Amendment No. 11 to Amended and Restated Motor Vehicle Installment Contract
Loan and Security Agreement
This Amendment is entered into by and between Ugly Duckling Corporation,
successor in interest to Ugly Duckling Holdings, Inc. ("Ugly Duckling"), a
Delaware corporation; Ugly Duckling Car Sales and Finance Corporation
("UDCSFC"), an Arizona corporation formerly known as Duck Ventures, Inc.; Ugly
Duckling Credit Corporation ("UDCC") formerly known as Champion Acceptance
Corporation, an Arizona corporation; Ugly Duckling Car Sales, Inc. ("Sales"); an
Arizona corporation; Champion Financial Services, Inc. ("Champion"), an Arizona
corporation; Ugly Duckling Car Sales Florida, Inc. ("Car Sales Florida"), a
Florida corporation; Cygnet Financial Corporation ("Cygnet"), a Delaware
corporation; Cygnet Support Services, Inc. ("Services"), an Arizona corporation;
Cygnet Financial Services, Inc. ("Cygnet Services"), an Arizona corporation;
Cygnet Financial Portfolio, Inc. ("Cygnet Portfolio"), an Arizona corporation;
Ugly Duckling Portfolio Partnership, L.L.P. ("UDPP"), an Arizona limited
liability partnership; Ugly Duckling Finance Corporation ("UDFC"), an Arizona
corporation; and Ugly Duckling Portfolio Corporation ("UDPC") an Arizona
corporation formerly known as Champion Portfolio Corporation (all of the
foregoing entities collectively referred to herein as "Borrower"); and General
Electric Capital Corporation, a New York corporation ("Lender").
RECITALS
A. Borrower and Lender are parties to an Amended and Restated Motor Vehicle
Installment Contract Loan and Security Agreement dated as of August 15, 1997, as
amended by an Assumption and Amendment Agreement dated October 23, 1997,
Amendment No. 1 dated December 22, 1997, Amendment No. 2 dated September 9,
1998, Amendment No. 3 dated January 18, 1999, Amendment No. 4 dated as of July
19, 1999, Amendment No. 5 dated August 16, 1999, Amendment No. 6 dated August
27, 1999, Amendment No. 7 dated November 30, 1999, Amendment No. 8 dated
December 7, 1999, Amendment No. 9 dated December 8, 1999, and Amendment No. 10
dated March 6, 2000 (the Amended and Restated Motor Vehicle Installment Contract
Loan and Security Agreement as so amended is referred to herein as the
"Agreement") pursuant to which Lender agreed to make Advances to Borrower on the
terms and conditions set forth in the Agreement.
B. Borrower and Lender desire to amend certain provisions of the Agreement
pursuant to the terms set forth in this Amendment.
In consideration of the premises and other good and valuable consideration,
the receipt of which is hereby acknowledged by each of the parties hereto, the
parties agree as follows:
1. Defined Terms. Unless otherwise specified herein, all capitalized
terms used in this Amendment shall have the same meaning given to such
term(s) in the Agreement.
2. Amendments to Agreement. Effective as of the date hereof, the
Agreement is hereby amended as follows.
a.) Loan Term: Right to Terminate. Section 2.3 of the Agreement is
hereby amended in its entirety to read as follows:
"Loan Term; Right to Terminate. Unless sooner terminated as
hereinafter provided, this Agreement shall terminate without any
notice requirement on June 30, 2001 if not renewed or extended by
a mutual written agreement. Upon the occurrence of an Event of
Default, Lender may, without prior notice to Borrower,
immediately terminate this Agreement. A prepayment in full of the
Loan shall be a termination of this Agreement. Notwithstanding
termination of this Agreement in any manner, the Indebtedness
shall be payable in accordance with this Agreement, and all
rights and remedies granted to Lender hereunder or pursuant to
applicable law shall continue until all obligations of Borrower
to Lender have been fully paid and performed."
b.) Borrowing Base. The definition of Borrowing Base in Section 16.0
of the Agreement is deleted and replaced in its entirety as
follows:
Borrowing Base: the amount equal to the lesser of (i) One Hundred
Twenty-five Million Dollars ($125,000,000.00) minus the Loan
Availability Cap, or (ii) an amount equal to (A) the lesser of
the Securitization Net Proceeds Percentage or sixty five percent
(65%) of the Outstanding Principal Balance of all Originated
Eligible Contracts (but not to exceed one hundred fifteen percent
(115%) of the NADA average wholesale Black Book value for all
such Contracts in the aggregate) during the time they are
included in the Borrowing Base pursuant to Section 3.1; plus (B)
eighty-six percent (86%) of the Outstanding Principal Balance of
all Champion Eligible Contracts (but not to exceed one hundred
seven percent (107%) of wholesale Xxxxx Blue Book for all such
Contracts in the aggregate) during the time they are included in
the Borrowing Base pursuant to Section 3.1; plus (C) seventy-five
percent (75%) of the Outstanding Principal Balance of all
Seminole Eligible Contracts during the time they are included in
the Borrowing Base pursuant to Section 3.1; plus (D) the
Inventory Advance Value; plus (E) during the term of the Dealer
Contract Facility, the Dealer Contract Advance Value; plus (F)
fifty percent (50%) of the Outstanding Principal Balance of all
DCT Eligible Contracts during the time the DCT Eligible Contracts
are included in the Borrowing Base pursuant to Section 3.1. (G)
forty and one-half percent (40.5%) of the Outstanding Principal
Balance of all VAM Eligible Contracts during the time the VAM
Eligible Contracts are included in the Borrowing Base pursuant to
Section 3.1. At Lender's sole and absolute discretion following
Borrower's request, Lender may agree to include Bulk Purchase
Contracts as part of the Borrowing Base hereunder. The amount of
advance against Bulk Purchase Contracts, if any, shall be at
Lender's sole and absolute discretion. With respect to section
(ii) (A) of this definition, compliance with the parenthetical
test based on Black Book values shall be measured by Lender's
sample of 100 or more Contracts and not on a Contract-by-Contract
basis.
