of the principal
amount of the Advances or interests therein so assigned, all accrued and unpaid
Yield thereon and any other amounts (including Fees and any amounts owing under
this Article VI) to which such Affected Person is entitled
hereunder; provided, that the Borrower shall provide such Affected
Person with an Officer’s Certificate of CAR stating that such replacement bank,
financial institution or Structured Lender has advised the Borrower that it is
not subject to, or has agreed not to seek, such increased amount.

 

EFFECTIVENESS; CONDITIONS TO ADVANCES

 

Effectiveness.  This
Agreement shall become effective on the first day (the “Effective Date”)
on which the Administrative Agent, on behalf of the Agents and the Lenders,
shall have received the following, each in form and substance satisfactory to
each Agent:

 

11

 

Agreement.  This Agreement executed by each party
thereto;

 

Notes.  For each Lender Group, a Note duly completed
and executed by the Borrower and payable to the Agent for such Lender Group;

 

Fee
Letter.  The Fee Letter, duly executed
and delivered by the parties thereto, and evidence that all amounts required to
be paid on the Effective Date thereunder shall have been paid;

 

Transaction
Documents.  Executed counterparts of each
of the other Transaction Documents, the Backup Servicer Fee Letter and the
Collateral Agent Fee Letter, duly executed by each of the parties thereto; 

 

Resolutions.  A copy of the resolutions of the Board of
Directors (or similar items) of each of the Borrower, the Servicer and the
Seller approving the Transaction Documents to be delivered by it hereunder and
the transactions contemplated hereby, certified by its Secretary or Assistant
Secretary;  

 

Charters.  The Articles of Incorporation or certificate
of organization of each of the Borrower, the Servicer and the Seller certified
by the Secretary of State of its jurisdiction of organization; and a certified
copy of the Borrower’s, the Servicer’s and the Seller’s by-laws, limited
liability company agreement or the equivalent; 

 

Good
Standing Certificates.  Good Standing
Certificates for each of the Borrower, the Seller, and the Servicer issued by
the applicable Official Body of its jurisdiction of organization; 

 

Incumbency.  A certificate of the Secretary or Assistant
Secretary of each of the Borrower, the Servicer and the Seller certifying the
names and true signatures of the officers authorized on its behalf to sign this
Agreement and the other Transaction Documents to be delivered by it;  

 

Filings.  Acknowledgment copies of proper Financing
Statements, as may be necessary under the UCC of all appropriate jurisdictions
or any comparable law to perfect the security interest of the Collateral Agent
on behalf of the Secured Parties in all Borrower Collateral in which an
interest may be pledged hereunder;  

 

Searches.  Copies of UCC financing statement lien
searches certified by a party reasonably acceptable to each Agent), dated a
date reasonably near to the date of the initial Advance, listing all effective
financing statements which name the Borrower or CAR (under their respective
present names and any previous names) as debtor and which are filed in the
jurisdictions in which filings were made pursuant to Section 7.1(i),
together with copies of such financing statements;  

 

12

 

Opinions.  Legal opinions of counsel for the Collateral
Agent and the Backup Servicer in form and substance reasonably satisfactory to
the Administrative Agent covering such matters as the Administrative Agent
shall reasonably request, and legal opinions of Troutman Sanders LLP, special
counsel for the Borrower, CCRT, CAR and CAR Servicing, as to (i) the true
sale of the Dealer Transaction Rights conveyed pursuant to the Sale and
Servicing Agreement, (ii) UCC creation, perfection and, where appropriate,
priority opinions as to the security interest in Dealer Transaction Rights (and
assuming such right constitutes a “payment intangible” under the UCC) and in
the Borrower Collateral, to the extent a security interest in such Collateral
can be perfected by the filing of a financing statement under the UCC as in
effect in the State of Georgia or Nevada, as applicable, (iii) enforceability
of the Sale and Servicing Agreement against the Borrower, CAR and CAR
Servicing, and of this Agreement and the related Transaction Documents against
the Borrower, CAR, CAR Servicing and CCRT, (iv) non-consolidation under
federal bankruptcy law as to the Borrower, on the one hand, and CCRT, CAR, CARS
Acquisition and CAR Servicing, on the other hand and(v) general corporate
matters, each in form and substance reasonably satisfactory to the
Administrative Agent;  

 

Commercial
Paper Ratings.  Evidence reasonably
satisfactory to each initial Lender (e.g. ratings letters) that is a Structured
Lender that its acquisition of Notes and the making of Advances hereunder will
not result in a reduction or withdrawal of the rating of its commercial paper
notes by Moody’s, Standard & Poor’s or any other nationally recognized
rating agency rating its commercial paper notes; 

 

Transition
Servicing Agreement.  A transition
servicing agreement among Wells Fargo Financial America, Inc., the
Predecessors in Interest and CARS Acquisition in form and substance acceptable
to the Administrative Agent; 

 

Payment of
Fees.  Evidence that all fees payable on
or prior to the Effective Date pursuant to the Fee Letter have been paid in
full; and

 

PATRIOT
Act.  All satisfactory information deemed
necessary or desirable by the Administrative Agent with respect to the
Borrower, CAR, the Servicer and CCRT in order for the Administrative Agent, the
Agents and the Lenders to comply fully with their obligations under law,
including without limitation, under the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of
2001, also known as the USA PATRIOT Act, as amended from time to time
(including all regulations promulgated thereunder).

 

All Advances.  The making
of each Advance (including the initial Advance) is subject to the condition
that the Effective Date shall have occurred and to the following further
conditions precedent that:

 

13

 

No
Facility Termination Event, etc.  Each of
the Transaction Documents shall be in full force and effect and (i) no
Facility Termination Event or Unmatured Facility Termination Event has occurred
and is continuing or will result from the making of such Advance, (ii) the
representations and warranties of the Borrower, the Servicer and the Seller
contained herein are true and correct in all material respects as of the date
of such requested Advance, with the same effect as though made on the date of
(and after giving effect to) such Advance (except to the extent (A) such
representation and warranties specifically relate to an earlier date or (B) such
representations and warranties become untrue by reason of events or conditions
otherwise permitted under the Transaction Documents), (iii) after giving effect
to such Advance, the aggregate outstanding principal balance of the Advances
hereunder will not exceed the lesser of the Facility Limit and the Borrowing
Base and (iv) the Backup Servicer shall not have been appointed as
successor Servicer;  

 

Advance
Request, etc.  The Administrative Agent
shall have received the Advance Request for such Advance (including a
certification that the conditions described in subsections 7.2(a) through
7.2(h) have been satisfied with respect thereto) in accordance with Section 2.2,
together with all items required to be delivered in connection therewith;

 

Facility
Termination Date.  The Facility
Termination Date shall not have occurred;

 

Minimum
Advance Amount.  The amount of such
Advance is not less than $1,000,000;

 

Custodial
Receipt.  The Administrative Agent and
the Collateral Agent shall have received a duly completed and executed
Custodial Receipt in respect of each Transferred Receivable identified in the
related Schedule of Contracts or Schedule of Subsequent Contracts, as
the case may be, if any, delivered since the date of the prior Advance;

 

Borrowing
Base Confirmation.  The Administrative
Agent shall have received an Officer’s Certificate dated the date of such
requested Advance certifying the Borrowing Base in the form attached hereto as Exhibit C
(a “Borrowing Base Confirmation”), computed as of the date of such Advance and
after giving effect thereto and to the purchase by the Borrower of any Dealer
Transaction Rights to be purchased by it under the Sale and Servicing Agreement
on such date, demonstrating that the aggregate principal amount of all Advances
shall not exceed the Borrowing Base;

 

Interest
Rate Caps; Cap Funding Reserve Account. 
The Administrative Agent shall have received evidence, in form and substance
satisfactory to the Required Lenders, that the Borrower has arranged for the
Collateral Agent to enter into Interest Rate Caps to the extent required by,
and satisfying the requirements of, Section 11.6; and after giving effect
to the Advance, to the transfer of Receivables and Dealer Transaction Rights
from the Seller to the Borrower on the date of such Advance and the application
of the proceeds thereof in accordance with Section 2.3, the amount on
deposit in the Cap Funding Reserve Account is not less than the Cap Funding
Reserve Account Requirement, if any; and

 

Net
Spread.  Net Spread shall be *** or more
after giving effect to the Advance, to the transfer of Dealer Transaction
Rights from the Seller to the Borrower on the date of such Advance and the
application of the proceeds thereof in accordance with Section 2.3.

 

14

 

No
Lender which is a Structured Lender shall make any Advance unless such Lender’s
Support Facilities are in full force and effect.  If any such Structured Lender’s Support
Facilities are not in full force and effect, the Committed Lenders for such
Structured Lender shall make such Advance so long as the conditions to such
Advance in this Section 7.2 are satisfied.

 

15

 

ADMINISTRATION AND SERVICING OF RECEIVABLES

 

Duties of the Servicer.  The
Servicer shall manage, service, administer and make collections on the
Transferred Receivables and perform the other actions required by the Servicer
under the terms and provisions of the Sale and Servicing Agreement and this
Agreement.

 

Representations and Warranties of the
Servicer.  The Servicer (so long as CAR, CAR Servicing
or an Affiliate of CAR is the Servicer) represents, warrants and covenants as
of the Effective Date and as of the date of each Advance as to itself:

 

Organization
and Good Standing.  It has been duly
organized and is validly existing as a limited liability company in good
standing under the laws of its jurisdiction of organization, with power and
authority to own its properties and to conduct its business as such properties
are currently owned and such business is currently conducted, and had at all
relevant times; 

 

Due
Qualification.  It is duly qualified to
do business as a foreign limited liability company in good standing and has
obtained all necessary licenses and approvals in all jurisdictions where the
failure to do so would have a Material Adverse Effect with respect to the
Servicer; 

 

Power and
Authority.  It has the power and
authority to execute and deliver this Agreement and the other Transaction
Documents to which it is a party and to perform its obligations hereunder and
thereunder; and the execution, delivery and performance of this Agreement and
the Transaction Documents to which it is a party have been duly authorized by
the Servicer by all necessary corporate action; 

 

Binding
Obligation.  This Agreement and the
Transaction Documents to which it is a party (in any capacity) have been
executed and delivered by the Servicer and constitute its legal, valid and
binding obligations enforceable in all material respects in accordance with
their respective terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, or other similar laws affecting the enforcement of
creditors’ rights generally and by equitable limitations on the availability of
specific remedies, regardless of whether such enforceability is considered in a
proceeding in equity or at law; 

 

No
Violation.  The execution, delivery and
performance of this Agreement and the Transaction Documents to which it is a
party, the consummation of the transactions contemplated thereby and the
fulfillment of the terms thereof do not (A) conflict with, result in any
breach of any of the terms and provisions of, or constitute (with or without
notice or lapse of time) a default under, its articles of organization or
operating agreement, or any indenture, agreement, mortgage, deed of trust or
other instrument to which it is a party or by which it or its properties are
bound, (B) result in the creation or imposition of any Lien upon any of
its properties pursuant to the terms of any such indenture, agreement,
mortgage, deed of trust or other instrument, other than this Agreement and the
other Transaction Documents, or (c) violate any law, order, rule or
regulation applicable to it of any Official Body having jurisdiction over it or
any of its properties; 

 

16

 

No
Proceedings.  There are no proceedings or
investigations pending or, to its knowledge, threatened against it, before any
Official Body having jurisdiction over it or its properties (A) asserting
the invalidity of any of the Transaction Documents, (B) seeking to prevent
the issuance of the Notes or the consummation of any of the transactions
contemplated by the Transaction Documents, (C) seeking any determination
or ruling that would have a Material Adverse Effect with respect to the
Servicer, (D) that would have a material adverse effect on the Borrower
Collateral, or (E) seeking to materially and adversely affect the federal
income tax or other federal, state or local tax attributes of the Notes or
seeking to impose any excise, franchise, transfer or similar tax upon the Notes
or the sale and assignment of the Transferred Receivables or Transferred Dealer
Transaction Rights hereunder; 

 

No
Consents.  No consent, license, approval,
authorization or order of, or registration, declaration or filing with, any
Official Body or other Person is required to be made in connection with the
execution, delivery or performance of this Agreement and the Transaction
Documents to which it is a party (in any capacity) or the consummation of the
transactions contemplated thereby, except such as have been duly made, effected
or obtained or to the extent the failure to obtain any such consent, license,
approval, authorization or order, or to make any registration, declaration or
filing would not have a Material Adverse Effect with respect to the Servicer; 

 

Taxes; ERISA.  The Servicer has filed on a timely basis all
tax returns (including, without limitation, foreign, federal, state, local and
otherwise) required to be filed, is not liable for taxes payable by any other
Person and has paid or made adequate provisions for the payment of all taxes,
assessments and other governmental charges due from the Servicer.  No tax lien or similar adverse claim has been
filed, and no claim is being asserted, with respect to any such tax, assessment
or other governmental charge.  Any taxes,
fees and other governmental charges payable by the Servicer in connection with
the execution and delivery of this Agreement and the other Transaction
Documents and the transactions contemplated hereby or thereby have been paid or
shall have been paid if and when due. 
Each benefit plan, if any, of the Servicer that is a “defined benefit”
plan as defined in Section 3(35) of ERISA is in compliance in all material
respects with ERISA and there is no Lien of the Pension Benefit Guaranty
Corporation on any of the Borrower Collateral; 

 

Investment
Company Status.  It is not an “investment
company” within the meaning of the Investment Company Act of 1940, as amended,
or is exempt from all provisions of such Act; 

 

Information
True and Complete.  All information
heretofore or hereafter furnished by or on behalf of the Servicer in writing to
the Borrower, any Lender, any Agent or the Administrative Agent in connection
with this Agreement or any transaction contemplated hereby is and will be, in
each case as of the date furnished or such other date(s) as to be specified in
the information furnished, true and complete in all material respects and does
not and will not, in each case as of the date furnished or such other date(s)
as to be specified in the information furnished, omit to state a material fact
necessary to make the statements contained therein not misleading; and

 

17

 

Other
Documents.  The representations and
warranties made by it in each of the other Transaction Documents to which it is
a party are true and correct in all material respects as of the date(s) made. 

 

Intentionally Omitted.

 

Servicing Fee; Payment of Certain Expenses by
Servicer; Backup Servicer Fee.  On each
Distribution Date, the Servicer shall be entitled to receive out of the
Collection Account the Servicing Fee – Senior and the Servicing Fee –
Subordinate for the related Collection Period pursuant to Section 9.5.
The Servicer shall be required to pay all expenses incurred by it in connection
with its activities under this Agreement and the Sale and Servicing Agreement; provided,
however, that if the Backup Servicer shall have become the successor
Servicer, the Servicer shall be entitled to reimbursement of its expenses as
specified in the Backup Servicer Fee Letter and Section 9.5.  On each Distribution Date, the Backup
Servicer shall be entitled to receive out of the Collection Account the Backup
Servicer Fee for the related Collection Period pursuant to Section 9.5.

 

Distribution Date Statement.  No later
than 2:00 p.m., New York City time, on each Determination Date, the
Servicer shall deliver to the Administrative Agent, the Collateral Agent and
the Backup Servicer a Distribution Date Statement executed by a Responsible
Officer of the Servicer.  The parties
hereto acknowledge that the basis for calculating Yield on the Advances may
change between the date the Servicer delivers a Distribution Date Statement and
the related Distribution Date and that the amount the Servicer sets forth in a
Distribution Date Statement as Yield accrued on the Advances as of the related
Distribution Date is its good faith estimate of such Yield; in the event of any
change in calculating Yield during such period of time, the parties agree to
use reasonable efforts to revise the Distribution Date Statement on or prior to
such Distribution Date to reflect such changes, provided that if such
revisions are not made by such time, then appropriate corrections shall be made
on the next Distribution Date.

 

Annual Statement as to Compliance; Notice of
Servicer Default.

 

The
Servicer shall deliver to the Administrative Agent and the Collateral Agent on
or before April 30 (or 120 days after the end of the Servicer’s fiscal
year, if other than December 31) of each year, beginning on April 30,
2006, an officer’s certificate signed by any Responsible Officer of the
Servicer, dated as of the preceding December 31 (or other applicable
date), stating that (i) a review of the activities of the Servicer during
the preceding 12-month period (or such other period as shall have elapsed from
the Effective Date to the date of the first such certificate) and of its
performance under this Agreement and the Sale and Servicing Agreement has been
made under such officer’s supervision, and (ii) to such officer’s
knowledge, based on such review, the Servicer substantially has fulfilled all
its obligations under this Agreement and the Sale and Servicing Agreement
throughout such period, or, if there has been a default in the fulfillment of
any such obligation, specifying each such default known to such officer and the
nature and status thereof.

 

The
Servicer shall deliver to Administrative Agent, the Collateral Agent, the
Custodian (if other than CAR) and the Backup Servicer, promptly after having
obtained knowledge thereof, but in no event later than two Business Days
thereafter, written notice in an Officers’ Certificate of any event that, with
the giving of notice or lapse of time, would become a Servicer Default, Event
of Default or a Facility Termination Event.

 

Quarterly Independent Accountants’ Report.  8.  The Servicer shall cause BDO Siedman LLP or
other firm of nationally recognized independent certified public accountants
(the “Independent Accountants”), who may also render other services to
CCRT, CAR, the Servicer or the Seller, to deliver to the Administrative Agent,
on or before April 30, July 31, October 31 and January 31
of each year, beginning on July 31, 2005, with respect to the fiscal
quarter ended one month previously (or such other period as shall have elapsed
from the Effective Date to the date of such certificate), a statement (the “Accountants’
Report”) addressed to the Administrative Agent to the effect that (1) the
firm is independent of CCRT, CAR, the Seller and the Servicer within the
meaning of the Code of Professional Ethics of the American Institute of
Certified Public Accountants, and (2) included therein is a report on the
results of the application of agreed upon procedures acceptable to the Required
Lenders (such procedures to be substantially similar to those set forth in the
Field Examination Report dated August 25, 2004 prepared for

 

18

 

DBNY by Evergreen Collateral Consulting, LLC
prior to the occurrence and continuation of a Facility Termination Event) to (A) a
randomly selected Distribution Date Statement including the delinquency,
default and loss statistics required to be specified therein noting whether any
exceptions or errors in the Distribution Date Statements were found and (B) a
statistically significant number of randomly selected Contract Files.  If, in its sole discretion, the
Administrative Agent at any time agrees that the Servicer need only provide an
Accountant’s Report on annual basis, such statement will contain a report on
four randomly selected Distribution Date Statements from the preceding
year.  Such report shall set forth the
agreed-upon procedures performed and will be made available to each of the
Administrative Agent,  Collateral Agent,
and the Back-Up Servicer upon each such party reaching agreement with the
Independent Accountants concerning any potential terms or conditions associated
with the report’s release.  In the event
that such Independent Accountants require the Administrative Agent to agree to
the procedures to be performed by such firm in any of the reports required to
be prepared pursuant to this Section 8.7, the Agents shall direct
the Administrative Agent in writing to so agree; it being understood and agreed
that the Administrative Agent will deliver such letter of agreement in
conclusive reliance upon the written direction of the Agents, and the
Administrative Agent has not made any independent inquiry or investigation as
to, and shall have no obligation or liability in respect of, the sufficiency,
validity or correctness of such procedures. 
Notwithstanding the foregoing, if WFB shall become the successor
Servicer, such report (A) shall relate only to the Contracts and WFB’s
servicing of the Contracts, (B) the fees and expenses of WFB associated
therewith shall be reimbursable, and (C) the independence of the
accountants shall be only with respect to WFB and its Affiliates.

 

The Servicer shall promptly deliver to each Agent a copy of the
accountants’ letter delivered in connection with each Take-Out Securitization.

 

Access to Certain Documentation and
Information Regarding Contracts.  

 

The
Servicer shall permit representatives of the Administrative Agent, each Agent,
the Backup Servicer, the Collateral Agent and the Custodian at any time and
from time to time, but, so long as no Event of Default has occurred and is
continuing, no more than two times per year, during normal business hours as
the Administrative Agent, such Agent, the Backup Servicer, the Collateral Agent
and the Custodian shall reasonably request, (a) to inspect and make copies
of and abstracts from its records relating to the Transferred Receivables and
Transferred Dealer Transaction Rights, and (b) to visit its properties in
connection with the collection, processing or servicing of the Transferred
Receivables and Transferred Dealer Transaction Rights for the purpose of
examining such records, and to discuss matters relating to the Transferred
Receivables and Transferred Dealer Transaction Rights or such Person’s performance
under this Agreement and the other Transaction Documents with any officer or
employee of such Person having knowledge of such matters.  In each case, such access shall be afforded
without charge.  In connection with any
inspection, the Administrative Agent, any Agent, the Backup Servicer, the
Collateral Agent and the Custodian may institute procedures to permit it to
confirm the Obligor balances in respect of any Transferred Receivables or
Transferred Dealer Transaction Rights. 
The Servicer agrees to render to the Administrative Agent, each Agent,
the Backup Servicer, the Collateral Agent and the Custodian such clerical and
other assistance as may be reasonably requested with regard to the
foregoing.  Nothing in this Section 8.8
shall derogate from the obligation of the Servicer to observe any applicable
law prohibiting disclosure of information regarding the Obligors, and the
failure of any of them to provide access as a result of such obligation shall
not constitute a breach of this Section 8.8.

 

The Servicer shall make arrangements for the
prompt and safe transfer of, and the Servicer shall provide to the Backup
Servicer, all necessary servicing files and records, including (as deemed
necessary by the Backup Servicer at such time): 
(A) account documentation, (B) servicing system tapes (in a
format reasonably acceptable to the Backup Servicer), (C) account payment
history, (D) collections history and (E) the trial balances, in each
case reflecting all applicable loan information, as of the following dates: (1) on
an annual basis commencing December 31, 2005, (2) following the
occurrence and during the continuation of a Facility Termination Event under Section 14.1,
monthly, and (3) on the close of business on the day immediately preceding
the day on which the Backup Servicer becomes the successor Servicer.

 

19

 

Certain Duties of Backup Servicer.

 

On or
before each Determination Date, the Servicer shall deliver to the
Administrative Agent and the Backup Servicer a computer tape or a diskette or
any other electronic transmission in a format reasonably acceptable to the
Administrative Agent and the Backup Servicer containing the information with
respect to the Transferred Receivables and Transferred Dealer Transaction
Rights as of the related Accounting Date necessary for preparation of the
Distribution Date Statement relating to such Determination Date.

 

Prior to
each such Distribution Date, the Backup Servicer shall use such tape or
diskette (or other means of electronic transmission reasonably acceptable to
the Administrative Agent and the Backup Servicer) and review the related
Distribution Date Statement in order to perform the following:

 

confirm that the Distribution Date Statement is
complete on its face or note any discrepancies;

 

verify the Aggregate Outstanding Principal Balance of
the Transferred Receivables, the Delinquency Ratio, and the Charge-Off Ratio;
and

 

review the mathematical accuracy of any information
relating to the Collateral on the face of the Distribution Date Statement or
note any discrepancies.

 

20

 

In the
event of any discrepancy between the information set forth in (ii) or (iii) in
clause (b) above as calculated by the Servicer from that determined or
calculated by the Backup Servicer, the Backup Servicer shall promptly report
such discrepancy to the Servicer and the Administrative Agent.  In the event of a discrepancy as described in
the preceding sentence, the Servicer and the Backup Servicer shall attempt to
reconcile such discrepancies prior to the related Distribution Date, but in the
absence of a reconciliation, distributions on the related Distribution Date
shall be made by the Administrative Agent consistent with the information
provided by the Servicer and the Servicer and the Backup Servicer shall attempt
to reconcile such discrepancies prior to the next Determination Date.  If the Backup Servicer and the Servicer are
unable to reconcile discrepancies with respect to such Distribution Date
Statement by the next Determination Date, the Servicer shall cause the
Independent Accountants, at the Servicer’s expense, to examine the Distribution
Date Statement and attempt to reconcile the discrepancies at the earliest
possible date.  The effect, if any, of
such reconciliation shall be reflected in the Distribution Date Statement for
such next succeeding Determination Date.

 

Other than
the duties specifically set forth in this Agreement, the Backup Servicer shall
have no obligations hereunder, including to supervise, verify, monitor or
administer the performance of the Servicer. 
The Backup Servicer shall have no liability for any actions taken or
omitted by the Servicer, except for the express duties of the Backup Servicer
set forth herein.  The Backup Servicer
shall have no liability for any obligation of the Servicer or for any error
contained in any certificate, notice or data prepared by the Servicer (whether
or not verified by the Backup Servicer), such obligations being solely the
obligations of the Servicer.

 

Upon
appointment of the Backup Servicer as the successor Servicer, its obligations
as Backup Servicer shall terminate.

 

Consequences of a Servicer Default.  If a
Servicer Default shall occur and be continuing, the Administrative Agent,
acting at the direction of the Required Lenders, by written notice given to the
Servicer, may terminate all of the rights and obligations of the Servicer
pursuant to the terms of the Sale and Servicing Agreement and appoint a
successor pursuant to the terms thereof. 
In addition, upon the occurrence of a Servicer Default, the Servicer
shall, if so requested by the Administrative Agent, acting at the direction of
the Required Lenders, deliver to the Backup Servicer its Monthly Records within
two Business Days after demand therefor and a computer tape or diskette (or any
other means of electronic transmission reasonably acceptable to the Backup
Servicer) containing as of the close of business on the date of demand all of
the data maintained by the Servicer in computer format in connection with
servicing the Transferred Receivables and the Transferred Dealer Transaction
Rights.

 

Appointment of Backup Servicer as Successor
Servicer.  On and after the termination of the Servicer
pursuant to Section 8.10, the Backup Servicer (or any other
successor Servicer appointed by the Administrative Agent) shall be the
successor in all respects to the Servicer in its capacity as Servicer under
this Agreement and the Sale and Servicing Agreement and the transactions set
forth or provided for in this Agreement and the Sale and Servicing Agreement
and shall be subject to all the rights, responsibilities, restrictions, duties,
liabilities and termination provisions relating thereto placed on the Servicer
by the terms and provisions of this Agreement and the Sale and Servicing
Agreement.

 

Upon the notice to WFB that it shall be appointed
successor Servicer, WFB shall develop a reasonable transition plan and shall be
granted a reasonable period of time, which shall not exceed 90 days, to
implement such plan and assume the obligations of the Servicer and the
servicing of the Transferred Receivables and Transferred Dealer Transaction
Rights in accordance with its customary servicing procedures, including a
reasonable period of time to hire required personnel, load and configure the
necessary information onto its computer systems, establish necessary cash
management procedures, locate and contact the Obligors to redirect 

 

21

 

payments, and any other transition related item
required or reasonably necessary to perform its obligations as Servicer or
subservicer.

 

WFB shall service the Transferred Receivables and
Transferred Dealer Transaction Rights in its own name from centralized locations
using its own personnel and properties and shall have no liability arising from
or responsibility for the personnel or properties of any other or predecessor
Servicer.  All powers, rights and
authorities granted to the Servicer are hereby granted to WFB and each of its
Affiliates and agents as are necessary, appropriate or convenient to perform
its functions as Servicer or subservicer. 
If WFB shall be a subservicer, the Servicer shall deliver to WFB copies
of all information delivered to or by it in its capacity as Servicer, and WFB’s
obligations and liabilities shall be solely to the Servicer and not to any
other party or Person.  Any provision of
this Agreement or the Sale and Servicing Agreement requiring WFB to use best
efforts shall require only reasonable efforts with respect thereto.

 

After termination of the Servicer pursuant to Section 8.10,
if requested by the Collateral Agent, the Backup Servicer or successor Servicer
shall terminate each Lockbox Agreement and direct the Obligors to make all
payments under the Receivables Collateral directly to the successor Servicer or
to a lockbox established by the successor Servicer at the direction of the
Collateral Agent, at the prior Servicer’s expense.

 

In the event that WFB is appointed successor Servicer,
if (a) WFB is later removed as Servicer other than due to a Servicer
Default with respect to WFB that has occurred and is continuing or (b) all
or substantially all of the Contracts are sold in connection with an Event of
Default, WFB shall be entitled to a termination fee, immediately payable in
cash as part of the Servicing Fee – Subordinate, in an amount equal to two
times the average monthly fees of WFB over the preceding four Collection
Periods.

 

22

 

Indemnification of Backup Servicer.  Without
limiting any other rights which the Backup Servicer may have hereunder or under
applicable law, the Borrower agrees to indemnify the Backup Servicer, including
in its capacity as successor Servicer, and each of its successors, and assigns,
from and against any and all damages, losses, claims, liabilities and related
costs and expenses, including reasonable attorneys’ fees and disbursements
awarded against or incurred by any of them arising out of or relating to any
Transaction Document or the transactions contemplated thereby or the use of
proceeds therefrom by the Borrower, the Seller or CAR, except (a) damages,
losses, claims, liabilities, costs and expenses payable to such Person to the
extent determined by a court of competent jurisdiction to have resulted from
gross negligence or willful misconduct on the part of any such Person or its
agent or subcontractor; and (b) any tax upon or measured by the net income
on any such Person.

 

Delegation of Duties.  The
Servicer, including the Backup Servicer as successor Servicer, may at any time
appoint a subservicer or subcontractor to perform all or any portion of its
obligations as Servicer hereunder; provided that the Servicer shall be
obligated and be liable for the performance of such obligations in accordance
with the provisions of this Agreement without diminution of such obligations by
virtue of the appointment of such subservicer or subcontractor to the same
extent as if the Servicer were alone performing such obligations.

 

ACCOUNTS; PAYMENTS

 

Borrower Accounts.

 

On or
prior to the Effective Date, the Servicer shall establish the Collection
Account and the Cap Funding Reserve Account each in the name of the Collateral
Agent for the benefit of the Secured Parties. 
The Collection Account and the Cap Funding Reserve Account shall each be
an Eligible Account which is a segregated trust account initially established
with the Collateral Agent.  If at any
time the Collection Account or the Cap Funding Reserve Account ceases to be an
Eligible Account, the Collateral Agent, at the written direction of the
Servicer, shall transfer such account to another institution such that such
account shall meet the requirements of an Eligible Account.

 

All
amounts held in the Collection Account and the Cap Funding Reserve Account
(collectively, the “Borrower Accounts”), shall, to the extent permitted by
applicable laws, rules and regulations, be invested by the Collateral
Agent, as directed by the Servicer (so long as CAR, CAR Servicing or an
Affiliate of CAR is the Servicer) in writing (or, if the Servicer fails to
provide such direction, amounts in the Collection Account shall be invested in
investments described in clause (f) of the definition of Permitted
Investments), in Permitted Investments that mature not later than one Business
Day prior to the Distribution Date for the Collection Period to which such
amounts relate.  Any such written
direction shall certify that any such investment is authorized by this Section 9.1.  Investments in Permitted Investments shall be
made in the name of the Collateral Agent on behalf of the Secured Parties and,
except as specifically required below, such investments shall not be sold or
disposed of prior to their maturity.  The
taxpayer identification number associated with each Borrower Account shall be
that of the Borrower and the Borrower shall report for Federal, state and local
income tax purposes, the income, if any, represented by each Borrower
Account.  If any amounts are needed for
disbursement from the Collection Account or the Cap Funding Reserve Account and
sufficient uninvested funds are not available therein to make such
disbursement, the Collateral Agent shall, at the written direction of the
Servicer, cause to be sold or otherwise converted to cash a sufficient amount
of the investments in such account to make such disbursement upon the written
direction of the Servicer (so long as CAR, CAR Servicing or an Affiliate of CAR
is the Servicer) or, if the Servicer shall fail to give such written direction,
DBNY.  

 

Subject to the
other provisions hereof, the Collateral Agent shall have sole control over each
such investment and the income thereon, and any certificate or other instrument

 

23

 

evidencing any
such investment, if any, shall be delivered directly to the Collateral Agent or
its agent, together with each document of transfer, if any, necessary to
transfer title to such investment to the Collateral Agent in a manner that
complies with this Section 9.1. 
All interest, dividends, gains upon sale and other income from, or
earnings on, investments of funds in the Collection Account shall be deposited
in the Collection Account and distributed pursuant to Section 9.5.  All interest, dividends, gains upon sale and
other income from or earnings on, investments of funds in the Cap Funding
Reserve Account shall be deposited in the Collection Account and distributed
pursuant to Section 9.5.  If
the Collateral Agent is given instructions by the Servicer to invest funds in
any of the Borrower Accounts in investments other than investments of the type
described in clause (f) of the definition of “Permitted
Investments,” the Servicer agrees to assist the Administrative Agent in
complying with the requirements herein with respect to such investments.

 

Servicer Reimbursements.  The
Servicer shall be entitled to be reimbursed from amounts on deposit in, or to
be deposited in, the Collection Account with respect to a Collection Period for
amounts previously deposited in the Collection Account but later determined by
the Servicer to have resulted from mistaken deposits or postings or checks
returned for insufficient funds.  The
amount to be reimbursed hereunder shall be paid to the Servicer on or prior to
the related Distribution Date pursuant to Section 9.5(a)(iv).  Upon the request of the Administrative Agent
or any Agent, the Servicer shall certify any amount to be reimbursed hereunder
and shall supply such other information as may be necessary in the opinion of
the Administrative Agent to verify the accuracy of such certification.  The Administrative Agent shall not be under
any obligation to make the request described in the immediately preceding
sentence.

 

Application of Collections.  With
respect to each Transferred Receivable or Transferred Dealer Transaction Right,
payments by or on behalf of the Obligor shall be applied to interest and
principal thereof to reduce the balance thereof in accordance with the terms of
such Transferred Receivable or Transferred Dealer Transaction Right and Section 5.02
of the Sale and Servicing Agreement.

 

Additional Deposits.  On or
before each Determination Date, the Servicer (so long as CAR, CAR Servicing or
an Affiliate of CAR is the Servicer) or the Borrower, as applicable, shall
deposit into the Collection Account the aggregate Repurchase Amounts with
respect to Repurchased Receivables or Repurchased Dealer Transaction
Rights.  All such deposits of Repurchase
Amounts shall be made in immediately available funds.  Upon receipt, the Collateral Agent shall
remit to the Collection Account any amounts paid by a counterparty under any
Interest Rate Cap.

 

Distributions.

 

On
each Distribution Date prior to the occurrence and continuation of a
Termination Event or an Event of Default, the Collateral Agent shall
distribute, at the written direction of the Servicer, from the Collection
Account, in accordance with the applicable Distribution Date Statement provided
by the Servicer, the Amount Available for such Distribution Date in the
following order of priority:  

 

FIRST, from the Amount
Available, to the extent not previously paid by CAR or otherwise by or on
behalf of the Borrower, to the Backup Servicer, any accrued and unpaid fees and
expenses pursuant to the Backup Servicer Fee Letter, which expenses shall not
exceed the amount of the Capped Fees/Expenses – Backup Servicer;

 

SECOND, from the
remaining Amount Available, to the extent not previously paid by CAR or
otherwise by or on behalf of the Borrower, to the Administrative Agent, any
accrued and unpaid fees, if any, and expenses (including those of its legal
counsel) for the related Collection Period pursuant to the Administrative Agent
Fee Letter, which expenses shall not exceed the amount of the Capped
Fees/Expenses –Administrative Agent and to the Collateral Agent, any accrued
and 

 

24

 

unpaid fees and expenses
(including those of its legal counsel) for the related Collection Period
pursuant to the Collateral Agent Fee Letter, which expenses shall not exceed
the amount of the Capped Fees/Expenses –Collateral Agent;

 

THIRD, from the remaining
Amount Available, if the Custodian is not CAR or an Affiliate of CAR, to the
extent not previously paid by CAR or otherwise by or on behalf of the Borrower,
to the Custodian, any accrued and unpaid fees and expenses (including those of
its legal counsel) for the related Collection Period pursuant to the Custodian
Fee Letter, which expenses shall not exceed the amount of the Capped Fees/Expenses
– Custodian;

 

FOURTH, from the
remaining Amount Available, to the Servicer, any accrued and unpaid Servicing
Fees — Senior, and any transition expenses payable to a successor Servicer
pursuant to the Sale and Servicing Agreement to the extent not paid by the
predecessor Servicer, provided, that such transition expenses, including
travel, boarding fees, mailing costs, obligor letters (welcome and goodbye) and
document packaging and shipping, shall not exceed 200,000 in the aggregate and
the amounts specified in Section 9.2 to the extent the Servicer has
not reimbursed itself in respect of such amounts pursuant to Section 9.6;

 

FIFTH, from the remaining
Amount Available, to the Administrative Agent, on behalf of the Lenders, an
amount equal to Yield on the Advances accrued during the Accrual Period with
respect to such Distribution Date (and any Yield with respect to any prior
Accrual Period to the extent not paid on a prior Distribution Date), and the
Fees payable on such Distribution Date pursuant to the Fee Letter (and any Fees
due and not paid on a prior Distribution Date);

 

SIXTH, from the remaining
Amount Available, to the Administrative Agent, on behalf of the Lenders, to
repay pursuant to Section 2.6(b) the principal amount of
Advances in an amount equal to the excess, if any, of the then outstanding
principal amount of all Advances over the Borrowing Base with respect to such
Distribution Date;

 

SEVENTH, from the
remaining Amount Available, to the Servicer, any accrued and unpaid Servicing
Fees — Subordinate;

 

EIGHTH, from the
remaining Amount Available, to the Administrative Agent, for the benefit of
Affected Persons any Increased Costs and other unpaid amounts then due and
owing pursuant to Section 6.1; and

 

NINTH, from the remaining
Amount Available, to the Borrower.

 

On
each Distribution Date following the occurrence and continuation of a Facility
Termination Event or an Event of Default, the Collateral Agent shall distribute
from the Collection Account, in accordance with the applicable Distribution
Date Statement provided by the Servicer, the Amount Available for such
Distribution Date in the following order of priority:

 

FIRST, from the Amount
Available, to the extent not previously paid by CAR or otherwise by or on
behalf of the Borrower, to the Backup Servicer, any accrued and unpaid fees and
expenses pursuant to the Backup Servicer Fee Letter, which expenses shall not
exceed the amount of the Capped Fees/Expenses – Backup Servicer;

 

25

 

SECOND, from the
remaining Amount Available, to the extent not previously paid by CAR or
otherwise by or on behalf of the Borrower, to the Administrative Agent, any
accrued and unpaid fees and expenses (including those of its legal counsel) for
the related Collection Period pursuant to the Administrative Agent Fee Letter,
which expenses shall not exceed the amount of the Capped Fees/Expenses –Administrative
Agent and to the Collateral Agent, any accrued and unpaid fees and expenses
(including those of its legal counsel) for the related Collection Period
pursuant to the Collateral Agent Fee Letter, which expenses shall not exceed
the amount of the Capped Fees/Expenses –Collateral Agent;

 

THIRD, from the remaining
Amount Available, if the Custodian is not CAR or an Affiliate of CAR, to the
extent not previously paid by CAR or otherwise by or on behalf of the Borrower,
to the Custodian, any accrued and unpaid fees and expenses (including those of
its legal counsel) for the related Collection Period pursuant to the Custodian
Fee Letter, which expenses shall not exceed the amount of the Capped
Fees/Expenses – Custodian;

 

FOURTH, from the
remaining Amount Available, to the Servicer, any accrued and unpaid Servicing
Fees — Senior, and any transition expenses payable to a successor Servicer
pursuant to the Sale and Servicing Agreement to the extent not paid by the
predecessor Servicer, provided, that such transition expenses, including
travel, boarding fees, mailing costs, obligor letters (welcome and goodbye) and
document packaging and shipping, shall not exceed $200,000 in the aggregate and
the amounts specified in Section 9.2 to the extent the Servicer has
not reimbursed itself in respect of such amounts pursuant to Section 9.6;;

 

FIFTH, from the remaining
Amount Available, to the Administrative Agent, on behalf of the Lenders, an
amount equal to Yield on the Advances accrued during the Accrual Period with
respect to such Distribution Date (and any Yield with respect to any prior
Accrual Period to the extent not paid on a prior Distribution Date), and the
Fees payable on such Distribution Date pursuant to the Fee Letter (and any Fees
due and not paid on a prior Distribution Date)

 

SIXTH, from the remaining Amount Available, to the
Administrative Agent on behalf of the Lenders, the principal amount of
outstanding Advances until such Advances are paid in full;

 

SEVENTH, from the
remaining Amount Available, to the Administrative Agent, for the benefit of
Affected Persons any Increased Costs and other unpaid amounts then due and
owing pursuant to Section 6.1;

 

EIGHTH, from the
remaining Amount Available, to the Servicer, any accrued and unpaid Servicing
Fees — Subordinate;

 

NINTH, from the remaining
Amount Available, to the Borrower.

 

On
each Interim Distribution Date, the Collateral Agent shall, at the written
direction of the Servicer (so
long as CAR, CAR Servicing or an Affiliate of CAR is the Servicer) delivered at
least two Business Days prior to such Interim Distribution Date, withdraw from the Collection Account and distribute the
following amounts in the following order of priority:  

 

FIRST, to the
Administrative Agent, on behalf of the Lenders, Yield and Fees accrued in
respect of the Advances being paid or prepaid on such date; and

 

26

 

SECOND, to the
Administrative Agent, on behalf of the Lenders, an amount equal to the Advances
being paid or prepaid on such date.

 

On
any Business Day, the Borrower may request in writing that the Collateral Agent
withdraw Excess Funds from the Collection Account and distribute such amounts
to, or as directed by, the Borrower so long as the following conditions have
been satisfied:  

 

the Borrower shall have provided the Administrative
Agent with one Business Day’s prior written notification of the amount of
Excess Funds to be distributed and the date of such distribution and shall have
provided the Collateral Agent written notification of the amount of Excess
Funds to be distributed and the date of such distribution prior to noon, New
York City time, on the date of such distribution;

 

before and after giving effect to such distribution
(and after including in the Aggregate Outstanding Principal Balance on such day
the Dealer Transaction Rights and related Receivables transferred to the
Borrower on such day), no Borrowing Base Deficiency shall exist;

 

the Servicer shall have provided the Administrative
Agent with prior written confirmation of the amount of Excess Funds;

 

no Facility Termination Event or Unmatured Facility
Termination Event shall have occurred and be continuing; and

 

no Level Two Trigger Event shall have occurred and be
continuing, provided that the Servicer may
request that the Collateral Agent withdraw Excess Funds from the Collection
Account following the occurrence of a Level Two Trigger if the Servicer shall
be delivering to the Collateral Agent and the Administrative Agent daily
reports on Collections, Delinquent Receivables, Defaulted Receivables, the
Aggregate Outstanding Principal Balance, the Borrowing Base and such other information
as the Administrative Agent may reasonably request.

 

Net Deposits.  So long as no Servicer Default has occurred
and is continuing, the Servicer may make the remittances to be made by it
pursuant to Sections 9.3 and 9.4 net of amounts (which amounts may
be netted prior to any such remittance for a Collection Period) to be
distributed to it pursuant to Section 9.2, 9.5(a)(iii) or 9.5(b)(ii); provided, however, that the Servicer shall
account for all of such amounts in the related Distribution Date Statement as
if such amounts were deposited and distributed separately; and provided,
further, that if an error is made by the Servicer in calculating the
amount to be deposited or retained by it, with the result that an amount less
than required is deposited in the Collection Account, the Servicer shall make a
payment of the deficiency to the Collection Account immediately upon becoming
aware, or receiving notice from the Administrative Agent or Collateral Agent or
any Agent, of such error.

 

REPRESENTATIONS AND WARRANTIES

 

In order to induce the other parties hereto to enter
into this Agreement and, in the case of the Lenders, to make Advances
hereunder, the Borrower hereby represents and warrants to the Administrative
Agent, the Backup Servicer and the Investors, as of the Effective Date and the
date of each Advance (unless otherwise indicated), as follows:

 

Organization and Good Standing.  It has been
duly organized and is validly existing under the laws of the jurisdiction of
its organization, with power and authority to own its properties and to conduct
its business as such

 

27

 

properties are currently owned and such
business is currently conducted.  It had
at all relevant times and now has, power, authority and legal right, in the
case of the Borrower, to acquire and own the Transferred Receivables, the
Transferred Dealer Transaction Rights and the Other Conveyed Property, and to
grant to the Collateral Agent a security interest in the Transferred
Receivables, the Transferred Dealer Transaction Rights, the Other Conveyed
Property and the other Borrower Collateral.

 

Due Qualification.  It is duly
qualified to do business and has obtained (or prior to the Initial Closing Date
will have obtained) all necessary licenses and approvals in all jurisdictions
where the failure to do so would have a Material Adverse Effect with respect to
the Borrower.

 

Power and Authority.  It has the
power and authority to execute and deliver this Agreement and the other
Transaction Documents to which it is a party and to CARS Acquisition out its
terms and their terms, respectively; the Borrower has full power and authority
to grant to the Collateral Agent, for the benefit of the Secured Parties, a
perfected first priority security interest in the Borrower Collateral and has
duly authorized such grant by all necessary corporate action; and the
execution, delivery and performance of this Agreement and the other Transaction
Documents to which it is a party have been duly authorized by each such Person
by all necessary corporate or limited liability company action.

 

Security Interest; Binding Obligations.  This
Agreement and the Transaction Documents to which it is a party have been duly
executed and delivered; this Agreement (together with the filing of any
required financing statements) shall create a valid first priority perfected
security interest (except, as to priority, for any Permitted Liens that may
arise after the Effective Date, to the extent granted priority under applicable
law (except to the extent the Collateral Agent has elected not to perfect such
Security Interest) in the Borrower Collateral in favor of the Collateral Agent,
for the benefit of the Secured Parties, enforceable against the Borrower and
creditors of the Borrower and any Affiliate thereof (including CAR), to the
extent (as to perfection and priority) that a security interest in said
Borrower Collateral may be perfected by the filing of a financing statement
under the applicable UCC; and this Agreement and the other Transaction
Documents to which it is a party shall constitute legal, valid and binding
obligations of each such Person enforceable in accordance with their respective
terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of creditors’
rights generally and by equitable limitations on the availability of specific
remedies, regardless of whether such enforceability is considered in a
proceeding in equity or at law.

 

No Violation.  The
consummation of the transactions contemplated by this Agreement and the other
Transaction Documents to which it is a party, and the fulfillment of the terms
of this Agreement and the other Transaction Documents to which it is a party,
shall not conflict with, result in any breach of any of the terms and
provisions of, or constitute (with or without notice or lapse of time) a
default under, the articles of incorporation or bylaws or the equivalent of
such Person, or any indenture, agreement, mortgage, deed of trust or other
instrument to which such Person is a party or by which it is bound or any of
its properties are subject in any material respect, or result in the creation
or imposition of any Lien (other than Permitted Liens) upon any of its properties
pursuant to the terms of any such indenture, agreement, mortgage, deed of trust
or other instrument, other than this Agreement, or violate any law, order, rule or
regulation applicable to such Person of any Official Body having jurisdiction
over such Person or any of its properties, or in any way materially adversely
affect such Person’s ability to perform its obligations under this Agreement or
the other Transaction Documents to which it is a party.

 

No Proceedings.  There are
no proceedings or investigations pending or, to the knowledge of such Person,
threatened against such Person, before any court or Official Body having
jurisdiction over it or its properties (A) asserting the invalidity of
this Agreement or any of the other Transaction Documents, (B) seeking to
prevent the consummation of any of the transactions contemplated by this
Agreement or any of the other Transaction Documents, (C) seeking any
determination or ruling that would materially and adversely affect the
performance by such Person of its obligations under, or the validity or
enforceability of, this Agreement or any of the other Transaction Documents, (D) that
would have a material adverse effect on the Transferred Receivables, the
Transferred Dealer Transaction Rights or other Borrower Collateral or (E) seeking
to materially and adversely affect the federal income tax or other federal,
state or local tax attributes of the Notes or seeking to impose any excise,
franchise, transfer or similar tax upon the Notes or the sale and assignment of
the Transferred Receivables, Transferred Dealer Transaction Rights and the
other Borrower Collateral hereunder.

 

No Consents.  It is not
required to obtain the consent of any other party or any approval,
authorization, consent, license, approval or authorization, or registration or
declaration with, any Official Body or other Person in connection with the
execution, delivery, performance, validity or enforceability of this Agreement
or the other Transaction Documents to which it is a party, except such as have
been duly made, effected or obtained.

 

Solvency.  It is
solvent and will not become insolvent after giving effect to the transactions
contemplated by this Agreement and the Transaction Documents.  The Borrower has no Indebtedness to any
Person other than pursuant

 

28

 

 to
this Agreement and the other Transaction Documents except such Indebtedness to
the Seller as has been subordinated to the Borrower’s obligations under this
Agreement.  After giving effect to the
transactions contemplated by this Agreement and the other Transaction
Documents, it will have an adequate amount of capital to conduct its business
in the foreseeable future.

 

Tax Treatment.  For federal
income tax purposes, the Borrower or Seller will be treated as the owner of the
Transferred Receivables, Transferred Dealer Transaction Rights and Other
Conveyed Property, the Borrower or the Seller will be treated as the borrower
under this Agreement, and the Advances made under this Agreement will be
treated as the Indebtedness of the Borrower or the Seller.  For legal purposes, the Seller and the
Borrower will treat the purchase or absolute assignment of the Transferred
Receivables, Transferred Dealer Transaction Rights and Other Conveyed Property
pursuant to the Sale and Servicing Agreement as a purchase or absolute
assignment of the relevant Seller’s full right, title and ownership interest in
such Transferred Receivables, Transferred Dealer Transaction Rights and Other
Conveyed Property.  For avoidance of
doubt, CAR may consolidate the Borrower and/or its properties and other assets
for accounting purposes.

 

Compliance With Laws.  It has
complied and will comply in all material respects with all applicable laws,
rules, regulations, judgments, agreements, decrees and orders with respect to
its business and properties and all Borrower Collateral.

 

Taxes.  It has
filed on a timely basis all tax returns (including, without limitation,
foreign, federal, state, local and otherwise) required to be filed, is not
liable for taxes payable by any other Person and has paid or made adequate
provisions for the payment of all taxes, assessments and other governmental
charges due from such Person.  No tax
lien or similar adverse claim has been filed, and no claim is being asserted,
with respect to any such tax, assessment or other governmental charge.  Any taxes, fees and other governmental
charges payable by such Person in connection with the execution and delivery of
this Agreement and the other Transaction Documents and the transactions
contemplated hereby or thereby including the transfer of each Transferred
Receivables, each Transferred Dealer Transaction Right and Other Conveyed
Property to such Person have been paid or shall have been paid if and when due
at or prior to the Effective Date and the relevant Purchase Date, as the case
may be.

 

Certificates.  Each
Distribution Date Statement, Advance Request and Borrowing Base Confirmation is
accurate in all material respects as of the date thereof.

 

No Liens, Etc.  The Borrower
Collateral and each part thereof is owned by the Borrower free and clear of any
Adverse Claim or restrictions on transferability and the Borrower has the full
right, corporate power and lawful authority to assign, transfer and pledge the
same and interests therein, and upon the making of each Advance, the Collateral
Agent, for the benefit of the Secured Parties, will have acquired a perfected,
first priority and valid security interest (except, as to priority, for any
Permitted Liens that may arise to the extent granted priority under applicable
law) in such Borrower Collateral, free and clear of any Adverse Claim or
restrictions on transferability, to the extent (as to perfection and priority)
that a security interest in said Borrower Collateral may be perfected under the
applicable UCC.  No effective financing
statement or other instrument similar in effect covering all or any part of the
Borrower Collateral is on file in any recording office, except such as will be
released on the Effective Date or as may have been filed in favor of the
Collateral Agent as “Secured Party” pursuant hereto or as necessary or
advisable to effect the sales contemplated by the Sale and Servicing Agreement.

 

Purchase and Sale.  After
giving effect to the making of the Advances and the application of the proceeds
thereof on each Purchase Date, the Borrower Collateral will have been purchased
by or contributed to the Borrower on such Purchase Date pursuant to the Sale
and Servicing Agreement and all amounts owing to the Seller as consideration
therefor will be paid in full (other than amounts due under the Promissory
Notes).

 

Information True and Complete.  All
information heretofore or hereafter furnished by or on behalf of such Person in
writing to any Lender, any Agent or the Administrative Agent in connection with
this Agreement or any transaction contemplated hereby is and will be true and
complete in all material respects and does not and will not omit to state a
material fact necessary to make the statements contained therein not
misleading.

 

ERISA Compliance.  It has no
benefit plans subject to ERISA.

 

Financial or Other Condition.  There has
been no material adverse change in its financial condition, business, or
results of operations since the date of organization.

 

Investment Company Status.  It is not
an “investment company” or an “affiliated person” of, or “promoter” or “principal
underwriter” for, an “investment company,” as such terms are defined in the
Investment Company Act of 1940, as amended.

 

Eligible Receivables.  All
Transferred Receivables included by the Borrower in the Borrowing Base as of
the most recently delivered Distribution Date Statement or Borrowing Base
Confirmation are Eligible Receivables.

 

Use of Proceeds.  Neither the
Borrower, the Seller nor CAR is engaged in the business of extending credit for
the purpose of purchasing or CARS Acquisition margin stock (as defined in
Regulation U (12 CFR Part 221) of the 

 

29

 

Board of Governors of the Federal Reserve
System) and none of the proceeds of the Advances will be used, directly or
indirectly, for a purpose that violates Regulation T, Regulation U, Regulation
X or any other regulation promulgated by the Board of Governors of the Federal Reserve
System from time to time.

 

Separate Existence.  The
Borrower is operated as an entity with assets and liabilities distinct from
those of CCRT, CAR, the Seller and any other Affiliates of the Borrower, the
Seller, CCRT or CAR, and the Borrower hereby acknowledges that the
Administrative Agent, each of the Agents and each of the Lenders are entering
into the transactions contemplated by this Agreement in reliance upon the
Borrower’s identity as a separate legal entity from CCRT, CAR, the Seller and
each such Affiliate.  Since its
formation, the Borrower has been (and will be) operated in such a manner as to
comply with the covenants set forth in Section 11.5.

 

Investments.  The
Borrower does not own or hold, directly or indirectly, any capital stock or equity
security of, or any equity interest in, any Person, other than, in the case of
the Borrower, the Permitted Investments in the Borrower Accounts.

 

Representation and Warranties True and
Complete.  Each of the representations and warranties of
such Person contained in this Agreement and the other Transaction Documents is
true and complete in all material respects and such Person hereby makes each
such representation and warranty to, and for the benefit of, the Administrative
Agent and the other Secured Parties as if the same were set forth in full
herein.

 

Transaction Documents.  The Sale
and Servicing Agreement is the only agreement pursuant to which the Borrower
purchases and receives contributions of Transferred Dealer Transaction Rights
and Transferred Receivables, and the Transaction Documents delivered to the
Administrative Agent represent all material agreements between the Seller, on
the one hand, and the Borrower, on the other. 
It has furnished to the Administrative Agent and each Agent true, correct
and complete copies of each Transaction Document to which it is a party, each
of which is in full force and effect. 
Neither the Borrower, the Seller nor any Affiliate party thereto is in
default of any of its obligations thereunder in any material respect.  All such assets are transferred to the
Borrower without recourse to the Seller except as described in the Sale and
Servicing Agreement.  The purchases of
such assets by the Borrower constitute valid and true sales for consideration
(and not merely a pledge of such assets for security purposes) and the
contributions of such assets received by the Borrower constitute valid and true
transfers for consideration, each enforceable against creditors of the Seller,
and no such assets shall constitute property of the Seller.

 

Ownership of the Borrower.  One hundred
percent (100%) of the outstanding capital stock of the Borrower is and will be
directly owned (both beneficially and of record) by CARS Acquisition.  All such stock is and will be validly issued,
and there are no options, warrants or other rights to acquire shares or other
equity rights in the Borrower.

 

 

BORROWER COVENANTS

 

From the date hereof until the first day following the
Facility Termination Date on which all Obligations shall have been finally and
fully paid and performed, the Borrower hereby covenants and agrees with the
Investors, the Custodian, the Administrative Agent and the Collateral Agent
that:

 

30

 

Protection of Security Interest of
the Secured Parties.

 

At
or prior to the Effective Date, the Borrower shall have filed or caused to be
filed a UCC-1 financing statement, naming the Borrower as debtor, naming the
Collateral Agent (for the benefit of the Secured Parties) as secured party and
describing the Borrower Collateral, with the office of the Secretary of State
of the State of Nevada.  From time to
time thereafter, the Borrower shall file such financing statements and cause to
be executed and filed such continuation statements, all in such a manner and in
such places as may be required by law fully to preserve, maintain and protect
the interest of the Secured Parties under this Agreement in the Borrower
Collateral and in the proceeds thereof to the extent a security interest in
such Collateral can be perfected by the filing of a financing statement under
the UCC.  The Borrower shall deliver (or
cause to be delivered) to the Administrative Agent and the Collateral Agent
file-stamped copies of, or filing receipts for, any financing statement,
statement of continuation or statement of amendment filed as provided above, as
soon as available following such filing. 
In the event that the Borrower fails to perform its obligations under
this subsection, the Collateral Agent at the direction of the Required Lenders
may do so, in each case at the expense of the Borrower.

 

The
Borrower shall not change its name, identity or corporate structure in any
manner that would, make any financing statement or continuation statement filed
by the Borrower (or by the Collateral Agent on behalf of the Borrower) in
accordance with paragraph (a) above seriously misleading or change its
jurisdiction of organization, unless the Borrower shall have given the
Collateral Agent at least 30 days prior written notice thereof, and shall
promptly file appropriate amendments to all previously filed financing
statements and continuation statements.

 

The
Borrower shall maintain its computer systems, if any, so that, from and after
the time of the first Advance under this Agreement, the Borrower’s master
computer records (including archives) that shall refer to the Borrower
Collateral indicate clearly that such Borrower Collateral is subject to first
priority security interest in favor of the Collateral Agent, for the benefit of
the Secured Parties.  Indication of the
Collateral Agent’s (for the benefit of the Secured Parties) security interest
shall be deleted from or modified on the Borrower’s computer systems when, and
only when, the Borrower Collateral in question shall have been paid in full,
the security interest under this Agreement has been released in accordance with
its terms, with respect to any Transferred Receivables, upon such Transferred
Receivables becoming a Repurchased Receivable or otherwise as expressly
permitted by the Sale and Servicing Agreement or by this Agreement.  Notwithstanding the foregoing, until the
Servicer shall have in effect a new computer system for maintaining records from
that in effect on the Initial Closing Date, the covenant set forth in this
clause (c) shall not apply.

 

Without
limiting any of the other provisions hereof, if at any time the Borrower shall
propose to sell, grant a security interest in, or otherwise transfer any
interest in motor vehicle receivables or dealer transaction rights to any
prospective lender or other transferee, the Borrower shall give to such
prospective lender or other transferee computer tapes, records, or print-outs
(including any restored from archives) that, if they shall refer in any manner
whatsoever to any Borrower Collateral, shall indicate clearly that such
Borrower Collateral is subject to a first priority security interest in favor
of the Collateral Agent, for the benefit of the Secured Parties.

 

31

 

The
Borrower agrees that at any time and from time to time, at its expense, it
shall promptly execute and deliver all further instruments and documents, and
take all reasonable further action, that may be necessary or desirable or that
the Required Lenders may reasonably request to perfect and protect the
assignments and security interests granted or purported to be granted by this
Agreement or to enable the Collateral Agent or any of the Secured Parties to
exercise and enforce its rights and remedies under this Agreement with respect
to any Borrower Collateral.  Without
limiting the generality of the foregoing, the Borrower shall execute and file
such financing or continuation statements, or amendments thereto, and such other
instruments or notices as may be necessary or desirable or that the Required
Lenders may reasonably request to protect and preserve the assignments and
security interests granted by this Agreement. 
The Borrower shall in no circumstance be required to obtain a security
interest in favor of the Borrower or the Collateral Agent in a Financed Vehicle
by causing the Borrower’s or the Collateral Agent’s name to be reflected on the
Title Document for such Financed Vehicle. 
The Borrower is in compliance with this Agreement and the other
Transaction Documents in respect of perfection in the Financed Vehicle so long
as the Title Documents for the Financed Vehicle reflects that the Seller, the
Dealer, a Predecessor in Interest or an initial lender has a security interest
in such Financed Vehicle, and the Seller has a blanket or individual power of
attorney from the named lienholder authoring the Seller to do all acts
necessary to perfect in the Seller’s name any liens or security interests in
such Financed Vehicle. 

 

The
Borrower and each Secured Party hereby severally authorize the Collateral
Agent, upon receipt of written direction from the Required Lenders (if the
Borrower has failed to fulfill its duties under Section 11.1(e)), to file
one or more financing or continuation statements, and amendments thereto,
relating to all or any part of the Borrower Collateral.

 

It
shall furnish to the Administrative Agent and the Collateral Agent from time to
time such statements and schedules further identifying and describing the
Receivables Collateral and such other reports in connection with the Borrower
Collateral as the Required Lenders may reasonably request, all in reasonable
detail. 

 

Other Liens or Interests.  Except for the security interest granted
hereunder, the Borrower will not sell, pledge, assign or transfer to any other
Person, or grant, create, incur, assume or suffer to exist any Lien on the
Borrower Collateral or any interest therein (other than Permitted Liens), and
the Borrower shall defend the right, title, and interest of the Collateral
Agent (for the benefit of the Secured Parties) and the Investors in and to the
Borrower Collateral against all claims of third parties claiming through or
under the Borrower.

 

Costs and Expenses.  The Borrower shall pay all of its reasonable
costs and disbursements in connection with the performance of its obligations
hereunder and under the Transaction Documents.

 

Reporting Requirements.  The Borrower shall furnish, or cause to be
furnished, to the Administrative Agent:

 

as
soon as available and in any event within 120 days (or next succeeding Business
Day if the last day of such period is not a Business Day) after the end of each
fiscal year, (i) a copy of CCRT and its consolidated subsidiaries’ audited
financial statements, certified without qualification by Independent
Accountants acceptable to the Required Lenders, and each other report or
statement sent to shareholders or publicly filed by CAR, CCRT, the Seller or
the Borrower and (ii) a copy of CARS Acquisition and its consolidated
subsidiaries’ unaudited financial statements, certified by its chief financial
officer;  

 

32

 

as
soon as available and in any event within 45 days (or next succeeding Business
Day if the last day of such period is not a Business Day) after the end of each
of the first three quarters of each fiscal year of CCRT and CARS Acquisition, a
consolidated balance sheet of each of CCRT and its consolidated Subsidiaries
and CARS Acquisition and its consolidated Subsidiaries as of the end of such
quarter and including the prior comparable period, and consolidated statements
of income and retained earnings of each of CCRT and its consolidated
Subsidiaries and CARS Acquisition and its consolidated Subsidiaries for such
quarter and for the period commencing at the end of the previous fiscal year
and ending with the end of such quarter, certified by the chief financial
officer or chief accounting officer of CCRT or CARS Acquisition identifying
such documents as being the documents described in this paragraph (b) and
stating that the information set forth therein fairly presents the financial
condition of CCRT or CARS Acquisition and its consolidated Subsidiaries as of
and for the periods then ended, subject to year-end adjustments and confirming
compliance with all financial covenants applicable to CCRT or CARS Acquisition
in the Transaction Documents;

 

as
soon as possible and in any event within five days after the occurrence of a
Facility Termination Event or Unmatured Facility Termination Event, an Officer’s
Certificate of the Borrower or CAR setting forth complete details of such
Facility Termination Event or Unmatured Facility Termination Event and the
action which the Borrower has taken, is taking and proposes to take with
respect thereto;  

 

promptly,
from time to time, such other information, documents, records or reports
respecting the Transferred Receivables, Transferred Dealer Transaction Rights,
the Other Conveyed Property related thereto or the Financed Vehicles related
thereto, the other Borrower Collateral or the results of operations or
financial condition, of the Borrower or the Seller as any Agent may, from time
to time, reasonably request; and

 

notwithstanding
the foregoing, with respect to financial statements and materials and reporting
requirements pursuant to this Section by CCRT, the timely filing of such
materials with the Securities Exchange Commission’s EDGAR system shall
constitute delivery thereof pursuant to this Section 11.4.  

 

Separate Existence.

 

The
Borrower shall conduct its business solely in its own name through its duly
authorized officers or agents so as not to mislead others as to the identity of
the entity with which such persons are concerned, and shall use commercially
reasonable efforts to avoid the appearance that it is conducting business on
behalf of any Affiliate thereof or that the assets of the Borrower are
available to pay the creditors of CCRT, CAR or any Affiliate thereof (other
than as expressly provided herein).

 

It
shall maintain corporate records and books of account separate from those of
CCRT, CAR and any other Affiliate thereof.

 

It
shall obtain proper authorization for all corporate action requiring such
authorization.

 

Other
than organizational expenses and as expressly provided herein or in the other
Transaction Documents, it shall pay its own operating expenses and liabilities
from its own funds.

 

33

 

It
will insure that the annual financial statements of CCRT and the financial
statements of CAR shall disclose the effects of the transactions contemplated
hereby in accordance with GAAP.

 

The
resolutions, agreements and other instruments of the Borrower underlying the
transactions described in the Transaction Documents shall be continuously
maintained by the Borrower as official records of the Borrower.

 

It
shall maintain an arm’s-length relationship with CCRT and CAR and its other
Affiliates, and shall not hold itself out as being liable for the debts of CCRT
and CAR or any of their respective Affiliates.

 

It
shall keep its assets and liabilities separate from those of all other entities
other than as permitted by the Transaction Documents.

 

The
books and records of the Borrower shall be maintained at the address designated
herein for receipt of notices, unless the Borrower shall otherwise advise the
parties hereto in writing.  

 

It
shall not maintain bank accounts or other depository accounts to which any
Affiliate is an account party, into which any Affiliate makes deposits or from
which any Affiliate has the power to make withdrawals, except as otherwise
permitted by the Transaction Documents.

 

It
shall insure that any consolidated financial statements of CCRT and the
financial statements of CAR have notes to the effect that the Borrower is a
separate entity whose creditors have a claim on its assets prior to those
assets becoming available to its equity holders.

 

It
shall not amend, supplement or otherwise modify (i) its articles of
incorporation in any respect that affects its limited purpose or its
separateness covenants without the prior written consent of the Required
Lenders (which consent shall not be unreasonably withheld) or (ii) its
bylaws in any manner that is inconsistent therewith or with its articles of
incorporation.

 

Interest Rate Caps.

 

The Borrower hereby covenants and agrees that in the event the one-month
LIBOR Rate is greater than *** at any Determination Date, it shall, within two
Business Days, obtain and deliver to the Collateral Agent one or more Interest
Rate Caps from qualified Cap Providers in favor of the Collateral Agent for the
benefit of the Secured Parties having, singly or in the aggregate, an Aggregate
Interest Rate Caps Notional Amount not less than the Required Interest Rate
Caps Notional Amount, provided that each Interest Rate Cap (1) shall
have an initial notional principal amount equal to or greater than $1,000,000, (2) may
provide for reductions of the Aggregate Interest Rate Caps Notional Amount on
each Distribution Date on an amortization schedule for such Aggregate
Interest Rate Caps Notional Amount assuming zero losses and (x) a 0.5 ABS
prepayment speed until the pool factor reaches 10% and (y) a 0.0 ABS prepayment
speed thereafter, and (3) shall have other terms and conditions and be
represented by Cap Agreements otherwise acceptable to the Required Lenders and
the Rating Agencies.  The Borrower agrees
that each Interest Rate Cap shall provide that payments by the Cap Provider
shall be made to the Collateral Agent and that such payments shall be deposited
into the Collection Account.

 

On any Determination Date on which the Minimum Liquidity Amount Test has
not been satisfied, the Borrower shall be required to deposit an amount equal
to the Cap Funding Reserve Account Requirement into the Cap Funding Reserve
Account on the related Date; provided, however, that
if the Minimum Liquidity Amount Test is subsequently satisfied on any
Determination Date following the Determination Date on which the Minimum
Liquidity Amount Test failed to be satisfied, all funds then on deposit in the
Cap Funding Reserve Account shall be released to the Borrower on such
Determination Date; provided further,
that if the Cap Funding Reserve Account Requirement shall increase on any
applicable Determination Date as a result of an increase in the estimated cost
of purchasing Interest Rate Caps from qualified Cap Providers, the Borrower
shall be required to deposit an amount equal to such additional cost into the
Cap Funding Reserve Account on the related Distribution Date; provided further, that if the Cap Funding Reserve Account
Requirement shall decrease on any applicable Determination Date as a result of
a decrease in the estimated cost of purchasing Interest Rate Caps from
qualified Cap Providers, the excess of the amount on deposit in the Cap Funding
Reserve Account over the adjusted Cap Funding Reserve Account Requirement shall
be withdrawn from the Cap 

 

34

 

Funding Reserve Account and released to the Borrower on such
Determination Date.  As specified in Section 11.6(a) above,
in the event the one-month LIBOR Rate is greater than 6.00% at any
Determination Date, the Borrower may use the funds in the Cap Funding Reserve
Account to purchase one or more Interest Rate Caps.  If the Borrower defaults on its obligations
under Section 11.6(a), the Administrative Agent, at the direction
of the Required Lenders, may use the funds in the Cap Funding Reserve Account
to purchase the Interest Rate Caps; provided, however,
that such action by the Administrative Agent shall not release the Borrower
from its obligations under this Section 11.6; provided
further, that the Servicer shall provide the Administrative Agent
with all information necessary to purchase such Interest Rate Caps; provided further, that if the amount on deposit in the Cap
Funding Reserve Account is insufficient to purchase any required Interest Rate
Caps, the Borrower shall be responsible for any such shortfall; provided further, that if the Borrower defaults on its
obligation with respect to such Cap Funding Reserve Account shortfall, the
Administrative Agent shall follow the instructions provided by the Required
Lenders with respect to the satisfaction of any such shortfall or the purchase
of any Interest Rate Caps.  Funds
retained in the Cap Funding Reserve Account following application as set forth
above shall be invested at the direction of the Servicer in Permitted
Investments with maturities not later than the next succeeding Business
Day.  Any earnings on such invested funds
shall be applied pursuant to Section 9.1.

 

In the event that any Cap Provider defaults in its obligation to make a
payment to the Collateral Agent under one or more Cap Agreements on any date on
which payments are due pursuant to a Cap Agreement, the Collateral Agent shall
make a demand on such Cap Provider, or any guarantor, if applicable, demanding
payment by 12:30 p.m., New York City time, on such date.  The Collateral Agent shall give notice to the
Lenders and the Rating Agencies upon the continuing failure by any Cap Provider
to perform its obligations within two Business Days following a demand made by
the Collateral Agent on such Cap Provider, and shall take such action with
respect to such continuing failure as may be directed in writing by the
Required Lenders.

 

In the event that any Cap Provider no longer maintains the ratings
specified in the definition of “Cap Provider,” then within 30 days after
receiving notice of such decline in the creditworthiness of such Cap Provider
as determined by any Rating Agency, either (x) such Cap Provider, upon the
receipt of the consent of the Required Lenders, will enter into an arrangement
the purpose of which shall be to assure performance by the Cap Provider of its
obligations under the Interest Rate Cap; or (y) the Borrower shall at its
option either (i) upon the receipt of the consent of the Required Lenders,
cause such Cap Provider to pledge securities in the manner provided by
applicable law which shall be held by the Collateral Agent free and clear of
the Lien of any third party, in a manner conferring on the Collateral Agent a
perfected first Lien in such securities securing such Cap Provider’s
performance of its obligations under the applicable Interest Rate Cap, (ii) provided
that a Replacement Interest Rate Cap or Qualified Substitute Arrangement
meeting the requirements of Section 11.6(e) has been obtained,
(A) provide written notice to such Cap Provider (with a copy to the
Administrative Agent and the Collateral Agent) of its intention to terminate
the applicable Interest Rate Cap within such 30-day period and (B) terminate
the applicable Interest Rate Cap within such 30-day period, request the payment
to it of all amounts due to the Collateral Agent under the applicable Interest
Rate Cap through the termination date and deposit any such amounts so received,
on the day of receipt, to the Collection Account, or (iii) establish any
other arrangement (including an arrangement or arrangements in addition to or
in substitution for any prior arrangement made in accordance with the
provisions of this Section 11.6(d)) which are reasonably
satisfactory to the Required Lenders (a “Qualified Substitute Arrangement”);
provided, however, that in the event at any time any alternative
arrangement established pursuant to clause (x) or (y)(i) or (y)(iii) above
shall cease to be satisfactory to the Required Lenders, then the provisions of
this Section 11.6(d) shall again be applied and in connection
therewith the 30-day period referred to above shall commence on the date the
Borrower receives notice of such cessation or termination, as the case may be.

 

Unless an alternative arrangement pursuant to clause (x) or (y)(i) or
(y)(iii) of Section 11.6(d) is being established, the
Borrower shall use reasonable efforts to obtain a Replacement Interest Rate Cap
or Qualified Substitute Arrangement meeting the requirements of this Section 11.6(e) during
the 30-day period referred to in Section 11.6(d).  Neither the Borrower nor the Collateral Agent
shall terminate the Interest Rate Cap unless, prior to the expiration of the 30-day
period referred to in said Section 11.6(d), the Borrower delivers
to the Collateral Agent (i) a Replacement Interest Rate Cap or Qualified
Substitute Arrangement, (ii) to the extent applicable, an Opinion of
Counsel as to the due authorization, execution and delivery and validity and
enforceability of such Replacement Interest Rate Cap or Qualified Substitute
Arrangement, as the case may be, and (iii) evidence that the Required
Lenders have consented to the termination of the Interest Rate Cap and its
replacement with such Replacement Interest Rate Cap or Qualified Substitute
Arrangement.

 

The Servicer or the Borrower shall notify in writing the Administrative
Agent and the Collateral Agent within five Business Days after obtaining actual
knowledge that the senior unsecured debt rating of the Cap Provider has been
withdrawn or reduced by any Rating Agency.

 

Notwithstanding the foregoing, the Borrower may at any time obtain a
Replacement Interest Rate Cap, provided that the Borrower delivers to the
Collateral Agent evidence of the receipt of the consent of the Required Lenders
to the termination of the then-current Interest Rate Cap and its replacement
with such Replacement Interest Rate Cap.

 

The Borrower shall not agree to any amendment to any Interest Rate Cap
unless the Borrower shall have received evidence of the consent of the Required
Lenders to such amendment to such Interest Rate Cap (which consent will not be
unreasonably withheld or delayed).

 

The Borrower shall notify the Lenders and the Collateral Agent after
obtaining actual knowledge of the transfer by the related Cap Provider of any
Interest Rate Cap, or any interest or obligation thereunder.

 

35

 

The Collateral Agent, upon written direction from the Borrower and the
Required Lenders, shall sell all or a portion of the Interest Rate Caps subject
to the following conditions having been met:

 

(x)                                   the Aggregate Interest Rate Caps Notional Amount after
giving effect to such sale shall equal or exceed the Required Interest Rate
Caps Notional Amount as of the date of such sale after giving effect to all
payments and allocations made pursuant to this Agreement; and

 

(y)                                 the minimum notional amount denomination of any Interest
Rate Cap to be sold is $1,000,000.

 

The Borrower shall have the duty of obtaining a fair
market value price for the sale of the Collateral Agent’s rights under any
Interest Rate Cap, notifying the Collateral Agent of prospective purchasers and
bids, and selecting the purchaser of such Interest Rate Cap.  The Collateral Agent upon receipt of the
purchase price in the Collection Account shall execute all documentation
prepared by the Borrower necessary to effect the transfer
of the Collateral Agent’s rights under such Interest Rate Cap and to release
the Lien of the Collateral Agent on such Interest Rate Cap and proceeds
thereof.

 

Tangible Net Worth.  The Borrower shall maintain at all times a
positive Tangible Net Worth.

 

Stock, Merger, Consolidation, Etc.  The Borrower
shall not merge or consolidate with any other Person or permit any other Person
to become the successor to all or substantially all of its business or assets
without the prior written consent of the Required Lenders.

 

Change in Name.  It shall
not make any change to its name or use any trade names, fictitious names,
assumed names or “doing business as” names.

 

Indebtedness; Guarantees.  The Borrower shall not create, incur, assume
or suffer to exist any Indebtedness other than
Indebtedness permitted under the Transaction Documents.  The Borrower shall incur no additional
borrowed money indebtedness secured by the Borrower Collateral other than the
Advances.  The Borrower shall not assume,
guarantee, endorse or otherwise be or become directly or contingently liable
for the obligations of any Person by, among other things, agreeing to purchase
any obligation of another Person, agreeing to advance funds to such Person or
causing or assisting such Person to maintain any amount of capital.

 

Limitation on Transactions with
Affiliates.  The Borrower
shall not enter into, or be a party to any transaction with any Affiliate of
the Borrower, except for (a) the transactions contemplated by the
Transaction Documents and (b) to the extent not otherwise prohibited under
this Agreement, other transactions upon fair and reasonable terms materially no
less favorable to the Borrower than would be obtained in a comparable arm’s-length
transaction with a Person not an Affiliate.

 

Documents.  Except as otherwise expressly permitted
herein (including, without limitation, in Section 11.6 regarding
Interest Rate Caps), it shall not cancel or terminate any of the Transaction
Documents to which it is party (in any capacity), or consent to or accept any
cancellation or termination of any of such agreements, or amend or otherwise
modify any term or condition of any of the Transaction Documents to which it is
party (in any capacity) or give any consent, waiver or approval under any such
agreement, or waive any default under or breach of any of the Transaction
Documents to which it is party (in any capacity) or take any other action under
any such agreement not required by the terms thereof, unless (in each case) the
Required Lenders shall have consented thereto (which consent shall not
unreasonably be withheld to the extent set forth in such Transaction Document).

 

Preservation of Existence.  It shall observe all procedures required by
its organizational documents and preserve and maintain its existence, rights,
franchises and privileges in the jurisdiction of its formation and qualify and
remain qualified in good standing in each jurisdiction where the failure to
preserve and maintain such existence, rights, franchises, privileges and qualifications
would materially adversely affect (1) the interests hereunder of the
Required Lenders or any Secured Party, (2) the collectibility of any
Transferred Receivables or Transferred Dealer Transaction Right or (3) its
ability to perform its obligations hereunder or under any of the other
Transaction Documents.

 

Accounting Treatment.  The Borrower shall not prepare any financial
statements or other statements (including any tax filings which are not
consolidated with those of CAR) which shall account for the transactions
contemplated by the Sale and Servicing Agreement in any manner other than as
the sale of, or a capital contribution of, the 

 

36

 

Transferred Receivables and
Transferred Dealer Transaction Rights and the related assets by the Seller to
the Borrower.  For avoidance of doubt, CAR may
consolidate the Borrower and/or its properties and other assets for accounting
purposes.

 

Limitation on Investments.  The Borrower shall not form, or cause to be
formed, any Subsidiaries; or make or suffer to exist any loans or advances to,
or extend any credit to, or make any investments (by way of transfer of
property, contributions to capital, purchase of stock or securities or
evidences of indebtedness, acquisition of the business or assets, or otherwise)
in, any Affiliate or any other Person except as otherwise permitted herein and
pursuant to the other Transaction Documents.

 

Distributions.  The Borrower shall not declare or make (a) payment
of any distribution on or in respect of any shares of its capital stock, or (b) any
payment on account of the purchase, redemption, retirement or acquisition of
any option, warrant or other right to acquire such shares unless (in each case)
at the time of such declaration or payment (and after giving effect thereto) no
Facility Termination Event under Section 14.1 or Unmatured Facility
Termination Event under Section 14.1 shall occur or be continuing
and no amount payable by the Borrower under any Transaction Document is then due
and owing but unpaid.

 

Performance of Borrower Assigned
Agreements.  The Borrower shall (i) perform and observe all
the terms and provisions of the Transaction Documents (including, without
limitation, each of the Borrower Assigned Agreements) to which it is a party to
be performed or observed by it, maintain such Transaction Documents in full
force and effect, enforce such Transaction Documents in accordance with their
terms and take all such action to such end as may be from time to time
requested by any Agent, and (ii) upon request of any Agent, make to any
other party to such Transaction Documents such demands and requests for
information and reports or for action as the Borrower is entitled to make
thereunder.

 

Notice of Material Adverse Claim.  It shall advise the
Administrative Agent and the Collateral Agent promptly, in reasonable detail, (i) of
any material Adverse Claim, other than a Permitted Lien, known to it made or
asserted against any of the Borrower Collateral, and (ii) of the
occurrence of any event which would have a material adverse effect on the
aggregate value of the Borrower Collateral or on the assignments and security
interests granted by the Borrower in this Agreement.

 

Access to Certain Documentation
and Information Regarding Contracts.  The Borrower shall permit representatives of the
Administrative Agent, each Agent, the Backup Servicer, the Collateral Agent and
the Custodian at any time and from time to time, but, so long as no Event of
Default has occurred and is continuing, no more than two times per year, during
normal business hours as the Administrative Agent, such Agent, the Backup
Servicer, the Collateral Agent and the Custodian shall reasonably request, (a) to
inspect and make copies of and abstracts from its records relating to the
Transferred Receivables and Transferred Dealer Transaction Rights, and (b) to
visit its properties in connection with the collection, processing or servicing
of the Transferred Receivables and Transferred Dealer Transaction Rights for
the purpose of examining such records, and to discuss matters relating to the
Transferred Receivables and Transferred Dealer Transaction Rights or such
Person’s performance under this Agreement and the other Transaction Documents
with any officer or employee of such Person having knowledge of such
matters.  In each case, such access shall
be afforded without charge.  In
connection with any inspection, the Administrative Agent, any Agent, the Backup
Servicer, the Collateral Agent and the Custodian may institute procedures to
permit it to confirm the Obligor balances in respect of any Transferred
Receivables or Transferred Dealer Transaction Rights.  The Borrower agrees to render to the
Administrative Agent, each Agent, the Backup Servicer, the Collateral Agent and
the Custodian such clerical and other assistance as may be reasonably requested
with regard to the foregoing.  Nothing in
this Section 11.19 shall derogate from the obligation of the
Borrower to observe any applicable law prohibiting disclosure of information regarding
the Obligors, and the failure of any of them to provide access as a result of
such obligation shall not constitute a breach of this Section 11.19.

 

THE SERVICER; THE BACKUP SERVICER

 

Liability of Servicer.  The Servicer (in its capacity as such) shall
be liable hereunder only to the extent of the obligations in this Agreement and
the other Transaction Documents specifically undertaken by the Servicer and the
representations made by the Servicer.

 

Merger or Consolidation of, or
Assumption of the Obligations of, the Servicer.  The Servicer shall not merge or consolidate
with any other Person, convey, transfer or lease all or substantially all its
assets as an entirety to another Person, or permit any other Person to become
the successor to all or substantially all of its business or assets, unless
after the merger, consolidation, conveyance, transfer, lease or succession, the
successor or surviving entity shall be an Eligible Servicer and shall be
capable of fulfilling the duties of the Servicer contained in this
Agreement.  Any Person (i) into
which the Servicer may be merged or consolidated, (ii) resulting from any
merger or consolidation to

 

37

 

which the Servicer shall be a party, (iii) which
acquires by conveyance, transfer, or lease substantially all of the assets of
the Servicer, or (iv) succeeding to the business of the Servicer, in any
of the foregoing cases shall execute an agreement of assumption to perform
every obligation of the Servicer under this Agreement and the other Transaction
Documents to which the Servicer is a party and, whether or not such assumption
agreement is executed, shall be the successor to the Servicer under this
Agreement without the execution or filing of any paper or any further act on
the part of any of the parties to this Agreement, anything in this Agreement to
the contrary notwithstanding; provided, however, that nothing contained herein
shall be deemed to release the Servicer from any obligation hereunder.  The Servicer shall provide notice of any
merger, consolidation or succession pursuant to this Section 12.2
to the Required Lenders and the Backup Servicer and the Required Lenders shall
have consented thereto.  Notwithstanding
the foregoing, as a condition to the consummation of the transactions referred
to in clauses (i), (ii), (iii) and (iv) above, (x) immediately
after giving effect to such transaction, no representation or warranty made
pursuant to Section 8.2 shall have been breached in any material
respect (for purposes hereof, such representations and warranties shall speak
as of the date of the consummation of such transaction) and no event that after
notice or lapse of time would become a Facility Termination Event pursuant to Section 14.1
shall have occurred and be continuing, and (y) the Servicer shall have
delivered to the Administrative Agent an Officer’s Certificate and an Opinion
of Counsel each stating that such consolidation, merger or succession and such
agreement of assumption comply with this Section 12.2.

 

The
parties to this Agreement acknowledge that this Section 12.2 shall only
apply to the Servicer so long as CAR, CAR Servicing or an Affiliate of CAR is
the Servicer.

 

38

 

Covenants of Servicer.

 

Preservation of Existence.  The Servicer shall observe all procedures
required by its organizational documents and preserve and maintain its
existence, rights, franchises and privileges in the jurisdiction of its
formation and qualify and remain qualified in good standing in each
jurisdiction where the failure to preserve and maintain such existence, rights,
franchises, privileges and qualifications would materially adversely affect (1) the
interests hereunder of the Required Lenders or any Secured Party, (2) the
collectibility of any Transferred Receivables or Transferred Dealer Transaction
Right or (3) its ability to perform its obligations hereunder or under any
of the other Transaction Documents.

 

Keeping of Records and Books of Account.  The Servicer shall maintain and implement
administrative and operating procedures (including, without limitation, an
ability to recreate records evidencing the Transferred Receivables in the event
of the destruction of the originals thereof) and keep and maintain, all documents,
books, records and other information reasonably necessary or advisable for the
collection of all Transferred Receivables and Transferred Dealer Transaction
Rights (including, without limitation, records adequate to permit the daily
identification of all collections of and adjustments to each Transferred
Receivables or Transferred Dealer Transaction Right).

 

Maintain Records of Receivables Collateral.  The Servicer shall, at its own
cost and expense, maintain satisfactory and complete records of the Receivables
Collateral, including a record of all payments received and all credits granted
with respect to the Receivables Collateral and all other dealings with the
Receivables Collateral.  The Servicer
shall maintain its computer systems so that, from and after the time of sale
under the Sale and Servicing Agreement of the Dealer Transaction Rights to the
Borrower, the Servicer’s master computer records (including any back-up
archives) that refer to a Transferred Dealer Transaction Right and the related
Receivable shall indicate the interest of the Borrower and the Collateral Agent
in such Transferred Dealer Transaction Right and that such Transferred Dealer
Transaction Right and the right to receive all monies in respect of the related
Receivable are owned by the Borrower and have been pledged to the Collateral
Agent for the benefit of the Secured Parties pursuant to this Agreement.  Notwithstanding the foregoing, until the
Servicer shall have in effect a new computer system for maintaining records
from that in effect on the Initial Closing Date, the covenant set forth in this
clause (c) regarding noting the interest of, and the pledge to, the
Borrower and the Collateral Agent relating to such Transferred Dealer
Transaction Rights and right to receive monies therefor shall not apply.

 

Notice of Material Adverse Claim.  The Servicer shall
advise the Administrative Agent and the Collateral Agent promptly, in
reasonable detail, (i) of any material Adverse Claim, other than a
Permitted Lien, known to it made or asserted against any of the Borrower
Collateral, and (ii) of the occurrence of any event which would have a
material adverse effect on the aggregate value of the Borrower Collateral or on
the assignments and security interests granted by the Borrower in this
Agreement.

 

Limitation on Liability of Backup
Servicer.

 

Neither
the Backup Servicer nor any of the directors or officers or employees or agents
of the Backup Servicer shall be under any liability to the Borrower, the
Investors or the Administrative Agent, except as provided in this Agreement,
for any action taken or for refraining from the taking of any action pursuant
to this Agreement; provided, however, that this provision shall not protect the
Backup Servicer or any such Person against any liability that would otherwise
be imposed by reason of a breach of this Agreement or willful misfeasance, bad
faith or negligence in the performance of its duties.  The Backup Servicer and any director,
officer, employee or agent of the Backup Servicer may rely in good faith on the
written advice of counsel or on any document of any kind prima facie
properly executed and submitted by any Person respecting any matters arising
under this Agreement.

 

Unless
acting as Servicer hereunder, the Backup Servicer shall not be liable for any
obligation of the Servicer contained in this Agreement, and the Administrative
Agent, the Collateral Agent, the Borrower and the Investors shall look only to
the Servicer to perform such obligations.

 

39

 

The
Backup Servicer shall have no responsibility and shall not be in default
hereunder nor incur any liability for any failure, error, malfunction or any
delay in CARS Acquisition out any of its duties under this Agreement if any
such failure or delay results from the Backup Servicer acting in accordance
with information prepared or supplied by a Person other than the Backup
Servicer or the failure of any such Person to prepare or provide such
information.  The Backup Servicer shall
have no responsibility, shall not be in default and shall incur no liability (i) for
any act or failure to act by any third party, including the Servicer or the
Administrative Agent or for any inaccuracy or omission in a notice or
communication received by the Backup Servicer from any third party or (ii) that
is due to or results from the invalidity, unenforceability of any Transferred
Receivables under applicable law or the breach or the inaccuracy of any
representation or warranty made with respect to any Transferred Receivables.

 

Backup Servicer Not to Resign.  Subject to the provisions of Section 12.2,
the Backup Servicer shall not resign from the obligations and duties imposed on
it by this Agreement as Backup Servicer except upon a determination that by
reason of a change in legal requirements the performance of its duties under
this Agreement would cause it to be in violation of such legal requirements and
the Administrative Agent does not elect to waive the obligations of the Backup
Servicer to perform the duties which render it legally unable to act or to
delegate those duties to another Person. 
Any such determination permitting the resignation of Backup Servicer
shall be evidenced by an Opinion of Counsel to such effect delivered and
acceptable to the Required Lenders.  No
resignation of the Backup Servicer shall become effective until an entity
acceptable to the Required Lenders shall have assumed the responsibilities and
obligations of the Backup Servicer; provided, however, that in
the event a successor Backup Servicer is not appointed within 60 days after the
Backup Servicer has given notice of its resignation as permitted by this Section 12.4,
the resignation of the Backup Servicer shall become effective.

 

GRANT OF SECURITY INTEREST

 

Borrower’s Grant of Security Interest.  As security
for the prompt payment or performance in full when due, whether at stated
maturity, by acceleration or otherwise, of all Obligations (including, without
limitation, Advances, Yield and other amounts at any time owing hereunder), the
Borrower hereby assigns and pledges to the Collateral Agent, for the benefit of
the Secured Parties, and grants to the Collateral Agent, for the benefit of the
Secured Parties, a security interest in and lien upon, all of the Borrower’s
right, title and interest in and to the following, in each case whether now or
hereafter existing or in which Borrower now has or hereafter acquires an
interest and wherever the same may be located (collectively, the “Borrower
Collateral”):

 

all
Receivables Collateral;

 

the
Sale and Servicing Agreement and all other documents now or hereafter in effect
to the extent they relate to the purchase, servicing or processing of
Transferred Receivables or Transferred Dealer Transaction Rights, including the
right to receive Dealer Recourse payments pursuant to the Dealer Purchase
Agreements to the extent permitted under the Sale and Servicing Agreement
(collectively, the “Borrower Assigned Agreements”), including (i) all
rights of the Borrower to receive moneys due and to become due under or
pursuant to the Borrower Assigned Agreements, (ii) all rights of the
Borrower to receive proceeds of any insurance, indemnity, warranty or guaranty
with respect to the Borrower Assigned Agreements, (iii) the Borrower’s
right of foreclosure as lienholder of the Financed Vehicles underlying the
Contracts, (iv) claims of the Borrower for damages arising out of or for
breach of or default under the Borrower Assigned Agreements, and (v) the
right of the Borrower to amend, waive or terminate the Borrower Assigned
Agreements, to perform under the Borrower Assigned Agreements and to compel
performance and otherwise exercise all remedies and rights under the Borrower
Assigned Agreements;

 

40

 

all
of the following (the “Borrower Account Collateral”):

 

the Collection
Account, all funds held in the Collection Account, and all certificates and
instruments, if any, from time to time representing or evidencing the
Collection Account or such funds,

 

the Cap Funding
Reserve Account, all funds held in the Cap Funding Reserve Account, and all
certificates and instruments, if any, from time to time representing or
evidencing the Cap Funding Reserve Account or such funds,

 

all investments from
time to time of amounts in the Collection Account and Cap Funding Reserve
Account, and all certificates and instruments, if any, from time to time
representing or evidencing such investments,

 

all notes, certificates
of deposit and other instruments from time to time delivered to or otherwise
possessed by the Collateral Agent or any Secured Party or any assignee or agent
on behalf of the Collateral Agent or any Secured Party in substitution for or
in addition to any of the then existing Borrower Account Collateral, and

 

all interest, dividends,
cash, instruments and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any and all of the then
existing Borrower Account Collateral;

 

each Interest Rate Cap including all rights
of the Borrower to receive moneys due and to become due thereunder;

 

all
additional property that may from time to time hereafter be granted and pledged
by the Borrower or by anyone on its behalf under this Agreement, including the
deposit with the Collateral Agent of additional moneys by the Borrower;

 

all
Accounts, all Chattel Paper, all Documents, all Equipment, all General
Intangibles, all Instruments, all Investment Property and all Inventory of the
Borrower; and

 

all
Proceeds, accessions, substitutions, rents and profits of any and all of the
foregoing Borrower Collateral (including proceeds that constitute property of
the types described in paragraphs (a) through (f) above) and, to the
extent not otherwise included, all payments under insurance (whether or not the
Collateral Agent or a Secured Party or any assignee or agent on behalf of the
Collateral Agent or a Secured Party is the loss payee thereof) or any
indemnity, warranty or guaranty payable by reason of loss or damage to or
otherwise with respect to any of the foregoing Borrower Collateral.

 

Delivery of Collateral.  All documents in the
Contracts File shall be delivered to and held by or on behalf of the Custodian
pursuant to the Sale and Servicing Agreement, and shall be in suitable form for
transfer by delivery.

 

Borrower Remains Liable.  Notwithstanding anything in this Agreement, (a) except to
the extent of the Servicer’s duties under this Agreement, the Borrower shall
remain liable under the Transferred Receivables, Transferred Dealer Transaction
Rights, Borrower Assigned Agreements and other agreements (including each
Interest Rate Cap) included in the Borrower Collateral to perform in all
material respects all of its duties and obligations thereunder to the same
extent as if this Agreement had not been executed, (b) the exercise by a
Secured Party or the Collateral Agent of any of its rights under this Agreement
shall not release the Borrower, CAR, the Custodian or the 

 

41

 

Servicer from any of their
respective duties or obligations under the Transferred Receivables, Transferred
Dealer Transaction Rights, Borrower Assigned Agreements or other agreements
included in the Borrower Collateral, (c) the Agents, the Secured Parties,
the Administrative Agent, the Collateral Agent and the Custodian shall not have
any obligation or liability under the Transferred Receivables, Transferred
Dealer Transaction Rights, Borrower Assigned Agreements or other agreements
included in the Borrower Collateral by reason of this Agreement, and (d) neither
the Agent, the Administrative Agent, the Collateral Agent nor any of the
Secured Parties shall be obligated to perform any of the obligations or duties
of the Borrower, CAR, the Custodian or the Servicer under the Transferred
Receivables, Borrower Assigned Agreements or other agreements included in the
Borrower Collateral or to take any action to collect or enforce any claim for
payment assigned under this Agreement.

 

Release of Borrower Collateral.

 

Generally. 
To the extent that (i) the Borrowing Base equals or exceeds the
aggregate outstanding principal amount of Advances, (ii) all amounts due
and owing with respect to the Advances, including the Yield thereon and other
amounts due under the Receivables Financing Agreement have been paid in full,
and (iii) no Facility Termination Event or Unmatured Facility Termination
Event under Section 14.1 has occurred and is continuing, in connection
with the sale or transfer of Transferred Dealer Transaction Rights, Contracts
or Transferred Receivables pursuant to a Take-Out Securitization to which the
Administrative Agent has consented, in connection with the purchase by the
Servicer or the Seller of a Transferred Receivables and related Transferred
Dealer Transaction Right pursuant to the Sale and Servicing Agreement, in
connection with the payment in full of the Advances and other Obligations
hereunder, or if a Transferred Receivable is a Defaulted Receivable, the
Borrower may from time to time obtain releases of the Collateral Agent’s (for
the benefit of the Secured Parties) security interest in all or any part of the
Receivables Collateral (with the matters set forth in the foregoing clauses
(i), (ii) and (iii) being determined immediately after giving effect
to any requested release and any payments made on the date thereof, including,
without limitation, any repayment of Advances and payment of Yield thereon on
such date).  Each request (a “Transfer
Request”) for a partial release of Receivables Collateral, except in connection
with the purchase by the Servicer or the Seller of a Transferred Receivables or
Transferred Dealer Transaction Right or the sale or transfer of a Defaulted
Receivable pursuant to the Sale and Servicing Agreement (in which case, the
Collateral Agent’s security interest in such Transferred Receivable,
Transferred Dealer Transaction Right or Defaulted Receivable and in the
Contract and Title Documents therefor shall be deemed automatically released
without the execution of a Transfer Request so long as clause (c) of this Section 13.4
is complied with as to the proceeds, if any, of such transfer), shall be
addressed to the Administrative Agent and the Collateral Agent, demonstrating
compliance with the immediately preceding sentence and acknowledging that the
receipt of proceeds from such sale or transfer shall be deposited into the
Collection Account.

 

Transfers. 
With respect to each Transfer Request that is received by the
Administrative Agent by 12:00 noon, New York time on a Business Day, the
Administrative Agent shall use due diligence and reasonable efforts to review
such Transfer Requests and instruct the Custodian to prepare the files,
identified in each Transfer Request, for shipment by 12:00 noon, New York time
on the fourth succeeding Business Day or, with respect to shipping out more
than 1000 files on any one Business Day, as mutually agreed between the
Custodian and the Borrower.

