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Exhibit 10.32
CONTRIBUTION AGREEMENT
THIS AGREEMENT, dated as of December 15, 1997, is made between First Merchants
Acceptance Corporation, debtor and debtor-in-possession (the "Debtor") and Ugly
Duckling Corporation ("UDC"). Capitalized terms not otherwise defined herein are
used as defined in Schedule 1.
RECITALS
WHEREAS, on the Sale Date, the Agent, on behalf of the Bank Group, credit bid
the Purchase Price and acquired the Owned Loans.
WHEREAS, in addition to the Debtor's receipt of the Purchase Price, UDC has
agreed to become involved in all servicing of collections of the Owned Loans,
the Greenwich Collateral and the Securitized Pools.
WHEREAS, to facilitate UDC's agreement to service the Owned Loans, the Greenwich
Collateral and the Securitized Pools, UDC will enter into agreements whereby UDC
will assume the full, separate and independent rights, duties and
responsibilities for servicing the Owned Loans, the Greenwich Collateral and
Securitized Pools after the confirmation and effective date of the Chapter 11
Plan ("UDC Servicing Agreements").
WHEREAS, the Debtor and UDC wish to enter into such UDC Servicing Agreements,
inter alia, to create a procedure and format to enable the Debtor and
reorganized Debtor through the sale of the Owned Loans and a confirmed Chapter
11 Plan to: (a) maximize recovery of the Secured Claim Recovery Amount and all
amounts due UDC under the DIP Facility, and (b) more efficiently administer the
collection of the Owned Loans, the Greenwich Collateral and the Securitized
Pools for the benefit of the Debtor.
AGREEMENTS
NOW, THEREFORE, the parties hereto agree as follows:
1. SERVICING OF OWNED LOANS AND SECURITIZED POOLS AND PAYMENT OF SECURED
CLAIM RECOVERY AMOUNT AND DIP FACILITY. Prior to the effective date of the
Chapter 11 Plan (the "Effective Date"), UDC will consult with the Debtor in its
continued servicing of the Owned Loans, the Greenwich Collateral and the
Securitized Pools as agreed by UDC and the Debtor without compensation to UDC.
After the Effective Date, UDC, as servicer (in such capacity, the "Servicer"),
will expressly assume the rights, duties and responsibilities of servicing the
Owned Loans, the Greenwich
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Collateral and the Securitized Pools pursuant to the UDC Servicing Agreements.
UDC may assign its obligations as servicer to a wholly-owned subsidiary of UDC
or to such successor or assignee as set forth in the Chapter 11 Plan (such
parties are referred to herein as an "Authorized Assignee").
Any and all proceeds received by the Servicer from the Owned Loans will be
applied as follows: (a) first, to the Secured Claim Recovery Amount until paid
in full; and (b) second, if any amounts remain, then 82.5% of such amount (the
"Debtor Excess Amount") shall be paid by UDC to the Debtor in accordance with
paragraph 2 below, and the balance of such amount will be paid to UDC.
All proceeds and distributions from the B Pieces will be utilized to (a)
first, retire the Secured Claim Recovery Amount to the extent the Secured Claim
Recovery Amount remains outstanding; then (b) the next distributions will be
used to satisfy in full the remaining indebtedness to UDC under the DIP
Facility; then (c) if the Chapter 11 Plan is confirmed, the next distributions
will be used to satisfy in full the Modified UDC Fee; and (d) finally, if any
amount remains, 17.5% of such amount (the "UDC Excess Amount") shall be paid by
the Debtor to UDC in accordance with paragraph 2 below, and the balance of such
amount shall be retained by the Debtor.
All proceeds to the Debtor from collections on the Greenwich Collateral
(after payment in full of the obligations to Greenwich) will be utilized to (a)
first satisfy in full the remaining indebtedness to UDC under the DIP Facility,
if any, and then (b) be retained by the Debtor.
