October 12, 2000
SAI Investment Adviser, Inc.
0 XxxXxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx Xxxx
Xxx Xxxxxxx, XX 00000-6022
SunAmerica Life Insurance Company
0 XxxXxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx Xxxx
Xxx Xxxxxxx, XX 00000-6022
KZH Soleil-2 LLC
c/o The Chase Manhattan Bank
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
The Bank of New York, as Collateral Agent
0 Xxxxx XxXxxxx Xxxxxx
Chicago, IL 60602
Ladies and Gentlemen:
Reference is made to that certain Senior Secured Loan Agreement dated
as of May 14, 1999 (the "Loan Agreement") among Ugly Duckling Corporation, a
Delaware corporation ("Borrower"), The Bank of New York (as
successor-in-interest to Xxxxxx Trust & Savings Bank), as Collateral Agent (the
"Collateral Agent") and the Lenders party thereto (together with their
respective successors and assigns, "Lenders"). All capitalized terms used herein
and not otherwise defined shall have the meanings given to such terms in the
Loan Agreement.
Xxxxxxxx has previously advised Collateral Agent and Lenders that with
respect to the month of September 2000, Borrower is not in compliance with
Section 6.16 of the Loan Agreement (entitled "Minimum B Piece Cash Flows").
By countersigning this letter, Collateral Agent and Lenders hereby
permanently waive such failure to comply with Section 6.16 of the Loan Agreement
for such month (and only for such month) and agree that such failure shall not
constitute a Default or Event of Default pursuant to the Loan Agreement or the
other Loan Documents.
In consideration of the foregoing waiver and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Loan Documents are, upon (i) execution hereof by Collateral
Agent and the Required Lenders and (ii) compliance with the provisions of
Section 3.1 of the Loan Agreement with respect to the 2000-B Included
Certificates (as defined below), hereby amended as follows:
1. Section 6.16 of the Loan Agreement is hereby amended and restated in
its entirety to read as follows:
6.16 Minimum B-Piece Cash Flows. Not permit aggregate B-Piece
Cash Flows deposited to the Collateral Account with respect to
any month to be less than the following amounts determined as
of the applicable Payment Date (it being understood that for
purposes of determining compliance with this Section 6.16 the
amount deemed deposited with respect to any B-Piece may not
exceed the B-Piece Cash Flow with respect to such B-Piece):
(a) For Payment Dates through and including September
15, 1999 (which represent B-Piece Cash Flows with respect to
months through August 1999), $2,000,000.
(b) For Payment Dates from and including October 15,
1999, through and including March 15, 2000, $900,000 (which
represent B-Piece Cash Flows with respect to months from
September 1999 through February 2000).
(c) For the Payment Date on April 15, 2000 (which
represents B-Piece Cash Flows with respect to the month of
March 2000), $1,200,000.
(d) For the Payment Dates from and including May 15,
2000, through and including September 15, 2000 (which
represent B Piece Cash Flows with respect to the months from
April 2000 through August 2000), $2,000,000.
(e) For the Payment Dates from and including October
15, 2000, through and including March 15, 2001 (which
represent B Piece Cash Flows with respect to the months from
September 2000 through February 2001), $900,000.
(f) For the Payment Date on April 15,
2001, and for each Payment Date thereafter $2,000,000.
2. Notwithstanding the terms and provisions of the Loan Agreement, the other
Loan Documents, and the Letter Agreement dated August 30, 2000, the 2000-B
Included Certificates shall, subject to the last paragraph of the definition of
the term "Borrowing Base" set forth in the Loan Agreement, constitute Additional
Class B Certificates and shall be included in the computation of the Borrowing
Base even though not issued during the Securitization Period. The foregoing
shall not be deemed to extend the Securitization Period. As used herein, the
term "2000-B Included Certificates" means all of the "Class B Notes," "Class C
Certificates" and "Class D Certificates" issued in connection with the 2000-B
Securitization excluding the "Class C Certificate" in the face amount of
$2,600,599.98 issued to Ugly Duckling Finance Corporation. As used herein the
term "2000-B Securitization" means the securitization accomplished pursuant to
the following documents:
(a) Sale and Servicing Agreement dated as of August
28, 2000 (the "2000-B SSA") among Ugly Duckling Receivables
Corp. II (formerly known as Champion Receivables Corp. II)
("UDRC II"), Duck Auto Owner Trust 2000-B, a Delaware business
trust, as Issuer (the "2000-B Issuer"), Ugly Duckling Credit
Corp. (formerly known as Champion Acceptance Corporation)
("UDCC"), and The Bank of New York, as Indenture Trustee (the
"2000-B Indenture Trustee").
