STOCK PLEDGE AGREEMENT
THIS STOCK PLEDGE AGREEMENT dated as of January 11, 2001 (the "Pledge
Agreement") among UGLY DUCKLING CAR SALES AND FINANCE CORPORATION, an Arizona
corporation formerly known as Duck Ventures, Inc. ("Pledgor"), as owner of all
of the outstanding capital stock in Ugly Duckling Receivables Corp. II
("UDRCII"), a Delaware corporation, and Ugly Duckling Receivables Corp. III, a
Delaware corporation ("UDRC III"), UGLY DUCKLING CORPORATION, a Delaware
corporation ("UDC") and VERDE INVESTMENTS, INC., an Arizona corporation (the
"Lender").
INTRODUCTORY STATEMENTS
Pledgor is the sole holder of fifty (50) shares of common stock, $.01 par
value per share in UDRC II and one thousand (1000) shares of common stock, $.01
par value per share, in UDRC III (collectively, together with the capital stock
of each New Issuer (as defined below) pledged or required to be pledged
hereunder, the "Pledged Shares"). UDC, as borrower, has on the date hereof
entered into a Loan Agreement with Lender (as such agreement may be amended,
supplemented or otherwise modified from time to time, the "Loan Agreement")
pursuant to which UDC has or will borrow money from the Lender. Pledgor, which
is a wholly owned subsidiary of UDC, will receive substantial direct and
indirect benefits from the loans made to UDC under the Loan Agreement and
Pledgor has agreed to pledge the Pledged Shares and any proceeds thereof as
security for Pledgor's obligations under the Loan Agreement. Accordingly, the
Pledged Shares and any proceeds thereof will secure obligations of UDC to
Lender. Terms used herein but not defined herein shall have the meanings
assigned to such terms in the Loan Agreement.
UDC has or will enter into a Senior Secured Loan Agreement with certain
lenders and the collateral agent as defined therein ("Senior Lenders"), which
shall be dated on or about January 11, 2001 ("Senior Secured Loan Agreement").
As a condition of the Senior Secured Loan Agreement and as security for the
obligations thereunder, Pledgor has or will enter into a Stock Pledge Agreement
among Pledgor, UDC and BNY Midwest Trust Company ("Senior Pledge Agreement").
Pursuant to the terms of the Senior Pledge Agreement, Pledgor pledged or will
pledge a first priority security interest in the Pledged Shares and additional
collateral as identified therein. Further, pursuant to the Senior Pledge
Agreement, Pledgor delivered or will deliver to the collateral agent thereunder
all share certificates or other instruments representing the Pledged Shares and
collateral.
As a condition precedent to entering into the Senior Secured Loan
Agreement, the Senior Lenders require that Lender subordinate the liens of the
Loan Agreement and this Pledge Agreement to the liens of the Senior Secured Loan
Agreement and Senior Pledge Agreement and to subordinate Lender's rights and
remedies, including, without limitation, its rights to receive any payments,
pursuant to the Loan Agreement to the Senior Lenders' rights and remedies
including, without limitation, their rights to receive payments pursuant to the
Senior Secured Loan Agreement, as more particularly provided in a separate
agreement of subordination of even date herewith ("Subordination Agreement").
In consideration of the premises and of the agreements herein contained,
Pledgor, Lender and UDC agree as follows:
Section 1. Definitions.
(a) Capitalized terms used but not otherwise defined in this Pledge
Agreement shall have the meanings specified therefor in the Loan Agreement.
(b) As used herein, the term "Final Date" shall mean the date upon which
all of the Obligations as defined in the Loan Agreement have been fully paid and
performed to the satisfaction of Lender. The term "Loan Documents" shall mean
the Loan Agreement, the Promissory Note, the Warrants, this Pledge Agreement and
any and all documents, instruments and agreements securing and/or relating to
the Obligations of UDC or Pledgor to Lender.
Section 2. Pledge of Stock and Grant of Security Interest. As security for
the prompt payment and performance in full when due of the Secured Obligations
(as defined below), Pledgor hereby delivers, pledges and assigns to Lender and
grants in favor of Lender, a security interest in all of Pledgor's right, title
and interest in and to the Pledged Shares (which represent all capital stock of
each issuer of Pledged Shares) and all capital stock of each New Issuer (as
defined below), together with all of Pledgor's rights and privileges with
respect thereto, all proceeds, income and profits thereof, all dividends and
other distributions in respect thereof (including, without limitation, any and
all investment property distributed in respect thereof) and all property
(including, without limitation, all investment property) received in exchange
thereof or in substitution therefor (the "Collateral").
