March 28, 2002
Xxxx Xxxxxxxx
Chief Financial Officer
Automotive Finance Corporation
000 Xxxx 00xx Xxxxxx
Xxxxx 000
Xxxxxxxxxxxx, XX 00000
RE: Ugly Duckling Corporation Master Loan and Security Agreement dated as of
August 24, 2001
Dear Sir:
With this letter we are requesting a waiver under Article VIII Section 8.0 (o)
No Defaults for December 2001 and January 2002.
As previously discussed with you, we hit termination charge-off triggers on
three of our securitized trusts in December and one termination delinquency
trigger on a trust in January 2002. These trigger breaches constitute an event
of default under the Insurance Agreements in each of these trusts. Each of the
trusts were only in breach of the termination trigger test for the month
indicated and have since been under these levels. MBIA, our insurer, has
indicated they will retain but not exercise their rights under the termination
events to, among other things, transition servicing and retain all future cash
flows from the trusts to pay off the A bondholder, assuming continued
improvement in the performance of the trusts.
To further validate MBIA's intent, we are scheduled to close our first
securitization of 2002 on April 2nd with MBIA acting as the insurer on the
transaction.
Thank you for your time and consideration. I have provided an area on an
attached page for your signature authorizing the waiver. Please call me with any
further questions at 000-000-0000.
Sincerely,
Xxx Xxxxxx
Treasurer
Ugly Duckling Corporation
The undersigned hereby waive as requested above:
Automotive Finance Corporation
By: _________________________
Name: _________________________
Title: _________________________