2. PAYMENT AND ACCOUNTING OF EXCESS.
(a) In the event that the Owned Loans are not being
serviced by the Servicer or an Authorized Assignee
without the prior written consent of the Debtor (an
"Owned Loan Servicing Change"), which consent will
not be unreasonably withheld, the Debtor's share of
excess collections on the B Pieces shall be 85% and
the UDC Excess Amount will be 15% with respect to
the B Pieces. In the event of an Owned Loan
Servicing Change,
(i) UDC will receive a 15% share (with 85% to the
Debtor) of the eligible proceeds and collections
received by the Servicer with respect to the Owned
Loans (after satisfaction in full of the Secured
Claim Recovery Amount); provided, however, that
for purposes of the foregoing calculation, the
amount of such proceeds
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and collections with respect to the Owned Loans
(after satisfaction in full of the Secured Claim
Recovery Amount) shall be limited to an amount
equal to the amount of any B Pieces that have been
applied to satisfy the Secured Claim Recovery
Amount during the period when UDC or an Authorized
Assignee was servicing the Owned Loans, and
(ii) the Debtor will receive 100% of any proceeds and
collections on the Owned Loans in excess of such
amount.
Except as specifically set forth above, UDC's rights to
payment and obligations hereunder are absolute and shall not
be affected by any subsequent transfer or sale of the Owned
Loans to GE or any other party.
(b) In no event will UDC be entitled to receive any of the UDC
Excess Amount related to a Securitized Pool for any period of
time during which UDC or an Authorized Assignee shall not be
acting as servicer for that Securitized Pool.
(c) On the 15th calendar day of each month, the Servicer shall
provide the Debtor with a written summary of the information
set forth in Paragraph 3(a) below, in sufficient detail to
permit the Debtor to confirm the accuracy thereof.
(d) The Debtor Excess Amount and UDC Excess Amount shall be
payable on the 20th calendar day of each month for amounts
payable with respect to the immediately preceding month.
3. REPORTING AND AUDIT.
(a) From and after the earlier of (i) confirmation of the Chapter
11 Plan, or (ii) that time at which the Servicer becomes the
servicer of any of the Owned Loans, the Greenwich Collateral
or the Securitized Pools, the Servicer will provide to the
Debtor monthly reports no later than the 15th day after the
end of each calendar month (each such month being a
"Collection Period" disclosing with respect to such Collection
Period, (i) the total amount of proceeds and collections from
the Owned Loans, Greenwich Collateral, the B Pieces and/or the
Securitized Pools, as applicable, (ii) the amount
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of Owned Loans collections applied to the Secured Claim
Recovery Amount, the amount of Greenwich Collateral applied to
the DIP Facility, the amount of the B Pieces applied to the
Secured Claim Recovery Amount, the DIP Facility and the
Modified UDC Fee (as applicable), as well as an accounting of
subsequent payments made from such proceeds, and (iii) any
Debtor Excess Amount and UDC Excess Amount payable with
respect to the applicable Collection Period (the "Monthly
Reports"). The Servicer shall also deliver to the Debtor
copies of all monthly, quarterly and annual reports which the
Servicer provides to any party under the UDC Servicing
Agreements at the time such reports are delivered to such
parties.
(b) Debtor and its agents shall have the right, upon 3 business
days prior written notice to the Servicer, to inspect, audit
and make copies of and abstracts from the records of the
Servicer with respect to servicing and proceeds of the Owned
Loans, the Greenwich Collateral and the Securitized Pools and
payments made or received with respect thereto.
(c) Within 15 days of the later to occur of paying off or writing
off of (i) the final Owned Loan outstanding, (ii) the final
loan outstanding in the pool of loans constituting the
Greenwich Collateral, and (iii) the final securitized loan
outstanding in the Securitized Pools (the "Final Outstanding
Loan Date"), UDC (or its successor or agent) shall deliver to
the Debtor a computation of both the total Debtor Excess
Amount and the total UDC Excess Amount. The Debtor will advise
UDC within ten (10) business days after delivery of such final
computation if it disagrees with the computation. If the
Debtor notifies UDC of such disagreement within such ten (10)
business day period, the parties agree in good faith to try to
reconcile their differences on such computation. If after a
subsequent ten (10) business day period they cannot agree on
the calculation, UDC and the Debtor will submit the disputed
elements to the Court for a resolution of those disputed
matters.
4. TRANSITION OF SERVICING. The Debtor and UDC will coordinate an orderly
and prompt transition of servicing of the Owned Loans, the Greenwich
Collateral and the Securitized Pools, as applicable, from the Debtor to
the Servicer during the pendency of the Bankruptcy Case to enable UDC (or
an Authorized Assignee) to begin such servicing activities on the
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Effective Date pursuant to the UDC Servicing Agreements. UDC (and where
applicable, the Debtor) will negotiate, enter into and, to the extent
required, agree to seek Court approval of the UDC Servicing Agreements.
