Amendment No. 9 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;; Ugly Duckling Car Sales New Mexico, Inc. ("Car Sales New
Mexico"), a New Mexico corporation; Ugly Duckling Car Sales California, Inc.
("Car Sales California"), a California corporation; Ugly Duckling Car Sales
Georgia, Inc. ("Car Sales Georgia"), a Georgia corporation; Cygnet Financial
Corporation ("Cygnet"), a Delaware corporation; Cygnet Dealer Finance, Inc.
("Dealer Finance"), an Arizona corporation; Cygnet Finance Alabama, Inc.
("Cygnet Alabama"), an Arizona 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; Ugly Duckling Portfolio
Corporation ("UDPC") an Arizona corporation formerly known as Champion Portfolio
Corporation; and Cygnet Dealer Finance Florida, Inc. ("CDFF"), a Florida
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, and Amendment No. 8
dated December 7, 1999, (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 Existing
Borrower on the terms and conditions set forth in the Agreement.
B. Borrower and Lender desire to amend the Agreement pursuant to the terms
and conditions 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.
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2. Amendments to Agreement. Effective as of the date hereof, the Agreement
is hereby amended as follows.
Definitions.
a.) 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) 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.
b.) VAM Eligible Contracts. The following definition is added to
Section 16.0 of the Agreement in proper alphabetical order:
VAM Eligible Contracts: an Eligible Contract which was purchased by
Borrower from Virginia Auto Mart on November 8, 1999.
c.) Inventory Advance Value. The definition of Inventory Advance Value
in Section 16.0 of the Agreement is deleted and replaced in its entirety as
follows:
Inventory Advance Value: the lesser of (i) Twenty-five Million
Dollars ($25,000,000.00); (ii) the cumulative Eligible Vehicle Advance
Value for all Eligible Vehicles in Borrower's inventory; (iii) an
amount equal to the Borrowing Base minus the amount outstanding under
the Installment Contract Facility or (iv) 65% of the cumulative NADA
average wholesale Black Book value for Borrower's inventory of Motor
Vehicles (compliance with which shall be measured by Lender's sample of
100 or more Contracts and not on a Contract-by-Contract basis).
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d.) Eligible Vehicle. The definition of Eligible Vehicle in Section
16.0 of the Agreement is deleted and replaced in its entirety as follows:
"Eligible Vehicle: a Motor Vehicle (i) which Borrower has
purchased for at least $1,500 and not more than $6,000; (ii)
which has been in Borrower's possession for no more than 120
days, or 150 days if purchased in the months of October 1999,
November, 1999 or December, 1999; (iii) which has not been
repossessed by Borrower (unless subsequently re-purchased at
auction); (iv) for which Borrower holds in its possession the
title and purchase documentation, provided, however, that, if
all other criteria for Eligible Vehicles is met, Motor
Vehicles may be held in Borrower's possession for 30 days
without title documentation; and (v) is not subject to any
lien, encumbrance or security interest of any kind other than
the interest of Lender as granted hereunder or any other
agreement with Lender.
e.) Application of Payments. The definition of Application of Payments
in Section 4.2 of the Agreement is deleted and replaced in its entirety as
follows:
Application of Payments. All Remittances received by Lender
shall be applied by Lender to the Indebtedness the same Business Day if
deposited in Lender's account before 1:30 PM CST and the next Business
Day if deposited in the Lender's account after 1:30 PM CST . No
Remittance other than cash shall be treated as a final payment to
Lender unless and until such item has actually been collected by
Lender's bank and such collection has been finally credited to Lender's
account; provided, further, that if a Remittance applied to the
Indebtedness is charged back to Lender's Bank, Lender can retroactively
remove the application of the Remittance to the Indebtedness and accrue
any interest not accrued because of the application of the Remittance
to the Indebtedness. Each Remittance shall be applied by Lender to the
Indebtedness (i) first to accrued interest and, if sufficient to pay
accrued interest, (ii) then to the Indebtedness, other than Advances,
and, (iii) then to the Loan. Lender reserves the right to use a
different order of application if there is an Event of Default or
Pre-Default Event, or Lender has given prior written notice to Borrower
of a different order. All Remittances received by Lender may be applied
to the Indebtedness even though no portion of the Indebtedness is
otherwise then due and even though Lender has not sent Borrower a
demand, notice or request for payment of the Indebtedness. Payments
shall be deemed to be due by Borrower when received by Lender unless
they are due sooner by the terms of the Loan Documents.
f.) Exhibit 5.1(C) of the Agreement is deleted and replaced in its
entirety as follows: Exhibit 5.1(C)
Report Frequency
Cash Report Daily
Borrowing Base Weekly
Deferment & Rewrite Report Monthly
Covenant Compliance Summary Monthly
Trial Balance of Contracts Monthly
Contract Delinquency Report Monthly
Paid Off Contract Report Monthly
Charged-Off Contract Report Monthly
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Recovery Report Monthly
Repossession Report Monthly
Title Tracking Report Monthly
Insurance Tracking Report Monthly
Vehicle Inventory Report Monthly
New Contract Report Monthly
Static Pool Information Quarterly
Status of Cygnet Program Quarterly
Performance of Securitized Assets Quarterly
The monthly reports shall be provided to Lender no later than
twenty (20) Business Days after the end of the month. The daily reports shall be
provided no later than two (2) Business days after the day covered by the
report; provided that, the daily reports for the last day of an Accounting
Period shall be provided no later than the fifth (5th) Business Day after the
end of the Accounting Period. Borrower shall deliver with the monthly reports a
certificate of the chief financial officer of Borrower, in the form of Exhibit
5.1(C)(1), certifying as to the completeness and accuracy of the reports
provided pursuant to this Exhibit 5.1(C). Borrower shall provide Lender with
quarterly reports no later than thirty (30) Business Days after the end of the
quarter. Borrower shall deliver to Lender, no later than the twentieth (20th)
Business Day following each Accounting Period, an up-to-date master file back-up
tape in a form usable by Lender's computer of all Pledged Contract information
for the Accounting Period relating to Contract files which the Borrower has
placed on electronic media, including but not limited to, payment histories,
contract accounting, Outstanding Principal Balance, customer service notes,
collection histories and Contract Debtor names and addresses.
3. 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.
4. 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.
5. 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.
6. 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.
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7. 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
December 8, 1999.
GENERAL ELECTRIC CAPITAL
CORPORATION UGLY DUCKLING CAR SALES, INC.
By: /S/ XXXX XXXXX By: /S/ XXX X. XXXXXXXX
Title: Account Executive Title: Secretary
UGLY DUCKLING CORPORATION UGLY DUCKLING CAR SALES NEW MEXICO, INC.
By: /S/ XXX X. XXXXXXXX By: /S/ XXX X. XXXXXXXX
Title: Secretary Title: Secretary
UGLY DUCKLING CAR SALES AND CHAMPION FINANCIAL SERVICES, INC.
FINANCE CORPORATION
By: /S/ XXX X. XXXXXXXX By: /S/ XXX X. XXXXXXXX
Title: Secretary Title: Secretary
UGLY DUCKLING CAR SALES FLORIDA, INC. UGLY DUCKLING CREDIT CORPORATION
By: /S/ XXX X. XXXXXXXX By: /S/ XXX X. XXXXXXXX
Title: Secretary Title: Secretary
UGLY DUCKLING CAR SALES GEORGIA, INC. UGLY DUCKLING CAR SALES CALIFORNIA, INC.
By: /S/ XXX X. XXXXXXXX By: /S/ XXX X. XXXXXXXX
Title: Secretary Title: Secretary
CYGNET FINANCIAL CORPORATION CYGNET DEALER FINANCE, INC.
By: /S/ XXX X. XXXXXXXX By: /S/ XXXXXX X. XXXXXXX
Title: Secretary Title: Secretary
CYGNET FINANCE ALABAMA, INC. CYGNET SUPPORT SERVICES, INC.
By: /S/ XXXXXX X. XXXXXXX By: /S/ XXX X. XXXXXXXX
Title: Secretary Title: Secretary
CYGNET FINANCIAL SERVICES, INC. CYGNET FINANCIAL PORTFOILIO, INC.
By: /S/ XXX X. XXXXXXXX By: /S/ XXX X. XXXXXXXX
Title: Secretary Title: Secretary
UGLY DUCKLING PORTFOLIO UGLY DUCKLING FINANCE CORPORATION
PARTNERSHIP, L.L.P.
By: /S/ XXX X. XXXXXXXX By: /S/ XXX X. XXXXXXXX
Title: Secretary Title: Secretary
UGLY DUCKLING PORTFOLIO CYGNET DEALER FINANCE FLORIDA,
CORPORATION INC.
By: /S/ XXX X. XXXXXXXX By: /S/ XXXXXX X. XXXXXXX
Title: Secretary Title: Secretary