(b) Trust Agreement (Duck Owner Trust 2000-B) dated
as of August 28, 2000 (the "2000-B Owner Trust Agreement")
between UDRC II, as Seller, and Wilmington Trust Company, as
Owner Trustee (the "2000-B Owner Trustee").
(c) Indenture dated as of August 28, 2000 (the
"2000-B Indenture") between the 2000-B Issuer and the 2000-B
Indenture Trustee.
Except as specifically modified by this waiver and agreement, all of
the terms and provisions of the Loan Agreement, each other Loan Document and
each of the documents referred to therein or delivered in connection therewith
shall remain in full force and effect. The waivers set forth herein shall be
limited precisely as written and shall not be deemed, except as expressly set
forth herein, (a) to be a consent to any modification or waiver of other terms
or conditions of the Loan Agreement, any other Loan Document or any of the
documents referred to therein or delivered in connection therewith or (b) to
prejudice any right, remedy, power or privilege which any party hereto or any
party consenting hereto now has or may have in the future under or in connection
with the Loan Agreement, any other Loan Document or any of the documents
referred to therein or delivered in connection therewith. Without limiting the
generality of the foregoing, the Security Documents and all of the Collateral
described therein do and shall, to the extent set forth therein, continue to
secure the payment of all obligations and liabilities of the Borrower under the
Loan Agreement and/or any of the other Loan Documents, in each case as amended
hereby.
Concurrently with the execution and delivery of this letter agreement
and as a condition precedent to the effectiveness thereof, UDC shall pay to
Lenders an aggregate waiver/modification fee of $25,000, which shall be
distributed to the Lenders on a pro rata basis.
The Borrower shall promptly pay the reasonable out-of-pocket expenses
incurred by the Collateral Agent and the Lenders in connection with the
preparation of this waiver and agreement including the reasonable fees,
disbursements and other charges of its counsel.
This letter agreement shall be governed by and construed in accordance
with the laws of the State of New York.
Borrower hereby represents and warrants to Collateral Agent and Lenders
as follows:
(i) The execution, delivery and performance of this Letter Agreement by
Xxxxxxxx and Guarantor has been duly authorized by all necessary corporate
action of Borrower and Guarantor.
(ii) This Letter Agreement has been duly executed and delivered by
Xxxxxxxx and Guarantor and constitutes the legal, valid and binding obligation
of Borrower and Guarantor in accordance with its terms, except as enforcement
may be limited by equitable principles or by bankruptcy, insolvency,
reorganization, moratorium, or similar laws relating to or limiting creditors'
rights generally.
(iii) As of the date hereof, the representations and warranties of
Borrower and Guarantor set forth in the Loan Documents are true and correct in
all material respects.
(iv) As of the date hereof and after giving effect to the execution and
delivery of this Letter Agreement by Xxxxxxxx, Collateral Agent and Lenders, no
Default or Event of Default has occurred and is continuing.
This Agreement 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.
Please sign and return the enclosed copy of this letter.
Very truly yours,
UGLY DUCKLING CORPORATION,
a Delaware corporation
By:
Name:
Title:
CONSENTED AND AGREED:
GALAXY CLO 1999-1, LTD.
By: SAI Investment Adviser, Inc.,
its Collateral Manager
By:
Name:
Title:
SUNAMERICA LIFE INSURANCE
COMPANY
By:
Name:
Title:
KZH SOLEIL-2 LLC
By:
Name:
Title:
THE BANK OF NEW YORK,
as Collateral Agent
By:
Name:
Title:
Guarantor hereby consents and agrees to the foregoing and agrees that
the Guaranty remains in full force and effect and that the Guaranteed
Obligations (as defined in the Guaranty) include, without limitation, payment of
the obligations of Borrower pursuant to the foregoing Letter Agreement and the
Loan Documents as amended by the foregoing Letter Agreement.
UGLY DUCKLING CAR SALES AND
FINANCE CORPORATION,
an Arizona corporation
By:
Name:
Title:
