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 ("UDRC
II"), a Delaware corporation, and Ugly Duckling Receivables Corp. III, a
Delaware corporation ("UDRC III"), UGLY DUCKLING CORPORATION, a Delaware
corporation ("UDC") and BNY MIDWEST TRUST COMPANY, as collateral agent (in such
capacity, together with its successors in such capacity, the "Collateral Agent")
for the Lenders from time to time party to the Loan Agreement referred to below.
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 (1,000) 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 Senior Secured Loan Agreement with certain lenders (such lenders,
together with their successors and assigns, the "Lenders") and the Collateral
Agent (as such agreement may be amended, supplemented or otherwise modified from
time to time, the "Loan Agreement") pursuant to which UDC has borrowed money
from the Lenders. 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 (i) guarantee the Obligations
(as defined in the Loan Agreement) pursuant to the Guaranty (as defined in the
Loan Agreement), and (ii) pledge the Pledged Shares and any proceeds thereof as
security for Pledgor's obligations under the Guaranty. Accordingly, the Pledged
Shares and any proceeds thereof will secure obligations of Pledgor to Lenders.
Terms used herein but not defined herein shall have the meanings assigned to
such terms in the Loan Agreement.
In consideration of the premises and of the agreements herein contained,
Pledgor, Lenders 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 each Lender. The term "Loan Documents" shall
mean the Loan Agreement, the Notes, the Guaranty, the Collateral Account
Agreement, this Pledge Agreement and any and all documents, instruments and
agreements securing and/or relating to the Obligations of UDC or Pledgor to any
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 the
Collateral Agent, for the benefit of the Collateral Agent and the ratable
benefit of the Lenders and grants in favor of the Collateral Agent, for the
benefit of the Collateral Agent and the ratable benefit of the Lenders, a first
priority 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").
SECTION 3. 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 (including, without limitation, the Guaranty), 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 Collateral Agent or any 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 4. Dividends, Options, or Other Adjustments. Until the Final Date,
Pledgor shall deliver as Collateral to the Collateral Agent, and, as security
for the full and complete payment and performance of all of the Secured
Obligations hereby grants to the Collateral Agent 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. If any such
dividends, interest payments, additional shares of capital stock, instruments,
or other property, a security interest in which can only be perfected by
possession, which are distributable on or by reason of the Collateral pledged
hereunder, shall come into the possession or control of Pledgor, Pledgor shall
forthwith transfer and deliver such property to the Collateral Agent as
Collateral hereunder.
SECTION 5. Delivery of Share Certificates; Stock Powers. Pledgor shall
promptly deliver to the Collateral Agent, 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
Collateral Agent notifies Pledgor that it requires additional stock powers
endorsed in blank, Pledgor shall promptly execute in blank and deliver the
requested power to the Collateral Agent.
SECTION 6. Power of Attorney. Pledgor hereby constitutes and irrevocably
appoints the Collateral Agent 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 Collateral Agent or any
nominee of either, 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 Collateral Agent's interest in the
Collateral and shall not impose any duty upon the Collateral Agent 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 Collateral Agent and each 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) 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 heretofore delivered to and
currently held by Lender, and upon delivery to the Collateral Agent of any
Pledged Shares hereafter issued to, acquired or received by Pledgor, the
Collateral Agent has (and, with respect to Pledged Shares hereafter delivered,
will have) a valid, perfected first priority security interest 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. Pursuant to the Standing Dividend Resolutions, Pledgor has
delivered the UDRC II Dividend Direction Letter and the UDRC III Dividend
Direction Letter to the Trustee.
(i) The chief place of business and chief executive office of Pledgor and
the office where Pledgor keeps its records concerning the Collateral are located
at the address specified below for Pledgor.
SECTION 8. Obligations of UDC and Pledgor. Pledgor further represents,
warrants and covenants to the Collateral Agent and each Lender that:
(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 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.
(b) During the Securitization Period, Pledgor will not cause or permit UDRC
II or UDRC III to enter into any securitization agreement or arrangement other
than as set forth in the UDRC II Securitization Documents or the UDRC III
Securitization Documents, or substantially similar agreements and arrangements
in the future, without the prior written consent of Lender.
(c) Pledgor will not effect any securitizations through any subsidiary or
affiliate other than UDRC II or 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 dividend direction letter executed by
the New Issuer and supported by a standing dividend resolution of the board of
directors of New Issuer, which dividend direction letter and standing dividend
resolution are each substantially similar to the UDRC II Dividend Direction
Letter and the UDRC III Dividend Direction Letter or the UDRC II Standing
Dividend Resolution and the UDRC III Standing Dividend Resolution, as
applicable, 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, or (C) UDC or Pledgor otherwise complies with the provisions of
Section 3.1 of the Loan Agreement, and (ii) all other matters in connection with
such securitization are reasonably satisfactory in form and substance to the
Required Lenders.
(d) Pledgor will, at Pledgor's expense, at any time and from time to time
at the request of the Collateral Agent or the Required Lenders 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 Collateral
Agent and the Lenders as created by, provided in, or emanating from this Pledge
Agreement.
(e) 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 Required Lenders.
(f) 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 Required Lenders.
(g) 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 UDRC II
Residual Certificates, the UDRC III Residual Certificates or any Additional
Residual Certificates.
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, the UDRC II Dividend Direction Letter or the UDRC III
Dividend Direction Letter, as the case may be, in any respect without the prior
written consent of the Required Lenders.
SECTION 10. Voting Proxy. Pledgor hereby grants to the Collateral Agent an
irrevocable proxy to vote the Pledged Shares at the direction of the Required
Lenders 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, which proxy
shall continue until the Final Date. Pledgor represents and warrants that it has
directed UDRC II and UDRC III and each New Issuer, in accordance with Section
217 of the Delaware General Corporation Law, to reflect on UDRC II's and UDRC
III's and such New Issuer's books, respectively, the right of the Collateral
Agent to vote the Pledged Shares at the direction of the Required Lenders. Upon
the request of the Collateral Agent or the Required Lenders, Pledgor shall
deliver to the Collateral Agent and the Lenders such further evidence of such
irrevocable proxy to vote the Collateral as Collateral Agent or Required Lenders
may request pursuant hereto.
SECTION 11. Rights of the Collateral Agent and the Lenders. The Collateral
Agent or any 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 Collateral Agent and each such 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. The
Collateral Agent 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 Collateral Agent may, without notice to Pledgor:
(i) cause the Collateral to be transferred to the Collateral Agent's name
or to the name of a nominee of the Collateral Agent, 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 Collateral Agent
shall decide at the direction of the Required Lenders; 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
Collateral Agent 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 Collateral Agent, at the direction of the Required
Lenders, 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 Collateral
Agent 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) At the direction of the Required Lenders, the Collateral Agent shall
sell the Collateral on any credit terms which the Required Lenders deem
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 Collateral
Agent or any Lender shall be applied to the Secured Obligations as and when such
payments are received and any price received by the Collateral Agent or any
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 Collateral Agent 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 Collateral Agent 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 Collateral Agent. The Collateral
Agent 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 Collateral Agent or any Lender until the selling
price is paid by the purchaser thereof, but neither the Collateral Agent nor any
Lender shall 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 Collateral Agent and the
Lenders, including but not limited to the foregoing, shall be cumulative and not
exclusive and shall be enforceable alternatively, successively or concurrently
as the Collateral Agent or such Lender may deem expedient.
SECTION 13. Limitation on Liability.
(a) None of the Collateral Agent, any Lender nor any of their respective
directors, officers, employers or agents shall 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 each of the Collateral
Agent and each Lender shall be liable for its own (and only for its own) gross
negligence, bad faith or willful misconduct.
(b) The Collateral Agent and each 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 Collateral Agent or such Lender, as
the case may be, 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 Collateral Agent or such Lender, as the case may
be) neither the Collateral Agent nor any Lender shall be required to make any
independent investigation with respect thereto. The Collateral Agent and each
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 Collateral Agent and each 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.
(d) The Collateral Agent shall not be required to exercise any discretion
or take any action under this Pledge Agreement, but shall be required to act or
refrain from acting (and shall be fully protected in so acting or refraining
from acting) upon the instructions of the Required Lenders, and such
instructions shall be binding upon all Lenders, and the Collateral Agent shall
not be liable to the Pledgor or any Lender with respect to any action taken or
omitted at the direction of the Required Lenders, provided that the Collateral
Agent shall not be required to take any action that exposes the Collateral Agent
in its sole judgment to personal liability or that is contrary to this Pledge
Agreement or applicable law.
SECTION 14. Indemnification. UDC and Pledgor jointly and severally agree to
indemnify each of the Collateral Agent, each Lender, each of their respective
Affiliates and Subsidiaries (as such terms are defined in the Loan Agreement)
and their respective directors, officers, employees and agents, for, and hold
each of the Collateral Agent, each Lender, each of their respective Affiliates
and Subsidiaries and all of their respective 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, the
Collateral shall be returned to Pledgor on the Final Date. The obligation of UDC
under Sections 13 and 15 of this Pledge Agreement shall survive the termination
of this Pledge Agreement.
SECTION 16. Compensation and Reimbursement. UDC agrees for the benefit of
each Lender and the Collateral Agent and as part of the Secured Obligations to
reimburse each Lender and the Collateral Agent upon its request for all
reasonable expenses, disbursements and advances incurred or made by such Lender
or the Collateral Agent 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 no Person
shall 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 such Person.
SECTION 17. Foreclosure Expenses. All expenses (including reasonable fees
and disbursements of counsel) incurred in compliance with this Pledge Agreement
by the Collateral Agent or any 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 Collateral Agent or any 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 an Secured Obligation
for all purposes of this Pledge Agreement and each of the Collateral Agent and
each 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 Loan 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
Loan Party or whether the Borrower or any other Loan 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
Loan 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 Loan 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 Collateral Agent or any Lender to disclose to the
Borrower or any other Loan Party any information relating to the financial
condition, operations, properties or prospects of any other Loan Party now or in
the future known to any the Collateral Agent or any Lender (Pledgor hereby
waiving any duty on the part of the Collateral Agent or any 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
Collateral Agent or any Lender that might otherwise constitute a defense
available to, or a discharge of, the Borrower, Pledgor, any other Loan Party or
any other guarantor or surety.
SECTION 19. 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 Collateral Agent
or any Lender or any other Person upon the insolvency, bankruptcy or
reorganization of the Borrower or any other Loan Party or otherwise, all as
though such payment had not been made.
SECTION 20. 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 Collateral Agent or any 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 21. 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 Collateral Agent:
BNY MIDWEST TRUST COMPANY
0 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx 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 22. General Provisions.
(a) The failure of the Collateral Agent or any 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 Collateral
Agent or any 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 Sections
13 and 15 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 NEW YORK.
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 THE SOUTHERN DISTRICT OF NEW YORK. PLEDGOR, COLLATERAL AGENT
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.
BORROWER 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.
UGLY DUCKLING CAR SALES AND FINANCE
CORPORATION, an Arizona corporation
By: _____________________________
Name: ___________________________
Title: __________________________
UGLY DUCKLING CORPORATION,
a Delaware corporation
By: _____________________________
Name: ___________________________
Title: __________________________
BNY MIDWEST TRUST COMPANY
By: _____________________________
Name: ___________________________
Title: __________________________