This Agreement secures, and the Collateral is collateral security for, the
prompt payment and performance in full when due, whether on a specified payment
date, at stated maturity, by acceleration or otherwise (including, without
limitation, the payment of amounts that would become due but for the operation
of the automatic stay under Section 362(a) of the Bankruptcy Code or any similar
law) of all obligations of UDC and all obligations of Pledgor, in each case of
every type and nature, now or hereafter existing under the Loan Documents,
whether for principal, interest (including, without limitation, interest that,
but for the filing of a petition in bankruptcy would accrue on such
obligations), fees, expenses, indemnities or otherwise (all such obligations
being the "Secured Obligations"). Without limiting the generality of the
foregoing, this Agreement secures the payment of all amounts that constitute
part of the Secured Obligations and would be owed to the Lender under the Loan
Documents but for the fact that they are unenforceable or not allowable due to
the existence of a bankruptcy, reorganization or similar proceeding.
Section 3. Subordination. As more particularly provided in the
Subordination Agreement, Lender agrees that the liens and security interests
created hereunder and all other right, title and interest of the Lender in the
Collateral are and will be at all times subordinate to the liens and security
interests created by the Senior Secured Loan Agreement and Senior Pledge
Agreement and all other right, title and interest of the Senior Lenders in and
to the Collateral. In the event of any inconsistency between this Pledge
Agreement and the Subordination Agreement, the Subordination Agreement shall
control.
Section 4. Dividends, Options, or Other Adjustments. Until the Final Date,
Pledgor shall deliver as Collateral to the Lender, and, as security for the full
and complete payment and performance of all of the Secured Obligations hereby
grants to the Lender a continuing security interest in, any and all additional
shares of stock or any other property (including, without limitation, investment
property) of any kind distributable on or by reason of the Collateral, whether
in the form of or by way of stock dividends, warrants, total or partial
liquidation, conversion, prepayments, redemptions or otherwise, including cash
dividends and any cash interest payments.
Section 5. Delivery of Share Certificates: Stock Powers. Unless delivered
to the Senior Lenders pursuant to the Senior Secured Loan Agreement, Pledgor
shall promptly deliver to Lender, or cause UDRC II or UDRC III or any other
entity issuing the Collateral to deliver directly to Lender, share certificates
or other instruments representing any Collateral issued to, acquired or received
by Pledgor after the date of this Pledge Agreement with a stock or bond power
duly executed in blank by Pledgor. If, at any time the Lender notifies Pledgor
that it requires additional stock powers endorsed in blank, Pledgor shall
promptly execute in blank and deliver the requested power to the Lender. If the
share certificates or other instruments representing any Collateral is held by
the Senior Lenders or by a third party on their behalf, such party shall be
deemed to be holding the same on behalf of Lender for the purpose of perfection
of a second lien on the Collateral. Further, if the share certificates or other
instruments are held by the Senior lenders or third party on their behalf,
Pledgor agrees that it shall not accept return of the same back from the Senior
Lenders without the prior consent of Lender.
Section 6. Power of Attorney. Subject to the Subordination Agreement,
Pledgor hereby constitutes and irrevocably appoints the Lender as Pledgor's true
and lawful attorney-in-fact, with the power, after the occurrence of an "Event
of Default" under and as defined in the Loan Agreement, to the full extent
permitted by law, to affix to any certificates and documents representing the
Collateral, the stock or bond powers delivered with respect thereto, and to
transfer or cause the transfer of Collateral, or any part thereof, on the books
of UDRC II or UDRC III or any other entity issuing such Collateral, to the name
of the Lender or any nominee thereof, and thereafter to exercise with respect to
such Collateral all the rights, powers and remedies of an owner. The power of
attorney granted pursuant to this Pledge Agreement and all authority hereby
conferred are granted and conferred solely to protect the Lender's interest in
the Collateral and shall not impose any duty upon the Lender to exercise any
power. This power of attorney shall be irrevocable as one coupled with an
interest until the Final Date.
Section 7. Inducing Representations of Pledgor. Pledgor represents and
warrants to the Lender that:
(a) The Pledged Shares are validly issued, fully paid for and
non-assessable.
(b) The Pledged Shares of UDRC II and UDRC III represent all of the issued
and outstanding capital stock of UDRC II and UDRC III, respectively.