 

42

 

Continuation of Lien. 
Unless released in writing by the Collateral Agent, as herein provided,
the security interest in favor of the Collateral Agent, for the benefit of the
Secured Parties, in all Borrower Collateral shall continue in effect until such
time as the Collateral Agent shall have received payment in full of the
proceeds, if any, from the sale or transfer of such Borrower Collateral to
third parties in accordance with this Section 13.4.

 

Application of Proceeds;
No Duty.  Neither the Collateral Agent nor any Secured
Party shall be under any duty at any time to credit Borrower for any amount due
from any third party in respect of any purchase of any Receivables Collateral
contemplated above, until the Administrative Agent has actually received such
amount in immediately available funds for deposit to the Collection
Account.  Neither any Secured Party nor
the Collateral Agent shall be under any duty at any time to collect any amounts
or otherwise enforce any obligations due from any third party in respect of any
such purchase of Contracts or Transferred Receivables covered by the release of
such portion of Receivables Collateral or in respect of a securitization or
financing thereof with a third party.

 

Representation in
Connection with Releases, Sales and Transfers. 
The Borrower represents and warrants that each request for any release
or transfer in connection with any Take-Out Securitizations pursuant to Section 13.4(a) shall
automatically constitute a representation and warranty to the Secured Parties
and the Administrative Agent to the effect that immediately before and after
giving effect to such release or Transfer Request, there is no Facility
Termination Event or Unmatured Facility Termination Event under Section 14.1
and each of the other conditions set forth in Section 13.4 have been
satisfied.

 

Release of Security
Interest.  Upon receipt of a Transfer Request or, in
connection with the purchase by the Servicer or the Seller of a Transferred
Dealer Transaction Right pursuant to the Sale and Servicing Agreement, upon the
Servicer’s written request, and, in each case upon receipt in the Collection
Account of proceeds from the sale or transfer (including, without limitation,
in connection with the purchase by the Servicer or the Seller of a Transferred
Dealer Transaction Right pursuant to the Sale and Servicing Agreement, the
related Repurchase Amount), the Collateral Agent shall promptly release, at the
Borrower’s expense, such part of the Receivables Collateral covered in
connection with the Transfer Request or such Servicer’s request and shall
deliver, at the Borrower’s expense, and without recourse, representation or
warranty of any kind, the Contracts Files on the released portion of
Receivables Collateral to the trustee or such similar entity in connection with
the applicable Take-Out Securitization or, in connection with the purchase by
the Servicer, CAR or the Seller of a Transferred Dealer Transaction Right
pursuant to the Sale and Servicing Agreement, the Servicer; provided that the
trustee or such similar entity in connection with the third party securitization
(including any Take-Out Securitization) or the Servicer or the Borrower, as the
case may be, acknowledges and agrees (i) that all proceeds thereof that it
receives from such sale are held in trust for the Secured Parties and (ii) that
it shall transfer such funds to the Administrative Agent for deposit in the
Collection Account.  The foregoing
notwithstanding, upon the deposit into the Collection Account of all amounts
required to effect a full payment or prepayment by an Obligor of a Transferred
Dealer Transaction Right, the security interest of the Collateral Agent in that
Transferred Dealer Transaction Right and any rights to payment in respect of
the related Receivables shall be automatically deemed released.

 

43

 

Expenses.  It is understood that
the Collateral Agent shall be entitled to receive reimbursement for its
reasonable, out-of-pocket, costs and expenses and such reimbursement obligation
shall be payable by the Borrower to the extent funds are available therefor
under Section 9.5 hereof and otherwise by CAR.

 

Representations And
Warranties Of the Collateral Agent.  The Collateral Agent represents and warrants as of the date
hereof that:

 

It
is a national banking association validly existing and in good standing under
the laws of the United States of America;

 

It
has full power, authority and legal right to execute, deliver and perform this
Agreement and has taken all necessary action to authorize the execution,
delivery and performance by it of this Agreement; and

 

This
Agreement has been duly executed and delivered by it and constitutes its legal,
valid and binding agreement, enforceable in accordance with its terms, except
as enforceability may be limited by bankruptcy, insolvency reorganization or
other similar laws affecting the enforcement of creditors’ rights generally and
by general principles of equity.

 

Certain Remedies.

 

Subject
to the provisions of Section 13.9 hereof, the Collateral Agent shall, at
the written direction of the Required Lenders, proceed to protect and enforce
its rights and the rights of the Secured Parties by such appropriate
proceedings as the Required Lenders shall deem necessary to protect and enforce
any such rights, whether for the specific enforcement of any covenant or
agreement in any Transaction Document or in and of the exercise of any power
granted herein, or to enforce any other proper remedy or legal or equitable
right vested in the Collateral Agent by any Transaction Document or by law.

 

In
case there shall be pending, relative to the Borrower or any other obligor upon
the Notes or any Person having or claiming an ownership interest in the
Borrower Collateral, proceedings under the Bankruptcy Code or any other
applicable federal or state bankruptcy, insolvency or other similar law, or in
case a receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been appointed for or
taken possession of the Borrower or its property or such other obligor or Person,
or in case of any other comparable judicial proceedings relative to the
Borrower or other obligor upon the Notes, or to the creditors of property of
the Borrower or such other obligor, the Collateral Agent, irrespective of
whether the principal of the Notes shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the
Collateral Agent shall have made any demand pursuant to the provisions of this
Section, shall be entitled and empowered but without any obligation, subject to
Section 13.7(a), by intervention in such proceedings or otherwise:

 

to file and prove a claim
or claims for the whole amount of principal and Yield owing and unpaid in
respect of the Notes, all other amounts owing to the Investors and to file such
other papers or documents as may be necessary or advisable in order to have the
claims of the Collateral Agent (including any claim for reimbursement of all
expenses (including the fees and expenses of counsel) and liabilities incurred,
and all advances, if any, made, by the Collateral Agent and each predecessor
Collateral Agent, except as determined to have been caused by its own gross
negligence or willful misconduct) and of each of the other Secured Parties
allowed in such proceedings;

 

44

 

unless prohibited by
applicable law and regulations, to vote (with the consent of each Agent) on
behalf of the holders of the Notes in any election of a trustee, a standby
trustee or person performing similar functions in any such proceedings;

 

to collect and receive
any moneys or other property payable or deliverable on any such claims and to
distribute all amounts received with respect to the claims of the Secured
Parties on their behalf; and

 

to file such proofs of
claim and other papers or documents as may be necessary or advisable in order
to have the claims of the Collateral Agent or the Secured Parties allowed in
any judicial proceedings relative to the Borrower, its creditors and its
property;

 

and any trustee,
receiver, liquidator, custodian or other similar official in any such
proceeding is hereby authorized by each of such Secured Parties to make
payments to the Collateral Agent, and, in the event that the Collateral Agent
shall consent, to the making of payments directly to such Secured Parties, to
pay to the Collateral Agent such amounts as shall be sufficient to cover all
reasonable expenses and liabilities incurred, and all advances made, by the
Collateral Agent and each predecessor Collateral Agent except as determined to
have been caused by its own gross negligence or willful misconduct.

 

45

 

Nothing
herein contained shall be deemed to authorize the Collateral Agent to authorize
or consent to or vote for or accept or adopt on behalf of any Lender or other
Secured Party any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any holder thereof or to
authorize the Collateral Agent to vote in respect of the claim of any Secured
Party in any such proceeding except, pursuant to Section 13.7(b)(ii), to
vote for the election of a trustee in bankruptcy or similar person.

 

All
rights of action and of asserting claims under the Transaction Documents, may
be enforced by the Collateral Agent without the possession of the Notes or the
production thereof in any trial or other proceedings relative thereto, and any
such action or proceedings instituted by the Collateral Agent shall be brought
in its own name as Collateral Agent, and any recovery of judgment, subject to
the payment of the reasonable expenses, disbursements and compensation of the
Collateral Agent, each predecessor Collateral Agent and their respective agents
and attorneys, shall be for the ratable benefit of the holders of the Notes and
other Secured Parties.

 

In
any proceedings brought by the Collateral Agent to enforce the Liens under the
Transaction Documents (and also any proceedings involving the interpretation of
any provision of any Transaction Document), the Collateral Agent shall be held
to represent all the Secured Parties, and it shall not be necessary to make any
Secured Party a party to any such proceedings.

 

Other Remedies.  Following an Event of
Default, the Collateral Agent shall, at the written direction of the Required
Lenders, also do one or more of the following (subject to Section 13.9):

 

institute
proceedings in its own name and on behalf of the Secured Parties as Collateral
Agent for the collection of all amounts then payable on the Notes or hereunder
and Fee Letter with respect thereto, whether by declaration or otherwise,
enforce any judgment obtained, and collect from the Borrower and any other
obligor upon the Notes moneys adjudged due;

 

institute proceedings from time to time for the
complete or partial foreclosure upon the Borrower Collateral;

 

exercise any remedies of a secured party under
the UCC and take any other appropriate action to protect and enforce the right
and remedies of the Collateral Agent and the Secured Parties; and

 

sell the Borrower Collateral or any portion
thereof or rights or interest therein, at one or more public or private sales
called and conducted in any manner permitted by law.

 

Limitation on Duty of Collateral
Agent in Respect of Collateral.

 

46

 

Beyond
the exercise of reasonable care in the custody thereof, the Collateral Agent
shall have no duty as to any Borrower Collateral in its possession or control
or in the possession or control of any agent or bailee or any income thereon or
as to preservation of rights against prior parties or any other rights
pertaining thereto and the Collateral Agent shall not be responsible for filing
any financing or continuation statements or recording any documents or instruments
in any public office at any time or times or otherwise perfecting or
maintaining the perfection of any security interest in the Borrower
Collateral.  The Collateral Agent shall
be deemed to have exercised reasonable care in the custody of the Borrower
Collateral in its possession if the Borrower Collateral is accorded treatment
substantially equal to that which it accords its own property and shall not be
liable or responsible for any loss or diminution in the value of any of the
Borrower Collateral, by reason of the act or omission of any carrier,
forwarding agency or other agent or bailee selected by the Collateral Agent in
good faith. 

 

The
Collateral Agent shall not be responsible for the existence, genuineness or
value of any of the Borrower Collateral or for the validity, perfection,
priority or enforceability of the Liens in any of the Borrower Collateral,
whether impaired by operation of law or by reason of any action or omission to
act on its part hereunder, except to the extent such action or omission
constitutes gross negligence or willful misconduct on the part of the
Collateral Agent, for the validity or sufficiency of the Borrower Collateral or
any agreement or assignment contained therein, for the validity of the title of
the Borrower to the Borrower Collateral, for insuring the Borrower Collateral
or for the payment of taxes, charges, assessments or Liens upon the Borrower
Collateral or otherwise as to the maintenance of the Borrower Collateral. 

 

The
Collateral Agent shall have no duty to act outside of the United States in
respect of any Borrower Collateral located in any jurisdiction other than the
United States. 

 

The
Collateral Agent may act through its agents or attorneys and shall not be
liable for any misconduct or negligence of any such agents or attorneys
appointed with due care by it hereunder. 

 

In
no event shall Collateral Agent be liable for special, punitive or
consequential damages. 

 

No
provision of this Receivables Financing Agreement or any other Transaction
Document shall require the Collateral Agent to risk its own funds or otherwise
incur financial liability in the performance of its duties hereunder or
thereunder if it shall have reasonable grounds for believing that repayment of
such funds or adequate indemnity is not assured to it.

 

FACILITY TERMINATION EVENTS; EVENTS OF DEFAULT

 

Facility Termination Events.  The occurrence of any of the following shall
constitute a Facility Termination Event under this Agreement:

 

The
aggregate principal amount of all Advances outstanding hereunder exceeds the
Borrowing Base and such condition continues unremedied for two Business Days;

 

47

 

The
Internal Revenue Service shall file notice of a lien pursuant to Section 6323
of the Internal Revenue Code with regard to any of the assets of the Borrower
or the Seller and such lien shall not have been released within 30 days, or the
Pension Benefit Guaranty Corporation shall file notice of a lien pursuant to Section 4068
of ERISA with regard to any of the assets of the Borrower or the Seller and
such lien shall not have been released within 30 days;

 

(i) 
Any Transaction Document or any lien or security interest granted thereunder by
the Borrower, shall (except in accordance with its terms), in whole or in part,
terminate, cease to be effective or cease to be the legally valid, binding and
enforceable obligation of the Borrower; or (ii) the Borrower, the Seller,
the Servicer, the Guarantor, CCRT or CAR or any other party shall, directly or
indirectly, contest in any manner the effectiveness, validity, binding nature
or enforceability of any Transaction Document to which it is a party; or (iii) any
security interest securing any Obligation shall, in whole or in part, cease to
be a perfected first priority security interest (except, as to priority, for
Permitted Liens that may arise after the applicable Purchase Date and as
provided in clause (b) above) against the Borrower;

 

A
Servicer Default shall have occurred and be continuing;

 

the
Delinquency Ratio exceeds ***;

 

the
Aggregate Outstanding Principal Balance of Eligible Receivables relating to
Dealers with Dealer Reserve Percentages less than 15% exceeds *** of Aggregate
Outstanding Principal Balance of all Eligible Receivables;  

 

the
Charge-Off Ratio exceeds (i) during any period other than a period that
includes any Collection Period that encompasses any month occurring during the
period of December through March of any year, *** or (ii) during
a period that includes any Collection Period that encompasses any month
occurring during the period of December through and including March of
any year, ***;

 

CCRT
fails to own directly or indirectly *** of the outstanding equity in the
Borrower; 

 

CAR
shall make any payment, dividend or other distribution to CCRT or any of its
Affiliates or to the principals of CCRT or CAR and the aggregate amount of such
payments, dividends and other distributions exceeds of *** without the prior
consent of the Administrative Agent (not to include amounts paid from time to
time in accordance with the Transaction Documents to the Servicer for Servicing
the Receivables relating to any Transferred Dealer Transaction Right or for any
tax payment due in accordance with the Transaction Documents);

 

the
Seller shall incur Indebtedness (other then any Indebtedness incurred pursuant
to the Transaction Documents) after the date hereof in an aggregate principal
amount in excess of *** without the prior consent of the Administrative Agent; 

 

the
Pool Discount/Reserve Percentage exceeds ***; or

 

the
occurrence of an Event of Default.

 

Events of Default.  Each of the following shall constitute an
Event of Default under this Agreement:

 

48

 

Default
in the payment when due of any principal of any Advance, which default shall
continue unremedied for one Business Day, or default in the payment of any
other amount payable by the Borrower or CAR (in any capacity) hereunder,
including, without limitation, any Yield on any Advance or any Fees which default
shall continue for two Business Days;

 

The
Borrower, CAR (in any capacity), the Servicer or CCRT shall fail to perform in
any material respect any covenant applicable to it contained in this Agreement
or any other Transaction Document, and, except in the case of the covenants and
agreements contained in Sections 11.7 and 11.8, as to each of which no grace
period shall apply, any such failure shall remain unremedied for 30 days after
knowledge thereof or after written notice thereof shall have been given by the
Administrative Agent to the Borrower, CAR, the Servicer or CCRT, as applicable;

 

Any
representation or warranty of the Borrower, CAR (in any capacity), the Servicer
or CCRT made or deemed to have been made hereunder or in any other Transaction
Document or any other writing or certificate furnished by or on behalf of the
Borrower, CAR, the Servicer or CCRT to the Administrative Agent for purposes of
or in connection with this Agreement or any other Transaction Document shall
prove to have been false or incorrect when made or deemed to have been made,
and such failure would result in a Material Adverse Effect with respect to such
Person, and such failure shall remain unremedied for 30 days after knowledge
thereof or after written notice thereof shall have been given by the
Administrative Agent to the Borrower, CAR, the Servicer or CCRT, as applicable;
provided that no breach shall be deemed to occur hereunder in respect of any
representation or warranty relating to the “eligibility” of any Receivable
relating to any Transferred Dealer Transaction Right if such Transferred Dealer
Transaction Right shall have been purchased or repurchased by the Servicer or
the Seller; or

 

An
Insolvency Event shall have occurred and be continuing with respect to the Borrower,
the Seller, the Servicer or CCRT.

 

Effect of an Event of Default.

 

Optional
Termination.  Upon notice by the Administrative Agent that
an Event of Default (other than an Event of Default described in Section 14.2(d))
has occurred, and so long as such Event of Default is continuing, the Required
Lenders may declare all or any portion of the outstanding principal amount of
the Advances and other Obligations to be due and payable, whereupon the full
unpaid amount of such Advances and other Obligations which shall be so declared
due and payable shall be and become immediately due and payable, without
further notice, demand or presentment and the Facility Termination Date shall
be deemed to have occurred.

 

Automatic
Termination.  Upon the occurrence of an Event of Default
described in Section 14.2(d), the Facility Termination Date shall be
deemed to have occurred automatically, and all outstanding Advances under this
Agreement and all other Obligations under this Agreement shall become
immediately and automatically due and payable, all without presentment, demand,
protest or notice of any kind.  

 

49

 

The
Administrative Agent will give the Collateral Agent written notice of the
occurrence of any Event of Default or any waiver of any Event of Default,
provided that the failure of the Administrative Agent to give the Collateral
Agent written notice of any Event of Default shall not affect the rights of the
Administrative Agent, the Collateral Agent or the Lenders with respect to the
Borrower or the Borrower Collateral following such Event of Default.

 

Rights Upon Event of
Default.  If an Event of Default shall have occurred
and be continuing, the Required Lenders may direct the Administrative Agent to
exercise any of the remedies specified herein in respect of the Borrower
Collateral.

 

Rights Upon Facility
Termination Event.  If a Facility Termination Event
shall have occurred and be continuing, the Facility Termination Date shall
occur and the commitments of the Lenders hereunder shall terminate.

 

THE AGENTS

 

Appointment.  Each Lender and each Agent hereunder hereby
irrevocably designates and appoints U.S. Bank National Association as
Collateral Agent hereunder and under the other Transaction Documents, and
authorizes the Collateral Agent to take such action on its behalf under the
provisions of this Agreement and the other Transaction Documents and to
exercise such powers and perform such duties as are expressly delegated to the
Collateral Agent by the terms of this Agreement and the other Transaction
Documents, together with such other powers as are reasonably incidental
thereto.  Each Lender and each Agent
hereunder hereby irrevocably designates and appoints Deutsche Bank AG, New York
Branch as the Administrative Agent hereunder and under the other Transaction
Documents, and authorizes the Administrative Agent to take such action on its
behalf under the provisions of this Agreement and the other Transaction
Documents and to exercise such powers and perform such duties as are expressly
delegated to the Administrative Agent by the terms of this Agreement and the
other Transaction Documents, together with such other powers as are reasonably
incidental thereto.  Each Lender in each
Lender Group hereby irrevocably designates and appoints the Agent for such
Lender Group as the agent of such Lender under this Agreement, and each such
Lender irrevocably authorizes such Agent, as the agent for such Lender, to take
such action on its behalf under the provisions of this Agreement and the other
Transaction Documents and to exercise such powers and perform such duties
thereunder as are expressly delegated to such Agent by the terms of this
Agreement and the other Transaction Documents, together with such other powers
as are reasonably incidental thereto. 
The Collateral Agent, the Administrative Agent and each Agent hereby accepts such appointment. 
Each of the Administrative Agent and the Collateral Agent shall promptly
deliver, but in any event no later than the following Business Day, a copy of
any notice, certificate, report or other documents received by it in its
capacity as Administrative Agent or Collateral Agent to each Agent, provided
that the Collateral Agent shall not be obligated to deliver any such copy to
DBNY, in its capacity as an Agent, if DBNY is the Administrative Agent at such
time and the notice, certificate, report or other document on its face
indicates that the Administrative Agent has received a copy of such item.  Notwithstanding any provision to the contrary
elsewhere in this Agreement, neither the Administrative Agent, the Collateral
Agent nor any Agent (the Administrative Agent, the Collateral Agent and each
Agent being referred to in this Article as a “Note Agent”) shall
have any duties or responsibilities, except those expressly set forth herein,
or any fiduciary relationship with any Lender, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or otherwise exist against any Note Agent.

 

Delegation of Duties.  Each Note Agent may execute any of its duties
under this Agreement and the other Transaction Documents by or through its
subsidiaries, affiliates, agents or attorneys-in-fact and shall be entitled to
advice of counsel concerning all matters pertaining to such duties.  No Note Agent shall not be
responsible for the negligence or misconduct of any agents or attorneys-in-fact
selected by it with reasonable CARS Acquisition.  The Administrative Agent hereby directs the
Collateral Agent to appoint, and the Collateral Agent hereby appoints, the
Custodian to act as its agent to maintain custody of the Contract Files and for
the other purposes described in Section 3.03 of the Sale and Servicing
Agreement.

 

Exculpatory Provisions.  Neither any Note Agent (acting in such
capacity) nor any of its directors, officers, agents or employees shall be (a) liable
for any action lawfully taken or omitted to be taken by it or them or any
Person described in Section 15.2 under or in connection with this Agreement
or the other Transaction Documents (except for its, their or such Person’s own
gross negligence or willful misconduct), or (b) responsible in any manner
to any Person for any recitals, statements, representations or warranties of
any Person (other than itself) contained in the Transaction Documents or in any
certificate, report, statement or other document referred to or provided for
in,

 

50

 

or received under or in connection with, the
Transaction Documents or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of the Transaction Documents or any other
document furnished in connection therewith or herewith, or for any failure of
any Person (other than itself or its directors, officers, agents or employees)
to perform its obligations under any Transaction Document or for the
satisfaction of any condition specified in a Transaction Document.  Except as otherwise expressly provided in
this Agreement, no Note Agent shall be under any obligation to any Person to
ascertain or to inquire as to the observance or performance of any of the
agreements or covenants contained in, or conditions of, the Transaction
Documents, or to inspect the properties, books or records of the Borrower, the
Seller, CAR, the Guarantor, CCRT, the Custodian, the Backup Servicer, any Cap
Provider or the Servicer.

 

Reliance by Agents.  Each Note Agent shall in all cases be
entitled to rely, and shall be fully protected in relying, upon any note,
writing, resolution, notice, consent, certificate, affidavit, letter,
cablegram, telegram, telecopy, telex or teletype message, statement, order or
other document or conversation believed by it to be genuine and correct and to
have been signed, sent or made by the proper Person or Persons and upon advice
and statements of legal counsel (including, without limitation, counsel to each
of the Lenders), independent accountants and other experts selected by such
Note Agent.  Each Note Agent shall in all
cases be fully justified in failing or refusing to take any action under this
Agreement, any other Transaction Document or any other document furnished in
connection herewith or therewith unless it shall first receive such advice or
concurrence of the Lenders, as it deems appropriate, or it shall first be
indemnified to its satisfaction (i) in the case of the Administrative
Agent or the Collateral Agent, by the Lenders or (ii) in the case of an
Agent, by the Lenders in its Lender Group, against any and all liability, cost
and expense which may be incurred by it by reason of taking or continuing to
take any such action.  Each of the
Administrative Agent and the Collateral Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement, the
other Transaction Documents or any other document furnished in connection
herewith or therewith in accordance with a request of the Required Lenders, and
such request and any action taken or failure to act pursuant thereto shall be
binding upon all the Lenders.  Each Agent
shall in all cases be fully protected in acting, or in refraining from acting,
under this Agreement, the other Transaction Documents or any other document
furnished in connection herewith or therewith in accordance with a request of the
Lenders in its Lender Group holding greater than 50% of the outstanding
Advances held by such Lender Group, and such request and any action taken or
failure to act pursuant thereto shall be binding upon all the Lenders in such
Lender Group.

 

Notices.  No Note Agent shall be deemed to have
knowledge or notice of the occurrence of any breach of this Agreement or the
occurrence of any Facility Termination Event unless such Note Agent has
received notice from the Servicer, the Borrower or any Lender, referring to
this Agreement and describing such event. 
In the event that the Administrative Agent or the Collateral Agent
receives such a notice, it shall promptly give notice thereof to each Agent,
and in the event any Agent receives such a notice, it shall promptly give
notice thereof to the Lenders in its Lender Group.  The Administrative Agent or Collateral Agent
shall take such action with respect to such event as shall be reasonably
directed by the Required Lenders, and each Agent shall take such action with
respect to such event as shall be reasonably directed by (i) Lenders in
its Lender holding greater than 50% of the outstanding Advances held by such
Lender Group; provided that unless and until such Note Agent shall have
received such directions, such Note Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, with respect to such
event as it shall deem advisable in the best interests of the Lenders or of the
Lenders in its Lender Group, as applicable.

 

Non-Reliance on Agent.  The Lenders expressly acknowledge that
neither any Note Agent, nor any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates has made any representations or warranties to
it and that no act by a Note Agent hereafter taken, including, without
limitation, any review of the affairs of the Borrower, the Borrower, the
Seller, CAR, the Guarantor, CCRT, the Servicer, the Custodian or the Backup
Servicer, shall be deemed to constitute any representation or warranty by such
Note Agent to any Lender.  Each Lender
represents to each Note Agent that it has, independently and without reliance
upon any Note Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of the Borrower, the Seller, CAR, the Guarantor,
CCRT, the Servicer, the Custodian, the Backup Servicer and the Borrower
Collateral and made its own decision to purchase its interest in the Notes
hereunder and enter into this Agreement. 
Each Lender also represents that it will, independently and without
reliance upon any Note Agent or any other Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own analysis, appraisals and decisions in taking or not taking action under any
of the Transaction Documents, and to make such investigation as it deems
necessary to inform itself as to the business, operations, property, financial
and other condition and creditworthiness of the Borrower, the Seller, CAR, the
Guarantor, CCRT, the Servicer, the Custodian, the Backup Servicer and the
Borrower Collateral.  Except as expressly
provided

 

51

 

herein, no Note Agent shall have any duty or
responsibility to provide any Lender with any credit or other information
concerning the Borrower Collateral or the business, operations, property,
prospects, financial and other condition or creditworthiness of the Borrower,
the Seller, CAR, the Guarantor, CCRT, the Borrower, the Servicer, the Custodian
or the Backup Servicer which may come into the possession of such Note Agent or
any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates.

 

Indemnification.  (i)  The Committed Lenders agree to
indemnify each of the Administrative Agent and the Collateral Agent and their
respective officers, directors, employees, representatives and agents (to the
extent not reimbursed by the Borrower, the Seller, the Guarantor, CCRT, the
Servicer, the Custodian or CAR under the Transaction Documents, and without
limiting the obligation of such Persons to do so in accordance with the terms
of the Transaction Documents), ratably according to their Commitment
Percentages and (ii) the Committed Lenders in each Lender Group agree to
indemnify the Agent for such Lender Group in its capacity as such (without
limiting the obligation (if any) of the Borrower, the Seller, the Guarantor,
CCRT, the Servicer, the Custodian or CAR under the Transaction Documents to
reimburse such Agent for any such amounts), ratably according to their
respective Commitments, in each case, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever (including, without
limitation, the reasonable fees and disbursements of counsel for such Note
Agent or the affected Person in connection with any investigative, or judicial
proceeding commenced or threatened, whether or not such Note Agent or such
affected Person shall be designated a party thereto) that may at any time be
imposed on, incurred by or asserted against such Note Agent or such affected
Person as a result of, or arising out of, or in any way related to or by reason
of, any of the transactions contemplated hereunder or under the Transaction
Documents or any other document furnished in connection herewith or therewith
(but excluding any such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting solely
from the gross negligence or willful misconduct of such Note Agent or such
affected Person).  The provisions of this
Section 15.7 shall survive the termination of the Transaction
Documents and the resignation or removal of the Administrative Agent,
Collateral Agent or any other Note Agent.

 

Successor Agent.  Each of the Administrative Agent and
Collateral Agent may, upon five (5) days’ notice to the Lenders (with a
copy to the Borrower and the Servicer), resign as Administrative Agent or
Collateral Agent; provided, that an Agent or a Lender agrees to become
the successor Administrative Agent or Collateral Agent hereunder in accordance
with the next sentence.  If the
Administrative Agent or Collateral Agent shall resign as Administrative Agent
or Collateral Agent under this Agreement, then the Required Lenders during such
period shall appoint from among the Agents and the Committed Lenders a
successor agent, whereupon such successor agent shall succeed to the rights,
powers and duties of the Administrative Agent or Collateral Agent, as the case
may be, and the term “Administrative Agent” or “Collateral Agent” shall mean
such successor agent, effective upon its acceptance of such appointment, and
the rights, powers and duties of the former Administrative Agent or Collateral
Agent as Administrative Agent or Collateral Agent shall be terminated, without
any other or further act or deed on the part of such former agent or any of the
parties to this Agreement.  In the event of any such resignation of the Administrative
Agent or Collateral Agent, the Administrative Agent or Collateral Agent shall
promptly transfer (upon its receipt of any outstanding fees, expenses and
indemnities due and owing to it) to the successor Administrative Agent or
Collateral Agent, as the case may be, as directed in writing by the Required
Lenders, all accounts, funds and investments being administered under this
Agreement and shall cooperate with the Required Lenders, CAR and the successor
administrative agent to facilitate the continued perfection and priority of the
Lien granted for the benefit of the Secured Parties in the Borrower Collateral.  Any Agent may resign as Agent upon ten
days’ notice to the Lenders in its Lender Group, the Administrative Agent and
each other Agent, the Borrower and the Servicer with such resignation becoming
effective upon a successor agent succeeding to the rights, powers and duties of
the Agent pursuant to this Section 15.8.  If an Agent shall resign as Agent under this
Agreement, then Lenders in its Lender Group holding greater than 50% of the
outstanding Advances (or, if no Advances are outstanding, the Noncommited
Lender and more than 50% (by Commitment) of the Committed Lenders in such
Lender Group) held by such Lender Group shall appoint from among the Committed
Lenders in such Lender Group a successor agent for such Lender Group.  After any retiring Note Agent’s resignation
hereunder as Note Agent, the provisions of this Article XV shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Note Agent under this Agreement. 
No resignation of any Note Agent shall become effective until a successor
Note Agent shall have assumed the responsibilities and obligations of such Note
Agent; provided, however, that in the event a successor Note
Agent is not appointed within 60 days after such Note Agent has given notice of
its resignation as permitted by this Section 15.8, such Note Agent
may petition a court of competent jurisdiction for its removal and appointment
of a successor.

 

52

 

Agents in their Individual
Capacity.  Each Note
Agent and its Affiliates may make loans to, accept deposits from and generally
engage in any kind of business with the Borrower, the Seller, CAR, the
Guarantor, CCRT, the Servicer, the Custodian, the Backup Servicer or any other
Note Agent or Investor as though such Note Agent were not an agent
hereunder.  In addition, the Lenders
acknowledges that one or more Persons which are Note Agents may act (i) as
administrator, sponsor or agent for one or more Noncommitted Lenders and in
such capacity acts and may continue to act on behalf of each such Noncommitted
Lender in connection with its business, and (ii) as the agent for certain
financial institutions under the liquidity and credit enhancement agreements
relating to this Agreement to which any one or more Noncommitted Lenders is party
and in various other capacities relating to the business of any such
Noncommitted Lender under various agreements. 
Any such Person, in its capacity as Note Agent, shall not, by virtue of
its acting in any such other capacities, be deemed to have duties or
responsibilities hereunder or be held to a standard of CARS Acquisition in
connection with the performance of its duties as a Note Agent other than as
expressly provided in this Agreement. 
Any Person which is a Note Agent may act as a Note Agent without regard
to and without additional duties or liabilities arising from its role as such
administrator or agent or arising from its acting in any such other capacity.

 

ASSIGNMENTS

 

Restrictions on Assignments.  Except as specifically provided herein and in
the Transaction Documents, neither the Borrower, the Seller, the Guarantor,
CCRT, the Servicer, CAR, the Administrative Agent, the Collateral Agent, the
Custodian nor Backup Servicer may assign any of their respective rights or
obligations hereunder or any interest herein without the prior written consent
of the Administrative Agent and the Required Lenders.  No Noncommitted Lender shall assign any of
its Advances or rights hereunder without the consent of its Committed Lenders
and the consent of the Borrower; and no Committed Lender may assign any of its
Advances or rights or commitments hereunder without the consent of the related
Noncommitted Lenders and the consent of the Borrower.  Any Lender may furnish any information
concerning the Borrower, the Seller, the Servicer, the Guarantors, CAR or CCRT
or the Transaction Documents to prospective assignees or participants; provided
that prior to furnishing any such information, any such prospective assignee or
participant shall have executed a confidentiality agreement in which it agrees
to comply with the provisions of Section 18.14.

 

Documentation.  Each Lender shall deliver to each assignee an
assignment, in such form as such Lender and the related assignee may agree,
duly executed by such Lender assigning any such rights, obligations, Advance or
Note to the assignee; and such Lender shall promptly execute and deliver all
further instruments and documents, and take all further action, that the
assignee may reasonably request, in order to perfect, protect or more fully
evidence the assignee’s right, title and interest in and to the items assigned,
and to enable the assignee to exercise or enforce any rights hereunder or under
the Notes evidencing such Advance.

 

Rights of Assignee.  Upon the foreclosure of any assignment of any
Advances made for security purposes, or upon any other assignment of any
Advance from any Lender pursuant to this Article XVI, the
respective assignee receiving such assignment shall have all of the rights of
such Lender hereunder with respect to such Advances and all references to the
Lender or Investors in Section 6.1 shall be deemed to apply to such
assignee.

 

Notice of Assignment.  Each Lender shall provide notice to the
Borrower, the Servicer and the Seller of any assignment hereunder by such
Lender to any assignee.  Each Lender
authorizes the related Agent to, and such Agent agrees that it shall, endorse
the Notes to reflect any assignments made pursuant to this Article XVI
or otherwise, together with a copy of the executed assignments, which shall
include the address, contact information, and payment instructions for the
assignee.

 

Registration; Registration of
Transfer and Exchange.

 

The
Administrative Agent shall keep a register (the “Note Register”) in which,
subject to such reasonable regulations as it may prescribe, the Administrative
Agent shall provide for the registration of the Notes and of transfer of
interests in the Notes.  The
Administrative Agent is hereby appointed “Note Registrar” for the purpose of
registering the Notes and transfers of the Notes as herein provided.

 

53

 

Each
person who has or who acquired an interest in a Note shall be deemed by such
acquisition to have agreed to be bound by the provisions of this Section 16.5.  A Note may be exchanged (in accordance with Section 16.5(c))
and transferred to the holders (or their agents or nominees) of the Advances
and to any assignee (in accordance with Section 16.1) (or its agent or
nominee) of all or a portion of the Advances. 
The Administrative Agent shall not register (or cause to be registered)
the transfer of such Note, unless the proposed transferee shall have delivered
to the Administrative Agent (i) either (x) evidence satisfactory to
it that the transfer of such Note is exempt from registration or qualification
under the Securities Act of 1933, as amended, and all applicable state
securities laws and that the transfer does not constitute a “prohibited
transaction” under ERISA or (y) an express agreement by the proposed
transferee to be bound by and to abide by the provisions of this Section 16.5,
the restrictions noted on the face of such Note and (ii) a properly
executed Form W-9 and, in the case of a transferee who is a foreign person
(within the meaning of Section 7701(a)(5) of the Code), a properly
executed Form W-8ECI, Form W-8BEN or Form W-81MY.

 

At
the option of the holder thereof, a Note may be exchanged for one or more new
Notes of any authorized denominations and of a like class and aggregate
principal amount at an office or agency of the Borrower.  Whenever any Note is so surrendered for
exchange, the Borrower shall execute and deliver (through the Administrative
Agent) the new Note which the holder making the exchange is entitled to
receive.

 

Upon
surrender for registration of transfer of any Note at an office or agency of
the Borrower, the Borrower shall execute and deliver (through the
Administrative Agent), in the name of the designated transferee or transferees,
one or more new Notes of any authorized denominations and of a like class and
aggregate principal amount.

 

All
Notes issued upon any registration of transfer or exchange of any Note in
accordance with the provisions of this Agreement shall be the valid obligations
of the Borrower, evidencing the same debt, and entitled to the same benefits
under this Agreement, as the Note(s) surrendered upon such registration of
transfer or exchange.

 

Every
Note presented or surrendered for registration of transfer or for exchange
shall (if so required by the Borrower or the Administrative Agent) be fully
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Note Registrar, duly executed by the holder thereof or his
attorney duly authorized in writing. 
Each such Note shall be accompanied by a statement providing the name of
the transferee and indicating whether the transferee is subject to income tax
backup withholding requirements and whether the transferee is the sole
beneficial owner of such Notes.

 

No
service charge shall be made for any registration of transfer or exchange of a
Note, but the Borrower may require payment from the transferee holder of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer of exchange of a Note, other than
exchanges pursuant to this Section 16.5.

 

The
holders of the Notes shall be bound by the terms and conditions of this
Agreement.

 

Mutilated, Destroyed, Lost and Stolen Notes.

 

54

 

If
any mutilated Note is surrendered to the Administrative Agent, the Borrower
shall execute and deliver (through the Administrative Agent) in exchange
therefor a new Note of like class and tenor and principal amount and bearing a
number not contemporaneously outstanding.

 

If
there shall be delivered to the Borrower and the Administrative Agent prior to
the payment of the Notes (i) evidence to their satisfaction of the
destruction, loss or theft of any Note and (ii) such security or indemnity
as may be required by them to save each of them and any agent of either of them
harmless, then, in the absence of notice to the Borrower or the Administrative
Agent that such Note has been acquired by a bona fide Lender, the Borrower
shall execute and deliver (through the Administrative Agent), in lieu of any
such destroyed, lost or stolen Note, a new Note of like class, tenor and
principal amount and bearing a number not contemporaneously outstanding.

 

Upon
the issuance of any new Note under this Section 16.6, the Borrower may
require the payment from the transferor holder of a sum sufficient to cover any
tax or other governmental charge that may be imposed in relation thereto and
any other expenses connected therewith.

 

Every
new Note issued pursuant to this Section 16.6 and in accordance with the
provisions of this Agreement, in lieu of any destroyed, lost or stolen Note
shall constitute an original additional contractual obligation of the Borrower,
whether or not the destroyed, lost or stolen Note shall be at any time
enforceable by anyone, and shall be entitled to all the benefits of this
Agreement equally and proportionately with any and all other Notes duly issued
hereunder.

 

The
provisions of this Section 16.6 are exclusive and shall preclude (to the extent
lawful) all other rights and remedies with respect to the replacement or
payment of a mutilated, destroyed, lost or stolen Note.

 

Persons Deemed Owners.  The
Borrower, the Servicer, the Seller, the Backup Servicer, the Agents, the
Administrative Agent, the Collateral Agent, the Custodian and any agent for any
of the foregoing may treat the holder of any Note as the owner of such Note for
all purposes whatsoever, whether or not such Note may be overdue, and none of
Borrower, the Seller, the Guarantor, CCRT, the Servicer, the Agents, the
Administrative Agent, the Collateral Agent, the Custodian and any such agent
shall be affected by notice to the contrary.

 

Cancellation.  All Notes surrendered for payment or
registration of transfer or exchange shall be promptly canceled.  The Borrower shall promptly cancel and
deliver to the Administrative Agent any Notes previously authenticated and
delivered hereunder which the Borrower may have acquired in any manner
whatsoever, and all Notes so delivered shall be promptly canceled by the
Borrower.  No Notes shall be
authenticated in lieu of or in exchange for any Notes canceled as provided in
this Section 16.8, except as expressly permitted by this Agreement.

 

Participations; Pledge.

 

At
any time and from time to time, each Lender may, in accordance with applicable
law, at any time grant participations in all or a portion of its Commitment
and/or its interest in the Advances and other payments due to it under this
Agreement and the Notes to any Person (each, a “Participant”); provided,
however, that no participation shall be granted to any Person unless and until
the Administrative Agent shall have consented thereto (which consent shall not
be unreasonably withheld or delayed). 
Each Lender hereby acknowledges and agrees that (A) any such
participation will not alter or affect such Lender’s direct obligations
hereunder, and (B) neither the Borrower, the Seller, the Guarantor, CCRT,
Administrative Agent, the Collateral Agent, the Custodian, any Agent, the
Backup Servicer nor the Servicer shall have any obligation to have any
communication or relationship with any Participant.  Each Participant shall comply with the
provisions of Section 5.1(c).

 

55

 

Each
Lender may pledge its interest in the Advances and the Notes to any Federal
Reserve Bank as collateral in accordance with applicable law.

 

INDEMNIFICATION

 

Indemnity.  The Borrower (to the extent of funds
available therefor under Section 9.5 of this Agreement) agrees, to
indemnify and hold harmless the Administrative Agent, the Collateral Agent, the
Backup Servicer, the Lenders, the Agents and each of their Affiliates, and
their respective successors and assigns (each an “Indemnified Party”)
against any and all claims, damages, losses, liabilities or expenses
(including, but not limited to, reasonable attorneys’ fees, court costs and
costs of investigation to the extent actually incurred) of any kind or nature
whatsoever awarded against or incurred by any of them in connection with this
Agreement and the Transaction Documents; excluding, however, as
to each Indemnified Party (and the Borrower shall not have any obligation to
indemnify any such Person for any liabilities arising from), (a) claims,
damages, losses, liabilities or expenses payable to such Indemnified Party to the extent determined by a court of
competent jurisdiction to have resulted from gross negligence or willful
misconduct on the part of any such Indemnified Party
or its agent or subcontractor, or (b) taxes
imposed on such Indemnified Party or any affiliate thereof, however
denominated, and franchise taxes imposed on the net income of any Indemnified
Party, in each case imposed: (1) by the United States or any political
subdivision or taxing authority thereof or therein; (2) by any
jurisdiction under the laws of which such Indemnified Party or its applicable
lending office is organized or located, managed or controlled or in which its
principal office is located or any political subdivision or taxing authority
thereof or therein; or (3) by reason of any connection between the
jurisdiction imposing such tax and such Indemnified Party or such lending
office other than a connection arising solely from this Agreement or any other
Transaction Document or any transaction hereunder or thereunder.  The provisions of
this Section 13.7 shall survive the resignation or removal of the
Administrative Agent or the Collateral Agent or any successor Administrative
Agent or the Collateral Agent and the termination of this Agreement.  If the Borrower has made any indemnity
payments pursuant to this Section 17.1 and the Indemnified Party
thereafter collects any of such amounts from others, such Indemnified Party
shall promptly repay such amounts collected to the Borrower, without interest.

 

Contribution.  If for any reason (other than the exclusions (a) through
(b) set forth in Section 17.1) the indemnification provided
above in Section 17.1 is unavailable to an Indemnified Party or is
insufficient to hold an Indemnified Party harmless, then the Borrower agrees to
contribute to the amount paid or payable by such Indemnified Party as a result
of such loss, claim, damage or liability in such proportion as is appropriate
to reflect not only the relative benefits received by such Indemnified Party,
on the one hand, and the Borrower, on the other hand, but also the relative
fault of such Indemnified Party, on the one hand, and the Borrower, on the
other hand, as well as any other relevant equitable considerations.

 

MISCELLANEOUS

 

No Waiver; Remedies.  No failure
on the part of any Investor, any Agent, the Administrative Agent, the
Collateral Agent, any Indemnified Party or any Affected Person to exercise, and
no delay in exercising, any right, power or remedy hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise by any of them of any
right, power or remedy hereunder preclude any other or further exercise
thereof, or the exercise of any other right, power or remedy.  The remedies herein provided are cumulative
and not exclusive of any remedies provided by law.  Without limiting the foregoing, each Investor
and Participant is hereby authorized by the Borrower, the Seller and CAR at any
time and from time to time, to the fullest extent permitted by law, to set off
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other indebtedness at any time owing by it to or
for the credit or the account of the Borrower, the Seller or CAR (as the case
may be) to the amounts owed by the Borrower, such Seller or CAR, respectively,
under this Agreement, to the Administrative Agent, the Collateral Agent, the
Agents, any Affected Person, any Indemnified Party or any Investor or their
respective successors and assigns.

 

Amendments, Waivers.  This Agreement may not be amended,
supplemented or modified nor may any provision hereof be waived except in
accordance with the provisions of this Section 18.2.  With the written consent of the Required
Lenders, the Agents, Borrower, the Seller, the Guarantor, CCRT, the Servicer,
CAR, Administrative Agent, the Collateral Agent, the Custodian and the Backup
Servicer may, from time to time, enter into written amendments, supplements,
waivers or modifications hereto for the purpose of adding any provisions to
this

 

56

 

Agreement or changing in any manner the
rights of any party hereto or waiving, on such terms and conditions as may be
specified in such instrument, any of the requirements of this Agreement; provided,
however, that no such amendment, supplement, waiver or modification
shall (i) reduce the amount of or extend the maturity of any payment with
respect to an Advance or reduce the rate or extend the time of payment of Yield
thereon, or reduce or alter the timing of any other amount payable to any
Lender hereunder, in each case without the consent of each Lender affected
thereby or (ii) amend, modify or waive any provision of this Section 18.2
or 18.11, or reduce the percentage specified in the definition of Required
Lenders, in each case without the written consent of all Lenders.  Any waiver of any provision of this Agreement
shall be limited to the provisions specifically set forth therein for the period
of time set forth therein and shall not be construed to be a waiver of any
other provision of this Agreement.  No
amendment, supplement, modification or waiver of this Agreement shall take
effect unless each Rating Agency shall have confirmed that such action will not
result in the withdrawal or reduction of its rating of the Notes.

 

Notices, Etc.  All notices and other communications provided
for hereunder shall, unless otherwise stated herein, be in writing (including
facsimile communication) and shall be personally delivered or sent by certified
mail, postage prepaid, or by facsimile, to the intended party at the address or
facsimile number of such party set forth under its name on the signature pages hereof
or at such other address or facsimile number as shall be designated by such
party in a written notice to the other parties hereto.  All such notices and communications to CAR,
CAR Servicing or CCRT, in any capacity, shall be copied to its counsel,
Troutman Sanders LLP, 600 Peachtree Street, Suite 5200, Atlanta, Georgia
30308-2216, Attn: William Brinkley Dickerson, Esq., 404-885-3822
(telephone), 404-962-6743 (facsimile). 
All such notices and communications to the Borrower shall be copied to
its counsel, Lionel Sawyer & Collins, 50 W. Liberty Street, Suite 1100,
Reno, NV 89501, Attn: Colleen A. Dolan, (telephone) 775-788-8654, (facsimile)
775-788-8682.  All such notices and
communications shall be effective, (a) if personally delivered, when
received, (b) if sent by certified mail, three Business Days after having
been deposited in the mail, postage prepaid, (c) if sent by overnight
courier, one Business Day after having been given to such courier, and (d) if
transmitted by facsimile, when sent, receipt confirmed by telephone or
electronic means, except that notices and communications pursuant to Section 2.2
shall not be effective until received.

 

Costs, Expenses and Taxes.  (a)  In addition to the rights of
indemnification granted under Section 17.1, the Borrower or CAR on
behalf of the Borrower agrees to pay on demand all reasonable out of pocket
costs and expenses of the Administrative Agent, the Collateral Agent, the
Backup Servicer, the Agents and the Lenders in connection with the preparation
(subject to the Fee Letter), execution, delivery and syndication of this
Agreement, any Support Facility and the other documents and agreements to be
delivered hereunder or with respect hereto, and CAR further agrees to pay all
reasonable out of pocket costs and expenses of the Administrative Agent, the
Collateral Agent, the Backup Servicer, the Agents and the Lenders in connection
with any amendments, waivers or consents executed in connection with this
Agreement and any Support Facility, including, without limitation, the
reasonable actual fees and out-of-pocket expenses of counsel for the Administrative
Agent, the Collateral Agent, the Backup Servicer, the Agents and the Lenders
with respect thereto and with respect to advising the Administrative Agent, the
Collateral Agent, the Backup Servicer, the Agents and the Lenders as to their
rights and remedies under this Agreement and any Support Facility, and to pay
all reasonable costs and expenses, if any (including reasonable counsel fees
and expenses actually incurred), of the Administrative Agent, the Collateral
Agent, the Backup Servicer, the Agents, the Lenders, the Investors, and their
respective Affiliates, in connection with the enforcement against CCRT, CAR or
the Borrower of this Agreement or any of the other Transaction Documents and
the other documents and agreements to be delivered hereunder or with respect
hereto, provided that, so long as no Facility Termination Event has
occurred and is continuing, after the Effective Date the Borrower and CAR,
individually or collectively, shall not be obligated under this Agreement to
reimburse (x) the Administrative Agent, the Agents, the Lenders and the
Investors for costs and expenses, including without limitation filing fees,
periodic audit expenses, rating agency fees, due diligence expenses, accounting
expenses, fees and expenses of counsel and disbursements, in excess of $100,000
in the aggregate in any calendar year, (y) the Backup Servicer for costs and
expenses, including without limitation filing fees, periodic audit expenses,
fees and expenses of counsel and disbursements, in excess of $25,000 in the
aggregate in any calendar year and (z) the Collateral Agent for costs and
expenses, including without limitation filing fees, periodic audit expenses,
fees and expenses of counsel and disbursements, in excess of $25,000 in the
aggregate in any calendar year.

 

Binding Effect; Survival.  This Agreement shall be binding upon and
inure to the benefit of Borrower, the Seller, the Guarantor, CCRT, the
Investors, the Agents, the Administrative Agent, the Collateral Agent, the
Back-Up Servicer, the Custodian, the Servicer, CAR, and their respective
successors and permitted assigns, and the provisions of Section 5.1(b),
Article VI, Section 12.1 and Article XVII
shall inure to the benefit of the Affected Persons and the Indemnified Parties,
respectively, and their respective successors and permitted assigns; provided,
however, nothing in the foregoing shall be deemed to authorize any
assignment not permitted by Article XVI or any other provisions

 

57

 

of the Transaction Documents.  This Agreement shall create and constitute
the continuing obligations of the parties hereto in accordance with its terms,
and shall remain in full force and effect until such time when all Obligations
have been finally and fully paid and performed. 
The rights and remedies with respect to any breach of any representation
and warranty made by the Borrower pursuant to Article X and the
indemnification and payment provisions of Article VI,  Section 12.1
and Article XVII and the provisions of Section 18.10, Section 18.11
and Section 18.12 shall be continuing and shall survive any
termination of this Agreement and any termination of CAR’s rights to act as
Servicer hereunder or under any other Transaction Document.

 

Captions and Cross References.  The various captions (including, without
limitation, the table of contents) in this Agreement are provided solely for
convenience of reference and shall not affect the meaning or interpretation of
any provision of this Agreement.  Unless
otherwise indicated, references in this Agreement to any Section, Schedule or
Exhibit are to such Section of or Schedule or Exhibit to
this Agreement, as the case may be, and references in any Section, subsection,
or clause to any subsection, clause or subclause are to such subsection, clause
or subclause of such Section, subsection or clause.

 

Severability.  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 of this Agreement or affecting the
validity or enforceability of such provision in any other jurisdiction.

 

GOVERNING LAW.  THIS AGREEMENT AND THE NOTES SHALL BE A
CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAW OF THE STATE OF NEW YORK
WITHOUT REGARD TO ANY OTHERWISE APPLICABLE CONFLICT OF LAW PRINCIPLES (OTHER
THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW).

 

Counterparts.  This Agreement may be executed by the parties
hereto in several counterparts, each of which shall be deemed to be an original
but all of which shall constitute together but one and the same agreement.

 

WAIVER OF JURY TRIAL.  EACH OF THE PARTIES HERETO HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH, THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT, OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR
ACTIONS OF THE SELLER, THE BORROWER, THE SERVICER, THE CUSTODIAN, THE BACKUP
SERVICER, THE GUARANTOR, ADMINISTRATIVE/COLLATERAL AGENT, THE AGENTS, THE
INVESTORS OR ANY OTHER AFFECTED PERSON. 
EACH PARTY HERETO ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND
SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH OTHER PROVISION OF EACH
OTHER TRANSACTION DOCUMENT TO WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A
MATERIAL INDUCEMENT FOR ITS ENTERING INTO THIS AGREEMENT AND EACH SUCH OTHER
TRANSACTION DOCUMENT.

 

No Proceedings.

 

Each
of the Borrower, the Seller, CAR, the Guarantor, CCRT, the Custodian, the
Servicer, the Backup Servicer, the Administrative Agent, the Collateral Agent,
each Agent and each Investor hereby agrees that it will not institute against
any Lender which is a Structured Lender, or join any other Person in
instituting against such Lender, any insolvency proceeding (namely, any
proceeding of the type referred to in the definition of Insolvency Event) so
long as any commercial paper or other senior indebtedness issued by such Lender
shall be outstanding or there shall not have elapsed one year plus one day
since the last day on which any such commercial paper or other senior
indebtedness shall be outstanding.  The
foregoing shall not limit such Person’s right to file any claim in or otherwise
take any action with respect to any insolvency proceeding that was instituted
by any Person other than such Person.

 

58

 

Each
of CAR, the Custodian, the Servicer, the Seller, the Backup Servicer, each
Agent, each Investor, the Administrative Agent and the Collateral Agent hereby
agrees that it will not institute against the Borrower, or join any other
Person in instituting against the Borrower, any insolvency proceeding (namely,
any proceeding of the type referred to in the definition of Insolvency Event)
so long as any Advances or other amounts due from the Borrower hereunder or any
indebtedness issued by the Borrower secured by motor vehicle installment sales
contracts or loans and other related collateral shall be outstanding, or there
shall not have elapsed one year plus one day since the last day on which any
such Advances or other amounts shall be outstanding.  The foregoing shall not limit such Person’s
right to file any claim in or otherwise take any action with respect to any
insolvency proceeding that was instituted by any Person other than such Person.

 

Limited Recourse.  No recourse under any obligation, covenant or
agreement of a Lender, the Borrower, CAR, or the Servicer contained in this
Agreement shall be had against any incorporator, stockholder, officer,
director, member, manager, employee or agent of any Lender, the Borrower, CAR,
or the Servicer, or any of their respective Affiliates (solely by virtue of
such capacity), by the enforcement of any assessment or by any legal or
equitable proceeding, by virtue of any statute or otherwise; it being expressly
agreed and understood that this Agreement is solely a corporate obligation of
each Lender, the Borrower, CAR, or the Servicer, as applicable, and that no
personal liability whatever shall attach to or be incurred by any incorporator,
stockholder, officer, director, member, manager, employee or agent of any
Lender, the Borrower, CAR, or the Servicer, or any of their respective
Affiliates (solely by virtue of such capacity), or any of them under or by
reason of any of the obligations, covenants or agreements of a Lender, the
Borrower, CAR, or the Servicer contained in this Agreement or in any other
Transaction Document, or implied therefrom, and that any and all personal
liability for breaches by a Lender, the Borrower, CAR or the Servicer, as
applicable, of any of such obligations, covenants or agreements, either at
common law or at equity, or by statute, rule or regulation, of every such
incorporator, stockholder, officer, director, member, manager, employee or
agent is hereby expressly waived as a condition of and in consideration for the
execution of this Agreement and any of the other Transaction Documents; provided
that the foregoing shall not relieve any such Person from any liability it
might otherwise have as a result of their willful misconduct, gross negligence
or of fraudulent actions taken or fraudulent omissions made by them.

 

ENTIRE AGREEMENT.  THIS AGREEMENT AND THE OTHER TRANSACTION
DOCUMENTS EXECUTED AND DELIVERED HEREWITH REPRESENT THE FINAL AGREEMENT BETWEEN
THE PARTIES HERETO AND THERETO AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG
THE PARTIES.

 

Confidentiality.  9.  The Borrower, the Servicer, the Seller, CCRT,
the Guarantor and CAR shall hold in confidence, and not disclose to any Person,
the identity of any Lender or the terms of any fees payable in connection with
this Agreement except they may disclose such information (i) to their
affiliates and its and their officers, directors, employees, agents, counsel,
accountants, auditors, advisors or representatives, (ii) with the consent
of such Lender, (iii) to the extent the Borrower, the Seller, CAR, the
Guarantor, CCRT or the Servicer or any Affiliate of any of them should be
required by any law or regulation applicable to it or requested by any Official
Body to disclose such information or (iv) at any time which is 18 months
after such information was provided to the Borrower, the Seller, CAR, the
Guarantor, CCRT or the Servicer; provided, that, in the case of clause
(iii), the Borrower, such Seller, CAR, the Guarantor, CCRT or the Servicer, as
the case may be, will use all reasonable efforts to maintain confidentiality
and will (unless otherwise prohibited by law) notify the Administrative Agent
of its intention to make any such disclosure prior to making such disclosure.

 

The Administrative Agent, the Collateral Agent, the Backup Servicer,
each Agent and each Lender, severally and with respect to itself only,
covenants and agrees that any information obtained by the Administrative Agent,
the Collateral Agent, the Backup Servicer, such Agent or such Lender pursuant
to this Agreement shall be held in confidence (it being understood that
documents provided to the Administrative Agent, the Collateral Agent hereunder
may in all cases be distributed by the Administrative Agent, the Collateral
Agent to the Agents and the Lenders) except that the Administrative Agent, the
Collateral Agent, the Backup Servicer, such Agent or such Lender may disclose
such information (i) to its affiliates, officers, directors, employees,
agents, counsel, accountants, auditors, advisors or representatives, (ii) to
the extent such information has become available to the public other than as a
result of a disclosure by or through the Administrative Agent, the Collateral
Agent, the Backup Servicer, such Agent or such Lender, (iii) to the extent
such information was available to the Administrative Agent, the Collateral
Agent, the Backup Servicer, such 

 

59

 

Agent or such Lender on a nonconfidential basis prior to its disclosure
to the Administrative Agent, the Collateral Agent, the Backup Servicer, such
Agent or such Lender hereunder, (iv) with the consent of CAR, (v) to
the extent permitted by Article XVI, (vi) to the extent the
Administrative Agent, the Collateral Agent, the Backup Servicer, such Agent or
such Lender should be (A) required in connection with any legal or
regulatory proceeding or (B) requested by any Official Body to disclose
such information, (vii) for the purposes of establishing a “due diligence”
defense, (viii) in the case of any Lender that is a Structured Lender, to
rating agencies, placement agents and providers of liquidity and credit support
who agree to hold such information in confidence or (ix) at any time which
is 18 months after such information was provided to the Administrative Agent,
the Collateral Agent, the Backup Servicer, such Agent or such Lender; provided,
that, in the case of clause (vi) above, the Administrative Agent, the
Collateral Agent, the Backup Servicer, such Agent or such Lender, as
applicable, will use all reasonable efforts to maintain confidentiality and, in
the case of clause (vi)(A) above, will (unless otherwise prohibited by
law) notify CAR of its intention to make any such disclosure prior to making
any such disclosure.

 

[signature
pages begin on next page]

 

60

 

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

 

	
   

  	
  CAR FUNDING, INC., as Borrower

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
  101 Convention Center Drive, Suite 850-

  
	
   

  	
   

  	
   24A

  
	
   

  	
   

  	
  Las Vegas, NV 89109

  
	
   

  	
   

  	
  Attention: Joshua C. Miller, Assistant

  
	
   

  	
   

  	
   Secretary

  
	
   

  	
   

  	
  Facsimile No.: 702-598-3651

  
	
   

  	
   

  
	
   

  	
   

  
	
  CAR FINANCIAL SERVICES, INC., individually
  and as Seller and Custodian

  
	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
  245 Perimeter Center Parkway, Suite 600

  
	
   

  	
   

  	
  Atlanta, GA 30346

  
	
   

  	
   

  	
  Attention: General Counsel

  
	
   

  	
   

  	
  Facsimile No.: 770-206-6187

  
	
   

  	
   

  
	
   

  	
   

  
	
  CONSUMER AUTO RECEIVABLES SERVICING, LLC,
  individually and as Servicer

  
	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
  245 Perimeter Center Parkway, Suite 600

  
	
   

  	
   

  	
  Atlanta, GA 30346

  
	
   

  	
   

  	
  Attention: General Counsel

  
	
   

  	
   

  	
  Facsimile No.: 770-206-6187

  
											

 

61

 

 

	
  COMPUCREDIT
  CORPORATION, as Guarantor

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
  245 Perimeter Center Parkway, Suite 600

  
	
   

  	
   

  	
  Atlanta, GA 30346

  
	
   

  	
   

  	
  Attention: General Counsel

  
	
   

  	
   

  	
  Facsimile No.: 770-206-6187

  
					

 

62

 

 

	
   

  	
  U.S. BANK
  NATIONAL ASSOCIATION, as

  Collateral Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  U.S. Bank Corporate Trust Services

  
	
   

  	
  60 Livingston Avenue

  
	
   

  	
  EP-MN-WS3D

  
	
   

  	
  St. Paul, Minnesota 55107-2292

  
	
   

  	
   

  
	
   

  	
  Attention: Car Funding Inc.

  
	
   

  	
  Facsimile No.: (651) 495-8093

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  DEUTSCHE
  BANK AG, NEW YORK BRANCH,

  as Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  60 Wall Street

  
	
   

  	
  New York, New York 10005

  
	
   

  	
  Attention: Conduit Funding/Administration

  
	
   

  	
  Telecopier: (212) 797-5150

  

 

63

 

	
   

  	
  WELLS FARGO BANK, NATIONAL ASSOCIATION, as
  Backup Servicer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  Address: MAC N9311-161

  
	
   

  	
   

  	
  Sixth Street and Marquette Avenue

  
	
   

  	
   

  	
  Minneapolis, Minnesota 55479

  
	
   

  	
  Attention:

  	
  Corporate
  Trust Services – Asset-

  Backed Administration

  
	
   

  	
  Telephone:

  	
  612-667-8058

  
	
   

  	
  Facsimile No.:

  	
  612-667-3464

  
					

 

64

 

 

NANTUCKET
LENDER GROUP

 

	
  Type of Lender:

  	
  NANTUCKET FUNDING CORP., LLC

  
	
  Noncommitted
  Lender

  	
   

  
	
   

  	
   

  
	
  Maximum Purchase

  	
  By:

  	
   

  	
   

  
	
  Amount: 
  $150,000,000

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address for Notices:

  
	
   

  	
   

  
	
   

  	
  c/o Lord Securities Corporation

  
	
   

  	
  48 Wall Street, 27th Floor

  
	
   

  	
  New York, New York 10005

  
	
   

  	
  Attn: President

  
	
   

  	
  Telecopier: (212)346-9012

  
	
   

  	
   

  
	
   

  	
  with a copy to:

  
	
   

  	
   

  
	
   

  	
  c/o Deutsche
  Bank AG, New York Branch,

  Agent

  
	
   

  	
  60 Wall Street

  
	
   

  	
  New York, New York 10005

  
	
   

  	
  Attention: Conduit Funding/Administration

  
	
   

  	
  Telecopier: (212) 797-5150

  
	
   

  	
   

  
	
   

  	
  Payment Instructions:

  
	
   

  	
   

  
	
   

  	
  Fed ABA: 026-003-780

  
	
   

  	
  Fed Bank: Deutsche Bank, NY

  
	
   

  	
  Acct. #: 10-598524-0008

  
	
   

  	
  Acct. Name: Nantucket Funding Corp., LLC

  
	
   

  	
  Attention:
  Siegfried Rader Ph: 212-474-7737

  
	
   

  	
  Ref: CCRT

  
	
   

  	
   

  
	
   

  	
   

  
	
  Type of Lender:

  	
  DEUTSCHE BANK AG, NEW YORK BRANCH

  
	
  Committed
  Lender

  	
   

  
	
   

  	
   

  
	
  Commitment: $150,000,000

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
					

 

65

 

 

	
   

  	
  Address for Notices:

  
	
   

  	
   

  
	
   

  	
  c/o
  Deutsche Bank AG, New York Branch

  
	
   

  	
  60 Wall Street

  
	
   

  	
  New York, New York 10005

  
	
   

  	
  Attention: Conduit Funding/Administration

  
	
   

  	
  Telecopier: (212) 797-7973

  
	
   

  	
   

  
	
   

  	
  Payment Instructions:

  
	
   

  	
   

  
	
   

  	
  Fed ABA: 021-000-018

  
	
   

  	
  Fed Bank: The Bank of New York

  
	
   

  	
  Acct. Name: DBO

  
	
   

  	
  Account #: GLA-111569

  
	
   

  	
  Attention:
  Nicole Lashley

  
	
   

  	
  Ref: CCRT

  

 

66

 

	
   

  	
  DEUTSCHE
  BANK AG, NEW YORK BRANCH,

  as Agent

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  Address for Notices:

  
	
   

  	
   

  
	
   

  	
  c/o
  Deutsche Bank AG, New York Branch

  
	
   

  	
  60 Wall Street

  
	
   

  	
  New York, New York 10005

  
	
   

  	
  Attention: Conduit Funding/Administration

  
	
   

  	
  Telecopier: (212) 797-7973

  
	
   

  	
   

  
	
   

  	
  Payment Instructions:

  
	
   

  	
   

  
	
   

  	
  Fed ABA: 021-000-018

  
	
   

  	
  Fed Bank: The Bank of New York

  
	
   

  	
  Acct. Name: DBO

  
	
   

  	
  Account #: GLA-111569

  
	
   

  	
  Attention:
  Nicole Lashley

  
	
   

  	
  Ref: CCRT

  

 

67

 

EXHIBIT A

 

Deutsche Bank
AG, New York Branch,

as Administrative Agent

60 Wall Street

New York, NY 10005

Attention:                     

Fax #: (212) 797-        

Phone #: (212) 250-++++

 

RE:          Advance Request: $               

 

[                      
]

 

Gentlemen and Ladies:

 

This Advance Request is delivered to you pursuant to Section 2.2
of the Receivables Financing Agreement, dated as of April 1, 2005
(together with all amendments, if any, from time to time made thereto, the “Receivables
Financing Agreement”), among CAR Funding Inc. (the “Borrower”), CAR
Financial Services, Inc., Consumer Auto Receivables Servicing, LLC,
CompuCredit Corporation, U.S. Bank National Association, Deutsche Bank AG, New
York Branch, Wells Fargo Bank, National Association, and the Lenders and Agents
parties thereto.  Unless otherwise
defined herein or the context otherwise requires, capitalized terms used herein
have the meanings provided in the Receivables Financing Agreement.

 

The Borrower hereby requests that an Advance be made
in the aggregate principal amount of
$          on the                            .

 

Please wire xxxxxxxxx to the Cap Reserve
Account to cause the amount on deposit therein to equal the Required Cap
Reserve Account Amount and xxxxxxxxxx to the Borrower at the Borrower’s
direction.  Wiring instructions are
included at the end of this letter.

 

The Borrower represents that the conditions described
in subsections 7.2(a) through 7.2(h) of the Receivables Financing
Agreement have been satisfied with respect to the Advance.

 

The Borrower agrees that if prior to the Effective
Date any matter certified to herein by it will not be true and correct at such time as if then made, it will immediately so notify the
Administrative Agent.  Except to the
extent, if any, that prior to the time of the Advance requested hereby the
Administrative Agent shall receive written notice to the contrary from the
Borrower, each matter certified to herein shall be deemed once again to be
certified as true and correct at the date of such Advance as if then made.

 

The Borrower has caused this Advance Request to be
executed and delivered, and the certification and warranties contained herein
to be made, by its duly authorized officer this     day of
          , 200  .

 

	
   

  	
  CAR FUNDING, INC.

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

Wire Instructions:

 

Bank:

ABA

Account Name:

Account Number:

For further credit to account

Ref:

 

 

EXHIBIT B

 

NOTE

 

THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY STATE
SECURITIES LAW, AND MAY NOT BE DIRECTLY OR INDIRECTLY OFFERED OR SOLD OR
OTHERWISE DISPOSED OF BY THE OWNER HEREOF UNLESS SUCH TRANSACTION IS EXEMPT
FROM REGISTRATION UNDER THE ACT AND SUCH STATE LAWS, AND WILL NOT BE A “PROHIBITED
TRANSACTION” UNDER THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED (“ERISA”).  BY ACCEPTANCE OF THIS
NOTE, THE HOLDER AGREES TO BE BOUND BY ALL THE TERMS OF THE RECEIVABLES
FINANCING AGREEMENT.

 

	
  $                    

  	
                
     , 2005

  

 

FOR VALUE RECEIVED, the undersigned, CAR FUNDING,
INC., a Nevada corporation (the “Borrower”), promises to pay to the
order of                    ,
as Agent, on the Facility Termination Date the principal sum of                           
              ($                )
or, if less, the aggregate unpaid principal amount of all Advances shown on the
schedule attached hereto (and any continuation thereof) and/or in the
records of Agent made by the Lenders in the related Lender Group pursuant to
that certain Receivables Financing Agreement, dated as of April 1, 2005]
(together with all amendments and other modifications, if any, from time to
time thereafter made thereto, the “Receivables Financing Agreement”),
among the Borrower, CAR Financial Services, Inc., Consumer Auto
Receivables Servicing, LLC, CompuCredit Corporation, U.S. Bank National
Association, Deutsche Bank AG, New York Branch, Wells Fargo Bank, National
Association, and the Lenders and the Agents parties thereto.  Unless otherwise defined, capitalized terms
used herein have the meanings provided in the Receivables Financing Agreement.

 

The Borrower also promises to pay Yield on the unpaid
principal amount hereof from time to time outstanding from the date hereof
until maturity (whether by acceleration or otherwise) and, after maturity,
until paid, at the rates per annum and on the dates specified in the
Receivables Financing Agreement.

 

Payments of both principal and Yield are to be made in
lawful money of the United States of America in same day or immediately
available funds to the account designated by the Administrative Agent pursuant
to the Receivables Financing Agreement.

 

This Note is one of the Notes referred to in, and
evidences indebtedness incurred under, the Receivables Financing Agreement, and
the holder hereof is entitled to the benefits of the Receivables Financing
Agreement, to which reference is made for a description of the security for
this Note and for a statement of the terms and conditions on which the Borrower
is permitted and required to make prepayments and repayments of principal of
the indebtedness evidenced by this Note and on which such indebtedness may be
declared to be immediately due and payable.

 

 

All parties hereto, whether as makers, endorsers, or
otherwise, severally waive presentment for payment, demand, protest and notice
of dishonor.

 

As provided in the Receivables Financing Agreement and
subject to certain limitations therein set forth, the transfer of this Note is
registrable in the Note Register, upon surrender of this Note for registration
of transfer at the office or agency of the Administrative Agent in The City of
New York, duly endorsed by, or accompanied by a written instrument of transfer
in the form satisfactory to the Note Registrar duly executed by, the holder
hereof or his attorney duly authorized in writing, and thereupon one or more
new Notes, of authorized denominations and for the same aggregate principal
amount, will be issued to the designated transferee or transferees.

 

The Notes are issuable only in registered form without
coupons in minimum denominations of $100,000. 
As provided in the Receivables Financing Agreement and subject to
certain limitations therein set forth, Notes are exchangeable for a like
aggregate principal amount of Notes of a different authorized denomination, as
requested by the holder surrendering the same.

 

No service charge shall be made for any such
registration of transfer or exchange, but the Borrower may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.

 

The Borrower, any agent of the Borrower, and the
Administrative Agent may treat the Person in whose name this Note is registered
as the owner hereof for all purposes, whether or not this Note may be overdue,
and neither the Borrower nor any such agent shall be affected by notice to the
contrary.

 

The holder hereof hereby agrees, and any assignee of
such holder, by accepting such assignment, shall be deemed to have agreed, that
it will not institute against any Lender which is a Structured Lender or the
Borrower, or join any other Person in instituting against any such Lender or
the Borrower, any insolvency proceeding (namely, any proceeding of the type
referred to in the definition of Insolvency Event) so long as, in the case of
any such Lender, any commercial paper or other senior indebtedness issued by
such Lender shall be outstanding or there shall not have elapsed one year plus
one day since the last day on which any such commercial paper or other senior
indebtedness shall be outstanding and, in the case of the Borrower, any
Advances or other amounts due from the Borrower hereunder shall be outstanding
or there shall not have elapsed one year plus one day since the last day
on which any such Advances or other amounts shall be outstanding.  The foregoing shall not limit such Person’s
right to file any claim in or otherwise take any action with respect to any
insolvency proceeding that was instituted by any
Person other than such Person.  The
agreement set forth in this paragraph shall survive payment of this Note.

 

 

THIS NOTE SHALL BE DEEMED TO BE A CONTRACT MADE UNDER
AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
ANY OTHERWISE APPLICABLE PRINCIPLES OF CONFLICTS OF LAWS (OTHER THAN SECTION 5-1401
OF THE NEW YORK GENERAL OBLIGATIONS LAW).

 

	
   

  	
  CAR FUNDING, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

Form of
Assignment Form

 

ASSIGNMENT FORM

 

If you the holder want to assign this Note, fill in
the form below and have your signature guaranteed:

 

I or we assign and transfer this Note to:

 

(Print or type name, address
and zip code and

social
security or tax ID number of assignee)

 

and irrevocably appoint                                             ,
agent to transfer this Note on the books of the Borrower.  The agent may substitute another to act for
him.

 

	
  Dated:

  	
   

  	
   

  	
  Signed:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  (sign exactly as the name appears on the

  other side of this Note)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Signature Guarantee 

  	
   

  
								

 

Important Notice: 
When you sign your name to this Assignment Form without filling in
the name of your “Assignee” or “Attorney”, this Note becomes fully negotiable,
similar to a check endorsed in blank. 
Therefore, to safeguard a signed Note, it is recommended that you fill
in the name of the new owner in the “Assignee” blank.  Alternatively, instead of using this
Assignment Form, you may sign a separate “power of attorney” form and then mail
the unsigned Note and the signed “power of attorney” in separate
envelopes.  For added protection, use
certified or registered mail for a Note.

 

 

 

Schedule attached to Note dated April 1, 2005 of CAR Funding, Inc.
payable to the order of
                            ,
as Agent

 

	
  Date of 

  Advance or Repayment

  	
   

  	
  Amount of 

  Advance

  	
   

  	
  Amount of 

  Repayment

  	
   

  
	
  April 1,
  2005

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

EXHIBIT C

 

FORM OF BORROWING BASE
CERTIFICATE

 

***

 

 

	
  ARTICLE I DEFINITIONS

  	
   

  	
   

  
	
  ARTICLE II THE FACILITY, ADVANCE PROCEDURES AND NOTE

  	
   

  	
   

  
	
  ARTICLE III YIELD, FEES, ETC.

  	
   

  	
   

  
	
  ARTICLE IV GUARANTY

  	
   

  	
   

  
	
  ARTICLE V PAYMENTS; TAXES

  	
   

  	
   

  
	
  ARTICLE VI INCREASED COSTS, ETC.

  	
   

  	
   

  
	
  ARTICLE VII EFFECTIVENESS; CONDITIONS TO ADVANCES

  	
   

  	
   

  
	
  ARTICLE VIII ADMINISTRATION AND SERVICING OF RECEIVABLES

  	
   

  	
   

  
	
  ARTICLE IX ACCOUNTS; PAYMENTS

  	
   

  	
   

  
	
  ARTICLE X REPRESENTATIONS AND WARRANTIES

  	
   

  	
   

  
	
  ARTICLE XI BORROWER COVENANTS

  	
   

  	
   

  
	
  ARTICLE XII THE SERVICER; THE BACKUP SERVICER

  	
   

  	
   

  
	
  ARTICLE XIII GRANT OF SECURITY INTEREST

  	
   

  	
   

  
	
  ARTICLE XIV FACILITY TERMINATION EVENTS; EVENTS OF DEFAULT

  	
   

  	
   

  
	
  ARTICLE XV THE AGENTS

  	
   

  	
   

  
	
  ARTICLE XVI ASSIGNMENTS

  	
   

  	
   

  
	
  ARTICLE XVII INDEMNIFICATION

  	
   

  	
   

  
	
  ARTICLE XVIII MISCELLANEOUS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT A 

  	
  Form of Advance Request

  	
   

  	
   

  
	
  EXHIBIT B 

  	
  Form of Note

  	
   

  	
   

  
	
  EXHIBIT C 

  	
  Form of Borrowing Base Confirmation

  	
   

  	
   

  

 

 

EXECUTION COPY

 

ANNEX I

 

DEFINITIONS

 

As used in the Receivables Financing Agreement to
which this Annex I is annexed, the following terms shall have the meanings
herein specified or as specified in the Section of such Receivables
Financing Agreement or in such other document herein referenced:

 

“Accountants’ Report” has the meaning set forth
in Section 8.7 of the Receivables Financing Agreement.

 

“Accounting Date” means (a) the last day
of a Collection Period and (b) with respect to a Distribution Date or
Determination Date, the last day of the Collection Period preceding such
Distribution Date or Determination Date (such date being referred to as the “related
Accounting Date” with respect to such Distribution Date or Determination
Date).

 

“Accrual Period” means, with respect to any
Distribution Date, the period from and including the previous Distribution Date
(or, in the case of the first Distribution Date, from and including the
Effective Date) through and including the day preceding such Distribution Date.

 

“Accrued Costs” means, on any day, the sum of
the following:

 

unpaid Yield and Fees accrued in respect of
the Advances assuming each Advance has borne interest at the Alternative Rate
during the period from the prior Distribution Date to such date;

 

Yield and Fees in respect of the Advances
estimated to accrue for the period from such date to the succeeding
Distribution Date assuming (A) that the aggregate outstanding principal
amount of the Advances during each day of such period will equal *** of the aggregate outstanding principal amount of the Advances
on such day and (B) that each Advance will bear interest during such
period at the Alternate Rate; and

 

any excess of the amounts required to be distributed pursuant to
clauses (i) through (viii) of Section 9.5(a) of the
Receivables Financing Agreement on the preceding Distribution Date over the
Amount Available on such Distribution Date.

 

provided that the *** percentages used in clause (b) above
shall be 100% if no Level Two Trigger Event shall have occurred and be
continuing and the Servicer is delivering to the
Collateral Agent and the Administrative Agent daily reports on Collections,
Delinquent Receivables, Defaulted Receivables, the Aggregate Outstanding
Principal Balance, the Borrowing Base and such other information as the
Administrative Agent may reasonably request.

 

“Acquisition Agreement” means the Asset
Purchase Agreement, dated as of December 10, 2004, between the
Predecessors in Interest and CCRT and CARS Acquisition, as amended,
supplemented or otherwise modified from time to time.

 

“Adjusted Commitment Percentage” means, for a
Committed Lender with respect to a specific Noncommitted Lender, the Commitment
of such Committed Lender as a percentage of the Maximum Loan Amount of such
Noncommitted Lender.

 

 

“Adjusted Eurodollar Rate” means, for any Fixed
Period, a rate per annum (rounded upwards, if necessary, to the nearest 1/100th
of 1%) equivalent to the rate determined pursuant to the following formula:

 

	
  Adjusted Eurodollar
  Rate

  	
  =

  	
  LIBOR Rate

  	
   

  	
   

  
	
   

  	
   

  	
  1-LIBOR Reserve
  Percentage

  	
   

  	
   

  

 

on the first day of such Fixed Period.

 

“Administrative Agent” means Deutsche Bank AG,
New York Branch solely in its capacity as Administrative Agent, together with
its permitted successors and assigns in such capacity.

 

“Administrative Agent Fee Letter” means any
letter agreement(s) or schedule of fees entered into by CAR and the
Borrower, with the consent of the Required Lenders,
with a substitute Administrative Agent relating to fees payable to such
substitute Administrative Agent.

 

“Administrative Agent’s Account” has the
meaning set forth in Section 5.1(a) of the Receivables
Financing Agreement.

 

“Advance” means, individually and collectively,
the amounts disbursed by any Lender to the Borrower pursuant to Section 2.1
of its Receivables Financing Agreement.

 

“Advance Rate” means, on any day, the lower of (a) 60%
and (b) the Base Advance Rate on such day minus the Pool Discount/Reserve
Percentage as of the preceding Distribution Date.

 

“Adverse Claim” means any claim of ownership or
any Lien, security interest, title retention, trust or other charge or
encumbrance, or other type of preferential arrangement having the effect or
purpose of creating a Lien or security interest, other than the security
interests created under the Transaction Documents.

 

“Affected Person” has the meaning set forth in Section 6.1
of the Receivables Financing Agreement.

 

“Affiliate” of any Person means any other
Person that directly or indirectly controls, is controlled by or is under
common control with such Person (excluding any trustee under, or any committee
with responsibility for administering, any employee benefit plan).  A Person shall be deemed to be “controlled by”
any other Person if such other Person possesses, directly or indirectly, power

 

to
vote 10% or more of the securities (on a fully diluted basis) having ordinary
voting power for the election of directors or managing partners; or

 

to
direct or cause the direction of the management and policies of such Person
whether by contract or otherwise.

 

“AFP Program” means the program of CAR (or a
Predecessor in Interest) for purchasing Receivables which has been designated
as the “Advanced Funding Program” or “AFP Program” as more particularly
described in the Credit and Collection Policy.

 

2

 

“Agent” has the meaning set forth in the Preamble
of the Receivables Financing Agreement.

 

“Aggregate Eligible Receivables Balance” means,
as of any date, the Aggregate Outstanding Principal Balance of all Transferred
Receivables which are Eligible Receivables on such day of determination.

 

“Aggregate Interest Rate Caps Notional Amount”
means with respect to any date of determination an amount equal to the sum of
the notional amounts or equivalent amounts of all outstanding Cap Agreements,
Replacement Interest Rate Caps and Qualified Substitute Arrangements, each as
of such date of determination.

 

“Aggregate Outstanding Principal Balance”
means, with respect to any group of Receivables as of any date, the sum of the
outstanding Principal Balances of all such Receivables as at 11:59 p.m. on
the immediately preceding day.

 

“Aggregate Net Outstanding Principal Balance”
means, with respect to any group of Receivables as of any date, the sum of the
Net Outstanding Principal Balances of all such Receivables as at 11:59 p.m.
on the immediately preceding day.

 

“Agreement” means this Receivables Financing
Agreement (including the Fee Letter), as it may be amended, supplemented or
otherwise modified from time to time.

 

“Alternate Base Rate” means a fluctuating rate
per annum as shall be in effect from time to time, which rate shall be at all
times equal to the higher of:

 

the rate of interest announced publicly by DBNY in New York, New York,
from time to time as DBNY’s base commercial lending rate; and

 

1⁄2 of one percent above the Federal Funds
Rate.

 

“Alternative Rate”
for any Advance means a rate per annum equal to the Adjusted Eurodollar Rate
for such Advance or portion thereof; provided, however, that in
the case of

 

any Fixed Period on or after
the first day on which a Committed Lender shall have notified the related Agent
that the introduction of or any change in or in the interpretation of any law
or regulation makes it unlawful, or any central bank or other governmental
authority asserts that it is unlawful, for such Committed Lender to fund such
Advance at the Alternative Rate set forth above (and such Committed Lender
shall not have subsequently notified such Agent that such circumstances no
longer exist),

 

any Fixed Period of
less than seven days,

 

any Fixed Period of
seven to (and including) 29 days, in the event the Adjusted Eurodollar Rate is
not reasonably available to any Agent for such a Fixed Period,

 

any Fixed Period as to which
the related Advance will not be funded by issuance of commercial paper, as
determined by the related Agent (on behalf of a Noncommitted Lender) later than
12:00 noon (New York City time) on the second Business Day preceding the first
day of such Fixed Period, or

 

(e)           any Fixed Period for a Borrowing the
principal amount of which allocated to the Committed Lenders in the aggregate
is less than $1,000,000,

 

the “Alternative Rate” shall be a
floating rate per annum equal to the Alternate Base Rate in effect on each day
of such Fixed Period.

 

3

 

“Amount Available” means, with respect to any
Distribution Date, the sum of (a) the amount of Net Collections with
respect to the related Collection Period and any amounts paid into the
Collection Account under any Interest Rate Cap with respect to the Accrual
Period ending on the day preceding such Distribution Date, plus (b) any
investment income earned on amounts on deposit in the Collection Account and
the Cap Funding Reserve Account since the prior Distribution Date (or the
Effective Date in the case of the first Distribution Date), plus (c) any
Repurchase Amounts deposited in the Collection Account since the last day of
the related Collection Period.

 

“Ancillary Product” means, with respect to any
Contract, any extended vehicle service contract, vehicle warranty, guaranteed
auto protection policies or waivers, mechanical breakdown contracts or such
other products or services sold to an Obligor in connection with his or her
financing of a Financed Vehicle.

 

“Approved State” means (a) the 38 states
where CAR is licensed (as necessary) and doing business as of the Effective
Date, (b) following successful state licensing or approval (as necessary),
Arkansas, Illinois, Iowa, Mississippi and Wisconsin and (c) any additional
states approved by the Administrative Agent. 
Such approval shall not be unreasonably withheld. Such approval will be
granted upon CAR’s demonstration of being licensed to do business in such
state, conformity by CAR with any applicable laws or regulations and the
satisfactory due diligence by the Administrative Agent.

 

“APR” of a Contract means annual percentage
rate and is the annual rate of finance charges specified in such Contract.

 

“Assignments” means, collectively, the original
instrument of assignment of a Receivable and all other documents securing such
Receivable made by a Dealer to the Seller and by the Seller to the Purchaser.

 

“Available Commitment Amount” of a Noncommitted
Lender means the aggregate of the unutilized Commitments of the Committed
Lenders with respect to such Noncommitted Lender.

 

“Backup Servicer” means Wells Fargo Bank,
National Association, a national banking association, in its capacity as Backup
Servicer, together with its permitted successors and assigns in such capacity.

 

“Backup Servicer Fee” means, for any
Distribution Date, the amount payable to the Backup Servicer as its regular fee
on such Distribution Date pursuant to the Backup Servicer Fee Letter.

 

“Backup Servicer Fee Letter” means (a) that
certain schedule of fees of WFB, acknowledged by CAR and the Borrower, and
consented to by the Administrative Agent, as the same may be amended,
supplemented or otherwise modified by the parties thereto with the consent of
the Required Lenders and (b) any letter agreement(s) or schedule of
fees entered into by CAR and the Borrower, with the consent of the Required
Lenders, with a substitute Backup Servicer in replacement of the schedule of
fees referred to in clause (a) above relating to fees payable to such
substitute Backup Servicer.

 

4

 

“Bankruptcy Code” means the Bankruptcy Code, 11
U.S.C. § 101, et  seq., as amended.

 

“Base Advance Rate” means, on any day, (i) if
no Level One Trigger Event or Level Two Trigger Event has occurred, ***; (ii) if
a Level One Trigger Event has occurred, ***; and (iii) if a Level Two
Trigger Event has occurred, ***.  If a
Level One Trigger Event shall have occurred, then the Advance Rate will remain
*** until no Level One Trigger Event or Level Two Trigger Event shall have
occurred for a period of three consecutive months — at which point the Advance
Rate shall be ***.  If a Level Two
Trigger Event shall have occurred, then (a) the Advance Rate will remain
*** until no Level Two Trigger Event shall have occurred for a period of three
consecutive months — at which point the Advance Rate shall be *** — and (b) the
Advance Rate will thereafter be *** until no Level One Trigger Event or Level
Two Trigger Event shall have occurred for a period of three consecutive months
thereafter — at which point the Advance Rate shall be ***.

 

“Borrower” has the meaning set forth in the Preamble
of the Receivables Financing Agreement.

 

“Borrower Account Collateral” has the meaning
set forth in Section 13.1 of the Receivables Financing Agreement.

 

“Borrower Accounts” has the meaning set forth
in Section 9.1 of the Receivables Financing Agreement.

 

“Borrower Assigned Agreements” has the meaning
set forth in Section 13.1 of the Receivables Financing Agreement.

 

“Borrower Collateral” has the meaning set forth
in Section 13.1 of the Receivables Financing Agreement.

 

“Borrowing Base” means, on any day, the sum of (a) the
product of (i) the Advance Rate and (ii) the Aggregate Outstanding
Principal Balance of all Transferred Receivables other than PIPP Receivables,
if any, which are Eligible Receivables less any Overconcentration Amount plus
(b) the product of (i) *** and (ii) the aggregate outstanding
principal amount of payments under Eligible Receivables purchased under the
PIPP Program plus (c) the amount on deposit in the Collection
Account as of such day (excluding, on any Distribution Date, any amount to be
included in the Amount Available on such Distribution Date) minus (d) if
such date is not a Distribution Date, the amount equal to the sum of clauses (a) and
(b) of the definition of Accrued Costs on such date.

 

“Borrowing Base Confirmation” has the meaning
set forth in Section 7.2(g) of the Receivables Financing
Agreement.

 

“Branch Office” means any office of the Seller.

 

“Breach” means any breach of, or any inaccuracy
in, any representation or warranty or any breach of, or failure to perform or
comply with, any covenant or obligation, in or of any 

 

5

 

contract, or any event which with the passing of
time or the giving of notice, or both, would constitute such a breach,
inaccuracy or failure.

 

“Business Day” means any day that is not a Saturday,
Sunday or other day on which banking institutions in Atlanta, Georgia, Las
Vegas, Nevada, St. Paul, Minnesota or New York, New York are authorized or
obligated by law, executive order or government decree to remain closed.

 

“Calculation Day” means the last day of each
calendar month.

 

“Cap Agreements” means each interest rate cap
agreement, between the Borrower and a Cap Provider, as amended from time to
time, and any additional interest rate protection agreement or agreements,
entered into between the Borrower and a Cap Provider, as the same may from time
to time, with the prior written consent of the Required Lenders, be amended,
restated, modified and in effect.

 

“Cap Funding Reserve Account” means the account
designated as the Cap Funding Reserve Account in, and which is established and
maintained pursuant to, Section 9.1(a) of the Receivables
Financing Agreement.

 

“Cap Funding Reserve Account Requirement”
means, with respect to any Determination Date, the amount required as of such
date to purchase Interest Rate Caps meeting the requirements of Section 11.6
of the Receivables Purchase Agreement if they were required to be purchased on
such date pursuant thereto; provided that
the Servicer (or, if CAR Servicing shall not be the Servicer, DBNY) shall
contact qualified Cap Providers to determine the Cap Funding Reserve Account
Requirement and shall report such amount (i) in the first monthly
Distribution Date Statement following the Effective Date and (ii) in each
monthly Distribution Date Statement following the Determination Date in which
CAR fails to satisfy the Minimum Liquidity Amount Test.

 

“Cap Provider” means (a) a third party cap
provider having a senior unsecured debt rating of at least “A” by Standard &
Poor’s and “A2” by Moody’s and not on credit watch with negative implications
(or a similar status), or (b) a third party cap provider approved by the
Required Lenders.

 

“Capped Fees/Expenses – Administrative Agent”
means, at any time, fees, costs and expenses due at such time (if any) to the Administrative
Agent under the Transaction Documents such that the aggregate amount of such
fees, costs and expenses paid to the Administrative Agent under the Transaction
Documents in any calendar year do not exceed $150,000.

 

“Capped Fees/Expenses – Backup Servicer” means,
at any time, fees, costs and expenses due at such time (if any) to the Backup
Servicer under the Transaction Documents such that the aggregate amount of such
fees, costs and expenses paid to the Backup Servicer under the Transaction Documents
in any calendar year do not exceed $300,000.

 

“Capped Fees/Expenses –Collateral Agent” means,
at any time, fees, costs and expenses due at such time (if any) to the
Collateral Agent under the Transaction Documents such that the 

 

6

 

aggregate amount of such fees, costs and expenses
paid to the Collateral Agent under the Transaction Documents in any calendar
year do not exceed (a) prior to the occurrence and continuation of a
Facility Termination Event or Event of Default, $25,000. or
(b) during the occurrence and continuation of a Facility Termination Event
or Event of Default, $50,000.

 

“Capped Fees/Expenses – Custodian” means, at
any time, fees, costs and expenses due at such time (if any) to the Custodian
under the Transaction Documents such that the aggregate amount of such fees,
costs and expenses paid to the Custodian under the Transaction Documents in any
calendar year do not exceed $25,000.

 

“CAR” has the meaning set forth in the Preamble
of the Receivables Financing Agreement.

 

“CARS Acquisition” means CARS Acquisition, LLC,
a Georgia limited liability company.

 

“CAR Servicing” has the meaning set forth in
the Preamble of the Receivables Financing Agreement.

 

“CCRT” has the meaning set forth in the Preamble
of the Receivables Financing Agreement.

 

“Charge-Off Ratio” means, on any day, the
average of the Monthly Charge-Off Ratios for the three most recently completed
Collection Periods.

 

“Closing Date” means, unless the context
otherwise requires, the Initial Closing Date and each Subsequent Closing Date
as may be agreed to from time to time by CAR and the Borrower.

 

“Collateral” shall have the meaning given to
such term in Section 2.01(c) of the Sale and Servicing
Agreement.

 

“Collateral Agent” means U.S. Bank National
Association solely in its capacity as Collateral Agent, together with its
permitted successors and assigns in such capacity.

 

“Collateral Agent Fee Letter” means (a) that
certain schedule of fees of U.S. Bank National Association, acknowledged
by CAR and the Borrower, as the same may be amended, supplemented or otherwise
modified by the parties thereto with the consent of the Required Lenders and (b) any
letter agreement(s) or schedule of fees entered into by CAR and the
Borrower, with the consent of the Required Lenders, with a substitute
Collateral Agent in replacement of the schedule of fees referred to in
clause (a) above relating to fees payable to such substitute
Collateral Agent.

 

“Collection Account” means the account
designated as the Collection Account in, and which is established and
maintained pursuant to, Section 9.1(a) of the Receivables
Financing Agreement.

 

7

 

“Collection Period” means any calendar month
and, with respect to a Determination Date or a Distribution Date, the calendar
month preceding the month in which such Determination Date or Distribution Date
occurs (such calendar month being referred to as the “related” Collection
Period with respect to such Determination Date or Distribution Date) or, in the
case of the initial Distribution Date and Determination Date, the period
commencing at the opening of business on the Effective Date and ending at the
end of the calendar month immediately following the calendar month in which the
Effective Date occurs.  Any amount stated
“as of the close of business of the last day of a Collection Period” shall give
effect to the following calculations as determined as of the end of the day on
such last day:  (i) all applications
of collections on the Transferred Receivables and Transferred Dealer
Transaction Rights and Repurchase Amounts, and (ii) all distributions.

 

“Commercial Paper Rate” for Advances means, to
the extent a Noncommitted Lender funds such Advances by issuing commercial paper,
the sum of (i) the weighted average of the rates at which commercial paper
notes of such Noncommitted Lender issued to fund such Advances may be sold by
any placement agent or commercial paper dealer selected by such Noncommitted
Lender, as agreed in good faith between each such agent or dealer and such
Noncommitted Lender; provided if the rate (or rates) as agreed between
any such agent or dealer and such Noncommitted Lender for any Advance is a
discount rate (or rates), then such rate shall be the rate (or if more than one
rate, the weighted average of the rates) resulting from converting such
discount rate (or rates) to an interest-bearing equivalent rate per annum plus
(ii)  any and all commissions of placement agents and commercial paper
dealers in payment of commercial paper issued to fund the making of or
maintenance of an Advance and any and all reasonable costs and expenses of any
issuing and paying agent or other Person responsible for the administration of
such Noncommitted Lender’s commercial paper program in connection with the
preparation, completion, issuance, delivery or payment of commercial paper
issued to fund the making or maintenance of any Advance not to exceed 5 basis
points per annum in the aggregate.  Each
Noncommitted Lender shall notify the Administrative Agent of its Commercial
Paper Rate applicable to any Advance promptly after the determination thereof.

 

“Commitment” means, for any Committed Lender,
the maximum amount of such Committed Lender’s commitment to fund Advances hereunder,
as set forth on the signatures pages hereof.  In the event that a Committed Lender
maintains a portion of its Commitment hereunder with respect to more than one
Noncommitted Lender, such Committed Lender shall be deemed to hold separate
Commitments hereunder in each such capacity.

 

“Commitment Percentage” means, for a Committed
Lender, such Committed Lender’s Commitment as a percentage of the aggregate
Commitments of all Committed Lenders.

 

“Committed Lender” means, with respect to a
Noncommitted Lender, each financial institution party to this Agreement
designated as a “Committed Lender” with respect to such Noncommitted Lender,
and any permitted assignee of such Committed Lender pursuant to Article XVI
to the extent such assignee has assumed a portion of the Commitment of such
Committed Lender.

 

“Contract” means a motor vehicle retail
installment sale contract (including any written amendments and assumptions
thereto) pursuant to which the related Obligor has (i) agreed to pay 

 

8

 

the amount financed set forth therein for
the purchase of the related Financed Vehicle and the related finance charge
thereon and (ii) granted the related Dealer a security interest in the
Financed Vehicle to secure the payment of the amount financed and the finance
charge.

 

“Contract Files” has the meaning set forth in Section 3.03
of the Sale and Servicing Agreement.

 

“Contract Number” means, with respect to any
Receivables transferred to the Purchaser, the number assigned to the related
Contract by the Servicer, which number is set forth in the related Schedule of
Receivables.

 

“Contract Rate” means, the rate of interest
reflected on a Contract.

 

“Credit and Collection Policy” means credit and
collection policies and practices of the Seller and Servicer, as in effect from
time to time or, if there should be a successor Servicer, of the successor
Servicer only.  The Seller and Servicer
have delivered a copy thereof, as in effect on the date hereof, to the
Purchaser and the Lenders.

 

“Custodial Receipt” means a Custodian’s
Acknowledgment in the form of Exhibit A to the Sale and Servicing
Agreement.

 

“Custodian” means CAR, in its capacity as the
Custodian of the Contracts under the Receivables Financing Agreement and the
Sale and Servicing Agreement, and each successor thereto (in the same
capacity).

 

“Custodian Fee Letter” means any letter
agreement(s) or schedule of fees entered into by CAR and the Borrower,
with the consent of the Required Lenders, with a substitute Custodian in
replacement of the schedule of fees referred to in clause (a) above
relating to fees payable to such substitute Custodian.

 

“Cut-Off Date” means, with respect to (i) the
Initial Closing Date, February 28, 2005 and (ii) each Subsequent
Closing Date, the Business Day immediately preceding such Subsequent Closing
Date.

 

“DBNY” means Deutsche Bank AG, New York Branch.

 

“Dealer” means, with respect to any Receivable
and the related Financed Vehicle, the automobile dealer or its Affiliate, or a
finance company or similar entity, that (i) sold
the related Financed Vehicle, (ii) originated the related Contract, and/or
(iii) sold and assigned such Receivable to the Seller.

 

“Dealer Discount” means, with respect to any Receivable, the discount from par at which the Seller or a
Predecessor in Interest purchased such Receivable from the related Dealer.

 

“Dealer Discount Percentage” means, with
respect to any date, the weighted average (weighted by outstanding Principal
Balance) of the Dealer Discount Percentage – Individual Receivable for all
Receivables outstanding on such date.

 

9

 

“Dealer Discount Percentage – Individual Receivable”
means, with respect to any Receivable, (a) the Dealer Discount of such
Receivable divided by (b) the outstanding Principal Balance of such
Receivable on the date the Seller or a Predecessor in Interest purchased such
Receivable from the related Dealer.

 

“Dealer Purchase Agreement” means an agreement
pursuant to which a Dealer has assigned, and CAR or a Predecessor in Interest
has acquired, an interest in a Receivable, including any short form purchase
agreement authorized by such agreement to affect subsequent transactions
between the parties thereto, as the same may from time to time be amended,
supplemented or otherwise modified and in effect.

 

“Dealer Recourse” means all obligations of a
Dealer under any Dealer Purchase Agreement to pay monies due to a Receivable
transferred thereunder becoming a defaulted Receivable, in lieu of the Seller charging
the balance of such Receivable to the reserve fund thereunder.

 

“Dealer Reserve” means the unfunded contingent
liability of the Seller or any Predecessor in Interest to each Dealer pursuant
to the related Dealer Purchase Agreement to pay the remaining principal balance
of the agreed purchase price of the Receivables transferred pursuant to such
Dealer Purchase Agreement, and is used to allow the Seller, by exercising a
right of offset, to satisfy the Dealer’s obligation to the Seller to repurchase
any Receivable for any of the reasons set forth in such Dealer Purchase
Agreement.

 

“Dealer Reserve Percentage” means, with respect
to any Dealer on any date, the higher of (a) (i) the amount of the
Dealer Reserve for such Dealer on such date divided by (ii) the
outstanding Principal Balance of all Receivables purchased by the Seller or a
Predecessor in Interest from such Dealer and outstanding on such date and (b) the
remaining principal balance of the agreed purchase price of the Receivable most
recently transferred pursuant to such Dealer Purchase Agreement divided by the
outstanding Principal Balance of such Receivable.  The Dealer Reserve Percentage shall not apply
to the Receivables in the Franklin Pool or the Receivables originated under the
PIPP Program

 

“Dealer Reserve Target Percentage” means, with
respect to any Dealer on any date, the percentage specified with respect to
such Dealer on such date by CAR.

 

“Dealer Transaction Rights” means, with respect
to any Receivable, the right to receive all payments after the Cut-Off Date
applicable to such Receivable by an Obligor on a Contract, and “Dealer
Transaction Right” means any such right.

 

“Default” means any event that with the giving
of notice, the lapse of time or both would become an Event of Default.

 

“Default Rate” means a rate per  annum
equal to 2.00% plus the Alternate Base Rate (but not less than the Yield (if
any) in effect for the related monetary obligation).

 

“Defaulted Receivable” means a Receivable (i) with
respect to which the Servicer has determined in good faith that all amounts it
expects to recover have been received; (ii) with 

 

10

 

respect to which the related Financed Vehicle
was repossessed and any cure period required by law has expired; (iii) with
respect to which at least 5% of a scheduled payment is more than 90 days past
due; or (iv) as to which the Obligor became the subject of a bankruptcy
proceeding commenced after the execution of the related Contract.

 

“Delinquency Ratio” means, on any day, the
average of the Monthly Delinquency Ratios for the three most recently completed
Collection Periods.

 

“Delinquent Receivable” means a Receivable
(other than a Defaulted Receivable) with respect to which at least 10% of a
scheduled payment is more than 60 days past due.

 

“Determination Date” means, with respect to any
Distribution Date, the third Business Day prior to such Distribution Date.

 

“Discount Factor” means as of any date of
determination, a percentage agreed to by the Seller and the Purchaser under the
Sale and Servicing Agreement to account for profit, the time value of money,
the risk of non-payment and anticipated collectiblity of the Receivable, the
liquidation of any contingent liability of the Seller relating to the related
Receivable, and the value attributable to the Seller bringing to the Purchaser
the related Receivable.

 

“Distribution Date” means the 20th day of each
calendar month, or if such 20th day is not a Business Day, the next succeeding
Business Day, commencing May 20, 2005.

 

“Distribution Date Statement” has the meaning
specified in Section 4.09 of the Sale and Servicing Agreement.

 

“Dollar(s)” and the sign “$” mean lawful
money of the United States of America.

 

“Due Date” means, with respect to any Contract,
the date upon which an installment of Monthly P&I is due.

 

“Effective Date” has the meaning set forth in Section 7.1
of the Receivables Financing Agreement.

 

“Eligible Account” means (i) a segregated
trust account or (ii) a segregated direct deposit account, in each case,
maintained with a depository institution or trust company organized under the
laws of the United States of America, or any of the States thereof, or the
District of Columbia, having a certificate of deposit, short term deposit or
commercial paper rating of at least A-1+ by Standard & Poor’s and P-1
by Moody’s.  In either case, such
depository institution or trust company shall have been approved by the
Required Lenders, acting in their discretion, by written notice to the
Servicer.  U.S. Bank National Association
and DBNY are each deemed to be an acceptable depository institution to the
Required Lenders.

 

“Eligible AFP Receivable” means, as of any
date, a Receivable (a) which was originated under the AFP Program by a
Dealer which has transferred Receivables under at least ten (10) Contracts
to the Seller or a Predecessor in Interest; (b) which has an outstanding
Principal Balance not greater than 15% of the Aggregate Outstanding Principal
Balance of all outstanding 

 

11

 

Receivables acquired from such Dealer; and (c) with
respect to which the obligations of such Dealer under the related Dealer
Purchase Agreement are fully cross-collateralized by security interests in all
Receivables transferred to the Seller by such Dealer.

 

“Eligible Dealer” means, as of any date, a
Dealer (a) which has been in business for at least 2 years, (b) which
has executed and is in compliance with a Dealer Purchase Agreement with CAR or
any of the Predecessors in Interest, (c) with respect to which the
Aggregate Outstanding Principal Balance on such date of Delinquent Receivables
purchased from such Dealer by the Seller (or any of the Predecessors in
Interest) is less than 15% of the Aggregate Outstanding Principal Balance on
such date of all Receivables purchased from such Dealer by the Seller (or any
of the Predecessors in Interest), provided if the Aggregate Outstanding
Principal Balance on such date of Delinquent Receivables purchased from such
Dealer by the Seller (or any of the Predecessors in Interest) is greater than
or equal to 15% of the Aggregate Outstanding Principal Balance on such date of
all Receivables purchased from such Dealer by the Seller (or any of the
Predecessors in Interest), then such Dealer will nevertheless be an Eligible
Dealer if the Dealer Reserve Percentage with respect to such Dealer on such
date is greater than 15%; and (d) with respect to which the Aggregate
Outstanding Principal Balance of all outstanding Receivables purchased from
such Dealer by the Seller (or any of the Predecessors in Interest) which became
Defaulted Receivables less Net Liquidation Proceeds (including Dealer Reserves
applied to such Defaulted Receivables) with respect thereto does not exceed $0.

 

“Eligible Dealer Purchase Agreement” means, as
of any date, a Dealer Purchase Agreement (a) which, except in the case of
a Dealer Purchase Agreement with respect to the PIPP Program, has Dealer
Reserve Target Percentage no less than 15% and no greater than 35%; (b) which
contains a recourse obligation of the Dealer to repurchase a Receivable if the
total of all payments due in the first 30 days after the Receivable is assigned
by the related Dealer is not paid in full by the Obligor; (c) which,
except in the case of a Dealer Purchase Agreement with respect to the VLAP
Program, states that it is a sale, assignment, transfer and conveyance of the
related Receivables; and (d) in the case of a Dealer Purchase Agreement
with respect to the VLAP Program, states that it is a sale of the related
Receivables.

 

“Eligible Dealer Transaction Right” means, as
of any date, a Dealer Transaction Right relating to an Eligible Receivable on
such date:

 

“Eligible Origination Programs” means the
Standard Bulk Purchase Program, the AFP Program, the PIPP Program, the VLAP
Program, and the Major Account Purchase Program.

 

“Eligible PIPP Receivable” means, as of any
date, a Receivable (a) which was originated under the PIPP Program by a
Dealer which has transferred Receivables under at least ten (10) Contracts
to the Seller or a Predecessor in Interest; (b) which has an outstanding
Principal Balance not greater than 15% the Aggregate Outstanding Principal
Balance of all outstanding Receivables acquired from such Dealer; (c) with
respect to which the obligations of such Dealer under the related Dealer
Purchase Agreement are fully cross-collateralized by security interests in all
Receivables transferred to the Seller by such Dealer; (d) with respect to
which the first payment purchased by the Seller is not due more than two months
from the date of such purchase; and (e) with respect to which the
aggregate remaining number of principal payments 

 

12

 

due under such Receivable exceeds the number
of months set forth in the table below opposite the number of payments
purchased by the Seller:

 

	
  Number
  of Payments Purchased

  	
   

  	
  Required Months Remaining on Contract

  
	
   

  	
   

  	
   

  
	
  6

  	
   

  	
   

  	
  10 months

  
	
  9

  	
   

  	
   

  	
  18 months

  
	
  12

  	
   

  	
   

  	
  25 months

  
	
  15

  	
   

  	
   

  	
  28 months

  
	
  18

  	
   

  	
   

  	
  32 months

  

 

“Eligible Receivable” means, as of any date, a
Receivable as to which the following representations and warranties are true
and correct on such date.

 

Schedule of
Receivables.  The calculation of the Principal Balance
appearing in the Schedule of Receivables for the Receivable has been
performed in accordance with this Agreement and is accurate, and the
characteristics and all other information pertaining to the Receivable set
forth in such Schedule of Receivables are true and correct in all material
respects as of the date such Schedule of Receivables was delivered.

 

Security
Interests. 
The Receivable is secured by a valid and enforceable first priority
security interest in favor of the initial lender, the Dealer, the Seller or one
of the Predecessors in Interest in the related Financed Vehicle, and such
security interest has been duly perfected or may be duly perfected as described
in clause (b) below and is prior to all other Liens upon and security
interests in such Financed Vehicle which exist or may thereafter arise or be
created (except, as to priority, for any Permitted Lien arising after such
Closing Date).

 

Title
Documents. 
Except as provided below in this paragraph (b), if the related Financed
Vehicle was sold in a state in which (A) notation of a security interest
on the Title Document is required or permitted to perfect such security
interest, the Title Document for such Financed Vehicle shows, or if a new or
replacement Title Document is being applied for with respect to such Financed
Vehicle the Title Document will be received within 120 days of the related
Closing Date, and will show the initial lender, the Dealer, the Seller or one
of the Predecessors in Interest named as the original secured party under the
related Contract as the holder of a first priority security interest in such
Financed Vehicle, and (B) the filing of a financing statement under the
UCC is required to perfect a security interest in motor vehicles, such filings
or recordings have been duly made and show the initial lender, the Dealer, the
Seller or one of the Predecessors in Interest named as the original secured
party under the related Contract, and in either case, the Collateral Agent has
the same rights or similar rights by virtue of (i) the Seller’s first
priority security interest in the Receivable and a power of attorney or (ii) the
Seller’s right to amend such financing statement to name itself as secured
party of record, in either case as the secured party noted on the title
document or such financing statement has or would have (if such secured party
were still the lender) against all parties claiming an interest in such
Financed Vehicle.  With respect to each
Contract for which the Title Document has not yet been returned from the
Registrar of Titles, the Seller has received written evidence from the related
Dealer that such Title Document showing the initial lender, the Dealer, the
Seller or one of the Predecessors in Interest as first lienholder has been
applied for.  In each case where the
Seller is not named in the 

 

13

 

certificate of
title, the Seller has a blanket or individual power of attorney from the named
lienholder authorizing the Seller to do all acts necessary to perfect in the
Seller’s name any liens or security interests in the Financed Vehicles.

 

Title to the
Contracts. 
Immediately prior to the related Closing Date, the Seller had good and
indefeasible title to and was the sole owner of, or holder of a security
interest in, each Contract relating to a Dealer Transaction Right to be transferred
to the Purchaser pursuant to Section 2.01 of the Sale and Servicing
Agreement free of Liens and rights to payments of any Person.  Upon the transfer of such Dealer Transaction
Right to the Purchaser pursuant to such Section 2.01, the Purchaser will
have a perfected security interest in the Seller’s right, title and interest in
such Contract free of Liens (except for Permitted Liens arising after such
Closing Date) and rights to payment of any Person.

 

Current in
Payment. 
The Contract is not a Delinquent Receivable or Defaulted Receivable as
of such date.  Except
with respect to Receivables transferred on the Initial Closing Date, no
Contract is more than 30 days past due as of the related Closing Date.

 

Approved State.  The related Contract was originated in an
Approved State.

 

Rescission,
Offset, Etc.  There is no right of rescission, offset,
defense or counterclaim to the obligation of the Obligor to pay the unpaid
principal or interest due under the related Contract; the operation of the
terms of the related Contract or the exercise of any right thereunder will not
render the Contract unenforceable in whole or in part or subject to any right
of rescission, offset, defense or counterclaim, and no such right of
rescission, offset, defense or counterclaim has been asserted.

 

Mechanics’
Liens. 
As of the Cut-Off Date, there are no liens or claims for work, labor,
material or storage affecting the related Financed Vehicle which is a Lien
prior to or equal with the security interest granted by the Contract.

 

Compliance With Laws.  The related Contract, and the sale of the
Financed Vehicle sold thereunder, complied, at the time it was made, in all
material respects with all applicable state and federal laws (and regulations
thereunder), including without limitation usury, equal credit opportunity, fair
credit reporting, truth-in-lending or other similar laws, the Federal Trade
Commission Act, and applicable state laws regulating retail installment sales
contracts and consumer loans in general and motor vehicle retail installment
contracts and consumer loans in particular; the transfer of Dealer’s interest
in such Contract to the Seller and Seller’s interest therein to the Borrower
did not violate any applicable state or federal law or cause such Contract or
Receivable to be unenforceable.  The
related Contract was not originated in or subject to the laws of any
jurisdiction under which the sale, transfer and assignment of such Contract and
Receivable and the documents in the Contract Files, the Seller’s security
interest in the Financial Vehicle, or the receipt of interest by the Seller, is
unlawful, void or voidable.

 

Valid and
Binding. 
The Receivable is the legal, valid and binding obligation of the Obligor
thereunder and is enforceable in accordance with its terms, except as
enforcement may be limited by bankruptcy, insolvency or similar laws affecting
the enforcement of creditors’ rights generally; all parties to the related
Contract had full legal capacity to execute and deliver the Contract and all
other documents related thereto and to grant the security interest purported to
be granted thereby; the terms of the Receivable have not been waived, amended
or modified in any respect, except by instruments that are part of the Contract
Files; and no such waiver, amendment or modification has caused the Receivable
or the related Contract to fail to meet all of the representations, warranties
and conditions set forth with respect thereto.

 

Enforceability.  The related Contract contains customary and
enforceable provisions such as to render the rights and remedies of the holder
or assignee as owner of such Receivable adequate for the realization against
the collateral of the benefits of the security, subject, as to enforceability,
to bankruptcy, insolvency, reorganization or similar laws affecting the
enforcement of creditors’ rights generally.

 

No Default.  There is (A) no default, breach,
violation or event permitting acceleration existing under the related Contract
(except payment delinquencies permitted by clause (e) of this
subsection) and (B) no event which, with notice,  the expiration of any grace or cure 

 

14

 

period, would
constitute a default, breach, violation or event permitting acceleration under
the related Contract, and (C) neither the Seller nor the Servicer has
waived any such default, breach, violation or event permitting acceleration
except payment delinquencies permitted by clause (e) of this definition.

 

Insurance.  The related Contract requires that the
Obligor thereunder obtain and maintain in effect insurance on the related
Financed Vehicle until the indebtedness thereunder is paid.

 

Acquisition of
Contract. 
The Contract was either originated by the Seller in its ordinary course
of business or acquired by Seller (or a Predecessor in Interest) in its
ordinary course of business from a Dealer who was an Eligible Dealer on the
applicable Cut-Off Date pursuant to an Eligible Dealer Purchase Agreement or
from a third party-lender pursuant to an agreement containing rights of
recourse against the related lender similar to those in the Dealer Purchase
Agreements with which it ordinarily does business.  No adverse selection procedures have been
utilized in selecting such Receivable from all other similar contracts
originated or purchased by the Seller.

 

Scheduled
Payments. 
Scheduled payments under the related Contract are applied in accordance
with the Rule of 78’s method or the simple interest method and are due on
a frequency no greater than monthly in level payments through its Maturity Date
sufficient to fully amortize the principal balance of such Contract by its
Maturity Date, assuming timely payment by Obligors on Simple Interest
Contracts, except that the initial or final payment of the Contract may be
minimally different from the level payment.

 

One Original.  There is only one original of the related
Contract and such original, together with all other documents in the Contract
Files, is being delivered to the Custodian pursuant to Section 3.03.  Such Contract constitutes “tangible chattel
paper” as defined in the applicable UCC. 
None of the documents in the Contract Files that constitute or evidence
each Contract has any marks or notations indicating that the Receivable has
been pledged, assigned or otherwise conveyed to any Person other than the
Purchaser.

 

Identification.  The Servicer and the Seller have clearly
marked their electronic records to indicate that the Contract has been
transferred to and is owned by the Purchaser.

 

Principal
Balance.  At the
Cut-Off Date the initial Principal Balance of such Receivable was not greater
than the sum of the purchase price of the related vehicle, plus taxes, license
fees and warranty costs.

 

Location of
Contract Files.  The Contract Files are kept at one or more of
the locations listed in Schedule C to the Sale and Servicing
Agreement as such Schedule may be amended.

 

No Government
Entity Obligors. 
The related Obligor shall not be a local, state or federal governmental
entity.

 

No Extensions.  The number of, or timing of, scheduled
payments has not been changed on any Receivable on or before the related
Closing Date, except as reflected on the related Schedule of Receivables.

 

Repossession.  As of the applicable Cut-Off Date, the
related Financed Vehicle has not been repossessed.

 

No Consent; No
Bulk Transfer Law Violation.  The related Contract does not require the
related Obligor to consent to or receive notice of its transfer, sale or
assignment and the sale, transfer and assignment of such Receivable, together
with all Receivables being sold, transferred and assigned on the related
Closing Date, will not violate any applicable bulk transfer laws.

 

Contract
Characteristics.  As of the related date in which the loan was
transferred from Seller to Borrower, the related Contract had an outstanding
Principal Balance of not more than $30,000. 
As of the date of its origination, such Contract had a term of not more
than 87 months.  After giving effect to
the transfer of such Receivables, or the related Seller’s security interest
therein, the weighted average remaining term to maturity of the Contracts
related to all Transferred Receivables will not exceed 22 months.

 

Origination.  The Receivable has been originated pursuant
to one of the Eligible Origination Programs in accordance with the Credit and
Collection Policy as in effect on the date on which such Receivable was
originated (x) in the United States of America by a Dealer 

 

15

 

who as of the
date such Receivable was originated was an Eligible Dealer for the consumer or
commercial sale of a Financed Vehicle in the ordinary course of such Dealer’s
business or (y) by the Seller, shall have been fully and properly executed by
the parties thereto, shall have been purchased by the Seller from such Eligible
Dealer under an existing Eligible Dealer Purchase Agreement with the Seller or
under an agreement containing rights of recourse against the related Dealer
similar to those in the form of Dealer Purchase Agreement under which it
ordinarily does business (unless such Receivable was originated by the Seller),
and shall have been validly assigned (which assignment may convey either an
ownership interest or a security interest) by such Eligible Dealer to the
Seller in accordance with its terms.

 

Dollars.  The Receivable is an obligation denominated
in United States Dollars.  The Obligor on
the related Contract has provided as its most recent billing address an address
located in the continental United States.

 

Forced Placed
Insurance.  The
related Contract is not subject to a forced placed insurance policy on the
related Financed Vehicle.

 

No
Bankruptcies. 
The Obligor has not been the subject of a bankruptcy proceeding
commenced after the execution of the related Contract except if such Obligor
has received a discharge or dismissal of such proceeding under the US
Bankruptcy Code.

 

Dealer Reserve.  As of the Cut-Off Date, the related Dealer
Reserve satisfied the Dealer Reserve Target Percentage.

 

Seasoning.  The Receivable was originated not less than
three months prior to the Cut-Off Date except if it was acquired by the Seller
(or one of the Predecessors in Interest) pursuant to the AFP Program.

 

PIPP
Eligibility; AFP Eligibility.  If the Receivable was originated under the
PIPP Program, the Receivable is an Eligible PIPP Receivable.  If the Receivable was originated under the
AFP Program, the Receivable is an Eligible AFP Receivable.

 

The Receivables in the Franklin Pool shall be deemed
to be Eligible Receivables on the Initial Closing Date.

 

“Eligible Servicer” means (a) CAR
Servicing, (b) the Backup Servicer or (c) another Person which at the
time of its appointment as Servicer (i) is servicing a portfolio of motor
vehicle retail installment contracts and/or motor vehicle installment loans, (ii) is
legally qualified and has the capacity to service the Transferred Receivables, (iii) has
demonstrated the ability to service a portfolio of motor vehicle retail
installment contracts and/or motor vehicle installment loans similar to the
Transferred Receivables with reasonable skill and care, (iv) is qualified
and entitled to use, pursuant to a license or other written agreement, and
agrees to maintain the confidentiality of, the software which the Servicer uses
in connection with performing its duties and responsibilities under this
Agreement or otherwise has available software which is adequate to perform its
duties and responsibilities under this Agreement, (v) has capital in
excess of $75,000,000 and (vi) has been approved by the Required Lenders.

 

“ERISA” means the U.S. Employee Retirement
Income Security Act of 1974, as amended from time to time.

 

“Event of Default” means any of the events
described in Section 14.2 of the Receivables Financing Agreement.

 

“Excess Funds” means, on any day, the amount on
deposit in the Collection Account minus Accrued Costs on such day

 

16

 

“Facility” has the meaning set forth in Section 2.1
of the Receivables Financing Agreement.

 

“Facility Limit” means the aggregate of the
Commitments of all Committed Lenders..

 

“Facility Termination Date” means the earliest
of (a) the Scheduled Facility Termination Date, (b) the Stated
Facility Termination Date, (c) the effective date on which the Facility is
terminated pursuant to Section 14.3 of the Receivables Financing
Agreement and (d) the date on which a Facility Termination Event occurs.

 

“Facility Termination Event” means any of the
events described in Section 14.1 of the Receivables Financing
Agreement.

 

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

 

“Fee Letter” has the meaning set forth in Section 3.4
of the Receivables Financing Agreement.

 

“Fees” means all fees and other amounts payable
by the Borrower to the Administrative Agent, on behalf of itself, the Lenders
and the Support Parties, pursuant to the Fee Letter.

 

“Financed Vehicle” means, as to any Contract,
the new or used automobile, light-duty truck, sports utility vehicle, van or
minivan, together with all accessories thereto, the financing of which gave
rise to such Contract.

 

“Fixed Period” means with respect to any
Advance:

 

(a)           the period commencing on the date of the
initial funding of such Advance and ending on the succeeding Distribution Date;
and

 

(b)           thereafter, each period commencing on the last day
of the immediately preceding Fixed Period for such Advance and ending on the
next succeeding Distribution Date.

 

“Franklin Pool” means that certain pool of
receivables purchased on May 4, 2004, from First Federal Bank, a federally
chartered stock savings bank located and operating in Pennsylvania, which
consists of motor vehicle retail installment contracts secured by new and used
automobiles, light-duty trucks, all-terrain vehicles, motorcycles and
recreational vehicles.

 

“Full Prepayment” means any of the
following:  (i) payment to the
Servicer of 100% of the outstanding principal balance of a Receivable,
exclusive of any Receivable referred to in 

 

17

 

clause (ii), (iii) or (iv) of the definition
of the term “Defaulted Receivable,” together with all accrued and unpaid
interest thereon to the date of such payment, or (ii) payment by the
Seller or the Servicer, as the case may be, of the purchase price of a
Receivable in connection with the purchase of a Receivable pursuant to Section 3.02
or 4.07 of the Sale and Servicing Agreement.

 

“GAAP” means generally accepted accounting
principles in the United States, which are applicable to the circumstances as
of any date of determination.

 

“Guarantor” has the meaning set forth in the Preamble
of the Receivables Financing Agreement.

 

“Increased Costs” means collectively, any
increased cost, loss or liability owing to the Administrative Agent and/or any
other Affected Person under Article VI of the Receivables Financing
Agreement.

 

“Indebtedness” means, with respect to any
Person at any time, (a) indebtedness or liability of such Person for
borrowed money whether or not evidenced by bonds, debentures, notes or other
instruments, or for the deferred purchase price of property or services
(including trade obligations); (b) obligations of such Person as lessee
under leases which should have been or should be, in accordance with GAAP,
recorded as capital leases; (c) current liabilities of such Person in
respect of unfunded vested benefits under plans covered by Title IV of ERISA; (d) obligations
issued for or liabilities incurred on the account of such Person; (e) obligations
or liabilities of such Person arising under acceptance facilities; (f) obligations
of such Person under any guarantees, endorsements (other than for collection or
deposit in the ordinary course of business) and other contingent obligations to
purchase, to provide funds for payment, to supply funds to invest in any Person
or otherwise to assure a creditor against loss; (g) obligations of such
Person secured by any lien on property or assets of such Person, whether or not
the obligations have been assumed by such Person; or (h) obligations of
such Person under any interest rate or currency exchange agreement.

 

“Indemnified Amounts” has the meaning set forth
in Section 17.1 of the Receivables Financing Agreement.

 

“Indemnified Party” has the meaning set forth
in Section 17.1 of the Receivables Financing Agreement.

 

“Indemnity Amounts” means, collectively, all
indemnity obligations and other amounts owing to the Administrative Agent, any
Agent, any Lender and/or any other Indemnified Party under Section 13.7, Article XVII
or Section 18.4 of the Receivables Financing Agreement.

 

“Independent Accountants” has the meaning set
forth in Section 8.7 of the Receivables Financing Agreement.

 

“Initial Closing Date” means, April 1,
2005.

 

“Insolvency Event” means, with respect to any
Person, (i) the entry of a decree or order for relief by a court or
regulatory authority having jurisdiction in respect of such Person in an 

 

18

 

involuntary case under the federal bankruptcy laws, as
now or hereafter in effect, or any other present or future, federal or State,
bankruptcy, insolvency or similar law, or appointing a receiver, liquidator,
assignee, custodian, trustee, sequestrator or other similar official for such
Person or for any substantial part of its property, or ordering the winding-up
or liquidation of such Person’s affairs, and the continuance of any such decree
or order unstayed and in effect for a period of 90 consecutive days, (ii) the
commencement of an involuntary case under the federal bankruptcy laws, as now
or hereinafter in effect, or any other present or future federal or state
bankruptcy, insolvency or similar law and such case is not dismissed within 90
days, (iii) the commencement by such Person of a voluntary case under the
federal bankruptcy laws, as now or hereinafter in effect, or any other present
or future federal or state, bankruptcy, insolvency or similar law, or (iv) the
consent by such Person to the appointment of a conservator or receiver or liquidator
in any insolvency, readjustment or debt, marshalling of assets and liabilities
or similar proceedings of or relating to such Person or of or relating to all
or substantially all of its property, or a decree or order of a court or agency
or supervisory authority having jurisdiction in the premises for the
appointment of a conservator or receiver or liquidator in any insolvency,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings, or for the winding-up or liquidation of its affairs, shall have
been entered against such Person, or such Person shall admit in writing its
inability to pay its debts generally as they become due, file a petition to
take advantage of any applicable insolvency or reorganization statute, make an assignment
for the benefit of its creditors or voluntarily suspend payment of its
obligations or the taking of corporate action by such Person in furtherance of
any the foregoing.

 

“Insurance Policy” means, with respect to a
Financed Vehicle, (i) any comprehensive, collision, fire, theft or other
insurance policy maintained by an Obligor that also lists the Dealer or the
Seller as loss payee with respect to the related Financed Vehicle or (ii) any
credit life, involuntary unemployment, or accident and health insurance
maintained by an Obligor in connection with any Contract.

 

“Insurance Proceeds” means proceeds paid
pursuant to any Insurance Policy and amounts (exclusive of rebated premiums)
paid by any insurer under any other insurance policy related to a Financed
Vehicle, a Contract or an Obligor.

 

“Interest Rate Caps” shall mean the interest
rate caps provided pursuant to Cap Agreements by one or more Cap Providers in
favor of the Collateral Agent for the benefit of the Secured Parties pursuant
to Section 11.6 of the Receivables Financing Agreement which shall
entitle the Collateral Agent to receive monthly payments equal to the product
of (i) the positive difference, if any, between the 30-day LIBOR Rate in
effect for each applicable Fixed Period and a rate per annum of 9.0%, (ii) the
notional amount of such interest rate cap and (iii) the actual number of
days in the Interest Accrual Period divided by 360.

 

“Interim Distribution Date” means any Business
Day, other than a Distribution Date, on which Advances
are being paid or prepaid.

 

“Investor” means (i) all Lenders, (ii) all
other owners by assignment or participation of an Advance and, to the extent of
the undivided interests so assigned or participated, all Participants (in
accordance with Section 16.9), and (iii) each Agent and any
subsequent holder of a Note (in accordance with Section 16.5).

 

19

 

“Lender” means any Noncommitted Lender or
Committed Lender, and “Lenders” means, collectively, all Noncommitted
Lenders and Committed Lenders.

 

“Lender Group” shall mean each group of Lenders
consisting of (i) a Noncommitted Lender and (ii) the Committed
Lenders with respect to such Noncommitted Lender.  The initial Lender Group shall be the
Nantucket Purchaser Group, which shall consist of Nantucket Funding Corp., LLC,
as the Noncommitted Lender, and DBNY, as the Committed Lender.  The Agent for the Nantucket Purchaser Group
shall be DBNY.

 

“Level One Trigger Event” means occurrence of
any one of the following:

 

(a)           the Delinquency Ratio exceeds ***;

 

(b)           the Aggregate Outstanding Principal
Balance of Eligible Receivables relating to Dealers with Dealer Reserve
Percentages less than 15% exceeds *** of the Aggregate Eligible Receivables
Balance;

 

(c)           the Charge-Off Ratio exceeds (i) during
any period other than a period that includes any Collection Period that
encompasses any month occurring during the period of December through March of
any year, *** or (ii) during a period that includes any Collection Period
that encompasses any month occurring during the period of December through
and including March of any year, ***; or

 

(d)           the Pool Discount/Reserve Percentage exceeds
***.

 

“Level Two Trigger Event” means occurrence of
any one of the following:

 

(a)           the Delinquency Ratio exceeds ***;

 

(b)           the Aggregate Outstanding Principal
Balance of Eligible Receivables relating to Dealers with Dealer Reserve
Percentages less than 15% exceeds *** of the Aggregate Eligible Receivables
Balance;

 

(c)           the Charge-Off Ratio exceeds (i) during
any period other than a period that includes any Collection Period that
encompasses any month occurring during the period of December through March of
any year, *** or (ii) during a period that includes any Collection Period
that encompasses any month occurring during the period of December through
and including March of any year, ***; or

 

(d)           the Pool Discount/Reserve Percentage exceeds
***.

 

“LIBOR Rate”
means, with respect to any Fixed Period, the rate per annum shown on Telerate Page 3750
as the composite offered rate for London interbank deposits for a period equal
to such Fixed Period, as shown under the heading “USD” as of 11:00 a.m.,
London time, two Business Days prior to the first day of such Fixed Period; provided
that in the event no such rate is shown, the LIBOR Rate shall be the rate per
annum based on the rates at which Dollar deposits for a period equal to such
Fixed Period are displayed on page ”LIBOR” of the Reuters 

 

20

 

Monitor Money
Rates Service or such other page as may replace the LIBOR page on
that service for the purpose of displaying London interbank offered rates of
major banks as of 11:00 a.m., London time, two London Business Days prior
to the first day of such Fixed Period (it being understood that if at least two
such rates appear on such page, the rate will be the arithmetic mean of such
displayed rates); provided  further that in the event fewer than
two such rates are displayed, or if no such rate is relevant, the LIBOR Rate
shall be a rate per annum at which deposits in Dollars are offered by the
principal office of Deutsche Bank AG in London, England to prime banks in the
London interbank market at 11:00 A.M. (London time) two Business Days
before the first day of such Fixed Period for delivery on such first day and
for a period equal to such Fixed Period.

 

“LIBOR Reserve
Percentage” means, with respect to any Fixed Period, a percentage
(expressed as a decimal) equal to the weighted average of the percentages in
effect during such Fixed Period, as prescribed by the Board of Governors of the
Federal Reserve System (or any successor thereto) for determining the maximum
reserve requirements applicable to “Eurocurrency liabilities” pursuant to
Regulation D or any other applicable regulation of the Federal Reserve
Board (or any successor thereto) which prescribes reserve requirements
applicable to “Eurocurrency liabilities” as currently defined in
Regulation D.

 

“Lien” means any security interest, lien,
charge, pledge, preference, equity or encumbrance of any kind, including tax
liens, mechanics’ liens and any liens that attach by operation of law.

 

“Liquidation Expenses” means reasonable
out-of-pocket expenses (and, if CAR, CAR Servicing or an Affiliate of CAR is
the Servicer, not to exceed Liquidation Proceeds), other than any overhead
expenses, incurred by the Servicer in connection with the realization of the
amounts due under any Receivable (including the attempted liquidation of a
Receivable which is brought current and is no longer in default during such
attempted liquidation) and the sale of any property acquired in respect thereof
which are not recoverable under any Insurance Policy.

 

“Liquidation Proceeds” means amounts received
by the Servicer (before reimbursement for Liquidation Expenses) in connection
with the realization of the amounts due and to become due under any Delinquent
Receivable or Defaulted Receivable, including, without limitation, Dealer
Reserves and amounts paid by Dealers pursuant to the Dealer Purchaser
Agreements and applied with respect to any such Receivable, and/or the sale of
any property acquired in respect thereof but net of any amounts required to be
refunded to the Obligor of such Receivable.

 

“Liquidity Amount” means, on any determination
date, the sum of cash or cash equivalents owned by CARS Acquisition and its
wholly-owned direct or indirect subsidiaries on such determination date
(including Excess Funds) and available borrowing capacity on such determination
date under the Receivables Financing Agreement and the unsecured credit
facilities to which CAR is a party.

 

“Lockbox Account” has the meaning given such
term in Section 4.02(b) of the Sale and Servicing Agreement.

 

21

 

“Lockbox Agreement” means each lockbox control
agreement by and among a Lockbox Bank, the Collateral Agent and the Borrower,
to be entered into in connection with respect to each Lockbox Account as set
forth in Section 4.02(b) of the Sale and Servicing Agreement
in form and substance acceptable to the Administrative Agent, as be amended,
supplemented or otherwise modified from time to time.

 

“Lockbox Bank” means each depository
institution named by the Servicer and acceptable to the Agent which maintains a
Lockbox Account.

 

“Major Account Purchase Program” means the
program of CAR (or a Predecessor in Interest) for purchasing Receivables which
has been designated as the “Major Account Purchase Program”, as more
particularly described in the Credit and Collection Policy.

 

“Market Discount” means, with respect to any Receivable, the discount from par at which the Seller or a
Predecessor in Interest purchased such Receivable from the related Dealer.

 

“Material Adverse Change” in respect of a
Person means a material adverse change in (i) the business, properties,
results of operations, or financial condition of such Person or (ii) the
ability of such Person to perform, or of the Collateral Agent or any Lender to
enforce, the material obligations of such Person under any Transaction Document
to which it is a party.

 

“Material Adverse Effect” in respect of a
Person means a material adverse effect upon (i) the business, properties,
results of operations, or financial condition of CCRT and its Subsidiaries
taken as a whole, or (ii) the ability of such Person to perform, or of the
Collateral Agent or any Lender to enforce, the material obligations of such
Person under any Transaction Document to which it is a party.

 

“Maturity Date” means, with respect to any
Contract, the date on which the last scheduled payment of such Contract shall
be due and payable (after giving effect to all Prepayments received prior to
the date of determination) as such date may be extended pursuant to Section 4.02
of the Sale and Servicing Agreement.

 

“Maximum Loan Amount” of a Noncommitted Lender
means the aggregate Commitment of the Committed Lenders with respect to such
Noncommitted Lender.

 

“Minimum Liquidity Amount Test” shall be met,
on any date, if the Liquidity Amount is then, and is reasonably expected to be
throughout the then following six-month period, at least $50,000.  If such requirement is not met, CAR shall
have provided to the Administrative Agent a quarterly financial forecast for
the following two-year period and a reasonably detailed calculation of the
Liquidity Amount and projected compliance with such test.

 

“Monthly Charge-Off Ratio” means, with respect
to any Collection Period, the percentage equivalent of a fraction (a) the
numerator of which is the product of (i) the Aggregate Outstanding Principal
Balance of all Transferred Receivables which became Defaulted Receivables
during such Collection Period less Net Liquidation Proceeds (including Dealer
Reserves applied to such Defaulted Receivables) during such Collection Period
and (ii) 12 and 

 

22

 

(b) the denominator of
which is the Aggregate Outstanding Principal Balance of all Transferred
Receivables as of the last day of the preceding Collection Period.

 

“Monthly Delinquency Ratio” means, with respect
to any Collection Period, the percentage equivalent of a fraction (a) the
numerator of which is the Aggregate Outstanding Principal Balance of all
Transferred Receivables which are Delinquent Receivables as of the last day of
such Collection Period and (b) the denominator of which is the Aggregate
Outstanding Principal Balance of all Transferred Receivables as of the last day
of such Collection Period.

 

“Monthly P&I” means, with respect to any
Contract, the amount of each monthly installment of principal and interest
payable to the Obligee of such Contract in accordance with the terms thereof,
exclusive of any charges which represent late payment charges or extension
fees.

 

“Moody’s” means Moody’s Investors Service, Inc.,
or any successor thereto.

 

“Net Collections” means (i) the sum of all
amounts collected on or in respect of the Receivables and Dealer Transaction
Rights, including Monthly P&I (whether received in whole or in part,
whether related to a current, future or prior Due Date, whether paid
voluntarily by an Obligor or received in connection with the realization of the
amounts due and to become due under any Defaulted Receivable or upon the sale
of any property acquired in respect thereof), all partial Prepayments, all Full
Prepayments, Net Liquidation Proceeds, Net Insurance Proceeds, and the
Repurchase Amount for Repurchased Receivables but excluding any amounts
collected that the Servicer is entitled to retain.

 

“Net Insurance Proceeds” means, with respect to
any Receivable, Insurance Proceeds net of any such amount applied to the repair
of the related Financed Vehicle, released to the related Obligor in accordance
with the normal servicing procedures of the Servicer or representing expenses
incurred by the Servicer and recoverable hereunder.

 

“Net Liquidation Proceeds” means the amount
derived by subtracting from the Liquidation Proceeds of a Receivable the
related Liquidation Expenses.

 

“Net Outstanding Principal Balance” means, with
respect to a Receivable and any date, the product of (a) the outstanding
Principal Balance thereof and (b) 100% minus the sum of (i) the
Dealer Reserve Percentage on such date with respect to the Dealer which
originated such Receivable and (ii) the Dealer Discount Percentage on such
date with respect to such Dealer.

 

“Net Spread”
means, as of any date, the positive excess, if any, of (a) the sum of (i) the
weighted average APR of the Eligible Receivables on such date (after giving
effect to any reduction of the APR of any Eligible Receivable pursuant to the
provision of Section 4.01 of the Sale and Servicing Agreement) and (ii) the
weighted average Dealer Discount Percentage over (b) the sum of (i) 
the Total Expense Percentage plus (ii) the weighted (on the basis
of notional amounts) average strike prices for the Interest Rate Caps in effect
on such date.

 

“New Dealer” means, as of any date, a Dealer
from whom CAR or a Predecessor in Interest first purchased a Receivable within
the 12 months prior to such date.

 

23

 

“Noncommitted Lender” means each Structured
Lender which shall become a party to the Receivables Financing Agreement.

 

“Noncommitted Percentage” means, for a
Noncommitted Lender, such Noncommitted Lender’s Maximum Loan Amount as a
percentage of the Facility Limit.

 

“Note” means the promissory grid note, in the
form of Exhibit B to the Receivables Financing Agreement, made
payable to the order of an Agent, on behalf of the related Investors.

 

“Note Agent” has the meaning set forth in Section 15.1
of the Receivables Financing Agreement.

 

“Note Register” has the meaning set forth in Section 16.5(a) of
the Receivables Financing Agreement.

 

“Note Registrar” has the meaning set forth in Section 16.5(a) of
the Receivables Financing Agreement.

 

“Obligations” means all obligations (monetary
or otherwise) of the Borrower to the Lenders, the Agents, the Custodian, the
Backup Servicer, the Administrative Agent, the Collateral Agent or any other
Affected Person or Indemnified Party arising under or in connection with this
Agreement, the Notes and each other Transaction Document.

 

“Obligee” means the Person to whom an Obligor
is indebted under a Contract.

 

“Obligor” on a Contract means the purchaser or
co-purchasers of the Financed Vehicle and any other Person who owes payments
under the Contract.

 

“Officers’ Certificate” means a certificate
signed by the Chairman, the President, a Vice President, the Treasurer, an
Assistant Treasurer, the Controller, an Assistant Controller, the Secretary or
an Assistant Secretary of any Person delivering such certificate and delivered
to the Person to whom such certificate is required to be delivered.  In the case of an Officers’ Certificate of
the Servicer, the signing officer must be a Servicing Officer.  Unless otherwise specified, any reference
herein to an Officers’ Certificate shall be to an Officers’ Certificate of the
Borrower.

 

“Official Body” means any government or
political subdivision or any agency, authority, regulatory body, bureau,
central bank, commission, department or instrumentality of any such government
or political subdivision, or any court, tribunal, grand jury or arbitrator, in
each case whether foreign or domestic.

 

“Opinion of Counsel” means a written opinion of
independent counsel reasonably acceptable in form and substance and from
counsel acceptable to the Required Lenders.

 

“Other Conveyed Property” means the items
transferred to the Borrower pursuant to Section 2.01(b) of the
Sale and Servicing Agreement other than the Transferred Dealer 

 

24

 

Transaction Rights. 
Dealer Recourse with respect to a Receivable shall be deemed to be a Other Conveyed Property with respect to such Receivable.

 

“Outstanding” means, with respect to a
Receivable and as of time of reference thereto, a Receivable that has not
reached its Maturity Date, has not been fully prepaid, has not become a
Defaulted Receivable and has not been repurchased pursuant to Section 3.02
or 4.07 of the Sale and Servicing Agreement.

 

“Overconcentration Amount” means, as of any
date, the sum, without duplication, of the following (excluding, in each case,
the Franklin Pool):

 

(a)           the amount, if any, by which the Aggregate
Outstanding Principal Balance of all Transferred Receivables which are Eligible
Receivables which were originated by any Dealer exceeds *** of the Aggregate
Eligible Receivables Balance;

 

(b)           the amount, if any, by which the Aggregate
Outstanding Principal Balance of all Transferred Receivables which are Eligible
Receivables which were originated by any three Dealers exceeds *** of the
Aggregate Eligible Receivables Balance;

 

(c)           after the Initial Closing Date, the
amount, if any, by which the Aggregate Outstanding Principal Balance of all
Transferred Receivables which are Eligible Receivables which were originated by
any New Dealer exceeds *** of the Aggregate Eligible Receivables Balance;

 

(d)           the amount, if any, by which the Aggregate
Outstanding Principal Balance of all Transferred Receivables which are Eligible
Receivables which were originated by Obligors having an address in a particular
state exceeds the percentage of the Aggregate Eligible Receivables Balance set
forth opposite the name of such state below: 

 

	
  State

  	
   

  	
  Percentage

  
	
   

  	
   

  	
   

  
	
  Florida

  	
   

  	
  ***

  
	
   

  	
   

  	
   

  
	
  Texas

  	
   

  	
  ***

  
	
   

  	
   

  	
   

  
	
  Pennsylvania, Georgia, California or North
  Carolina

  	
   

  	
  ***

  
	
   

  	
   

  	
   

  
	
  All other states

  	
   

  	
  ***

  

 

(e)           the amount, if any, by which the
Aggregate Outstanding Principal Balance of all Transferred Receivables which
are Eligible Receivables which have remaining terms to maturity of greater than
24 months exceeds *** of the Aggregate Eligible Receivables Balance;

 

(f)            the amount, if any, by which the
Aggregate Outstanding Principal Balance of all Transferred Receivables which
are Eligible Receivables which have remaining terms to maturity of greater than
36 months exceeds *** of the Aggregate Eligible Receivables Balance;

 

25

 

(g)           the amount, if any, by which the
Aggregate Outstanding Principal Balance of all Transferred Receivables which
are Eligible Receivables which were originated under the AFP Program exceeds
*** of the Aggregate Eligible Receivables Balance; and

 

(h)           the amount, if any, by which the
Aggregate Outstanding Principal Balance of all Transferred Receivables which
are Eligible Receivables which were originated under the PIPP Program exceeds
*** of the Aggregate Eligible Receivables Balance.

 

“Participant” has the meaning set forth in Section 16.9
of the Receivables Financing Agreement.

 

“Permitted Investment” means, at any
time:

 

(a)           direct interest-bearing obligations of,
and interest-bearing obligations guaranteed as to timely payment of principal
and interest by, the United States or any agency or instrumentality of the
United States, the obligations of which are backed by the full faith and credit
of the United States;

 

(b)           demand or time deposits in, certificates
of deposit of, demand notes of, or bankers’ acceptances issued by any
depository institution or trust company organized under the laws of the United
States or any State thereof (including any federal or state branch or agency of
a foreign depository institution or trust company) and subject to supervision
and examination by federal and/or state banking authorities (including, if
applicable, the Administrative Agent or any agent thereof acting in its
commercial capacity); provided that the short-term unsecured debt
obligations of such depository institution or trust company at the time of such
investment, or contractual commitment providing for such investment, are rated
at least “A-1+” by Standard & Poor’s and “P-1” by Moody’s;

 

(c)           repurchase obligations pursuant to a
written agreement (i) with respect to any obligation described in clause (a) above,
where the Collateral Agent has taken actual or constructive delivery of such obligation
in accordance with Article IX of this Agreement, and (ii) entered
into with (x) DBNY or (y) the corporate trust department of a
depository institution or trust company organized under the laws of the United
States or any State thereof, the deposits of which are insured by the Federal
Deposit Insurance Corporation and the short-term unsecured debt obligations of
which are rated at least “A-1+” by Standard & Poor’s and “P-1” by
Moody’s (including, if applicable, the Collateral Agent or any agent thereof
acting in its commercial capacity);

 

(d)           securities bearing interest or sold at a
discount issued by any corporation incorporated under the laws of the United
States or any State whose long-term unsecured debt obligations are assigned one
of the two highest long-term ratings by each Rating Agency at the time of such
investment or contractual commitment providing for such investment; provided,
however, that securities issued by any particular corporation will not
be Permitted Investments to the extent that an investment therein will cause
the then outstanding principal amount of securities issued by such corporation
and held in the Collection Account and the Cap Funding Reserve Account to
exceed 10% of the value of Permitted Investments held in such accounts (with
Permitted Investments held in such accounts valued at par);

 

26

 

(e)           commercial paper that (i) is payable in United
States dollars and (ii) is rated at least “A-1+” by Standard &
Poor’s and “P-1” by Moody’s;

 

(f)            units of money market funds (which may be
managed by the Collateral Agent or one of its Affiliates) rated in the highest
credit rating category by each Rating Agency; or

 

(g)           any other demand or time deposit,
obligation, security or investment (including, without limitation, a hedging
arrangement) as may be acceptable to the Required Lenders, as evidenced by a
writing to that effect.

 

Permitted Investments may be purchased by or through
the Administrative Agent, the Collateral Agent or any of their respective
Affiliates.  All Permitted Investments
shall be held in the name of the Collateral Agent.  No Permitted Investment shall have an “r”
highlighter affixed to its Standard & Poor’s rating.

 

“Permitted Lien” means (i) the Lien in
favor of the Collateral Agent for the benefit of the Secured Parties, (ii) the
restrictions on transferability imposed by the Transaction Documents, (iii) 
inchoate Liens for taxes not yet payable and mechanics’ or suppliers’ liens for
services or materials supplied the payment of which is not yet overdue and (iv) with
respect to any Financed Vehicle, (A) any Lien for unpaid taxes or unpaid
storage or repair charges, (B) mechanics’ Liens and (C) any Lien that
attaches by operation of law and which may arise after the applicable Closing
Date in accordance with the UCC.

 

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

 

“PIPP” or “PIPP Program” means the
program of CAR (or a Predecessor in Interest) for purchasing Receivables which
has been designated as the “Payment Interval Purchase Program” or “PIPP Program”,
as more particularly described in the Credit and Collection Policy.

 

“Pool Discount/Reserve Percentage” means, as of
any Distribution Date, the percentage equivalent of a fraction the numerator of
which is the sum of the aggregate Dealer Discount with respect to all
Transferred Receivables on such Distribution Date and the aggregate Dealer
Reserve with respect to all Transferred Receivables on such day and the
denominator of which is the Aggregate Outstanding Principal Balance of all
Transferred Receivables on such Distribution Date.

 

“Predecessors in Interest” mean Wells Fargo
Financial America, Inc., Wells Fargo Financial Kentucky, Inc., Wells
Fargo Financial, Inc., Wells Fargo Financial Nevada, Inc., Wells
Fargo Financial North Carolina, Inc., Wells Fargo Financial Texas, Inc.
and Wells Fargo Financial CAR LLC.

 

“Principal Balance” means, with respect to a
Receivable and any date, the outstanding principal balance under the terms
thereof.

 

27

 

“Proceeds” or “proceeds” shall have the
meaning given to such term in the UCC.

 

“Promissory Note” means the note or notes, if
more than one, executed by the Borrower in favor of the Seller as part of the
purchase price paid by the Borrower for Contracts subject to this Agreement
substantially in the form of Exhibit C to the Sale and Servicing
Agreement.

 

“Purchase Date” means, with respect to a
Transferred Receivable or Transferred Dealer Transaction Right, the date on
which such Receivable or Transferred Dealer Transaction Right is sold or
contributed to the Borrower pursuant to the Sale and Servicing Agreement.

 

“Purchase Price” means, with respect to each
Receivable in which a Dealer Transaction Right is sold by the Seller to the
Purchaser pursuant to the Sale and Servicing Agreement, and measured on the
Cut-Off Date for such sale, an amount equal to the product of (a) the
outstanding Principal Balance of such Receivable, multiplied by (b) the
Discount Factor.

 

“Purchaser” means the Borrower in its capacity
as the “Purchaser” under the Sale and Servicing Agreement.

 

“Qualified Substitute Arrangement” shall have
the meaning specified in Section 11.6(d) of the Receivables
Financing Agreement.

 

“Rating Agencies” means Standard &
Poor’s and Moody’s.

 

“Receivable” means the right to payment arising
under a Contract for the sale of a motor vehicle and any interest in related
goods, insurance or services evidenced by or arising under such Contract.

 

“Record Date” means, with respect to any
Determination Date or Distribution Date, the last day of the immediately
preceding calendar month.

 

“Receivables Collateral” means the Transferred
Receivables and Transferred Dealer Transaction Rights together with the Other
Conveyed Property.

 

“Receivables Financing Agreement” means the
Receivables Financing Agreement dated as of April 1, 2005 (together with
all amendments and other modifications, if any, from time to time thereafter
made thereto), among the Purchaser, the Servicer, CompuCredit Corporation,
Deutsche Bank AG, New York Branch, the Backup Servicer, the Collateral Agent,
the Custodian and the Lenders and the Agents parties thereto.

 

“Registrar of Titles” means the agency,
department or office having the responsibility for maintaining records of
titles to motor vehicles and issuing documents evidencing such titles in the
jurisdiction in which a particular Financed Vehicle is registered.

 

“Related Security” means, for any Receivable,
all of the Seller’s right, title and interest in, to and under (i) the
Financed Vehicle related to the related Contract; (ii) any Insurance
Policies relating to such Financed Vehicle or to the related Obligor, (iii) all
Liens and property subject thereto, if any, purporting to secure payment of
such Contract, together with all financing 

 

28

 

statements describing any collateral securing such
Contract, (iv) all guarantees, letters of credit, insurance and other
agreements supporting or securing payment of such Contract, (v) all
Ancillary Products related to such Contract, (vi) rights or claims against
the applicable Dealer and (vii) all proceeds of the foregoing.

 

“Replacement Interest Rate Cap” means one or
more Interest Rate Caps, which in combination with all other Interest Rate Caps
then in effect, after giving effect to any planned cancellations of any
presently outstanding Interest Rate Caps satisfy the Borrower’s covenant
contained in Section 11.6 of the Receivables Financing Agreement to
maintain Interest Rate Caps.

 

“Repurchase Amount” means, with respect to any
Dealer Transaction Right and any related Receivable, the amount, as of the date
of repurchase, equal to the greater of (x) (a) the Purchase Price paid
with respect to such Dealer Transaction Right minus (b) collections in
respect of principal received on or prior to the date of repurchase and (y) the
product of (a) the outstanding Principal Balance thereof and (b) 100%
minus the sum of (i) the Dealer Reserve Percentage on such date with
respect to the Dealer which originated such Receivable and (ii) the Dealer
Discount Percentage on such date with respect to such Dealer.

 

“Repurchased Dealer Transaction Right” means,
with respect to any Collection Period, any Transferred Dealer Transaction Right
relating to any Transferred Receivable which became a Repurchase Receivable
during such Collection Period.

 

“Repurchased Receivable” means, with respect to
any Collection Period, any Transferred Receivable as to which the Repurchase
Amount has been deposited in the Collection Account by or on behalf of the Borrower
or the Servicer, as applicable, on or before the related Determination Date and
any Transferred Receivable purchased by the Servicer, the Seller or CAR
pursuant to the Sale and Servicing Agreement as to which the Repurchase Amount
has been deposited in the Collection Account by or on behalf of the Servicer,
the Seller or CAR, as the case may be.

 

“Required Interest Rate Caps Notional Amount”
means, with respect to any date of determination, the outstanding principal
amount of the Advances on such date of determination.

 

“Required Lenders” means, at any time, (a) Noncommitted
Lenders holding Advances aggregating at least 66-2/3% of all Advances then
owing to Noncommitted Lenders, and (b) Committed Lenders having
Commitments or, if no Commitments are in effect, Advances, aggregating at least
66-2/3% of the Facility Limit or Advances owing to Committed Lenders (as the
case may be).

 

“Responsible Officer” means, with respect to
any Person that is not an individual, the President, any Vice-President or
Assistant Vice-President, the Chief Financial Officer, the Treasurer or the
Controller of such Person, or any other trust officer, officer or employee
having similar functions.

 

“Rule of 78’s Contract” means a Contract
as to which payments thereunder are applied on the basis of the Rule of 78’s.

 

29

 

“Sale and Assignment” means a sale and
assignment delivered in connection with a sale of Receivables, substantially in
the form of Schedule B to the Sale and Servicing Agreement.

 

“Sale and Servicing Agreement” means the Sale
and Servicing Agreement, dated as of April 1, 2005(together with all
amendments and other modifications, if any, from time to time thereafter made
thereto), by and among the Borrower, the Seller, the Custodian and the
Servicer.

 

“Schedule of Receivables” means the list
or lists of Receivables attached as the Schedule of Receivables to each
Sale and Assignment executed in connection with this Agreement, which Schedule of
Receivables are incorporated by reference as Schedule A to Receivables
Financing Agreement.  Each such Schedule of
Receivables shall identify the Receivables which are being transferred to the
Purchaser and shall set forth such information with respect to each such
Receivable as the Purchaser or the Required Lenders may from time to time
require.

 

“Scheduled Facility Termination Date” means the
date that is 364 days from the Effective Date of this Agreement or such later
date to which the Scheduled Facility Termination Date may be extended, if
extended, pursuant to Section 2.7 of the Receivables Financing
Agreement.

 

“Secured Parties” means, collectively, each
Agent, each Lender, the Administrative Agent, the Collateral Agent, each other
Affected Person and their respective successors and assigns.

 

“Seller” has the meaning specified in the Preamble
of the Receivables Financing Agreement.

 

“Servicer” means CAR Servicing, in its capacity
as the Servicer of the Receivables under Section 4.01 of the Sale and
Servicing Agreement, and, in each case upon succession in accordance herewith,
each successor Servicer in the same capacity pursuant to Section 4.01 of
the Sale and Servicing Agreement and each successor Servicer pursuant to Section 8.02
of the Sale and Servicing Agreement.

 

“Servicer Default” means an event specified in Section 8.01
of the Sale and Servicing Agreement.

 

“Servicing Fee – Senior” means, with respect to
any Distribution Date, the fee payable to the Servicer on a senior basis for
services rendered during the related Collection Period, which shall be equal to
one-twelfth of the Servicing Fee Percentage — Senior multiplied by the average
Aggregate Net Outstanding Principal Balance of Transferred Receivables for each
day during the related Collection Period.

 

“Servicing Fee – Subordinate” means, with
respect to any Distribution Date, the fee payable to the Servicer on a
subordinate basis for services rendered during the related Collection Period,
which shall be equal to one-twelfth of the Servicing Fee Percentage –
Subordinate multiplied by the average aggregate outstanding balance of
Transferred Receivables for each day during the related Collection Period.

 

30

 

“Servicing Fee Percentage - Senior” means ***,
or, following a Servicer Default, such higher rate as may be payable at such
time to a successor Servicer.

 

“Servicing Fee Percentage - Subordinate” means
***, or, following a Servicer Default, such higher rate as may be payable at
such time to a successor Servicer.

 

“Servicing Officer” means any officer of the
Servicer involved in, or responsible for, the administration and servicing of
the Receivables whose name appears on a list of servicing officers furnished to
the Purchaser, the Administrative Agent and the Collateral Agent by the
Servicer pursuant to Section 4.01 of the Sale and Servicing
Agreement.

 

“Settlement Date” means, with respect to any
Advance, (x) each Distribution Date or (y) the date on which the Borrower shall
prepay such Advance pursuant to Section 2.6 of the Receivables
Financing Agreement.

 

“Simple Interest Contract” means a Contract as
to which interest is calculated each day on the basis of the actual principal
balance of such Contract on such day.

 

“SL Affected Party” has the meaning set forth
in Section 3.3(c) of the Receivables Financing Agreement.

 

“Standard & Poor’s” means Standard &
Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., or
any successor thereto.

 

“Standard Bulk Purchase Program” means the
program of CAR (or a Predecessor in Interest) for purchasing Receivables which
has been designated as the “Standard Bulk Purchase Program”, as more
particularly described in the Credit and Collection Policy.

 

“Stated Facility Termination Date” means the
date that is eighteen months from the Effective Date of this Agreement.

 

“Structured Lender” shall mean any Person whose
principal business consists of issuing commercial paper, medium term notes or
other securities to fund its acquisition and maintenance of receivables,
accounts, instruments, chattel paper, general intangibles and other similar
assets or interests therein and which is required by any nationally recognized
statistical rating organization which is rating such securities to obtain from
its principal debtors an agreement such as that set forth in Section 18.11(a) of
the Receivables Financing Agreement in order to maintain such rating.

 

“Subsequent Closing Date” means each Closing
Date other than the Initial Closing Date.

 

“Subsidiary” means, with respect to any Person,
a corporation of which such Person and/or its other Subsidiaries own, directly
or indirectly, such number of outstanding shares as have more than 50% of the
ordinary voting power for the election of directors.

 

31

 

“Support Facility” means any liquidity or
credit support agreement with a Noncommitted Lender which relates to this
Agreement (including any agreement to purchase an assignment of or
participation in Notes).

 

“Support Party” means any other bank, insurance
company or other financial institution extending or having a commitment to
extend funds to or for the account of a Noncommitted Lender (including by
agreement to purchase an assignment of or participation in Notes) under a
Support Facility.  Each Committed Lender
for a Noncommitted Lender shall be deemed to be a Support Party for such
Noncommitted Lender.

 

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

 

“Take-Out Securitization” means (i) a
financing transaction of any sort undertaken by CAR, any Affiliate of CAR, or
the Borrower secured, directly or indirectly, by any Receivable which was a
Transferred Receivable prior to such transaction or (ii) any auto loan or
other asset securitization, secured loans, whole loan sale or similar
transactions involving any Receivable which was a Transferred Receivable prior
to such transaction or any beneficial interest therein.

 

“Taxes” has the meaning set forth in Section 5.1(b) of
the Receivables Financing Agreement.

 

“Threatened” means, with respect to an action,
Proceeding or other matter, that any demand or statement has been made (in
writing or orally, if made to any of the officers or directors of a Person), or
that any other event has occurred or any other circumstances exist, that would
lead a reasonable person to conclude that such Proceeding or other matter is
likely to be asserted, commenced, taken or otherwise pursued in the future.

 

“Title Document” means, with respect to any
Financed Vehicle, the certificate of title for, or other evidence of ownership
of, such Financed Vehicle issued by the Registrar of Titles in the jurisdiction
in which such Financed Vehicle is registered.

 

“Total Expense Percentage” means, as of any
date, the sum of (a) the Servicing Fee Percentage — Senior plus the
Servicing Fee Percentage - Subordinate plus (b) the “Program Fee
Rate” (as defined in the Fee Letter) plus (c) the “Usage Fee Rate”
(as defined in the Fee Letter) plus (d) the rate at which fees due
to the Custodian under the Custodian Fee Letter accrue (if calculated on the
basis of the outstanding amount of Receivables) plus (e) the rate
at which fees and expenses due to the Backup Servicer under the Backup Servicer
Letter accrue (if calculated on the basis of the outstanding amount of
Receivables) plus (f) the rate, if any, at which fees due to the
Administrative Agent under the Administrative Agent Fee Letter accrue (if
calculated on the basis of the outstanding amount of Receivables) plus (g) the
rate at which fees due to the Collateral Agent under the Collateral Agent Fee
Letter accrue (if calculated on the basis of the outstanding amount of
Receivables).

 

32

 

“Transaction Documents” means the Receivables
Financing Agreement, the Notes, the Fee Letter, the Sale and Servicing
Agreement, each Lockbox Agreement, each Interest Rate Cap and the other
documents to be executed and delivered in connection with this Agreement.

 

“Transferred Dealer Transaction Right” means
each Dealer Transaction Right related to a Transferred Receivable.

 

“Transferred Receivable” means each Receivable
which appears on any Schedule of Receivables at any time hereafter
submitted to the Borrower pursuant to the Sale and Servicing Agreement relating
to a Dealer Transaction Right purchased by the Borrower or a contribution to
the capital of the Borrower.  Once a
Receivable appears on any such Schedule of Receivables it shall remain a
Transferred Receivable; provided, however, that any Transferred
Receivable shall not be a “Transferred Receivable” after such
Transferred Receivable or the related Dealer Transaction Right is released from
the Lien granted to the Collateral Agent for the benefit of the Secured Parties
pursuant hereto.

 

“Transfer Request” has the meaning set forth in
Section 13.4 of the Receivables Financing Agreement.

 

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

 

“United States” means the United States of
America.

 

“Unmatured Facility Termination Event” means
any event that, if it continues uncured, will, with lapse of time or notice or
lapse of time and notice, constitute a Facility Termination Event.

 

“Unmatured Servicer Default” means any event
that, if it continues uncured, will, with lapse of time or notice or lapse of
time and notice, constitute a Servicer Default.

 

“Vice President” of any Person means any vice
president of such Person, whether or not designated by a number or words before
or after the title “Vice President,” who is a duly elected officer of such
Person.

 

“VLAP Program” means the program of CAR (or a
Predecessor in Interest) for purchasing Receivables which has been designated
as the “Victory Lane Approval Program” or “VLAP Program”, as more particularly
described in the Credit and Collection Policy.

 

“WFB” means Wells Fargo Bank, National
Association, a national banking association.

 

“written” or “in
writing” (and other variations thereof) means any form of written
communication or a communication by means of telex, telecopier device,
telegraph or cable.

 

“Yield” means, with respect to any period, the
daily interest accrued on Advances outstanding during such period as provided
for in Article III of the Receivables Financing Agreement.

 

33

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