5. TERMINATION. Notwithstanding anything herein to the contrary, UDC shall
not be entitled to any payment of the UDC Excess Amount attributable to
any Securitized Pool which Servicer is not then servicing.
6. UDC STOCK OPTION. Nothing herein shall modify the UDC Stock Option.
7. NOTICES. Any notice or other communication under this Agreement shall
be in writing to the party for whom intended at the following address (or
at such other address as such party may have previously specified by
notice to the other parties at the address to which notice shall be given
to such party):
If to UDC or the Servicer, to:
Ugly Duckling Corporation
0000 X. Xxxxxxxxx Xxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Facsimile No.: (000) 000-0000
With a copy to:
Xxxxx & Xxxxxx L.L.P.
Xxx Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxxxxxx X. Xxxxxx, Esq.
Facsimile No.: (000) 000-0000
If to the Debtor, to:
First Merchants Acceptance Corporation
000 Xxxx Xxxx Xxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxxxx
Facsimile No.: (000) 000-0000
With a copy to:
Xxxxxxxxxxxx Xxxx & Xxxxxxxxx
Suite 8000 Sears Tower
000 X. Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxx
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Facsimile No.: (000) 000-0000
Each such notice or other communication, together with appropriate copies,
shall be (a) mailed by United States registered or certified mail, return
receipt requested, postage prepaid, (b) delivered by overnight delivery
service such as Federal Express, providing for signed receipts, (c)
delivered by personal service in the manner provided for service of legal
process, or (d) transmitted by facsimile at the above facsimile numbers,
with a copy by United States mail as provided in subsection (a) hereof.
Counsel to a party may give notice for its client provided such notice is
otherwise made in accordance with the provisions of this Section. Notices
shall be effective on the first business day following the date of mailing
or transmission, or upon receipt or personal service.
8. CHOICE OF LAW. Irrespective of the place of execution or performance,
this Agreement shall be governed by and construed in accordance with the
law of Delaware, without giving effect to choice of law principles.
9. BINDING EFFECT. The Agreement shall be binding upon, and shall inure to
the benefit of, the parties hereto, and their respective heirs,
beneficiaries, legal representatives, successors and permitted assigns,
including any successor trustee. Servicer cannot assign its servicing
obligations hereunder, except as set forth herein or as consented to in
writing by the Debtor, such consent not to be unreasonably withheld.
10. ATTORNEYS' FEES. If any action is brought by either party in respect
to its rights under this Agreement, the prevailing party shall be entitled
to reasonable attorneys' fees and court costs as determined by the court.
11. WAIVERS. No waiver of any of the provisions of this Agreement shall
constitute a waiver of any other provision, whether or not similar, nor
shall any waiver be a continuing waiver. Except as expressly provided in
this Agreement, no waiver shall be binding unless executed in writing by
the party making the waiver. Either party may waive any provisions of this
Agreement intended for its benefit; provided, however, that any such
waiver shall in no way excuse the other party from the performance of any
of its other obligations under this Agreement.
12. HEADINGS AND COUNTERPARTS. The headings of this Agreement are for
purposes of reference only and shall not limit or define the meaning of
any provision of this Agreement. This Agreement may be executed in any
number of
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counterparts, each of which shall be an original but all of which shall
constitute one and the same instrument.
13. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties pertaining to the subject matter contained in this
Agreement. All prior and contemporaneous agreements, representations and
understandings of the parties, oral or written, are superseded by and
merged in this Agreement. No supplement, modification or amendment of this
Agreement shall be binding unless in writing and executed by each of the
parties hereto.
14. SEVERABILITY. Any provision of this Agreement that 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 hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
15. ASSIGNMENT. UDC may assign its rights to receive amounts hereunder to
any subsidiary, affiliate or any successor, assign or transferee of any
such successor or affiliate. UDC shall remain liable for payment of the
Debtor Excess Amount owed to the Debtor hereunder in the event that the
Servicer fails to do so. This agreement shall bind any successors and
assigns to the parties hereto.
Agreed as of the date set forth above:
UGLY DUCKLING CORPORATION
By: Xxxxxx X. Xxxxxx
"UDC" or "SERVICER"
FIRST MERCHANTS ACCEPTANCE
CORPORATION,
Debtor and Debtor-in-Possession
By: Xxxxxxx Xxxxxxxxx
"DEBTOR"
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EXHIBIT A
CONTRACTS
[SEE ATTACHED]
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SCHEDULE I
DEFINITIONS
"1997-2 Securitized Pool" means the pool of contracts the Debtor
securitized through FMARC II on May 1, 1997.
"Acquisition Date" means August 21, 1997.
"Agent" means LaSalle National Bank in its capacity as agent under the
Warehouse Facility, or any successor agent thereunder.
"Bank Group" means the Current Bank Group and the Original Bank Group.
"Bank Group Claim" means all amounts owed to the Bank Group under the
Warehouse Facility.
"Bankruptcy Case" means the Debtor's chapter 11 bankruptcy case pending in
the United States District Court for the District of Delaware entitled In re
First Merchants Acceptance Corporation, Case No. 97-1500(JJF)(D. Del., July 11,
1997).
"B Pieces" means all of the residual interests and certificates in the
Securitized Pools held by FMARC or FMARC II.
"Chapter 11 Plan" means a chapter 11 plan of the Debtor containing terms
consistent with the terms of the Modified Plan Agreement.
"Committee" means the Official Committee of Unsecured Creditors of First
Merchants Acceptance Corporation.
"Contracts" means retail installment automobile loan contacts originated
or purchased by the Debtor.
"Contribution Agreement" means that certain Contribution Agreement dated
as of December 15, 1997 between FMAC and UDC.
"Court" means the United States District Court for the District of
Delaware.
"Current Bank Group" means as of December 15, 1997, UDC, Cerberus
Partners, L.P., and Bear, Xxxxxxx Co., Inc., solely in their capacities as
assignees of the Original Bank Group and as the current holders of the Bank
Group Claim.
"Debtor" means First Merchants Acceptance Corporation.
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"DIP Facility" means that certain Final Order (1) Authorizing Debtor in
Possession Financing; (2) Granting Liens and Superpriority Administrative
Claims; (3) Modifying the Automatic Stay; (4) Specifying Use of Cash
Collateral; and (5) Granting Adequate Protection Therefor Pursuant to Sections
361 and 363 of the Bankruptcy Code dated August 28, 1997, as amended by that
Stipulation and Agreed Order to Amend DIP Facility dated as of December 15,
1997.
"Exercise Date" means the date on which UDC will exercise the Stock Option.
"Excess Collections Split" means the sharing arrangement between the
Debtor and UDC on the proceeds and collections of the Owned Loans and the B
Pieces whereby, after payment in full of the Secured Claim Recovery Amount, the
DIP Facility and the Modified UDC Fee, the Debtor and UDC will share all excess
collections and proceeds on the Owned Loans and the B Pieces, with 82 1/2% of
such excess collections and proceeds to be paid to the Debtor and 17 1/2% of
such excess collections and proceeds to be paid to UDC, as more particularly
described in and subject to the terms of the Contribution Agreement (including
adjustments in the sharing percentages upon the occurrence of certain events as
set forth in the Contribution Agreement).
"FMAC" means First Merchants Acceptance Corporation.
"FMARC" means First Merchants Auto Receivables Corporation.
"FMARC II" means First Merchants Auto Receivables Corporation II.
"FSA" means Financial Security Assurance, Inc.
"GE" means General Electric Capital Corporation.
"Greenwich" means Greenwich Financial Products, Inc.
"Greenwich Collateral" means all Contracts and related collateral securing
repayment of the Debtor's obligations to Greenwich.
"Modified Plan Agreement" means that certain Binding Agreement To Propose
and Support Modified Plan Agreement dated as of December 15, 1997, by and among
the Debtor, UDC and the Committee.
"Modified UDC Fee" means a $450,000.00, non-recourse, flat fee, payable by
the Debtor to UDC prior to initiation of the Excess Collections Split on the B
Pieces and solely from collections from and proceeds of the B Pieces and
secured by a pledge of the B Pieces subordinate only to the DIP Facility and
the Secured Claim Recovery Amount.
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"Option Notice" means 15 days' advance written notice to be delivered by
UDC to the Debtor, and a public announcement by UDC on the same date as the
giving of the notice, specifying the Exercise Date and the Stock Option Shares.
"Original Bank Group" means LaSalle National Bank; NBD Bank; Firstar Bank
Milwaukee, N.A.; Xxxxxx Trust and Savings Bank; Nationsbank, N.A.; First Bank,
National Association; CoreStates Bank, N.A.; Fleet Bank, National Association,
f/k/a Natwest Bank, N.A.; and Mellon Bank, N.A.; solely in their capacity as
lenders to FMAC pursuant to the terms of the Warehouse Facility.
"Overadvance Cap" means additional advances under the DIP Facility (in
excess of the prior limit of $10,000,000 on such advances) to pay
administrative and post-Plan Confirmation operating expenses of the Debtor as
set forth in that certain Stipulation and Agreed Order to Amend DIP Facility
dated as of December 15, 1997 and the Modified Plan Agreement; provided,
however, that the total amount of advances outstanding at any time under the
DIP Facility shall not exceed $16,500,000.00.
"Owned Loans" means all of the Debtor's owned Contracts, other than the
Greenwich Collateral, whether current, delinquent, or charged off, together
with all of the Debtor's rights in the collateral securing such Contracts and
all related repossessed vehicles.
"Owned Loan Servicing Fee" means a charge, calculated on a monthly basis
for each such Contract, from and after the date on which UDC or its permitted
assigns begin to service the Owned Loans, of the greater of (i) 1/12 of 3-1/4%
of the then outstanding principal balance of the applicable Contracts, or (ii)
$15.00 per Contract, in each case applied only to Contracts which constitute
part of the Owned Loans and are less than 120 days past due at the end of such
month and for which the related vehicle has not been repossessed.
"Petition Date" means July 11, 1997.
"Plan Confirmation" means confirmation of the Chapter 11 Plan.
"Purchase Price" means the entire amount of the Bank Group Claim as of the
Sale Date, including, but not limited to, any and all outstanding principal,
plus accrued and unpaid interest through the Sale Date (including default
interest from and after the Petition Date through and including the Sale Date),
plus an agreed amount of $150,000.00 of attorneys' fees, costs and expenses of
the Original Bank Group incurred through the Acquisition Date and stipulated as
allowable under 11 U.S.C. Section 506(b), plus all attorneys fees, costs and
expenses of the Bank Group incurred after the Acquisition Date allowable under
11 U.S.C. Section 506(b); provided, that, attorneys fees, costs and expenses of
the Bank Group incurred after the Acquisition Date will be assumed to be
$450,000 for purposes of determining the Purchase Price; and provided further,
that, if
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(i) there are objections by the Debtor, the Committee or any other
party-in-interest to the attorneys' fees, costs and expenses of the Bank Group
incurred after the Acquisition Date after review of detailed supporting invoices
provided by the Bank Group, and (ii) at a subsequent hearing, the Court reduces
or increases the amount of such attorneys' fees, costs and expenses allowable
under 11 U.S.C. Section 506(b), the Purchase Price will be reduced or increased
by an amount equal to the reduction or increase in such fees, costs and
expenses.
"Replacement Lien" means the lien granted by the Debtor to the Agent on the
stock of FMARC and FMARC II to secure the Debtor's non-recourse guaranty of the
Secured Claim Recovery Amount.
"Retained Property" means all assets of the Debtor other than the Owned
Loans, including, but not limited to, the Tax Refunds and other tax attributes
of the Debtor, the Greenwich Collateral, and the Debtor's furniture, fixtures,
equipment, general intangibles and causes of action.
"Sale" means the sale of the Owned Loans by the Debtor to the Agent.
"Sale Date" means December 15, 1997.
"Secured Claim Recovery Amount" means any shortfall between (i) collections
on, net proceeds from sales of charged off Contracts constituting, and net
proceeds of collateral securing payment of, the Owned Loans after the Sale Date,
and (ii) the Purchase Price plus interest at the rate of 11% from and after the
Sale Date until paid in full plus the Owned Loan Servicing Fee, provided,
however, that in the event the servicing of the Owned Loans is transferred to an
entity other than UDC or a wholly-owned subsidiary of UDC or an entity agreed
upon by the Debtor, UDC and the Committee in the Chapter 11 Plan without the
prior written consent of the Debtor, which consent will not be unreasonably
withheld, the Secured Claim Recovery Amount shall be limited to $10,000,000.
"Securitized Pools" means the pools of Contracts the Debtor securitized
through FMARC and FMARC II, but excluding the 1997-2 Securitized Pool, unless
the Debtor or UDC becomes the servicer for the 1997-2 Securitized Pool.
"Securitized Pools Servicing Fee" means, subject to FSA approval (or any
other consents required pursuant to governing documents), the base servicing fee
UDC and/or the Debtor will receive after the Sale Date for servicing and
collection of the Securitized Pools, equal to the greater of 1/12 of 3 1/4%, or
$15.00 per Contract, calculated on a monthly basis, on the outstanding principal
balance of the Securitized Pools, applied only to Contracts in the Securitized
Pools which are less than 120 days past due at the end of such month, and for
which the related vehicle has not been repossessed, together with all
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other amounts, fees, costs and expenses payable under the servicing agreements
for the Securitized Pools.
"Stock Option" means UDC's option to distribute Stock Option Shares to the
Debtor for the benefit of the Debtor's unsecured creditors (and, if applicable,
stockholders), or if the Debtor so requests, at the Debtor's expense and solely
in accordance with the Debtor's instructions (and UDC shall have no liability
to any party in connection with any distribution made in accordance with such
instructions), to make direct distribution to the Debtor's unsecured creditors
(and if applicable, stockholders), in lieu of the Debtor's right to retain a
portion of the Debtor's share of the Excess Collections Split in cash, which
UDC may exercise by giving the Option Notice, subject to the following
conditions:
(a) UDC may exercise the Stock Option one time only, with exercise being
the actual delivery of the Stock Option Shares;
(b) Revocation of the Option Notice shall not be deemed to be an exercise
of the Stock Option by UDC;
(c) In the event that UDC exercises the Stock Option, and delivers the
Stock Option Shares to the Debtor for the benefit of the Debtor's
unsecured creditors (and, if applicable, stockholders), UDC shall be
entitled to receive the Debtor's share of cash distributions under
the Excess Collections Split from and after the Exercise Date until
UDC has received cash distributions equal to the Stock Option Value
(this is in addition to UDC's right to receive its share of cash
distributions under the Excess Collections Split);
(d) Once UDC has received cash distributions equal to the Stock Option
Value (without regard to any post-issuance change in the market value
of the issued Stock Option Shares), the Debtor shall be entitled to
and shall retain the remaining portion of the Debtor's share of cash
distributions under the Excess Collections Split, if any, in excess
of the Stock Option Value;
(e) In no event shall UDC be entitled to receive any portion of the
Debtor's share of cash distributions under the Excess Collections
Split in excess of the Stock Option Value, nor shall UDC be entitled
to recover any portion of the Stock Option Value from any source
other than the Debtor's share of the Excess Collections Split; and
(f) UDC shall not be entitled to exercise the Stock Option unless and
until (i) the value of UDC common stock on the Exercise Date and the
closing price for UDC common stock on each day during the previous
ten trading days shall be at least $8.00 per share, (ii) UDC shall
have caused (at UDC's sole cost and expense) the Stock Option Shares
to be (x) registered under the
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Securities Act of 1933, as amended, (y) unrestricted and (z) fully
transferable and shall have taken all steps necessary to allow the
Debtor to distribute the Stock Option Shares to the Debtor's
unsecured creditors, and if applicable, shareholders, and (iii) UDC
shall not have purchased any of its common stock (except upon the
exercise of previously issued and outstanding options, warrants,
stock appreciation rights or other rights) or announced any stock
repurchase programs from and after the delivery of the Option Notice
to the Debtor through the Exercise Date.
"Stock Option Shares" means the number of shares of UDC common stock that
UDC will issue to the Debtor on the Exercise Date.
"Stock Option Value" means that aggregate value of the Stock Option
Shares, determined by multiplying the Stock Option Shares by 98% of the average
of the closing prices of UDC common stock on the NASDAQ National Market or on
such other market as such stock may be traded, for the 10 trading days
immediately preceding the Exercise Date.
"Tax Refunds" means the Debtor's uncollected state and federal income tax
refunds for 1996 and prior years.
"UDC" means Ugly Duckling Corporation.
"UDC Warrants" means 3-year warrants to purchase 325,000 shares of UDC
common stock at a price of $20.00 per share which will be callable by UDC when
UDC common stock trades at a price of $28.50 per share, or greater, for 10
consecutive trading days, which UDC will issue to the Debtor pursuant to the
terms of the Warrant Agreement.
"Warehouse Facility" means the Debtor's warehouse loan facility pursuant
to that certain Fourth Amended and Restated Loan and Security Agreement, dated
as of February 28, 1996, as subsequently amended, by and among FMAC, the Agent
and the Original Bank Group.
"Warrant Agreement" means that certain Warrant Agreement to be entered
into between UDC and Xxxxxx Trust Company of California, as warrant agent.