(c) Except for the interests of the Senior Lenders under the Senior Secured
Loan Agreement and the liens created by the Senior Pledge Agreement, Pledgor is
the sole legal and beneficial owner of, and has good and marketable title to,
the Pledged Shares, free and clear of all pledges, liens, security interests and
other encumbrances except the security interest created by this Pledge
Agreement, and Pledgor has the unqualified right and authority to execute and
perform this Pledge Agreement.
(d) No options, warrants or other agreements with respect to the Collateral
are outstanding.
(e) Any consent, approval or authorization of or designation or filing with
any authority on the part of Pledgor which is required in connection with the
pledge and security interest granted under this Pledge Agreement has been
obtained or effected.
(f) Neither the execution and delivery of this Pledge Agreement by Pledgor,
the consummation of the transaction contemplated hereby nor the satisfaction of
the terms and conditions of this Pledge Agreement:
(i) conflicts with or results in any breach or violation of any provision
of the articles of incorporation or bylaws of Pledgor or any law,
rule, regulation, order, writ, judgment, injunction, decree,
determination or award currently in effect having applicability to
Pledgor or any of its properties, including regulations issued by an
administrative agency or other governmental authority having
supervisory powers over Pledgor;
(ii) conflicts with, constitutes a default (or an event which with the
giving of notice or the passage of time, or both, would constitute a
default) by Pledgor under, or a breach of or contravenes any provision
of, any agreement to which Pledgor or any of its subsidiaries is a
party or by which it or any of their properties is or may be bound or
affected, including without limitation any loan agreement, mortgage,
indenture or other agreement or instrument; or
(iii)results in or requires the creation of any lien upon or in respect of
any of Pledgor's assets except the lien created by this Pledge
Agreement.
(g) With respect to all Pledged Shares, and upon issuance of any additional
Pledged Shares hereafter issued to, acquired or received by Pledgor, the Lender
has (and, with respect to Pledged Shares hereafter issued, will have) a valid,
perfected second priority security interest (subordinate only to the Senior
Lenders) in and to the Collateral, enforceable as such against all other
creditors of Pledgor and against all persons purporting to purchase any of the
Collateral from Pledgor.
(h) The board of directors of UDRC II and UDRC III have duly adopted the
resolutions identified on Exhibits A-1 and A-2, respectively, attached hereto
(the "Standing Dividend Resolutions"), and such resolutions remain in full force
and effect and have not been rescinded, amended, altered, revoked or modified in
any respect. Subject to the rights of the Senior Lenders and so long as there is
no Event of Default existing under the Loan Agreement, all distributions made in
respect of the Pledged Shares shall be paid to Pledgor. If an Event of Default
under the Loan Agreement is in existence, subject to the rights of the Senior
Lenders, all such distributions shall be paid to Lender.
Section 8. Obligations of UDC and Pledgor. Pledgor further represents,
warrants and covenants to the Lender that, subject to the Subordination
Agreement:
(a) Pledgor will not sell, transfer or convey any interest in, or suffer or
permit any lien or encumbrance to be created upon or to exist with respect to,
any of the Collateral during the term of this Pledge Agreement, other than the
lien granted hereunder, the lien granted pursuant to the Senior Pledge Agreement
and the lien granted to General Electric Capital Corporation ("GECC") pursuant
to the Amended and Restated Motor Vehicle Installment Contract Loan and Security
Agreement entered into as of August 15, 1997 among GECC, UDC, Pledgor, and
certain other entities, as such Agreement may be amended from time to time,
which lien of GECC is subordinate to the lien granted hereunder.
(b) Pledgor will not effect any securitizations through any subsidiary or
affiliate other than UDRC III unless (i) either (A) Pledgor pledges to Lender
all of the capital stock of any such subsidiary or affiliate (the "New Issuer")
and Pledgor delivers to Lender a standing dividend resolution of the board of
directors of New Issuer, which standing dividend resolution is substantially
similar to the UDRC III Standing Dividend Resolution, or (B) the New Issuer
pledges directly to Lender all of its interests in any trust or other entity
which issues interests in a securitization.
(c) Pledgor will, at Pledgor's expense, at any time and from time to time
at the request of the Lender do, make, procure, execute and deliver all acts,
things, writings, assurances and other documents as may be reasonably proposed
by Lender to preserve, establish, demonstrate or enforce the rights, interests
and remedies of the Lender as created by, provided in, or emanating from this
Pledge Agreement.
(d) Pledgor will not take any action which would cause UDRC II or UDRC III
or any New Issuer to issue any other capital stock without the prior written
consent of the Lender.
(e) Pledgor will not consent to any amendment to the articles of
incorporation of UDRC II or UDRC III or any New Issuer without the prior written
consent of the Lender.
(f) Pledgor will not take any action which would cause, and will not
consent to, any transfer by UDRC II or UDRC III or any New Issuer of the Class B
Notes, Class C Certificates (other than the Excluded Class C Certificates, as
defined in the Senior Secured Loan Agreement) and the Class D Certificates, as
each are defined under the Senior Secured Loan Agreement, of UDRC II, UDRC III
or any New Issuer.
Section 9. Dividends. Pledgor has not and will not permit UDRC II or UDRC
III or any New Issuer to, rescind, amend, alter, revoke or modify any Standing
Dividend Resolutions in any respect without the prior written consent of the
Lender.
Section 10. Voting Right. Subject to the rights of the Senior Lenders and
the Subordination Agreement, and so long as no Event of Default exists under the
Loan Agreement, Pledgor shall retain the right to vote the Pledged Shares with
respect to any matter permitted under the Articles of Incorporation of UDRC II
and UDRC III and each New Issuer, as the case may be. However, Pledgor may not
vote the Pledged Shares in a manner that would violate this Pledge Agreement or
impair the rights of Lender. If an Event of Default under the Loan Agreement
exists, subject to the rights of the Senior Lenders and the Subordination
Agreement, Pledgor shall be deemed to have granted Lender a proxy to vote the
Pledged Shares. Subject to the rights of the Senior Lenders and the
Subordination Agreement, upon the request of Lender, Pledgor shall deliver to
Lender such further evidence of such proxy to vote the Pledged Shares as Lender
may request pursuant hereto.
Section 11. Rights of the Lender. The Lender may, at any time and without
notice, discharge any taxes, liens, security interests or other encumbrances
levied or placed on the Collateral, pay for the maintenance and preservation of
the Collateral, or pay for insurance on the Collateral; the amount of such
payments, plus any and all reasonable fees, costs and expenses of the Lender
(including attorneys' fees and disbursements) in connection therewith, shall be
reimbursed by UDC within five (5) days of demand, with interest thereon from the
date paid at the rate provided in the Loan Agreement.
Section 12. Remedies Upon Event of Default under the Loan Agreement.
Subject to the Subordination Agreement, Lender may exercise any one or more of
the following remedies:
(a) Upon the occurrence of an "Event of Default" pursuant to the Loan
Agreement, the Lender may, without notice to Pledgor:
(i) cause the Collateral to be transferred to the Lender's name or to the
name of a nominee of the Lender, and thereafter exercise as to such
Collateral all of the rights, powers and remedies of an owner;
(ii) collect by legal proceedings or otherwise all dividends, interest,
principal payments, capital distributions and other sums now or
hereafter payable on account of the Collateral, and hold all such sums
as part of the Collateral, or apply such sums to the payment of the
Secured Obligations in such manner and order as the Lender shall
decide; or
(iii)enter into any extension, subordination, reorganization, deposit,
merger, or consolidation agreement, or any other agreement relating to
or affecting the Collateral, and in connection therewith deposit or
surrender control of the Collateral thereunder, and accept other
property in exchange therefor and hold and apply such property or
money so received in accordance with the provisions hereof.
(b) In addition to all the rights and remedies of a secured party under the
Uniform Commercial Code as in effect in any applicable jurisdiction, upon the
occurrence of an "Event of Default" pursuant to the Loan Agreement, the Lender
shall have the right, without demand of performance or other demand,
advertisement or notice of any kind, except as specified below, to or upon
Pledgor or any other person (all and each of which demands, advertisements
and/or notices are hereby expressly waived to the extent permitted by law), to
proceed forthwith to collect, receive, appropriate and realize upon the
Collateral, or any part thereof in one or more parcels in accordance with
applicable securities laws and in a manner designed to ensure that such sale
will not result in a distribution of the Pledged Shares in violation of Section
5 of the Securities Act of 1933, as amended (the "Securities Act") and on such
terms (including a requirement that any purchaser of all or any part of the
Collateral shall be required to purchase any securities constituting the
Collateral solely for investment and without any intention to make a
distribution thereof) as the Lender deems appropriate without any liability for
any loss due to a decrease in the market value of the Collateral during the
period held. If any notification to Pledgor of intended disposition of the
Collateral is required by law, such notification shall be deemed reasonable and
properly given if mailed to Pledgor, postage prepaid, at least ten (10) days
before any such disposition at the address indicated by Pledgor's signature. Any
disposition of the Collateral or any part thereof may be for cash or on credit
or for future delivery without assumption of any credit risk, with the right of
the Lender to purchase all or any part of the Collateral so sold at any such
sale or sales, public or private, free of any equity or right of redemption in
Pledgor, which right of equity is, to the extent permitted by applicable law,
hereby expressly waived or released by Pledgor.
(c) The Lender shall sell the Collateral on any credit terms which it deems
reasonable. The out-of- pocket costs and expenses of such sale shall be for the
account of Pledgor. The sale of any of the Collateral on credit terms shall not
relieve Pledgor of its liability with respect to the Secured Obligations. All
payments received in respect of any sale of the Collateral by the Lender shall
be applied to the Secured Obligations as and when such payments are received and
any price received by the Lender in respect of such sale shall be conclusive and
binding upon Pledgor.
(d) Pledgor recognizes that it may not be feasible to effect a public sale
of all or a part of the Collateral by reason of certain prohibitions contained
in the Securities Act, and that it may be necessary to sell privately to a
restricted group of purchasers who will be obliged to agree, among other things,
to acquire the Collateral for their own account, for investment and not with a
view for the distribution or resale thereof. Pledgor agrees that private sales
may be at prices and other terms less favorable to the Seller than if the
Collateral were sold at public sale, and that the Collateral Agent has no
obligation to delay the sale of any Collateral for the period of time necessary
to permit the registration of the Collateral for public sale under the
Securities Act. Pledgor agrees that a private sale or sales made under the
foregoing circumstances shall be deemed to have been made in a commercially
reasonable manner.
(e) If any consent, approval or authorization of any state, municipal or
other governmental department, agency or authority shall be necessary to
effectuate any sale or other disposition of the Collateral or any partial
disposition of the Collateral, Pledgor will execute all such applications and
other instruments as may be required in connection with securing any such
consent, approval or authorization, and will otherwise use its best efforts to
secure the same.
(f) The Lender shall have the right to deliver, assign and transfer to the
purchaser thereof the Collateral so sold or disposed of, free from any other
claim or right of whatever kind, including any equity or right of redemption of
Pledgor. Pledgor specifically waives, to the extent permitted by applicable law,
all rights of redemption, stay or appraisal which it may have under any rule of
law or statute now existing or hereafter adopted.
(g) The Lender shall not be obligated to make any sale or other disposition
of the Collateral permitted under this Pledge Agreement, unless the terms
thereof shall be satisfactory to the Lender. The Lender may, without notice or
publication, adjourn any such private or public sale and, upon five (5) days'
prior notice to Pledgor, hold such sale at any time or place to which the same
may be so adjourned. In case of any such sale of all or any part of the
Collateral on credit or future delivery, the Collateral so sold may be retained
by the Lender until the selling price is paid by the purchaser thereof, but the
Lender shall not incur any liability in case of the failure of such purchaser to
take up and pay for the property so sold and, in the case of any such failure,
such property may again be sold as herein provided.
(h) All of the rights and remedies granted to the Lender, including but not
limited to the foregoing, shall be cumulative and not exclusive and shall be
enforceable alternatively, successively or concurrently as the Lender may deem
expedient.
Section 13. Limitation on Liability.
(a) The Lender, any of its directors, officers, employers or agents shall
not be liable to Pledgor, UDC, UDRC II, UDRC III or any New Issuer for any
action taken or omitted to be taken by it or them hereunder, or in connection
herewith, except that the Lender shall be liable for its own (and only for its
own) gross negligence, bad faith or willful misconduct.
(b) The Lender shall be protected and shall incur no liability to any party
in relying upon the accuracy, acting in reliance upon the contents, and assuming
the genuineness of any notice, demand, certificate, signature, instrument or
other document the Lender reasonably believes to be genuine and to have been
duly executed by the appropriate signatory, and (absent actual knowledge to the
contrary of any officer of the Lender) the Lender shall not be required to make
any independent investigation with respect thereto. The Lender shall at all
times be free independently to establish to its reasonable satisfaction, but
shall have no duty to independently verify, the existence or nonexistence of
facts that are a condition to the exercise or enforcement of any right or remedy
hereunder.