c.) Securitization Net Proceeds Percentage. The following definition
is added to Section 16.0 of the Agreement in proper alphabetical
order:
Securitization Net Proceeds Percentage: determined solely by
Lender according to the following formula: The aggregate of
[(Total Securitized Pool less any Securitization Reductions)
divided by Total Securitized Pool] minus [75 basis points
(.75%)], with the resulting number rounded to the nearest 1/100th
of a percent.
d.) Securitization Reductions. The following definition is added to
Section 16.0 of the Agreement in proper alphabetical order:
Securitization Reductions: Reductions from the Total Securitized
Pool including but not limited to reductions for credit
enhancement certificates or notes, initial deposits to spread
accounts, plus to the extent the following "Fees" deducted from
the closing proceeds are greater the one percent (1.00%) of the
Total Securitized Pool, placement agent fees, legal fees, insurer
fees, and accounting fees.
e.) Total Securitized Pool. The following definition is added to
Section 16.0 of the Agreement in proper alphabetical order:
Total Securitized Pool: The total dollar amount of the most
recently closed securitization by Borrower.
4. Incorporation of Amendment. The parties acknowledge and agree that
this Amendment is incorporated into and made a part of the Agreement,
the terms and provisions of which, unless expressly modified herein,
or unless no longer applicable by their terms, are hereby affirmed and
ratified and remain in full force and effect. To the extent that any
term or provision of this Amendment is or may be deemed expressly
inconsistent with any term or provision of the Agreement, the terms
and provisions of this Amendment shall control. Each reference to the
Agreement shall be a reference to the Agreement as amended by this
Amendment. This Amendment, taken together with the unamended
provisions of the Agreement which are affirmed and ratified by
Borrower, contains the entire agreement among the parties regarding
the transactions described herein and supersedes all prior agreements,
written or oral, with respect thereto.
5. Borrower Remains Liable. Borrower hereby confirms that the Agreement
and each document executed by Borrower in connection therewith
continue unimpaired and in full force and effect and shall cover and
secure all of Borrower's existing and future obligations to Lender.
Nothing contained herein is intended, nor shall be construed, to be a
novation or an accord and satisfaction of the outstanding liabilities
or any of Borrower's other obligations to Lender.
6. Headings. The paragraph headings contained in this Amendment are for
convenience of reference only and shall not be considered a part of
this Amendment in any respect.
7. Governing Law. This Amendment shall be governed by and construed in
accordance with the laws of the State of Arizona. -------------
Nothing herein shall preclude Lender from bringing suit or taking
other legal action in any jurisdiction.
8. Execution in Counterparts. This Amendment may be executed in any
number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be
deemed to be an original and all of which taken together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the undersigned have entered into this Amendment as of
June 30, 2000.
GENERAL ELECTRIC CAPITAL
CORPORATION UGLY DUCKLING CAR SALES, INC.
By: ________________________________ By: ______________________________
Title: ____________________________ Title: ___________________________
UGLY DUCKLING CORPORATION
By: _______________________________
Title: _____________________________
UGLY DUCKLING CAR SALES AND CHAMPION FINANCIAL SERVICES, INC.
FINANCE CORPORATION
By: ____________________________ By: ________________________________
Title: ____________________________ Title: _____________________________
UGLY DUCKLING CAR SALES FLORIDA, UGLY DUCKLING CREDIT
INC. CORPORATION
By: _____________________________ By: _____________________________
Title: ____________________________ Title: _____________________________
CYGNET FINANCIAL CORPORATION
By: ________________________________
Title: _____________________________
CYGNET SUPPORT SERVICES, INC.
By: ________________________________
Title: _____________________________
CYGNET FINANCIAL SERVICES, INC. CYGNET FINANCIAL PORTFOILIO, INC.
By: ________________________________ By: ________________________________
Title: _____________________________ Title: _____________________________
UGLY DUCKLING PORTFOLIO UGLY DUCKLING FINANCE CORPORATION
PARTNERSHIP, L.L.P.
By: ________________________________ By: ________________________________
Title: _____________________________ Title: _____________________________
UGLY DUCKLING PORTFOLIO
CORPORATION
By: ________________________________
Title: _____________________________