(c) The Lender may consult with qualified counsel, financial advisors or
accountants and shall not be liable for any action taken or omitted to be taken
by it hereunder in good faith and in accordance with the advice of such counsel,
financial advisors or accountants.
Section 14. Indemnification. UDC and Pledgor jointly and severally agree to
indemnify Lender and its directors, officers, employees and agents, for, and
hold Lender and its directors, officers, employees and agents harmless against,
any loss, liability or expense (including the costs and expenses of defending
against any claim of liability) arising out of or in connection with this Pledge
Agreement and the transactions contemplated hereby, except that no indemnitee
shall be entitled to indemnification to the extent any such loss, liability or
expense results from the gross negligence, bad faith or willful misconduct of
such indemnitee. The obligation of UDC and Pledgor under this Section shall
survive the termination of this Pledge Agreement.
Section 15. Termination. This Pledge Agreement shall continue in full force
and effect until the Final Date. Subject to any sale or other disposition of the
Collateral pursuant to and in accordance with this Pledge Agreement, any
Collateral held by Lender shall be returned to Pledgor on the Final Date. The
obligations of UDC under Section 14 and Section 16 of this Pledge Agreement
shall survive the termination of this Pledge Agreement.
Section 16. Compensation and Reimbursement. UDC agrees for the benefit of
the Lender and as part of the Secured Obligations to reimburse the Lender upon
its request for all reasonable expenses, disbursements and advances incurred or
made by the Lender in accordance with any provision of, or carrying out its
duties and obligations under, this Pledge Agreement (including the reasonable
compensation and fees and the expenses and disbursements of its agents, any
independent certified public accounts and independent counsel), except Lender
shall not be entitled to reimbursement for any expense, disbursement or advances
as may be attributable to gross negligence, bad faith or willful misconduct on
the part of Lender.
Section 17. Foreclosure Expenses. All expenses (including reasonable fees
and disbursements of counsel) incurred in compliance with this Pledge Agreement
by the Lender in connection with any actual or attempted sale, exchange of, or
any enforcement, collection, compromise or settlement respecting this Pledge
Agreement or the Collateral, or any other action taken in compliance with this
Pledge Agreement by the Lender hereunder, whether directly or as
attorney-in-fact pursuant to a power of attorney or other authorization herein
conferred, for the purpose of satisfaction of the Secured Obligations shall be
deemed a Secured Obligation for all purposes of this Pledge Agreement and the
Lender may apply the Collateral to payment of or reimbursement of itself for
such liability.
Section 18. Obligations Absolute. The obligations of Pledgor under this
Pledge Agreement are independent of the Obligations or any other obligations of
any other party under the Loan Documents, and a separate action or actions may
be brought and prosecuted against Pledgor to enforce this Pledge Agreement,
irrespective of whether any action is brought against the Borrower or any other
party or whether the Borrower or any other party is joined in any such action or
actions. The liability of Pledgor under this Pledge Agreement is joint and
several and shall be irrevocable, absolute and unconditional irrespective of,
and Pledgor hereby irrevocably waives any defenses it may now or hereafter have
in any way relating to, any or all of the following:
(a) any lack of validity or enforceability of any Loan Document or any
agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in any other
term of, all or any of the Obligations or any other obligations of any other
party under the Loan Documents, or any other amendment or waiver of or any
consent to departure from any Loan Document, including, without limitation, any
increase in the obligations resulting from the extension of additional credit to
the Borrower or any of its Subsidiaries or otherwise;
(c) any taking, exchange, release or non-perfection of any Collateral, or
any taking, release or amendment or waiver of or consent to departure from any
other guaranty, for all or any of the Obligations;
(d) any manner of application of collateral, or proceeds thereof, to all or
any of the Obligations, or any manner of sale or other disposition of any
collateral for all or any of the Obligations or any other obligations of any
other party under the Loan Documents or any other assets of the Borrower or any
of its Subsidiaries;
(e) any change, restructuring or termination of the corporate structure or
existence of the Borrower or any of its Subsidiaries;
(f) any failure of the Lender to disclose to the Borrower or any other
party any information relating to the financial condition, operations,
properties or prospects of any other party now or in the future known to the
Lender (Pledgor hereby waiving any duty on the part of the Lender to disclose
such information); or
(g) any other circumstance (including, without limitation, any statute of
limitations) or any existence of or reliance on any representation by the Lender
that might otherwise constitute a defense available to, or a discharge of, the
Borrower, Pledgor, any other party or any other guarantor or surety.
This Pledge Agreement shall continue to be effective or be reinstated, as
the case may be, if at any time any payment of any of the Secured Obligations is
rescinded or must otherwise be returned by the Lender or any other Person upon
the insolvency, bankruptcy or reorganization of the Borrower or any other party
or otherwise, all as though such payment had not been made.
Section 19. Waivers and Acknowledgments.
(a) Pledgor hereby waives promptness, diligence, notice of acceptance and
any other notice with respect to any of the Secured Obligations and this Pledge
Agreement and any requirement that the Lender protect, secure, perfect or insure
any Lien or any property subject thereto or exhaust any right or take any action
against the Borrower or any other person or any collateral.
(b) Pledgor hereby waives any right to revoke this Pledge Agreement, and
acknowledges that this Agreement is continuing in nature and applies to all
Secured Obligations, whether existing now or in the future.
Section 20. Notices. Any notice or other communication given hereunder
shall be in writing and shall be sent by registered mail, postage prepaid,
overnight courier or personally delivered or facsimiles to the recipient as
follows:
To Pledgor:
UGLY DUCKLING CAR SALES
AND FINANCE CORPORATION
0000 Xxxx Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attn: Xxx X. Xxxxxxxx
Facsimile: (000) 000-0000
with a copy to:
XXXXX & XXXXXX, L.L.P.
Xxx Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxxxxxx
Facsimile: (000) 000-0000
To Lender:
VERDE INVESTMENTS, INC.
0000 Xxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
To UDC:
UGLY DUCKLING CORPORATION
0000 Xxxx Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attn: Xxx X. Xxxxxxxx
Facsimile: (000) 000-0000
with a copy to:
XXXXX & XXXXXX, L.L.P.
Xxx Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxxxxxx
Facsimile: (000) 000-0000
Section 21. General Provisions.
(a) The failure of the Lender to exercise, or any delay in exercising, any
right, power or remedy hereunder, shall not operate as a waiver thereof, nor
shall any single or partial exercise by the Lender of any right, power or remedy
hereunder preclude any other or future exercise thereof, or the exercise of any
other right, power or remedy. The remedies herein provided are cumulative and
are not exclusive of any remedies provided by law or any other agreement.
(b) The representations, covenants and agreements of Pledgor herein
contained shall survive the date hereof; provided, however that only Section 14
and Section 16 shall survive after the Final Date.
(c) Neither this Pledge Agreement nor the provisions hereof can be changed,
waived or terminated unless any such change, waiver or termination shall be in
writing, signed by the parties hereto. This Pledge Agreement shall be binding
upon and inure to the benefit of the parties hereto, and their respective
successors, legal representatives and assigns. If any provision of this Pledge
Agreement shall be invalid or unenforceable in any respect or in any
jurisdiction, the remaining provisions shall remain in full force and effect and
shall be enforceable to the maximum extent permitted by law.
(d) This Pledge Agreement may be executed in counterparts, each of which
shall constitute an original but all of which, when taken together, shall
constitute one instrument.
(e) THE VALIDITY OF THIS PLEDGE AGREEMENT AND THE OTHER LOAN DOCUMENTS, THE
CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF AND THEREOF, AND THE RIGHTS
OF THE PARTIES HERETO AND THERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER
OR THEREUNDER OR RELATED HERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF ARIZONA.
THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION
WITH THIS PLEDGE AGREEMENT MAY BE TRIED AND LITIGATED IN THE UNITED STATES
DISTRICT COURT FOR ARIZONA. PLEDGOR AND LENDER WAIVE, TO THE EXTENT PERMITTED
UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM
NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN
ACCORDANCE WITH THIS SECTION.
THE PARTIES HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY OF THE LOAN AGREEMENT
OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT
CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. UDC
AND LENDER REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS PLEDGE AGREEMENT MAY BE
FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Pledge Agreement on the date first above written.
[Remainder of Page Left Intentionally Blank]
UGLY DUCKLING CAR SALES AND FINANCE CORPORATION,
an Arizona corporation
By:
Name:
Title:
UGLY DUCKLING CORPORATION,
a Delaware corporation
By:
Name:
Title:
VERDE INVESTMENTS, INC.,
an Arizona corporation
By:
Name:
Title:
