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AMENDED AND RESTATED
SENIOR SECURED LOAN AGREEMENT
Dated as of July 19, 2002
by and among
UGLY DUCKLING CORPORATION,
a Delaware corporation
("Borrower")
THE LENDERS FROM TIME TO TIME PARTY HERETO
and
XXXXX FARGO BANK MINNESOTA, NATIONAL ASSOCIATION
as Collateral Agent
$45,000,000 Senior Secured Loan
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TABLE OF CONTENTS
ARTICLE I. DEFINITIONS............................................................................................1
----------------------
1.1 Defined Terms...................................................................................1
1.2 Other Interpretive Provisions..................................................................17
1.3 Accounting Principles..........................................................................18
1.4 Times..........................................................................................18
ARTICLE II. the loan.............................................................................................19
2.1 The Loan.......................................................................................19
2.2 Payment Upon Collection; Monthly Amortization..................................................19
2.3 Payment Upon Maturity..........................................................................19
2.4 Interest.......................................................................................19
2.5 Voluntary Prepayments; Deposits to Collateral Account..........................................20
2.6 Application of Payments........................................................................20
2.7 Prepayment.....................................................................................21
2.8 Fees...........................................................................................21
2.9 Fees and Interest..............................................................................21
2.10 Payments by Borrower; Payments by Collateral Agent.............................................21
2.11 Taxes..........................................................................................22
2.12 Sharing of Payments, Etc.......................................................................23
2.13 Suspension of LIBOR............................................................................24
2.14 Increased Costs, Etc...........................................................................24
2.15 Promissory Notes...............................................................................25
ARTICLE III. security agreement and collateral...................................................................25
3.1 Security for Obligations.......................................................................25
3.2 Security Documents.............................................................................26
3.3 Duties Regarding Collateral....................................................................26
3.4 Borrower's Duties Regarding Collateral.........................................................26
3.5 Power of Attorney..............................................................................27
3.6 Collateral Inspections.........................................................................27
ARTICLE IV. CONDITIONS PRECEDENT; TERM OF AGREEMENT..............................................................27
4.1 Conditions Precedent...........................................................................27
4.2 Receipt of Documents...........................................................................28
4.3 Payment of Interest under Existing Loan Agreement..............................................29
4.4 Term...........................................................................................29
4.5 Effect of Termination..........................................................................29
ARTICLE V. REPRESENTATIONS AND WARRANTIES........................................................................30
5.1 No Encumbrances................................................................................30
5.2 Location of Chief Executive Office; FEIN.......................................................30
5.3 Due Organization and Qualification; Subsidiaries...............................................30
5.4 Due Authorization: No Conflict................................................................30
5.5 Litigation.....................................................................................31
5.6 Financial Statements; No Material Adverse Change...............................................32
5.7 Securitization Documents.......................................................................32
5.8 ERISA..........................................................................................32
5.9 Environmental and Safety Matters...............................................................32
5.10 Tax Matters....................................................................................33
5.11 [Reserved].....................................................................................33
5.12 Ownership of Properties........................................................................33
5.13 Investment Company Status......................................................................33
5.14 Solvency.......................................................................................33
ARTICLE VI. AFFIRMATIVE COVENANTS................................................................................33
6.1 Financial Statements and Other Documents.......................................................34
6.2 Inspection of Property.........................................................................34
6.3 Default Disclosure.............................................................................35
6.4 Notices to Lenders and the Collateral Agent....................................................35
6.5 Books and Records..............................................................................35
6.6 Compliance and Preservation....................................................................35
6.7 Perfection of Liens............................................................................36
6.8 Cooperation....................................................................................36
6.9 Use of Proceeds................................................................................36
6.10 Securitizations................................................................................36
6.11 Payment of Indebtedness........................................................................36
6.12 Tangible Net Worth.............................................................................36
6.13 Consolidated EBITDA to Consolidated Interest Expense...........................................37
6.14 Consolidated Senior Debt to Consolidated Total Capitalization..................................37
6.15 Minimum Residual Certificate Cash Flows........................................................37
6.16 Minimum Capital Base...........................................................................37
6.17 Minimum Other Interest Coverage................................................................37
6.18 [Reserved].....................................................................................37
6.19 Collateral Account.............................................................................37
6.20 Back-up Servicer...............................................................................37
6.21 Maintenance of Properties......................................................................37
6.22 Maintenance of Insurance.......................................................................38
6.23 Reorganization.................................................................................38
6.24 DriveTime Name Change..........................................................................38
6.25 Designated Senior Indebtedness.................................................................38
ARTICLE VII. NEGATIVE COVENANTS..................................................................................38
7.1 Liens..........................................................................................39
7.2 Indebtedness...................................................................................39
7.3 Restrictions on Fundamental Changes............................................................39
7.4 Disposal of Collateral, Residual Certificates, Additional Residual Certificates................39
7.5 Change Name....................................................................................39
7.6 Amendments.....................................................................................39
7.7 Change of Control..............................................................................40
7.8 Distributions..................................................................................40
7.9 Standing Dividend Resolutions..................................................................40
7.10 Change in Location of Chief Executive Office...................................................40
7.11 No Prohibited Transactions Under ERISA.........................................................40
7.12 Changes in Nature of Business..................................................................41
7.13 Transactions with Affiliates...................................................................41
ARTICLE VIII. EVENTS OF DEFAULT/REMEDIES.........................................................................41
8.1 Event of Default...............................................................................41
8.2 Rights and Remedies............................................................................43
ARTICLE IX. THE COLLATERAL AGENT.................................................................................44
9.1 Authorization and Action.......................................................................44
9.2 Collateral Agent's Reliance, Etc...............................................................44
9.3 Xxxxx Fargo Bank Minnesota, National Association and Affiliates................................45
9.4 Lender Credit Decision.........................................................................45
9.5 Indemnification................................................................................45
9.6 Successor Collateral Agents....................................................................45
9.7 Monthly Duties of Collateral Agent.............................................................46
ARTICLE X. MISCELLANEOUS.........................................................................................46
10.1 Amendments and Waivers.........................................................................46
10.2 Notices........................................................................................47
10.3 No Waiver: Cumulative Remedies................................................................48
10.4 Costs and Expenses.............................................................................48
10.5 Indemnity......................................................................................49
10.6 Marshaling: Payments Set Aside................................................................49
10.7 Successors and Assigns.........................................................................49
10.8 Set-off........................................................................................49
10.9 Counterparts...................................................................................50
10.10 Severability...................................................................................50
10.11 No Third Parties Benefited.....................................................................50
10.12 Time 50
10.13 Governing Law and Jurisdiction.................................................................50
10.14 Entire Agreement...............................................................................51
10.15 Interpretation.................................................................................52
10.16 Assignment; Register...........................................................................52
10.17 Revival and Reinstatement of Obligations.......................................................53
10.18 Survival 53
10.19 Confidentiality................................................................................53
10.20 Actions by Portfolio Advisor...................................................................53
ARTICLE XI. Acceptance Fees.......................................................................................6
ARTICLE XII. Additional Lender....................................................................................6
ARTICLE XIII. -...................................................................................................6
ARTICLE XIV. $1,000.00 per annum per Lender.......................................................................6
SCHEDULES AND EXHIBITS
Schedule A........Borrower's Subsidiaries
Schedule B........Warrants, Options, etc.
Schedule C........Litigation
Schedule D........Exceptions to Financial Statements
Schedule E........Permitted Liens
Schedule F........Residual Certificates
Schedule G........Subordinated Indebtedness
Schedule H........Collateral Agent Fees
Schedule I........Administrative Forms
Exhibit A.........UDRC II, UDRC III and UDRC IV Securitization Documents
Exhibit B.........Form of Collateral Account Agreement
Exhibit C.........Form of Assignment and Acceptance
Exhibit D.........Form of Promissory Note
Exhibit E.........Form of Guaranty
SENIOR SECURED LOAN AGREEMENT
This AMENDED AND RESTATED SENIOR SECURED LOAN AGREEMENT (the "Agreement"),
is entered into as of July 19, 2002, among UGLY DUCKLING CORPORATION, a Delaware
corporation ("Borrower"), with a place of business located at 0000 Xxxx Xxxxxx
Xxxxxx Xxxx, Xxxxxxx, Xxxxxxx 00000, the Lenders party hereto (together with
their respective successors and assigns, "Lenders") and XXXXX FARGO BANK
MINNESOTA, NATIONAL ASSOCIATION, as Collateral Agent (together with its
successors and assigns in such capacity, "Collateral Agent").
R E C I T A L S
WHEREAS, Borrower, certain financial institutions and BNY Midwest Trust
Company are parties to that certain Senior Secured Loan Agreement, dated as of
January 11, 2001 (as amended, supplemented or otherwise modified prior to the
date hereof, the "Existing Loan Agreement"); and
WHEREAS, the Borrower and the Lenders wish to amend and restate the
Existing Loan Agreement in the form of this Agreement to make available to the
Borrower the senior secured loan (the "Loan") as provided herein;
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the Borrower, the Lenders and the
Collateral Agent agree that the Existing Loan Agreement is hereby amended and
restated in full as follows:
ARTICLE I
DEFINITIONS
1.1 Defined Terms. In addition to the terms defined elsewhere in this
Agreement, the following terms have the following meanings:
"Additional Residual Certificates" shall mean all Class B Notes, Class C
Certificates (other than Excluded Class C Certificates), Class D Certificates
and other certificates of beneficial interest or similar interests which both
(i) are issued by a Securitization Trust or other similar entity with respect to
which UDRC II, UDRC III, UDRC IV or any other Affiliate of UDC or UDCC is the
seller or issuer (or equivalent), and (ii) represent the securitization of Ugly
Duckling Collateral.
"Administrative Form" means an administrative details form delivered by the
Collateral Agent and any Lender to Collateral Agent and Borrower. The initial
Administrative Forms are attached hereto as Schedule I. The Collateral Agent and
each Lender may change its Administrative Form at any time by delivering a new
Administrative Form to the Collateral Agent and Borrower.
"Affiliate" means, as to any Person, any other Person which, directly or
indirectly, is in control of, is controlled by, or is under common control with,
such Person. A Person shall be deemed to control another Person if the
controlling Person possesses, directly or indirectly, the power to direct or
cause the direction of the management and policies of the other Person, whether
through the ownership of voting securities, by contract or otherwise. Without
limitation, any director, executive officer or beneficial owner of twenty
percent (20%) or more of the equity of a Person shall for the purposes of this
Agreement, be deemed to control the other Person. In no event shall any Lender
be deemed an "Affiliate" of Borrower.
"Agreement" means this Senior Secured Loan Agreement, as amended,
supplemented or modified from time to time in accordance with the terms hereof.
"AIG" means AIG Global Investment Corp., and its successors and assigns.
"Assignment and Acceptance" means an assignment and acceptance in
substantially the form of Exhibit C.
"Attorney Costs" means and includes all fees and disbursements of any law
firm or other external or internal counsel.
"Base Rate" means a fluctuating interest rate per annum in effect from time
to time, which rate per annum shall at all times be equal to the highest of: (a)
either (1) the "prime rate" published in the "Money Rates" section of the Wall
Street Journal, as such "prime rate" may change from time to time or, if such
rate ceases to be published, (2) the rate of interest announced publicly by
Xxxxx Fargo Bank Minnesota, National Association from time to time as Xxxxx
Fargo Bank Minnesota, National Association's prime rate; and (b) 1/2 of one
percent per annum above the Federal Funds Rate.
"Bankruptcy Code" means the United States Bankruptcy Code (11 U.S.C.ss.101
et seq.), as amended, and any successor statute.
"Bond Insurance Policy" shall mean a financial guaranty or financial
insurance policy issued by (i) MBIA or any of its Affiliates, (ii) XL Capital
Assurance Inc. or any of its Affiliates or (iii) any other financial guarantor
in respect of one or more classes of investor certificates or other interests
issued by a Securitization Trust.
"Borrower Taxes" means any federal, state, local or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental, customs, duties, capital stock,
franchise, profits, withholding, social security (or similar), unemployment,
disability, real property, personal property, intangible, ad valorem, sales,
use, transfer, registration, value added, alternative or add-on minimum,
estimated or other tax or other governmental charge of any kind whatsoever,
including any interest, penalty or additions thereto.
"Borrower's Books" means all of Borrower's books and records including:
ledgers, records indicating, summarizing or evidencing Borrower's properties or
assets (including the Collateral and the assets of any Subsidiaries of Borrower)
or liabilities; all information relating to Borrower's business operations or
financial condition; and all computer programs, disk or tape files, printouts,
runs or other computer prepared information.
"Borrowing Base" means, as of any date of determination, the sum of the
products obtained by multiplying the Residual Certificate Value of each Residual
Certificate as of the most recent Calculation Date by the Advance Rate (as set
forth below) applicable to such Residual Certificate as of such Calculation
Date:
Complete Months of Seasoning Since
Securitization Cut-Off Date Advance Rate
................................... ............
0 - 3 months 15%
4 - 5 months 30%
6 - 9 months 35%
10 - 12 months 40%
13 - 18 months 45%
19 - 23 months 55%
Greater than or equal to 24 months 60%
Notwithstanding the foregoing or any other provision hereof or of any other
Loan Document to the contrary, (i) no Additional Residual Certificates shall be
included in the calculation of the Borrowing Base unless and until the
provisions of Section 3.1 have been complied with with respect to such
Additional Residual Certificates, (ii) Lenders shall be entitled to exclude from
the Borrowing Base any Residual Certificate (or any portion thereof) as to which
(A) Required Lenders determine that the Collateral Agent does not have a
perfected first priority, valid and enforceable security interest either in such
Residual Certificate directly or in 100% of the capital stock of the holder of
such Residual Certificate, or (B) a Securitization Default exists and (iii) to
the extent that the Residual Certificates under any three (3) Securitizations
represent in excess of 50% of the Borrowing Base, the amount of such excess
shall be excluded from the Borrowing Base.
"Business Day" means a day of the year on which banks are not required or
authorized by law to close in Los Angeles, California or Minneapolis, Minnesota
and, if the applicable Business Day relates to any Eurodollar Rate Advances, on
which dealings are carried on in the London interbank market.
"Calculation Date" means the second Business Day prior to the 15th day of
each month.
"Capital Base" means, at any time of determination, the sum of (i)
Borrower's Tangible Net Worth at such time plus (ii) the aggregate outstanding
principal amount of all Subordinated Debt of Borrower and its Subsidiaries at
such time (other than any such Subordinated Debt that is due within 12 months
from such date of determination).
"CERCLA" shall mean the Comprehensive Environmental Response, Compensation
and Liability Act (49 U.S.C. Section 9601, et seq.).
"Change of Control" shall be deemed to have occurred at such time as (i) a
"person" or "group" (within the meaning of Sections 13(d) and 14(d)(2) of the
Securities Exchange Act of 1934) other than Xxxxxx X. Xxxxxx (or an entity under
the control of Xxxxxx X. Xxxxxx) becomes, after the date of this Agreement, the
"beneficial owner" (as defined in Rule 13(d)(3) under the Securities Exchange
Act of 1934), directly or indirectly, of more than 25% of the total voting power
of all classes of stock then outstanding of Borrower entitled to vote in the
election of directors or (ii) Xxxxxx X. Xxxxxx (or an entity under the control
of Xxxxxx X. Xxxxxx) shall cease to be the record and beneficial owner of at
least 15% of the capital stock of Borrower, entitled, in the absence of
contingencies (whether or not any of such contingencies has occurred), to vote
in the election of directors of Borrower or (iii) Borrower ceases to own 100% of
the capital stock of UDCSFC, or (iv) UDCSFC ceases to own 100% of the capital
stock of UDRC II , UDRC III and UDRC IV. An entity shall be deemed to be under
the control of Xxxxxx X. Xxxxxx if Xxxxxx X. Xxxxxx possesses, directly or
indirectly, the power to direct or cause the direction of the management and
policies of such entity, whether through the ownership of voting securities, by
contract or otherwise.
"Closing Date" means the date on which all conditions precedent set forth
in Section 4.1 are either satisfied or waived by each Lender and each Lender
makes its ratable portion of the Loan.
"Code" means the Internal Revenue Code of 1986, as amended, and any
regulations promulgated thereunder.
"Collateral" means all "Collateral" referred to in the Security Documents
and all other property that is subject to any Lien in favor of the Collateral
Agent or any Lender.
"Collateral Account" means the collateral account or accounts established
and maintained pursuant to Section 6.19 or pursuant to the Collateral Account
Agreement.
"Collateral Account Agreement" means the cash collateral account agreement
in substantially the form of Exhibit B.
"Collateral Agent" has the meaning set forth in the preamble to this
Agreement and shall also include such other Collateral Agents as may be
appointed from time to time pursuant to Section 9.6.
"Collateral Servicing Report" means a report of the Borrower with respect
to the Residual Certificate Values, Residual Certificate Cash Flows and
Borrowing Base and such other information as Required Lenders may request in
form and detail acceptable to Required Lenders.
"Collections" means all proceeds of, payments or other distributions of
principal, interest or other amounts on, and other amounts received by or on
behalf of Borrower or any of its Affiliates in respect of any Residual
Certificate or any Collateral, including all amounts paid to Collateral Agent or
any Lender pursuant to any Dividend Direction Letter.
"Consolidated" refers to the consolidation of accounts in accordance with
GAAP.
"Consolidated EBITDA" means for any period, net income (or net loss) plus,
to the extent deducted in determining such net income (or net loss), the sum of
(a) interest expense, (b) income tax expense, (c) depreciation expense and (d)
amortization expense, in each case determined for the Borrower and its
Subsidiaries on a Consolidated basis for such period in conformity with GAAP.
"Consolidated Interest Expense" means, for any period, total interest
expense (including the interest component of capitalized leases) of the Borrower
and its Subsidiaries on a Consolidated basis for such period in conformity with
GAAP, including, without limitation, all commissions, discounts and other fees
and charges owed with respect to any financings or letters of credit and net
costs under hedge agreements.
"Consolidated Net Worth" means the excess of (i) the total assets of the
Borrower and its Subsidiaries determined on a Consolidated basis in conformity
with GAAP, over (ii) all liabilities of the Borrower and its Subsidiaries
determined on a Consolidated basis in conformity with GAAP.
"Consolidated Senior Debt" means, at any time of determination,
Consolidated Total Debt minus Subordinated Debt and Non-Recourse Debt.
"Consolidated Total Capitalization" means, at any time of determination,
the sum of (i) Consolidated Total Debt, and (ii) Consolidated Net Worth, in each
case, as of such time.
"Consolidated Total Debt" means, at any time of determination, all
indebtedness for borrowed money (including capitalized leases), in each case of
the Borrower and its Subsidiaries at such time determined on a Consolidated
basis.
"Debt" or "Indebtedness" means (i) indebtedness for borrowed money, (ii)
obligations evidenced by bonds, debentures, notes, matured reimbursable
obligations under letters of credit or other similar instruments, (iii)
obligations to pay the deferred purchase price of property or services other
than trade payables incurred in the ordinary course of business, (iv)
obligations as lessee under leases that shall have been or should be, in
accordance with GAAP recorded as capital leases, (v) obligations under direct or
indirect guaranties in respect of, and obligations (contingent or otherwise) to
purchase or otherwise acquire, or otherwise to assure a creditor against loss in
respect of, indebtedness or obligations of others of the kinds referred to in
clauses (i) through (iv), and (vi) liabilities in respect of unfunded vested
benefits under Pension Plans covered by Title IV of ERISA.
"Default" means any event or circumstance which, with the giving of notice,
the lapse of time, or both, would (if not cured or otherwise remedied)
constitute an Event of Default.
"Dividend Direction Letter" means (i) the UDRC II Dividend Direction
Letter, (ii) the UDRC III Dividend Direction Letter, (iii) the UDRC IV Dividend
Direction Letter, and (iv) each letter agreement or other agreement entered into
after the date hereof with respect to any Additional Residual Certificates
providing for payment of distributions in respect of such Additional Residual
Certificates (or payments and distributions in respect of the stock or other
equity interests of the holder of such Additional Residual Certificates) to be
made directly to the Collateral Account for application to the Obligations
and/or release to Borrower in accordance with the Collateral Account Agreement
and Section 2.6.
"Dollars," "dollars" and "$" each mean lawful money of the United States.
"DriveTime" means the proposed new business name for Borrower and its
Affiliates, as more particularly described in Section 6.24.
"Environmental and Safety Laws" means all Federal, state and local laws,
regulations and ordinances, relating to the discharge, handling, disposition or
treatment of Hazardous Materials and other substances or the protection of the
environment or of employee health and safety, including CERCLA, the Hazardous
Materials Transportation Act (49 U.S.C. Section 1801, et seq.), the Resource
Conservation and Recovery Act (42 U.S.C. Section 7401, et seq.), the Clean Air
Act (42 U.S.C. Section 7401, et seq.), the Toxic Substances Control Act (15
U.S.C. Section 2601, et seq.), the Occupational Safety and Health Act (29 U.S.C.
Section 651, et seq.) and the Emergency Planning and Community Right-To-Know Act
(42 U.S.C. Section 11001, et seq.), each as the same may be amended and
supplemented.
"Environmental Liabilities and Costs" means, as to any Person, all
liabilities, obligations, responsibilities, remedial actions, losses, damages,
punitive damages, consequential damages, treble damages, contribution, cost
recovery, costs and expenses (including all fees, disbursements and expenses of
counsel, expert and consulting fees, and costs of investigation and feasibility
studies), fines, penalties, sanctions and interest incurred as a result of any
claim or demand, by any Person, whether based in contract, tort, implied or
express warranty, strict liability, criminal or civil statute, permit, order or
agreement with any Federal, state or local governmental authority or other
Person, arising from environmental, health or safety conditions, or the release
or threatened release of a contaminant, pollutant or Hazardous Material into the
environment, resulting from the operations of such Person or its subsidiaries,
or breach of any Environmental and Safety Law or for which such Person or its
subsidiaries is otherwise liable or responsible.
"Equity Interests" means, with respect to a Person, any common stock,
preferred stock, partnership interest (whether general or limited), membership
interest or other equity or participating interest in such Person.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and regulations promulgated thereunder.
"ERISA Affiliate" of any Person means any other Person that for purposes of
Title IV of ERISA is a member of such Person's controlled group, or under common
control with such Person, within the meaning of Section 414 of the Internal
Revenue Code.
"ERISA Event" with respect to any Person means (a) the occurrence of a
reportable event, within the meaning of Section 4043 of ERISA, with respect to
any Plan of such Person or any of its ERISA Affiliates unless the 30-day notice
requirement with respect to such event has been waived by the PBGC; (b) the
provision by the administrator of any Plan of such Person or any of its ERISA
Affiliates of a notice of intent to terminate such Plan, pursuant to Section
4041(a)(2) of ERISA (including any such notice with respect to a plan amendment
referred to in Section 4041(e) of ERISA); (c) the cessation of operations at a
facility of such Person or any of its ERISA Affiliates in the circumstances
described in Section 4062(e) of ERISA; (d) the withdrawal by such Person or any
of its ERISA Affiliates from a Multiple Employer Plan during a plan year for
which it was a substantial employer, as defined in Section 4001(a)(2) of ERISA;
(e) the failure by such Person or any of its ERISA Affiliates to make a payment
to a Plan required under Section 302(f)(1) of ERISA; (f) the adoption of an
amendment to a Plan of such Person or any of its ERISA Affiliates requiring the
provision of security to such Plan, pursuant to Section 307 of ERISA; or (g) the
institution by the PBGC of proceedings to terminate a Plan of such Person or any
of its ERISA Affiliates, pursuant to Section 4042 of ERISA, or the occurrence of
any event or condition described in Section 4042 of ERISA that could constitute
grounds for the termination of, or the appointment of a trustee to administer,
such Plan.
"Event of Default" means any of the events or circumstances specified in
Section 8.1.
"Excluded Class C Certificate" means Class C Certificates or similar
residual certificates of beneficial interest issued to UDFC or its successor in
connection with any securitization of Ugly Duckling Collateral but only to the
extent the value of such Class C Certificates does not exceed 2% of the face
amount of all notes and certificates issued with respect to the applicable
securitization.
"Existing Loan Agreement" means the Senior Secured Loan Agreement dated as
of January 11, 2001, by and among the Borrower, the Collateral Agent (as
successor to Xxxxxx Trust and Savings Bank) and the Lenders party thereto as
amended to the date hereof.
"Federal Funds Rate" means, for any period, a fluctuating interest rate per
annum equal for each day during such period to the weighted average of the rates
on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank, or, if such rate is not so published for any day that is a
Business Day, the average of the quotations for such day for such transactions
received by Collateral Agent from three Federal funds brokers of recognized
standing selected by it.
"FEIN" means Federal Employer Identification Number.
"Financing Statements" means the Financing Statements on Form UCC-1
relating to and filed in connection with the Collateral and naming the
Collateral Agent as secured party.
"Fiscal Quarter" means a fiscal quarter of Borrower.
"Fiscal Year" means a fiscal year of Borrower.
"GAAP" means generally accepted accounting principles set forth from time
to time in the opinions and pronouncements of the Accounting Principles Board
and the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the accounting
profession), or in such other statements by such other entity as may be in
general use by significant segments of the U.S. accounting profession, which are
applicable to the circumstances as of the date of determination.
"Governing Documents" means, with respect to Borrower, Borrower's
certificate of incorporation and bylaws.
"Governmental Authority" means any nation or government, any state or other
political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any entity, body, authority, bureau, department
or instrumentality exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government, and any corporation or
other entity owned or controlled, through stock or capital ownership or
otherwise, by any of the foregoing.
"Greenwich Capital" means Greenwich Capital Financial Products, Inc., a
Delaware corporation.
"Guaranty" means the guaranty executed by UDCSFC on the date hereof in
substantially the form of Exhibit E.
"Guarantor" means (i) UDCSFC and (ii) each other Subsidiary of the Borrower
that, after the date hereof, becomes a party to the Guaranty.
"Hazardous Materials" means (a) any material or substance defined as or
included in the definition of "hazardous substances," "hazardous wastes,"
"hazardous materials," "toxic substances" or any other formulations intended to
define, list or classify substances by reason of their deleterious properties,
(b) any oil, petroleum or petroleum derived substance, (c) any flammable
substances or explosives, (d) any radioactive materials, (e) asbestos in any
form, (f) electrical equipment that contains any oil or dielectric fluid
containing levels of polychlorinated biphenyls in excess of fifty parts per
million, (g) pesticides or (h) any other chemical, material or substance,
exposure to which is prohibited, limited or regulated by any governmental agency
or authority or which may or could pose a hazard to the health and safety of
persons in the vicinity thereof.
"Indebtedness" see "Debt".
"Indemnified Liabilities" has the meaning specified in Section 10.5.
"Indemnified Person" has the meaning specified in Section 10.5.
"Initial Funding Amount" means the amount of Forty Two Million Seven
Hundred Fifty Thousand Dollars ($42,750,000).
"Initial Principal Amount" means the amount of Forty Five Million Dollars
($45,000,000).
"Insufficient Ratings Period" means the period, if any, commencing on the
31st day after the Closing Date and continuing until the first date on which the
Lenders have received written confirmation from (i) Fitch IBCA, Inc. that the
obligations hereunder shall be rated by them no lower than B+, (ii) Standard &
Poor's Ratings Services that the obligations hereunder shall be rated by them no
lower than B- and (iii) Xxxxx'x Investors Service, Inc. that the obligations
hereunder shall be rated by them no lower than B3.
"Intercreditor Agreement" means that certain Greenwich/Xxxxx Fargo
Intercreditor Agreement, dated as of July 18, 2001, by and between Greenwich
Capital and Collateral Agent.
"Interest Accrual Period" shall mean the one-month period from and
including a Payment Date to the close of business on the day preceding the next
Payment Date, except that the first Interest Accrual Period shall commence on
the Closing Date and end at the close of business on the day preceding the first
Payment Date.
"Lender Costs" or "Lender Expenses" means all: (a) costs or expenses
(including taxes and insurance premiums) required to be paid by Borrower under
any of the Loan Documents that are paid or incurred by Collateral Agent, any
Lender or any of their respective affiliates; (b) reasonable out-of-pocket fees
or charges paid or incurred by Collateral Agent or any Lender in connection with
Lenders' transactions with Borrower, including, fees or charges for
photocopying, notarization, couriers and messengers, telecommunication, public
record searches (including tax lien, litigation and UCC searches and including
searches with the patent and trademark office, the copyright office or the
department of motor vehicles), filing, recording, publication, appraisals, due
diligence, actual out-of-pocket costs and expenses incurred by Collateral Agent
or any Lender in the disbursement of funds to Borrower (by wire transfer or
otherwise); (c) actual out-of-pocket charges paid or incurred by Collateral
Agent or any Lender resulting from the dishonor of checks; (d) reasonable
out-of-pocket costs and expenses paid or incurred by Collateral Agent or any
Lender to correct any default or enforce any provision of the Loan Documents, or
in gaining possession of, maintaining, handling, preserving, storing, shipping,
selling, preparing for sale, or advertising to sell the Collateral, or any
portion thereof, irrespective of whether a sale is consummated; (e) reasonable
costs and expenses paid or incurred by Collateral Agent or any Lender in
examining Borrower's Books; (f) reasonable out-of pocket costs and expenses of
third party claims or any other suit paid or incurred by Collateral Agent or any
Lender in enforcing or defending the Loan Documents or in connection with the
transactions contemplated by the Loan Documents or Collateral Agent or any
Lender's relationship with Borrower; and (g) Collateral Agent's, any Lender's or
any of their respective Affiliate's reasonable Attorney Costs incurred in
advising, structuring, drafting, reviewing, administering, amending,
terminating, enforcing, defending, or concerning the Loan Documents,
irrespective of whether suit is brought (including, without limitation, any
negotiations in the nature of a work-out). For purposes of this definition, the
term "Lender" shall include any portfolio advisor or collateral manager
(including, without limitation, SunAmerica Investment Advisor, Inc.) acting on
behalf of any Lender or in connection with such Lender's Loan hereunder.
"LIBOR" shall mean, with respect to an Interest Accrual Period, the rate
per annum equal to the rate appearing at page 3750 of the Telerate Screen two
LIBOR Business Days prior to the beginning of such Interest Accrual Period, for
the one-month term corresponding to such Interest Accrual Period, or if such
rate shall not be so quoted then the applicable rate appearing on Bloomberg on
the day two LIBOR Business Days prior to the beginning of such Interest Accrual
Period, or if neither such rate shall be so quoted, the "London Interbank
Offered Rates (LIBOR)" (one month) published in the "Money Rates" section of the
Wall Street Journal two LIBOR Business Days prior to the beginning of such
Interest Accrual Period.
"LIBOR Business Day" shall mean any day which is a Business Day and which
is also a day on which dealings in U.S. Dollars are carried on in the London
interbank market.
"Lien or Encumbrance" or "Liens and Encumbrances" means any mortgage, deed
of trust, pledge, hypothecation, assignment, charge or deposit arrangement,
encumbrance, lien (statutory or other) or preference, priority or other security
interest or preferential arrangement of any kind or nature whatsoever (including
those created by, arising under or evidenced by any conditional sale or other
title retention agreement, the interest of a lessor under a capital lease
obligation, any financing lease having substantially the same economic effect as
any of the foregoing, or the filing of any financing statement naming the owner
of the asset to which such lien relates as debtor, under the UCC or any
comparable law) and any contingent or other agreement to provide any of the
foregoing.
"Loan Documents" means this Agreement, each Note, the Guaranty, the
Security Documents, the Stock Pledge Agreement, the Collateral Account
Agreement, each Dividend Direction Letter, the Financing Statements, and all
documents delivered to Collateral Agent or any Lender in connection therewith.
"Loan Party" means Borrower, UDCSFC and each other Affiliate of Borrower
that is a party to any Loan Document.
"Material Adverse Change" or "Material Adverse Effect" means a material
adverse change in, or a material adverse effect upon, any of (a) the operations,
performance, business, properties, condition (financial or otherwise) or
prospects of any Loan Party or of Borrower and its Subsidiaries taken as a
whole, (b) the ability of Borrower or any other Loan Party to perform under any
Loan Document and avoid any Event of Default, or (c) the legality, validity,
binding effect or enforceability of any Loan Document or the perfection or
priority of any Lien created or purported to be created thereunder.
"Maturity Date" shall mean January 15, 2005.
"MBIA" shall mean MBIA Insurance Corporation.
"Monthly Amortization Amount" means:
(i) with respect to any Payment Date occurring prior to January 15,
2004, the greater of (A) $1,500,000.00, and (B) the amount, if any, by
which the then Outstanding Principal Amount of the Loan exceeds the
Borrowing Base as of such date as set forth in the Collateral Servicing
Report required to be delivered with respect to such Payment Date; and
(ii) with respect to any Payment Date occurring on or after January
15, 2004, the greater of (A) $2,250,000.00, and (B) the amount, if any, by
which the then Outstanding Principal Amount of the Loan exceeds the
Borrowing Base as of such date as set forth in the Collateral Servicing
Report required to be delivered with respect to such Payment Date.
"Multiemployer Plan" of any Person means a multiemployer plan, as defined
in Section 4001(a)(3) of ERISA, to which such Person or any of its ERISA
Affiliates is making or accruing an obligation to make contributions, or has
within any of the preceding six plan years made or accrued an obligation to make
contributions.
"Multiple Employer Plan" of any Person means a single employer plan, as
defined in Section 4001(a)(15) of ERISA, that (a) is maintained for employees of
such Person or any of its ERISA Affiliates and at least one Person other than
such Person and its ERISA Affiliates or (b) was so maintained and in respect of
which such Person or any of its ERISA Affiliates could have liability under
Section 4064 or 4069 of ERISA in the event such plan has been or were to be
terminated.
"Non-Recourse Debt" means (i) the Securitizations identified on Exhibit A,
(ii) Debt under one or more warehouse facilities or securitizations of a
Subsidiary of Borrower that is a bankruptcy remote or other similar special
purpose entity so long as such Debt satisfies each of the following
requirements: (a) the sole collateral for such Debt are loan receivables
purchased by such bankruptcy remote or other special purpose entity and the
recourse of the lenders under such warehouse facility is limited to such
collateral and other collateral described in the Intercreditor Agreement, (b) no
Loan Party (1) provides credit support of any kind (including any undertaking,
agreement or instrument that would constitute Debt), (2) is directly or
indirectly liable as a guarantor or otherwise, or (3) constitutes the lender
(provided that a Loan Party may be the Servicer of the collateral securing such
warehouse facility or securitization and in such capacity may provide customary
indemnification or incur customary repurchase obligations with respect to breach
of representations regarding such collateral); (b) the lenders with respect to
such Debt have been notified, and have acknowledged in writing or pursuant to
the terms of the instruments and agreements governing such Debt, in each case
prior to the incurrence of such Debt, that they will not have any recourse to
the stock or assets of any Loan Party, and (c) the Lenders have received notice
of the amount and principal terms of such Debt prior to its incurrence, and
(iii) other Debt approved by the Required Lenders as Non-Recourse Debt.
"Note" means a promissory note of the Borrower in favor of a Lender in
substantially the form of Exhibit D evidencing the Borrower's obligations to
such Lender in respect of the principal amount of the Loan made by or otherwise
owing to such Lender.
"Obligations" means all Debt, advances, debts, liabilities, obligations,
covenants and duties owing by Borrower to Collateral Agent or any Lender, of any
kind or nature, present or future, whether or not evidenced by any note,
guaranty or other instrument, arising under this Agreement, any Note or under
any other Loan Document, absolute or contingent, due or to become due, now
existing or hereafter arising and however acquired.
"Outstanding Principal Amount" means the Initial Principal Amount minus all
amounts applied to the repayment of the Loan pursuant to Section 2.6(d).
"Payment Date" shall mean the 15th day of each month during the term of
this Agreement commencing on January 15, 2003.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Permitted Liens" means (a) Liens held by Collateral Agent or any Lender,
(b) each lien existing at or prior to the date of this Agreement that is
identified on Schedule E to this Agreement, (c) the Liens referred to in the
Intercreditor Agreement, (d) capitalized leases up to an aggregate amount at any
time outstanding of $6,000,000, and (e) liens securing indebtedness to finance
the purchase of inventory in an aggregate principal amount not to exceed
$50,000,000 at anytime outstanding.
"Permitted Subsidiary Indebtedness" means (a) Indebtedness outstanding
under the Principal Warehouse Agreement as such agreements may be amended,
supplemented or modified from time to time but without any increase in the
aggregate commitments or Indebtedness available to be borrowed (or other credit
available to be extended) thereunder, (b) Non-Recourse Debt, (c) other
Indebtedness in an aggregate principal amount not to exceed $15,000,000 at any
time outstanding and (d) indebtedness to finance the purchase of inventory in an
aggregate principal amount not to exceed $50,000,000 at any time outstanding.
For purposes of calculating the amount of Indebtedness outstanding under the
foregoing clause (c), obligations in respect of capitalized leases (as described
in clause (iv) of the definition of "Debt") shall be excluded to the extent the
aggregate principal amount of all such obligations (determined in accordance
with GAAP) does not exceed $6,000,000.
"Person" means a natural person, partnership, corporation, business trust,
joint stock company, trust, unincorporated association, limited liability
company, joint venture or Governmental Authority.
"Plan" means a Single Employer Plan or a Multiple Employer Plan.
"Pledge and Security Agreement" means that certain Amended and Restated
Pledge and Security Agreement dated as of the date hereof among UDCSFC, Ugly
Duckling Credit Corporation, Ugly Duckling Car Sales, Inc., and Ugly Duckling
Finance Corporation, as Pledgor, in favor of Collateral Agent.
"Principal Warehouse Agreement" means that certain Master Loan and Security
Agreement, dated as of April 13, 2001 by and between Borrower, UDCSFC, UDCC,
Ugly Duckling Car Sales, Inc., an Arizona corporation and UDFC, Borrower and
Greenwich Capital as lender, as such agreement is amended, restated, renewed,
refinanced, modified and extended from time to time.
"Repayment Date" means the earlier of (i) the Maturity Date or (ii) the
date that the Outstanding Principal Amount of the Loan outstanding hereunder,
together with all accrued interest in respect thereof and all other Obligations,
has been reduced to zero.
"Required Lenders" means Lenders holding greater than fifty percent (50%)
of the aggregate principal amount of the Loan.
"Requirement of Law" means, as to any Person, any law (statutory or
common), treaty, rule or regulation or determination of an arbitrator or of a
Governmental Authority, in each case applicable to or binding upon the Person or
any of its property or to which the Person or any of its property is subject.
"Residual Certificate" means the UDRC II Residual Certificates, the UDRC
III Residual Certificates, the UDRC IV Residual Certificates and all Additional
Residual Certificates.
"Residual Certificate Cash Flows" means, for any period, all cash
distributions with respect to a Residual Certificate and Excluded Class C
Certificates together with all related spread account or reserve account
distributions, in each case to the extent received by the Collateral Agent and
deposited to the Collateral Account, during such period; provided, however, upon
termination of a Securitization Trust at recapture or the exercise of an
optional repurchase right, the Residual Certificate Cash Flows for such
Securitization Trust in the month of such termination shall be (i) the Residual
Certificate Value of such Securitization Trust as of the Calculation Date
immediately preceding the date of termination multiplied by (ii) the Advance
Rate (as set forth in the definition of "Borrowing Base") applicable to such
Securitization Trust on such preceding Calculation Date.
"Residual Certificate Value" means, as of any date of determination with
respect to the Residual Certificates for a securitization, the amount of the
entire cash balance in the spread account or reserve account relating to such
Residual Certificates plus the difference between (a) the outstanding principal
balance of auto loans in the pool of collateral securing such securitization and
(b) the outstanding principal balance of all certificates and other interests or
rights to payment in respect of such securitization senior in priority to such
Residual Certificates, in each case as set forth in the then most recently
delivered Collateral Servicing Report.
"Responsible Officer" means the chief executive officer or the president of
Borrower, or any other officer having substantially the same authority and
responsibility or, with respect to financial matters, the chief financial
officer or the treasurer of Borrower, or any other officer having substantially
the same authority and responsibility.
"Security Documents" means the writings described in Article III hereof
(including, without limitation, the Stock Pledge Agreement, the Collateral
Account Agreement and each other document, agreement or instrument creating, or
purporting to create a security interest in favor of the Collateral Agent in any
Residual Certificate or any other Collateral or proceeds thereof), as they may
hereafter be amended, modified and/or supplemented, the Pledge and Security
Agreement and all other writings now or hereafter executed to create, evidence
and/or perfect any Lien(s) to secure the Loan or any portion(s) thereof.
"Securitization Default" means any termination event, default or event of
default, or event or occurrence which, with the passage of time or the giving of
notice or both, would become a termination event, default or event of default
under any Securitization Document, which has not been cured within any
applicable period thereunder.
"Securitization Documents" shall mean (i) each UDRC II Securitization
Document, (ii) each UDRC III Securitization Document, (iii) each UDRC IV
Securitization Document, (iv) each purchase agreement and/or pooling and
servicing agreement (or comparable document) entered into or acknowledged by
Borrower, UDCC, UDRC II, UDRC III, UDRC IV or any Affiliate of any of them after
the date hereof with respect to any Additional Residual Certificates, and (v)
the other agreements, instruments, certificates and documents entered into or
acknowledged by Borrower, UDCC, or any Affiliate of any of them or by a
Securitization Trust (or comparable vehicle) with respect to any Additional
Residual Certificates.
"Securitization Trust" shall mean any trust formed pursuant to a purchase
agreement or a pooling and servicing agreement specified on Exhibit A hereto or
contemplated in clause (iii) of the definition of Securitization Documents.
"Single Employer Plan" of any Person means a single employer plan, as
defined in Section 4001(a)(15) of ERISA, that (a) is maintained for employees of
such Person or any of its ERISA Affiliates and no Person other than such Person
and its ERISA Affiliates or (b) was so maintained and in respect of which such
Person or any of its ERISA Affiliates could have liability under Section 4069 of
ERISA in the event such plan has been or were to be terminated.
"Standing Dividend Resolutions" shall mean (i) the UDRC II Standing
Dividend Resolution, (ii) the UDRC III Standing Dividend Resolution, (iii) the
UDRC IV Standing Dividend Resolution, and (iv) all other resolutions adopted by
the board of directors of Borrower or any of its Affiliates or Subsidiaries to
the effect that any amounts received as distributions on any Additional Residual
Certificates or in respect of spread accounts (or the like) will be promptly
distributed to Collateral Agent for the ratable account of the Lenders.
"Stock Pledge Agreement" means that certain Stock Pledge Agreement, dated
as of the date hereof, among UDCSFC as Pledgor, Borrower and Collateral Agent,
pursuant to which UDCSFC grants to Collateral Agent a security interest in one
hundred percent (100%) of the issued and outstanding capital stock of each of
UDRC II, UDRC III and UDRC IV.
"Subordinated Debt" shall mean the Debt set forth on Schedule G and any
Debt incurred after the date hereof as to which the repayment of principal and
interest is subordinated to repayment of the Loan pursuant to subordination
provisions that have been approved in writing by Required Lenders.
"Subsidiary" of a Person means a corporation, partnership, limited
liability partnership, limited liability company or other entity in which that
Person directly or indirectly owns or controls the shares of stock or other
ownership interests having ordinary voting power to elect a majority of the
board of directors (or appoint other comparable managers) of such corporation,
partnership, limited liability partnership, limited liability company or other
entity.
"Tangible Net Worth" of Borrower shall mean the total of Borrower's and its
consolidated Subsidiaries' shareholders' equity (including capital stock,
additional paid-in capital and retained earnings), less (i) the total amount of
all Indebtedness owing to Borrower from its consolidated Subsidiaries,
Affiliates, shareholders, officers or employees, and (ii) the total amount of
any intangible assets of Borrower and its consolidated Subsidiaries, including
unamortized discounts, deferred charges and goodwill.
"Trustee" means (i) BNY Midwest Trust Company, in its capacity as trustee
under certain Securitization Documents and its successors and assigns in such
capacity, (ii) Xxxxx Fargo Bank Minnesota, National Association, in its capacity
as trustee under certain Securitization Documents and its successors and
assigns, and (iii) such other Person as may from time to time be a trustee under
Securitization Documents.
"UCC" means the Uniform Commercial Code as in effect from time to time in
the State of New York, and in any and all other states in which Borrower and/or
any of its Subsidiaries conduct, or are authorized to conduct business.
"UDCC" means Ugly Duckling Credit Corp., an Arizona corporation formerly
known as Champion Acceptance Corporation.
"UDCSFC" means Ugly Duckling Car Sales and Finance Corporation, an Arizona
corporation formerly known as Duck Ventures, Inc.
"UDFC" means Ugly Duckling Finance Corporation, an Arizona corporation.
"UDRC II" shall mean Ugly Duckling Receivables Corp. II, a Delaware
corporation.
"UDRC III" shall mean Ugly Duckling Receivables Corp. III, a Delaware
corporation.
"UDRC IV" shall mean Ugly Duckling Receivables Corporation IV, a Delaware
corporation.
"UDRC II Residual Certificates" shall mean the currently issued and
outstanding, and all further issued and then outstanding, Class B Certificates
or with respect to any securitization occurring after August 1, 1999, the issued
and outstanding Class B Notes, Class C Certificates (other than the Excluded
Class C Certificates) and the Class D Certificates issued by each Securitization
Trust with respect to which UDRC II or an owner trust is the seller, including
those set forth on Schedule F, which constitute all of the UDRC II Residual
Certificates in existence on the Closing Date.
"UDRC III Residual Certificates" shall mean the currently issued and
outstanding, and all further issued and then outstanding Class B Notes, Class C
Certificates (other than the Excluded Class C Certificates) and the Class D
Certificates issued by each Securitization Trust with respect to which UDRC III
or an owner trust is the seller, including those set forth on Schedule F, which
constitute all of the UDRC III Residual Certificates in existence on the Closing
Date.
"UDRC IV Residual Certificates" shall mean the currently issued and
outstanding, and all further issued and then outstanding, Class B Notes, Class C
Certificates (other than the Excluded Class C Certificates) and the Class D
Certificates issued by each Securitization Trust with respect to which UDRC IV
or an owner trust is the seller, including those set forth on Schedule F, which
constitute all of the UDRC IV Residual Certificates in existence on the Closing
Date.
"UDRC II Dividend Direction Letter" means the letter dated July 18, 2002,
in which Collateral Agent, Lender, UDRC II, UDCC and Trustee agree that Trustee
shall pay all distributions in respect of the UDRC II Residual Certificates and
Excluded Class C Certificates directly to the Collateral Account for application
to the Obligations and/or release to Borrower in accordance with the Collateral
Account Agreement and Section 2.6.
"UDRC III Dividend Direction Letter" means the letter dated July 18, 2002,
in which Collateral Agent, Lender, UDRC III, UDCC and Trustee agree that Trustee
shall pay all distributions in respect of the UDRC III Residual Certificates and
Excluded Class C Certificates directly to the Collateral Account for application
to the Obligations and/or release to Borrower in accordance with the Collateral
Account Agreement and Section 2.6.
"UDRC IV Dividend Direction Letter" means the letter dated July 18, 2002,
in which Collateral Agent, Lender, UDRC IV, UDCC and Trustee agree that Trustee
shall pay all distributions in respect of the UDRC IV Residual Certificates and
Excluded Class C Certificates directly to the Collateral Account for application
to the Obligations and/or release to Borrower in accordance with the Collateral
Account Agreement and Section 2.6.
"UDRC II Securitization Documents" shall mean each of (i) the purchase
agreements listed on Exhibit A hereto, (ii) the pooling and servicing or sale
and servicing agreements listed on Exhibit A hereto, and (iii) the other
agreements, instruments, certificates and documents entered into or acknowledged
by Borrower, UDCC, UDRC II or any Affiliate of any of them or by a
Securitization Trust.
"UDRC III Securitization Documents" shall mean each of (i) the purchase
agreements listed on Exhibit A hereto, (ii) the pooling and servicing or sale
and servicing agreements listed on Exhibit A hereto, and (iii) the other
agreements, instruments, certificates and documents entered into or acknowledged
by Borrower, UDCC, UDRC III or any Affiliate of any of them or by a
Securitization Trust.
"UDRC IV Securitization Documents" shall mean each of (i) the purchase
agreements listed on Exhibit A hereto, (ii) the pooling and servicing or sale
and servicing agreements listed on Exhibit A hereto, and (iii) the other
agreements, instruments, certificates and documents entered into or acknowledged
by Borrower, UDCC, UDRC IV or any Affiliate of any of them or by a
Securitization Trust.
"UDRC II Standing Dividend Resolution" shall mean the resolution adopted on
September 30, 1999 by the board of directors of UDRC II (formerly Champion
Receivables Corp. II) to the effect that any amounts received as distributions
on the UDRC II Residual Certificates should be distributed as dividends to
UDCSFC or any other holder or assignee of the Common Stock of UDRC II.
"UDRC III Standing Dividend Resolution" shall mean the resolution adopted
on December 18, 2000 by the board of directors of UDRC III to the effect that
any amounts received as distributions on the UDRC III Residual Certificates
should be distributed as dividends to UDCSFC or any other holder or assignee of
the Common Stock of UDRC III.
"UDRC IV Standing Dividend Resolution" shall mean the resolution adopted on
June 14, 2002 by the board of directors of UDRC IV to the effect that any
amounts received as distributions on the UDRC IV Residual Certificates should be
distributed as dividends to UDCSFC or any other holder or assignee of the Common
Stock of UDRC IV.
"Ugly Duckling Collateral" shall mean any installment contracts or
conditional sales contracts, with any amendments thereto, originated by Borrower
or its Subsidiaries pursuant to which a person has: (i) purchased a new or used
motor vehicle, (ii) granted a security interest in the motor vehicle, and (iii)
agreed to pay the unpaid purchase price and a finance charge in periodic
installments.
"United States" and "U.S." each means the United States of America.
"Voidable Transfer" has the meaning set forth in Section 10.17.
1.2 Other Interpretive Provisions.
(a) Defined Terms. Unless otherwise specified herein or therein, all
terms defined in this Agreement shall have the defined meanings when used
in any certificate or other document made or delivered pursuant hereto. The
meaning of defined terms shall be equally applicable to the singular and
plural forms of the defined terms. Terms (including uncapitalized terms)
not otherwise defined herein, and that are defined in the UCC shall have
the meanings therein described.
(b) The Agreement. The words "hereof," "herein," "hereunder" and words
of similar import when used in this Agreement shall refer to this Agreement
as a whole and not to any particular provision of this Agreement; and
section, schedule and exhibit references are to this Agreement unless
otherwise specified.
(c) Certain Common Terms.
(i) The term "documents" includes any and all instruments, documents,
agreements, certificates, indentures, notices and other writings, however
evidenced.
(ii) The term "including" is not limiting and means "including without
limitation."
(iii) The term "or" has, except where otherwise indicated, the
inclusive meaning represented by the phrase "and/or."
(d) Performance; Time. Whenever any performance obligation hereunder
or under any Note (other than a payment obligation) shall be stated to be
due or required to be satisfied on a day other than a Business Day, such
performance shall be made or satisfied on the next succeeding Business Day.
In the computation of periods of time from a specified date to a later
specified date, the word "from" means "from and including"; the words "to"
and "until" each mean "to but excluding"; and the word "through" means "to
and including." If any provision of this Agreement refers to any action
taken or to be taken by any Person, or which such Person is prohibited from
taking, such provision shall be interpreted to encompass any and all means,
direct or indirect, of taking, or not taking, such action.
(e) Contracts. Unless otherwise expressly provided herein, references
to agreements and other contractual instruments shall be deemed to include
all subsequent amendments and other modifications thereto, but only to the
extent such amendments and other modifications are not prohibited by the
terms of any Loan Document.
(f) Laws. References to any statute or regulation are to be construed
as including all statutory and regulatory provisions consolidating,
amending, replacing, supplementing or interpreting the statute or
regulation.
(g) Captions. The captions and headings of this Agreement are for
convenience of reference only and shall not affect the construction of this
Agreement.
(h) Independence of Provisions. The parties acknowledge that this
Agreement and other Loan Documents may use several different limitations,
tests or measurements to regulate the same or similar matters, and that
such limitations, tests and measurements are cumulative and must each be
performed, except as expressly stated to the contrary in this Agreement.
1.3 Accounting Principles.
(a) Unless the context otherwise clearly requires, all accounting terms not
expressly defined herein shall be construed, and all financial computations
required under this Agreement shall be made, in accordance with GAAP,
consistently applied. In the event that GAAP changes during the term of this
Agreement such that the covenants contained in Article VI would then be
calculated in a different manner or with different components, (i) Borrower and
Lenders agree to amend this Agreement in such respects as are necessary to
conform those covenants as criteria for evaluating Borrower's financial
condition to substantially the same criteria as were effective prior to such
change in GAAP and (ii) Borrower shall be deemed to be in compliance with the
covenants contained in Article VI following any such change in GAAP if and to
the extent that Borrower would have been (and would continue to be) in
compliance therewith under GAAP as in effect immediately prior to such change.
(b) References herein to "fiscal year" and "fiscal quarter" refer to such
fiscal periods of Borrower.
1.4 Times.
All times of the day herein are Los Angeles, California time.
ARTICLE II.
THE LOAN
2.1 The Loan. Each Lender, on the terms and conditions hereinafter set
forth and subject to the conditions precedent pursuant to Section 4.1 of this
Agreement, severally agrees to make the Loan to Borrower in the ratable portion
of the Initial Funding Amount set forth opposite such Lender's name on the
signature pages hereto. The Borrower acknowledges and agrees that (i) all
principal amounts outstanding on the Closing Date under the Existing Loan
Agreement shall be and become principal amounts outstanding hereunder and (ii)
the Loan is being funded on a discounted basis and that immediately following
the funding of the Initial Funding Amount, the Loan shall be outstanding, and
payable in accordance with the terms hereof, in the full principal amount of the
Initial Principal Amount.
2.2 Payment Upon Collection; Monthly Amortization. Upon receipt by Borrower
or any of its Affiliates of any Collections, Borrower shall promptly (and in any
event within one (1) Business Day) pay (or cause to be paid) such Collections to
Collateral Agent for deposit in the Collateral Account. Subject to Section 2.6,
Borrower shall, on each Payment Date, repay the Outstanding Principal Amount in
an amount equal to the Monthly Amortization Amount for such Payment Date. Each
Lender shall, upon receipt of any such Collections, apply such Collections and
any Collections paid directly to Lender by Trustee or Collateral Agent in
accordance with the procedures set forth in Section 2.6 (but subject to Section
2.12).
2.3 Payment Upon Maturity. On the Maturity Date, Borrower will pay to each
Lender an amount equal to the Outstanding Principal Amount of the Loan then
owing to such Lender, together with all accrued and unpaid interest on such
Outstanding Principal Amount and any other accrued and unpaid Obligations then
owing to such Lender.
2.4 Interest.
(a) Interest Rate. Interest shall accrue on the Outstanding Principal
Amount of the Loan during each Interest Accrual Period at a rate per annum equal
to the greater of (A) LIBOR for such Interest Accrual Period, and (B) 2.125%,
plus five hundred (500) basis points at all times other than during an
Insufficient Ratings Period and eight hundred (800) basis points during an
Insufficient Ratings Period. In addition, after the occurrence of and during the
continuance of any Event of Default under Section 8.1 of this Agreement, the
Outstanding Principal Amount of the Loan together with all accrued and unpaid
interest on the Loan and any other accrued and unpaid Obligations due and
payable to Lender under this Agreement shall bear interest during each Interest
Accrual Period at a rate per annum equal to (I) the greater of (A) LIBOR for
such Interest Accrual Period, and (B) 2.125%, plus seven hundred (700) basis
points or (II) if LIBOR pricing has been suspended pursuant to Section 2.13(a),
the Base Rate plus six hundred (600) basis points at all times other than during
an Insufficient Ratings Period and nine hundred (900) basis points during an
Insufficient Ratings Period. Upon determining LIBOR for each Interest Accrual
Period, the Collateral Agent shall notify the Lenders and Borrower of such LIBOR
determination and the rate thereof.
(b) Limitation on Interest Rate. The obligations of Borrower hereunder and
under the Notes shall be subject to the limitation that payments of interest to
any Lender, plus any other amounts paid to such Lender in connection herewith
and therewith, shall not be required, to the extent (but only to the extent)
that contracting for or receiving such payment by such Lender would be contrary
to the provisions of any law applicable to such Lender limiting the highest rate
of interest which may be lawfully contracted for, charged or received by such
Lender, and in such event Borrower shall pay such Lender interest and other
amounts at the highest rate permitted by applicable law.
2.5 Voluntary Prepayments; Deposits to Collateral Account.
(a) Voluntary Prepayments. Borrower shall have the right, at its option, to
prepay its obligations under the Loan in whole or in part at any time (in a
minimum amount of $100,000 and an integral multiple of $10,000, or such lesser
amount as is then outstanding); provided, however, that each such voluntary
prepayment shall be applied ratably among the Lenders and shall be accompanied
by payment of any amounts owing under Section 10.4(d) with respect to such
prepayment. Borrower shall give each Lender at least ten Business Days prior
notice of its intention to prepay, specifying the date of payment, the total
amount and portion of the Loan of such Lender to be paid on such date and the
amount of interest to be paid with such prepayment.
(b) Deposits to Collateral Account. In the event the Outstanding Principal
Amount shall at any time exceed the sum of the Borrowing Base plus the amount
then on deposit in the Collateral Account, the Borrower shall immediately
deposit cash in the amount of such excess to the Collateral Account.
2.6 Application of Payments. All payments on the Loan shall be applied,
without duplication, in the following order:
(a) First, to Collateral Agent and each Lender for any and all sums
advanced or incurred by Collateral Agent or such Lender as are reasonably
necessary in order to preserve the Collateral or the security interests in the
Collateral and all reasonable expenses of taking, holding, preparing for sale or
lease, selling or otherwise disposing of or realizing on the Collateral or of
any exercise by Collateral Agent or any Lender (or any portfolio advisor for any
Lender) of its rights under this Agreement or any other Loan Document, together
with reasonable Attorney Costs and unpaid fees and expenses; and
(b) Second, ratably to each Lender for application to overdue interest on
the Obligations;
(c) Third, ratably to each Lender for application to accrued interest on
the Obligations;
(d) Fourth, ratably to each Lender for application to the Outstanding
Principal Amount in an amount equal to such Lender's ratable portion of any
Monthly Amortization Amount then due and payable;
(e) Fifth, ratably to each Lender in payment of all other accrued and
unpaid Obligations owing to such Lender.
Any provision hereof or of the Collateral Account Agreement to the contrary
notwithstanding, any amounts held by Collateral Agent pursuant to the Collateral
Account Agreement and not otherwise required to be applied to the Obligations
shall, at the written direction of Borrower, be applied to repay Obligations
hereunder (to be applied as set forth in this Section 2.6) or, if the Borrowing
Base plus such amount on deposit in the Collateral Account exceeds the
Outstanding Principal Amount at such time and no Default has occurred and is
continuing, such amounts held in the Collateral Account shall, upon written
request by Borrower to Collateral Agent, be released to Borrower up to the
amount of such excess; provided, however, that any release to Borrower of
amounts on deposit in the Collateral Account shall only be made on a Payment
Date and only after giving effect to the payment of all amounts due hereunder
and under the other Loan Documents on such Payment Date.
2.7 Prepayment. Upon any prepayment of the Loan, Borrower shall pay to each
Lender such Lender's ratable share of the principal amount to be prepaid,
together with all accrued and unpaid interest thereon through the date of
prepayment and any applicable premium payable pursuant to Section 2.5. Notice of
prepayment having been given in accordance with Section 2.5, the amount
specified to be prepaid shall become due and payable on the date specified for
prepayment.
2.8 Fees.
(a) Reserved.
(b) Collateral Agent Fees. Borrower shall pay to the Collateral Agent,
as and when due, the non-refundable fees set forth on Schedule H.
2.9 Fees and Interest. All computations of fees and interest under this
Agreement shall be made on the basis of a 360-day year and actual days elapsed,
which results in more interest being paid than if computed on the basis of a
365-day year. Interest and fees shall accrue during each Interest Accrual Period
during which interest or such fees are computed from the first day thereof to
the last day thereof. Borrower shall pay to Lenders all accrued and unpaid
interest on August 15, 2002 and on each Payment Date thereafter.
2.10 Payments by Borrower; Payments by Collateral Agent.
(a) All payments (including prepayments) to be made by or on behalf of
Borrower on account of principal, interest, fees and other amounts required
hereunder or under any Note shall be made without set-off, deduction, recoupment
or counterclaim and shall, except as otherwise expressly provided herein, be
made to Collateral Agent at Collateral Agent's office as set forth on its
Administrative Form or as otherwise directed in writing by the Collateral Agent,
in dollars and in immediately available funds, no later than 11:00 a.m. on the
date specified herein. Any payment which is received by Collateral Agent later
than 11:00 a.m. shall be deemed to have been received on the immediately
succeeding Business Day and any applicable interest or fee shall continue to
accrue. The Collateral Agent will promptly after receipt of each payment cause
to be distributed like funds relating to the payment of principal and interest
ratably to each Lender, and like funds relating to the payment of any other
amount payable to any Lender to such Lender, in each case to be applied in
accordance with, and subject to, the terms of this Agreement. Upon its
acceptance of an Assignment and Acceptance and recording of the information
contained therein in the Register pursuant to Section 10.16, from and after the
effective date specified in such Assignment and Acceptance, the Collateral Agent
shall make all payments hereunder, under any Note and under any other Loan
Document in respect of the interest assigned thereby to the Lender assignee
thereunder, and the parties to such Assignment and Acceptance shall make all
appropriate adjustments in such payments for periods prior to such effective
date directly between themselves.
(b) Whenever any payment hereunder or under any Note shall be stated to be
due on a day, other than a Business Day, such payment shall be made on the next
succeeding Business Day, and such extension of time shall in such case be
included in the computation of interest or fees, as the case may be.
2.11 Taxes.
(a) Withholding Taxes. Any and all payments by the Borrower hereunder and
under any Note shall be made free and clear of and without deduction for any and
all present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding, in the case
of each Lender and the Collateral Agent, net income taxes that are imposed by
the United States and franchise taxes and net income taxes that are imposed on
such Lender or the Collateral Agent by the state or foreign jurisdiction under
the laws of which such Lender or the Collateral Agent (as the case may be) is
organized or any political subdivision thereof and, in the case of each Lender,
franchise taxes and net income taxes that are imposed on such Lender by the
state or foreign jurisdiction of such Lender's Applicable Lending Office or any
political subdivision thereof (all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred to
as "Taxes"). If the Borrower shall be required by law to deduct any Taxes from
or in respect of any sum payable hereunder (or under any Note) to any Lender or
the Collateral Agent, (i) the sum payable shall be increased as may be necessary
so that after making all required deductions (including deductions applicable to
additional sums payable under this Section 2.11(a)) such Lender Party or the
Collateral Agent (as the case may be) receives an amount equal to the sum it
would have received had no such deductions been made, (ii) the Borrower shall
make such deductions and (iii) the Borrower shall pay the full amount deducted
to the relevant taxation authority or other authority in accordance with
applicable law.
(b) Other Taxes. In addition, the Borrower shall pay any present or future
stamp, documentary, excise, property or similar taxes, charges or levies that
arise from any payment made hereunder or under any Note or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement or any
other Loan Document (hereinafter referred to as "Other Taxes").
(c) Indemnification. The Borrower shall indemnify each Lender and the
Collateral Agent for the full amount of Taxes and Other Taxes, and for the full
amount of taxes imposed by any jurisdiction on amounts payable under this
Section 2.11 paid by such Lender or the Collateral Agent (as the case may be)
and any liability (including penalties, additions to tax, interest and expenses)
arising therefrom or with respect thereto. This indemnification shall be made
within 30 days from the date such Lender or the Collateral Agent (as the case
may be) makes written demand therefor.
(d) Evidence of Payment. Within 30 days after the date of any payment of
Taxes, the Borrower shall furnish to the each Lender the original receipt of
payment thereof or a certified copy of such receipt. In the case of any payment
hereunder or under any Note by the Borrower through an account or branch outside
the United States or on behalf of the Borrower by a payor that is not a United
States person, if the Borrower determines that no Taxes are payable in respect
thereof, the Borrower shall furnish, or shall cause such payor to furnish, to
each Lender an opinion of counsel acceptable to such Lender stating that such
payment is exempt from Taxes. For purposes of this subsection (d) and subsection
(e), the terms "United States" and "United States person" shall have the
meanings specified in Section 7701 of the Internal Revenue Code.
(e) Foreign Lenders and Issuing Banks. Each Lender organized under the laws
of a jurisdiction outside the United States shall, on or prior to the date it
becomes a party to this Agreement, and from time to time thereafter upon the
reasonable request in writing by the Borrower or the Collateral Agent (but only
so long thereafter as such Lender remains lawfully able to do so), provide the
Collateral Agent and the Borrower with Internal Revenue Service Form 1001 or
4224 (or other appropriate form), as appropriate, or any successor form
prescribed by the Internal Revenue Service, certifying that such Lender is
exempt from or is entitled to a reduced rate of United States withholding tax on
payments under this Agreement. If the form provided by a Lender at the time such
Lender first becomes a party to this Agreement indicates a United States
interest withholding tax rate in excess of zero, withholding tax at such rate
shall be considered excluded from Taxes unless and until such Lender provides
the appropriate form certifying that a lesser rate applies, whereupon
withholding tax at such lesser rate only shall be considered excluded from Taxes
for periods governed by such form; provided, however, that, if at the date of
the assignment pursuant to which a Lender assignee becomes a party to this
Agreement, the Lender assignor was entitled to payments under subsection (a) in
respect of United States withholding tax with respect to interest paid at such
date, then, to such extent, the term Taxes shall include (in addition to
withholding taxes that may be imposed in the future or other amounts otherwise
includable in Taxes) United States withholding tax, if any, applicable with
respect to the Lender assignee on such date.
(f) Failure to Provide Forms. For any period with respect to which a Lender
has failed to provide the Borrower with the appropriate form described in
Section 2.11(e) (other than if such failure is due to a change in law occurring
after the date on which a form originally was required to be provided or if such
form otherwise is not required under Section 2.11(e)), such Lender Party shall
not be entitled to indemnification under Section 2.11(a) or Section 2.11(c) with
respect to Taxes imposed by the United States; provided, however, that should a
Lender become subject to Taxes because of its failure to deliver a form required
hereunder, the Borrower shall take such steps as such Lender shall reasonably
request to assist such Lender to recover such Taxes.
2.12 Sharing of Payments, Etc. If any Lender shall obtain at any time any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) (a) on account of Obligations due and payable to such
Lender hereunder or under any Note at such time in excess of its ratable share
(according to the proportion of (i) the amount of such Obligations due and
payable to such Lender at such time to (ii) the aggregate amount of the
Obligations due and payable to all Lenders hereunder and under the Notes at such
time) of payments on account of the Obligations due and payable to all Lenders
hereunder and under the Notes at such time obtained by all the Lenders at such
time or (b) on account of Obligations owing (but not due and payable) to such
Lender hereunder or under any Note at such time in excess of its ratable share
(according to the proportion of (i) the amount of such Obligations owing to such
Lender at such time to (ii) the aggregate amount of the Obligations owing (but
not due and payable) to all Lenders hereunder and under the Notes at such time)
of payments on account of the Obligations owing (but not due and payable) to all
Lenders hereunder and under the Notes at such time obtained by all the Lenders
at such time, such Lender shall forthwith purchase from the other Lenders such
participations in the Obligations due and payable or owing to them, as the case
may be, as shall be necessary to cause such purchasing Lender to share the
excess payment ratably with each of them; provided, however, that if all or any
portion of such excess payment is thereafter recovered from such purchasing
Lender, such purchase from each other Lender shall be rescinded and such other
Lender shall repay to the purchasing Lender the purchase price to the extent of
such other Lender's ratable share (according to the proportion of (i) the
purchase price paid to such Lender to (ii) the aggregate purchase price paid to
all Lenders) of such recovery together with an amount equal to such Lender's
ratable share (according to the proportion of (i) the amount of such other
Lender's required repayment to (ii) the total amount so recovered from the
purchasing Lender) of any interest or other amount paid or payable by the
purchasing Lender in respect of the total amount so recovered. The Borrower
agrees that any Lender so purchasing a participation from another Lender
pursuant to this Section 2.12 may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off) with respect
to such participation as fully as if such Lender were the direct creditor of the
Borrower in the amount of such participation.
2.13 Suspension of LIBOR.
(a) Illegality. Notwithstanding any other provision of this Agreement, if
the introduction of or any change in or in the interpretation of any law or
regulation shall make it unlawful, or any central bank or other governmental
authority shall assert that it is unlawful, for any Lender to perform its
obligations hereunder to make, fund or maintain its portion of the Loan as a
LIBOR based obligation, then, on notice thereof and demand therefor by such
Lender to the Borrower, the interest rate applicable to the Loan pursuant to
Section 2.4 shall thereafter be the Base Rate plus six hundred fifty (650) basis
points at all times other than during an Insufficient Ratings Period and nine
hundred (900) basis points during an Insufficient Ratings Period.
(b) Other Circumstances. If any Lender shall determine in good faith (which
determination shall be conclusive) that (A) LIBOR cannot be determined in
accordance with the definition thereof, or (B) LIBOR for any Interest Accrual
Period will not adequately reflect the cost to such Lender of making, funding or
maintaining such Lender's ratable portion of the Loan for such Interest Period,
such Lender shall forthwith so notify the Borrower and the other Lenders,
whereupon the interest rate applicable to the Loan pursuant to Section 2.4 for
such Lender shall thereafter be the Base Rate plus 5.0%. 2.14 Increased Costs,
Etc.
(a) Increased Costs. If, due to either (i) the introduction of or any
change in or in the interpretation of any law or regulation or (ii) the
compliance with any guideline or request from any central bank or other
governmental authority (whether or not having the force of law), there shall be
any increase in the cost to any Lender of agreeing to make or of making, funding
or maintaining its portion of the Loan based on LIBOR, then the Borrower shall
from time to time, upon demand by such Lender pay to such Lender additional
amounts sufficient to compensate such Lender for such increased cost A
certificate as to the amount of such increased cost, submitted to the Borrower
by such Lender, shall be conclusive and binding for all purposes, absent
manifest error.
(b) Capital Requirements. If, due to either (i) the introduction of or any
change in or in the interpretation of any law or regulation or (ii) the
compliance with any guideline or request from any central bank or other
governmental authority (whether or not having the force of law), there shall be
any increase in the amount of capital required or expected to be maintained by
such Lender or any corporation controlling such Lender as a result of or based
upon the existence of such Lender's commitment to lend hereunder, then, upon
demand by such Lender, the Borrower shall pay to such Lender, from time to time
as specified by such Lender, additional amounts sufficient to compensate such
Lender in the light of such circumstances, to the extent that such Lender
reasonably determines such increase in capital to be allocable to the existence
of such Lender's commitment to lend hereunder. A certificate as to such amounts
submitted to the Borrower by such Lender, shall be conclusive and binding for
all purposes, absent manifest error.
2.15 Promissory Notes. The Borrower hereby agrees that if, in the opinion
of any Lender, a promissory note or other evidence of debt is required,
appropriate or desirable to reflect or enforce the indebtedness of the Borrower
resulting from the Loan made by or otherwise owing to such Lender, then upon
request of such Lender, the Borrower shall (in the case of any such request by a
Lender that is not an initial party hereto, in accordance with Section 10.16)
promptly execute and deliver to such Lender, a promissory note substantially in
the form of Exhibit D, payable to the order of such Lender in an amount equal to
the principal amount of the Loan made by or otherwise owing to such Lender.
ARTICLE III.
SECURITY AGREEMENT AND COLLATERAL
3.1 Security for Obligations. As security for the payment and performance
of the Obligations under this Agreement and the other Loan Documents and all
other present and future debts, obligations and liabilities of any nature
whatsoever of Borrower to Collateral Agent or any Lender in respect of this
Agreement and the other Loan Documents, and all modifications, renewals,
replacements and extensions thereof, UDCSFC shall grant Collateral Agent (for
Collateral Agent's benefit and the ratable benefit of the Lenders) a security
interest in the Collateral pursuant to the Stock Pledge Agreement, the
Collateral Account Agreement and such other agreements, documents and
instruments as Required Lenders may reasonably require. Such security interest
shall be subject to the terms and conditions of the Intercreditor Agreement.
Borrower shall cause UDCSFC to execute and deliver the Stock Pledge Agreement
and to perform its obligations thereunder. Borrower will, prior to the creation
of any Additional Residual Certificates, take and cause its Affiliates and
Subsidiaries to take, such actions and execute such agreements, documents and
instruments (and deliver such opinions of counsel) as may be necessary or as
Collateral Agent or Required Lenders may reasonably request in order to create a
perfected first priority security interest securing the Obligations in favor of
Collateral Agent (for Collateral Agent's benefit and the ratable benefit of the
Lenders) in such Additional Residual Certificates or in 100% of the capital
stock or other equity interests of the entity owning such Additional Residual
Certificates, including, without limitation, compliance with Section 7(c) of the
Stock Pledge Agreement. Borrower will execute, and shall cause UDCSFC and
Borrower's other Affiliates and Subsidiaries, to execute, any security
agreements, collateral assignments, financing statements for filing and/or
recording and any other agreements, documents or instruments reasonably required
by Collateral Agent or Required Lenders to evidence and perfect the Liens and
security interests of Collateral Agent. A carbon, photographic or other
reproduced copy of this Agreement and/or any financing statement relating hereto
shall be sufficient for filing and/or recording as a financing statement.
3.2 Security Documents. The Financing Statements shall remain on file in
the appropriate jurisdictions and Borrower shall promptly execute or cause to be
executed any other financing statements and notices as are necessary to properly
perfect Collateral Agent's security interest in the Collateral.
3.3 Duties Regarding Collateral. Neither Collateral Agent nor any Lender
(nor any portfolio advisor for any Lender) shall have any duty or obligation to
protect, insure, collect or realize upon the Collateral or preserve rights in it
against prior parties. Borrower releases Collateral Agent and each Lender (and
each portfolio advisor) from, and shall indemnify Collateral Agent and each
Lender (and each portfolio advisor) against, any liability for any act or
omission relating to the Collateral, except with respect to any such Person for
any liability directly resulting from such Person's gross negligence or willful
misconduct.
3.4 Borrower's Duties Regarding Collateral. Borrower agrees as follows:
(a) General Maintenance of Collateral. Borrower: (i) shall keep the
Collateral free from all Liens (other than the Liens of ad valorem property
taxes which are not delinquent, any statutory landlords' liens which are covered
by lien waivers satisfactory to Required Lenders, mechanic's liens, Permitted
Liens, and any Liens in favor of Collateral Agent for the benefit of the
Lenders); (ii) shall defend the Collateral against all claims and legal
proceedings by persons other than Collateral Agent and Lenders; (iii) shall pay
and discharge when due all taxes, levies and other charges upon the Collateral;
(iv) shall cause UDCSFC and Borrower's other Affiliates and Subsidiaries not to
sell, lease or otherwise dispose of the Collateral; and (v) shall not permit the
Collateral to be used in violation of any Requirement of Law or any policy of
insurance.
(b) Perfection and Priority. Borrower shall pay all Lender's Expenses
necessary to, take all actions necessary to, and, upon Collateral Agent's or any
Lender's request, execute all writings and take and cause Borrower's Affiliates
and Subsidiaries to take all other actions reasonably deemed advisable by
Collateral Agent or any Lender to, preserve the Collateral or to establish, and
determine priority of, perfection, continued perfection or enforce Collateral
Agent's interest in the Collateral.
(c) Records and Inspections. Upon reasonable notice to Borrower, any Lender
may examine and conduct audits of the Collateral, and Borrower's and UDCSFC's
and Borrower's other Affiliates' and Subsidiaries' records concerning it,
wherever located, and make copies of such records, at any time during normal
business hours, and Borrower shall assist such Lender in so doing. Borrower
shall keep accurate, complete and current records respecting the Collateral. In
addition to the specific requirements of Section 6.1, Borrower shall, within ten
(10) Business Days of any request by any Lender, furnish to such Lender a
detailed statement, certified as being substantially accurate by a Responsible
Officer, setting forth the current status, value and location of all or any
portion of the Collateral.
3.5 Power of Attorney. Borrower hereby makes, constitutes and appoints
Collateral Agent and each Lender and its portfolio advisor the true and lawful
attorney-in-fact of Borrower, in the name, place and stead of Borrower, or
otherwise, upon the occurrence of any Event of Default which remains uncured
following the receipt of a notice pursuant to Section 10.2:
(a) To take all actions and to execute, acknowledge, obtain and deliver any
and all writings necessary or deemed advisable by Collateral Agent or such
Lender in order to exercise any rights of Borrower with respect to the
Collateral or to receive and enforce any payment or performance due to Borrower
with respect to the Collateral;
(b) To give any notices, instructions or other communications to any person
or entity in connection with the Collateral;
(c) To demand and receive all performances due under or with respect to the
Collateral and to take all lawful steps to enforce such performances and to
compromise and settle any claim or cause of action of Borrower arising from or
related to the Collateral and give acquittances and other discharges relating
thereto; and
(d) To file any claim or proceeding or to take any other action, in the
name of Collateral Agent or such Lender, Borrower or otherwise, to enforce
performances due under or related to the Collateral or to protect and preserve
the right, title and interest of Collateral Agent or such Lender thereunder.
The foregoing power of attorney is a power coupled with an interest and
shall be irrevocable and unaffected by the disability of the principal so long
as any portion of the Obligations remains contingent, unmatured, unliquidated,
unpaid or unperformed. Neither the Collateral Agent nor the Lender shall have
any obligation to exercise any of the foregoing rights and powers in any event.
3.6 Collateral Inspections. Collateral Agent and each Lender shall have the
right (but not the obligation) to do a physical on-site examination of the
Collateral. All costs and expenses associated therewith shall be included in
Lender Expenses.
ARTICLE IV.
CONDITIONS PRECEDENT; TERM OF AGREEMENT
4.1 Conditions Precedent. No Lender shall be required to make the Loan to
be made by it hereunder if Borrower has not fulfilled to the satisfaction of
such Lender and its counsel, each of the following conditions on or before the
Closing Date; provided, however, that each Lender, in its sole and absolute
discretion, may waive any of the following conditions.
4.2 Receipt of Documents. Each Lender shall have received each of the
following documents, duly executed, and each such document shall be in full
force and effect:
(a) This Agreement executed by Borrower, Collateral Agent and each Lender;
(b) The Notes duly executed, the Guaranty duly executed, the Collateral
Account Agreement duly executed and the Stock Pledge Agreement duly executed
together with the certificates representing 100% of the capital stock of UDRC
II, UDRC III and UDRC IV and undated stock powers relating thereto duly endorsed
in blank;
(c) The UDRC II Dividend Direction Letter;
(d) The UDRC III Dividend Direction Letter;
(e) The UDRC IV Dividend Direction Letter;
(f) The UDRC II Standing Dividend Resolution certified by UDRC II's
Secretary;
(g) The UDRC III Standing Dividend Resolution certified by UDRC III's
Secretary;
(h) The UDRC IV Standing Dividend Resolution certified by UDRC IV's
Secretary;
(i) Such Amendments to the Intercreditor Agreement as may be reasonably
necessary to evidence the transactions pursuant hereto;
(j) A consent by MBIA to the pledge of the Collateral to Collateral Agent;
(k) Certified copies of the resolutions of the board of directors of
Borrower approving and authorizing the execution, delivery and performance by
Borrower of this Agreement and the other Loan Documents to be delivered
hereunder, and authorizing the Loan, certified as of the Closing Date by the
Secretary or an Assistant Secretary of Borrower;
(l) A certificate of the Secretary or Assistant Secretary of Borrower
certifying the names and true signatures of the officers of Borrower authorized
to execute, deliver and perform, as applicable, this Agreement, the Stock Pledge
Agreement and all other Loan Documents to be delivered hereunder;
(m) Certified copies of the resolutions of the board of directors of UDCSFC
approving and authorizing the execution, delivery and performance by UDCSFC of
the applicable Loan Documents to be delivered hereunder, certified as of the
Closing Date by the Secretary or an Assistant Secretary of UDCSFC;
(n) A certificate of the Secretary or Assistant Secretary of UDCSFC
certifying the names and true signatures of the officers of UDCSFC authorized to
execute, deliver and perform the Stock Pledge Agreement and all other applicable
Loan Documents to be delivered hereunder;
(o) Copies of each of Borrower's, UDCSFC's, UDRC II's, UDRC III's and UDRC
IV's certificate of incorporation certified by the Secretary of the State of
their respective jurisdictions of incorporation and bylaws certified by their
respective Secretaries or Assistant Secretaries;
(p) Good standing certificates for the jurisdiction of incorporation and
the jurisdiction in which the chief executive office is located for each of
Borrower, UDCSFC, UDRC II, UDRC III and UDRC IV;
(q) A copy of lien searches, completed as of a recent date, against
Borrower and UDCSFC, UDRC II, UDRC III and UDRC IV, in such jurisdictions as
shall be satisfactory to Lenders and its counsel;
(r) Legal opinions from counsel for Borrower with respect to the
transactions contemplated by the Loan Documents, which opinions shall be in form
and substance satisfactory to Lenders and from counsel satisfactory to Lenders;
and
(s) The obligations hereunder shall have been rated "B" or above by a
rating agency acceptable to the Required Lenders.
(t) There shall have occurred since December 31, 2001, no Material Adverse
Change.
(u) Lenders shall have received Borrower's audited financial statements for
the fiscal year ended December 31, 2001 and unaudited financial statements for
the 3 month period ended March 31, 2002.
(v) Officers Certificate as to no default and truth of representations and
warranties.
4.3 Payment of Interest under Existing Loan Agreement. The Borrower shall
have paid all accrued and unpaid interest to and including the Closing Date
under the Existing Loan Agreement.
4.4 Term. This Agreement shall become effective upon the execution and
delivery hereof by Borrower, Collateral Agent and Lenders and shall continue in
full force and effect for a term ending on the earliest of (a) the Repayment
Date, or (b) the date of termination of this Agreement in accordance with its
terms after the occurrence and during the continuation of an Event of Default.
4.5 Effect of Termination. Upon termination of this Agreement, all
Obligations shall become due and payable immediately without notice or demand.
No termination of this Agreement, however, shall relieve or discharge Borrower
of Borrower's duties, Obligations, or covenants hereunder, and Collateral
Agent's continuing security interest in the Collateral shall remain in effect
until all Obligations have been fully and finally discharged.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Agreement and make the Loan,
Borrower makes the following representations and warranties which shall be true,
correct, and complete in all respects as of the date hereof, and shall be true,
correct, and complete in all respects as of the Closing Date (except to the
extent that such representations and warranties relate solely to an earlier
date) and such representations and warranties shall survive the execution and
delivery of this Agreement:
5.1 No Encumbrances. UDCSFC has good and indefeasible title to the
Collateral, free and clear of Liens except for Permitted Liens.
5.2 Location of Chief Executive Office; FEIN. The chief executive office of
Borrower is located at the address indicated in the preamble to this Agreement
and Borrower's FEIN is 00-0000000. The chief executive office of UDCSFC is
located at the address of Borrower indicated in the preamble to this Agreement
and UDCSFC's FEIN is 00-0000000.
5.3 Due Organization and Qualification; Subsidiaries.
(a) Each Loan Party is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation and qualified
and licensed to do business in, and in good standing in, any state where the
failure to be so licensed or qualified reasonably could be expected to have a
Material Adverse Effect.
(b) Set forth on Schedule A is a complete and accurate list of Borrower's
direct and indirect Subsidiaries, showing: (i) the jurisdiction of their
incorporation; (ii) the number of shares of each class of Equity Interests
authorized for each of such Subsidiaries; and (iii) the number and the
percentage of the outstanding shares of each such class owned directly or
indirectly by Borrower. All of the outstanding Equity Interests of each such
Subsidiary have been validly issued and are fully paid and non-assessable.
(c) Except as set forth on Schedule B, no Equity Interests (or any
securities, instruments, warrants, options, purchase rights, conversion or
exchange rights, calls, commitments or claims of any character convertible into
or exercisable for Equity Interests) of any direct or indirect Subsidiary of
Borrower is subject to the issuance of any security, instrument, warrant,
option, purchase right, conversion or exchange right, call, commitment or claim
of any right, title, or interest therein or thereto.
5.4 Due Authorization: No Conflict.
(a) The execution, delivery, and performance by each Loan Party of each of
the Loan Documents to which it is a party have been duly authorized by all
necessary corporate action.
(b) The execution, delivery, and performance by each Loan Party of each of
the Loan Documents to which it is a party do not and will not (i) violate any
provision of federal, state, or local law or regulation (including Regulations
T, U, and X of the Federal Reserve Board) applicable to such Loan Party, the
Governing Documents of such Loan Party, or any order, judgment, or decree of any
court or other Governmental Authority binding on any Loan Party, (ii) conflict
with, result in a breach of, or constitute (with due notice or lapse of time or
both) a default under any material contractual obligation or material lease of
any Loan Party, (iii) result in or require the creation or imposition of any
Lien of any nature whatsoever upon any properties or assets of any Loan Party,
other than pursuant to the Security Documents, or (iv) require any approval of
stockholders or any approval or consent of any Person under any material
contractual obligation of any Loan Party. No Loan Party or any of its
Subsidiaries is in violation of any law, rule, regulation, order, writ,
judgment, injunction, decree, determination or award or in breach of any such
contract, loan agreement, indenture, mortgage, deed of trust, lease or other
instrument, the violation or breach of which could have a Material Adverse
Effect.
(c) Other than the taking of any other action expressly required under this
Agreement or any of the other Loan Documents, the execution, delivery, and
performance by each Loan Party of this Agreement and the other Loan Documents to
which such Loan Party is a party do not and will not require any registration
with, consent, or approval of, or notice to, or other action with or by, any
federal, state, foreign, or other Governmental Authority or other Person.
(d) This Agreement, the other Loan Documents and all other documents
contemplated hereby and thereby, when executed and delivered by any Loan Party
party thereto, will be the legally valid and binding obligations of such Loan
Party, enforceable against such Loan Party in accordance with their respective
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.
(e) The Stock Pledge Agreement and the stock powers delivered in connection
therewith, and the Collateral Account Agreement when executed and delivered by
UDCSFC and UDC, will be the legally valid and binding obligations of UDCSFC and
UDC, enforceable against each of UDCSFC and UDC in accordance with their
respective 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.
(f) The Lien granted by UDCSFC and UDC on the Collateral is a validly
created and perfected first priority Lien, and the Collateral is subject to no
other Liens other than Liens in favor of Collateral Agent and the Permitted
Liens.
5.5 Litigation. Except as set forth in Schedule C, there are no actions or
proceedings pending by or against Borrower before any court or administrative
agency and Borrower does not have knowledge or belief of any pending,
threatened, or imminent litigation, governmental investigations, or claims,
complaints, actions, or prosecutions involving Borrower, except for: (a) ongoing
collection matters in which Borrower is the plaintiff, (b) matters that, if
decided adversely to Borrower, would not have a Material Adverse Effect and (c)
matters as to which Borrower has provided notice to the Lenders and which could
not reasonably be expected to be decided adversely to Borrower.
5.6 Financial Statements; No Material Adverse Change. All financial
statements relating to Borrower, UDRC II, UDRC III and UDRC IV that have been
delivered by Borrower to Lenders have been prepared in accordance with GAAP
(except, in the case of unaudited financial statements, for the lack of
footnotes and being subject to year-end audit adjustments) and fairly present
the financial condition as of the date thereof and the results of operations for
the period then ended for Borrower and its consolidated Subsidiaries, except as
disclosed on Schedule D. No information, exhibit or report furnished by Borrower
or any other Loan Party to the Collateral Agent or any Lender in connection with
the negotiation of the Loan Documents or pursuant to the terms of the Loan
Documents contained any untrue statement of a material fact or omitted to state
a material fact necessary to make the statements made therein not misleading.
There has not been a Material Adverse Change with respect to Borrower since
December 31, 2001. For purposes of this Section 5.6, so long as Borrower has not
failed to comply with Section 6.24 hereof, the requirement to refinance the GECC
Agreement shall not constitute a Material Adverse Change.
5.7 Securitization Documents. Borrower, UDRC II, UDRC III and UDRC IV and
each of their Affiliates are in full compliance with their respective
obligations under the Securitization Documents, and no Securitization Default
exists.
5.8 ERISA. No accumulated funding deficiency (as defined in Section 302 of
ERISA and Section 412 of the Code), whether or not waived, exists with respect
to any plan (other than a multiemployer plan). No liability to the Pension
Benefit Guaranty Corporation has been or is expected by Borrower to be incurred
with respect to any plan (other than a multiemployer plan) by Borrower which is
or would have a Material Adverse Effect. Borrower has not incurred and does not
presently expect to incur any withdrawal liability under Title IV of ERISA with
respect to any multiemployer plan which is or would be materially adverse to
Borrower. The execution and delivery of this Agreement and the other Loan
Documents will not involve any transaction which is subject to the prohibitions
of Section 406 of ERISA or in connection with which a tax could be imposed
pursuant to section 4975 of the Code. For the purpose of this Section 5.8, the
term "plan" shall mean an "employee pension benefit plan" (as defined in section
3 of ERISA) which is or has been established or maintained, or to which
contributions are or have been made, by Borrower or by any trade or business,
whether or not incorporated, which, together with Borrower, is under common
control, as described in Section 414(b) or (c) of the Code; and the term
"multiemployer plan" shall mean any plan which is a "multiemployer plan" (as
such term is defined in Section 4001(a)(3) of ERISA). No plan providing welfare
benefits to retired former employees of Borrower has been established or is
maintained for which the present value of future benefits payable, in excess of
irrevocably designated funds for such purpose, is or would have a Material
Adverse Effect.
5.9 Environmental and Safety Matters. Borrower (a) has complied in all
material respects with all applicable material Environmental and Safety Laws,
and Borrower has not received (i) notice of any material failure so to comply,
(ii) any letter or request for information under Section 104 of CERCLA or
comparable state laws or (iii) any information that would lead it to believe
that it is the subject of any Federal or state investigation concerning
Environmental and Safety Laws; (b) does not manage, generate, discharge or store
any Hazardous Materials in material violation of any material Environmental and
Safety Laws; (c) does not own, operate or maintain any underground storage tanks
or surface impoundments; and (d) except as disclosed to Lenders in writing prior
to the date hereof, is not aware of any conditions or circumstances associated
with its currently or previously owned or leased properties or operations (or
those of its tenants) which may give rise to any Environmental Liabilities and
Costs which could have a Material Adverse Effect.
5.10 Tax Matters. Each of Borrower and its Subsidiaries has filed all tax
returns that it was required to file. All such tax returns were correct and
complete in all material respects. All Borrower Taxes owed by any of Borrower
and its Subsidiaries have been paid.
5.11 [Reserved].
5.12 Ownership of Properties. Each Loan Party and its Subsidiaries has
good, marketable and insurable title in fee simple to, or a valid leasehold
interest in, all its real property, and good title to, or a valid leasehold
interest in, all its other Property.
5.13 Investment Company Status. Neither any Loan Party nor any of its
Subsidiaries is an "investment company," or an "affiliated person" of, or
"promoter" or "principal underwriter" for, an "investment company," as such
terms are defined in the Investment Company Act of 1940, as amended. Neither the
making of the Loan nor the application of the proceeds or repayment thereof by
Borrower, nor the consummation of the other transactions contemplated hereby,
will violate any provision of such Act or any rule, regulation or order of the
Securities and Exchange Commission thereunder.
5.14 Solvency. Each Loan Party is, individually and together with its
Subsidiaries, Solvent. For purposes hereof, the term "Solvent" means, with
respect to any Person on a particular date, that on such date (a) the fair value
of the property of such Person is greater than the total amount of liabilities,
including, without limitation, contingent liabilities, of such Person, (b) the
present fair salable value of the assets of such Person is not less than the
amount that will be required to pay the probable liability of such Person on its
debts as they become absolute and matured, (c) such Person does not intend to,
and does not believe that it will, incur debts or liabilities beyond such
Person's ability to pay as such debts and liabilities mature and (d) such Person
is not engaged in business or a transaction, and is not about to engage in
business or a transaction, for which such Person's property would constitute an
unreasonably small capital. The amount of contingent liabilities at any time
shall be computed as the amount that, in the light of all the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability.
ARTICLE VI.
AFFIRMATIVE COVENANTS
Borrower covenants and agrees that, so long as any credit hereunder shall
be available and until full and final payment of the Obligations, and unless
Required Lenders shall otherwise consent in writing, Borrower shall do all of
the following:
6.1 Financial Statements and Other Documents. Borrower shall deliver to
Lenders in form and detail satisfactory to Required Lenders:
(a) Within 45 days of the end of each fiscal quarter (except the last
fiscal quarter of each fiscal year), Borrower's consolidated unaudited financial
statements for such quarter, and, within 90 days of the end of Borrower's fiscal
year, Borrower's consolidated audited financial statements for such period,
certified by Borrower's Chief Financial Officer or Treasurer as fairly
presenting in all material respects, in accordance with GAAP (subject, in the
case of unaudited financial statements, to ordinary, good faith year-end
adjustments and to the absence of footnote disclosure), the financial position
and results of operations of Borrower and together, in each case, with a
certificate of the Chief Financial Officer of Borrower stating that the
representations and warranties herein are true and correct in all material
respects as of the date of such certificate and that no Default has occurred and
is continuing or, if a default has occurred and is continuing, a statement as to
the nature thereof and the action that Borrower has taken and proposes to take
with respect thereto and setting forth in reasonable detail satisfactory to
Required Lenders the calculations demonstrating compliance with Sections 6.13
through 6.16;
(b) Promptly upon receipt thereof, any financial statements of Borrower
distributed to other lenders or financing parties;
(c) On or prior to each Calculation Date, a Collateral Servicing Report
certified as true and correct by an officer of Borrower and including the
calculation of the Borrowing Base as of such Calculation Date and certifying
such calculation as true and correct.
(d) Promptly upon preparation thereof, a copy of each other report, if any,
submitted to Borrower by independent accountants in connection with any annual,
interim or special audit made by them of the books of Borrower;
(e) Promptly after its submission, copies of any other information or
documents regularly provided by Borrower to any of its other lenders or holders
of Borrower's Debt;
(f) Promptly upon receipt thereof, copies of any other information or
documents received by Borrower pursuant to any Securitization Document
(including, without limitation, monthly servicing reports with respect to each
Securitization);
(g) With reasonable promptness, such other financial data and information
as any Lender may reasonably request; and
(h) Promptly upon receipt thereof, (i) copies of any federal revenue
agent's reports (so called "thirty-day letter") issued by the IRS, and copies of
any equivalent documents from state or local tax authorities; (ii) copies of any
federal notice of deficiency (so-called "ninety-day letters") issued by the IRS,
and copies of any equivalent documents from state or local tax authorities; and
(iii) copies of any information requests or document requests received from
federal, state or local tax authorities that are not in the ordinary course of
business.
6.2 Inspection of Property. Borrower shall permit any Person designated by
any Lender in writing, to visit and inspect any of the properties of Borrower,
to examine the corporate books and financial records of Borrower and make copies
thereof or extracts therefrom and to discuss the affairs, finances and accounts
of any of such corporations with the principal officers of Borrower and its
independent public accountants, all at such reasonable times and as often as any
Lender may reasonably request.
6.3 Default Disclosure.
(a) Borrower shall forthwith, upon a Responsible Officer of Borrower
obtaining knowledge of an Event of Default or Default, promptly deliver to each
Lender a certificate of a Responsible Officer specifying the nature and period
of existence thereof and what action Borrower proposes to take with respect
thereto.
(b) Borrower shall forthwith, upon a Responsible Officer of Borrower
obtaining knowledge of a Securitization Default, deliver to each Lender a
certificate of a Responsible Officer specifying the nature and period of
existence thereof, what action the defaulting party proposes to take with
respect thereto, and what action Borrower proposes to take with respect thereto.
6.4 Notices to Lenders and the Collateral Agent. Borrower shall promptly
notify each Lender and the Collateral Agent in writing of:
(a) Any lawsuit over Five Hundred Thousand Dollars ($500,000) against
Borrower or any of its Subsidiaries;
(b) Any substantial dispute between Borrower or any of its subsidiaries and
any Governmental Authority; or
(c) Any change in any Loan Party's name, address, or legal structure.
6.5 Books and Records. Borrower shall maintain adequate books and records
in accordance with generally accepted accounting principles.
6.6 Compliance and Preservation. Borrower shall and shall cause its
Subsidiaries to:
(a) Comply with the laws (including any fictitious name statute),
regulations and orders of any government body with authority over its business;
(b) Maintain and preserve all privileges and franchises such Person now has
provided, however, that neither the Borrower nor any of its Subsidiaries shall
be required to preserve any privilege or franchise (other than the corporate
existence of each Loan Party, UDCC, UDRC II, UDRC III and UDRC IV) if the Board
of Directors of the Borrower shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Borrower or such
Subsidiary, as the case may be, and that the loss thereof is not disadvantageous
in any material respect to the Borrower, such Subsidiary or the Lenders; and
(c) Make any repairs, renewals, or replacements reasonably necessary to
keep such Person's properties in good working condition.
6.7 Perfection of Liens. Borrower shall take such actions as may be
necessary or as Collateral Agent or any Lender may request in order to perfect
and protect Collateral Agent's security interests and liens.
6.8 Cooperation. Borrower shall take any reasonable action requested by
Collateral Agent or any Lender to carry out the intent of this Agreement.
6.9 Use of Proceeds. Borrower shall use the proceeds of the Loan for (i)
repayment of all amounts outstanding under the Existing Loan Agreement (and
Borrower agrees that a net funding of the Initial Funding Amount may be used to
effect such repayment) and repayment of other indebtedness of the Borrower
(other than Subordinated Debt), (ii) general working capital to facilitate
ongoing growth in Borrower's core operations and (iii)to the extent permitted by
Section 7.8 and by the documents and instruments governing other indebtedness of
the Borrower, the repurchase of common stock of the Borrower.
6.10 Securitizations. Any securitizations of Ugly Duckling Collateral shall
be executed through UDRC II, UDRC III, UDRC IV or a New Issuer (as defined in
the Stock Pledge Agreement) that meets the requirements of Section 7(c) of the
Stock Pledge Agreement (and Borrower shall ensure that Pledgor performs its
obligations pursuant to the Stock Pledge Agreement) or by a person or entity
otherwise able to satisfy the requirements of Section 3.1 with respect to the
related Additional Residual Certificates. Borrower shall continue to execute
periodic securitizations (in an amount of not less than $75,000,000 in any
period of six consecutive months) of the Ugly Duckling Collateral and each such
securitization shall include Residual Certificates constituting Additional
Residual Certificates which grant an affiliate of UDCC acceptable to the
Required Lenders a 100% interest in all securitization assets (other than
Excluded Class C Certificates and Class A interests sold to senior third party
investors) and with respect to which the provisions of Section 3.1 have been
complied with. The Borrowing Base shall at all times include no less than seven
(7) separate securitizations, except in the event that Borrower elects to prepay
the securitization commonly referred to as the "2000-A Securitization" during
July of 2002 or to prepay the securitization commonly referred to as the "2000-B
Securitization" during October of 2002, in which case the total number of
separate securitizations may be no less than six (6) for the period prior to
December 15, 2002, upon and after which date the number of separate
securitizations shall be no less than seven (7). Borrower shall perform, keep
and observe each term, provision, condition or covenant or agreement contained
in each Bond Insurance Policy, the Principal Warehouse Agreement and any other
agreement evidencing Indebtedness.
6.11 Payment of Indebtedness. Borrower shall timely pay and shall cause its
Subsidiaries to timely pay all Indebtedness which, if not paid, could result in
the imposition of a Lien on any of the assets of UDRC II or UDRC III, UDRC IV or
any holder of Additional Residual Certificates.
6.12 Tangible Net Worth. Borrower shall maintain a consolidated Tangible
Net Worth of not less than the sum of (i) $130,000,000, plus (ii) 75% of the
cumulative net earnings (but only to the extent positive) after taxes of the
Borrower and its Subsidiaries on a consolidated basis determined in accordance
with generally accepted accounting principles for each period ending on or after
December 31, 2001 plus (iii) 60% of the cumulative net proceeds of the issuance
of any additional shares of capital stock of Borrower after March 31, 2002. As
used in this Section 6.12, "net proceeds" of the issuance of capital stock shall
mean the gross cash proceeds of such issuance less reasonable and customary fees
and expenses actually incurred in connection therewith, including, without
limitation, underwriting fees, investment banking fees, attorneys' and
accountant's fees, regulatory and listing fees and due diligence costs and
expenses.
6.13 Consolidated EBITDA to Consolidated Interest Expense. Maintain a ratio
of Consolidated EBITDA to Consolidated Interest Expense of not less than 1.25 to
1.0.
6.14 Consolidated Senior Debt to Consolidated Total Capitalization. Not
permit at any time Consolidated Senior Debt of the Borrower and its Subsidiaries
on a consolidated basis to exceed 52% of Consolidated Total Capitalization less
Non-Recourse Debt; provided, however, that in no event shall the average
Consolidated Senior Debt of the Borrower and its Subsidiaries on a consolidated
basis for any consecutive three (3) month period exceed 44% of Consolidated
Total Capitalization less Non-Recourse Debt.
6.15 Minimum Residual Certificate Cash Flows. Not permit aggregate Residual
Certificate Cash Flows deposited to the Collateral Account with respect to any
month to be less than $2,000,000 (it being understood that for purposes of
determining compliance with this Section 6.15 the amount deemed deposited with
respect to any Residual Certificate may not exceed the Residual Certificate Cash
Flow with respect to such Residual Certificate).
6.16 Minimum Capital Base. Borrower shall maintain a Capital Base of not
less than $145,000,000.
6.17 Minimum Other Interest Coverage. Maintain a ratio of operating income
to "interest expense, other" (as set forth on Borrower's publicly filed
financial statements for each fiscal quarter) of not less than 2.50 to 1.0;
provided, however, that for the fourth fiscal quarter of fiscal year 2002, the
ratio shall not be less than 2.0 to 1.0.
6.18 [Reserved].
6.19 Collateral Account. Borrower shall establish and maintain one or more
collateral accounts as may be requested by the Collateral Agent or the Required
Lenders. Each such collateral account shall be free and clear of all liens other
than liens in favor of the Collateral Agent pursuant to the Loan Documents and
Liens described in the Intercreditor Agreement and shall be on terms and
conditions satisfactory to the Collateral Agent and the Required Lenders.
6.20 Back-up Servicer. At all times, Borrower shall maintain back-up
service arrangements with respect to each securitization of Ugly Duckling
Collateral, on terms and conditions satisfactory to the Required Lenders, and
with OSI, Xxxxx Fargo Financial America, Inc., or another back-up servicer
satisfactory to the Required Lenders.
6.21 Maintenance of Properties. Borrower shall maintain and preserve, and
cause each of its Subsidiaries to maintain and preserve, all of its properties
that are used or useful in the conduct of its business in good working order and
condition, ordinary wear and tear excepted and excepting replacement in the
ordinary course of business.
6.22 Maintenance of Insurance. Borrower shall maintain, and cause each of
its Subsidiaries to maintain, insurance with responsible and reputable insurance
companies or associations in such amounts and covering such risks as is usually
carried by prudent companies engaged in similar businesses and owning similar
properties in the same general areas in which the Borrower or such Subsidiary
operates.
6.23 Reorganization. Lenders acknowledge that Borrower has advised Lenders
that Borrower may enter into a corporate reorganization pursuant to which a new
entity with the same direct or indirect equity ownership as Borrower may be
established (the "New Entity"). The New Entity would become the direct or
indirect owner of all or some of UDRC II, UDRC III, UDRC IV and the other
special purpose entities formed for the purpose of securitizing assets (or their
respective assets) and would also be the holder of retail installment contracts
prior to securitization. The parties acknowledge that such restructuring will
require, among other amendments to the Loan Documents, that the New Entity join
in the Loan Documents and the grants of security contained therein. Borrower
acknowledges, therefore, that any such transaction will be subject to approval
by the Collateral Agent and the Lenders and that the documents in connection
therewith will be subject to negotiation between Borrower, Collateral Agent and
Lenders and to such conditions (including, without limitation, continued
perfection of the security interests securing the Obligations) as Required
Lenders may reasonably deem necessary, provided, however, that Collateral Agent
and Lenders agree that except for reimbursement of costs and expenses
(including, without limitation, fees and disbursements of counsel) in connection
with such restructuring, Collateral Agent and Lenders will not charge any
"consent" or other similar fee as a condition to such approval.
6.24 DriveTime Name Change. Lenders acknowledge that Borrower has advised
them that Borrower intends to change its name from company and trade names using
the words "Ugly Duckling" to company and trade names using the word "DriveTime"
or similar names. Lenders hereby consent to such name change and Borrower agrees
to execute and deliver and cause to be executed and delivered such amendments,
modifications, financing statement amendments, and other documents as may be
reasonably necessary to evidence such name change and to provide for continued
perfection of all liens and security interests granted to Collateral Agent in
connection with the Loan Documents. Borrower shall pay all costs and expenses of
Collateral Agent and Lenders in connection with such name change and the
documents and instruments required to be executed, delivered, filed and recorded
in connection therewith.
6.25 Designated Senior Indebtedness. Borrower hereby designates the Loan as
"Designated Senior Indebtedness" pursuant to the Indenture, dated October 15,
1998 (the "Indenture"), from Borrower to BNY Midwest Trust Company, as successor
in interest to Xxxxxx Trust and Savings Bank, as trustee (pursuant to which
existing Subordinated Debt described on Exhibit G was issued and agrees to
maintain such designation at all times. Borrower will promptly notify the
trustee under the Indenture of such designation and in connection with each
supplemental indenture hereafter entered into in connection with the Indenture,
Borrower will cause such supplemental indenture to provide that the Loan is
included as "Designated Senior Indebtedness."
ARTICLE VII.
NEGATIVE COVENANTS
Borrower covenants and agrees that, so long as any credit hereunder shall
be available and until full and final payment of the Obligations, Borrower will
not do any of the following without Required Lender's prior written consent:
7.1 Liens. Create, incur, assume, or permit to exist, directly or
indirectly, any lien on or with respect to any of the assets of UDRC II, UDRC
III, or UDRC IV or any holder of Additional Residual Certificates, including the
UDRC II Residual Certificates, the UDRC III Residual Certificates, the UDRC IV
Residual Certificates or any Additional Residual Certificates, or any income or
profits from any of the foregoing, except for Permitted Liens listed on Schedule
E or liens of Collateral Agent for the benefit of Lenders.
7.2 Indebtedness.
(a) Permit UDRC II, UDRC III or UDRC IV or any holder of Additional
Residual Certificates to incur, assume, or permit to exist, directly or
indirectly any Indebtedness; or
(b) permit any other Subsidiary of the Borrower to incur, assume, or permit
to exist, directly or indirectly any Indebtedness other than Permitted
Subsidiary Indebtedness without the prior written consent of the Required
Lenders.
7.3 Restrictions on Fundamental Changes. Except as described in Section
6.23, enter into any merger, consolidation, reorganization, or recapitalization,
or reclassify its capital stock, or liquidate, wind up, or dissolve itself (or
suffer any liquidation or dissolution), or convey, sell, assign, lease,
transfer, or otherwise dispose of, in one transaction or a series of
transactions, all or any substantial part of its property or assets or permit
UDCSFC, UDCC, UDRC II, UDRC III or UDRC IV to do any of the foregoing).
7.4 Disposal of Collateral, Residual Certificates, Additional Residual
Certificates. Except as expressly consented to by Required Lenders in writing,
sell, lease, assign, transfer, or otherwise dispose of any of the Collateral or
permit any of its Affiliates to do any of the foregoing or permit UDRC II to
sell, lease, assign, transfer or otherwise dispose of any UDRC II Residual
Certificates, or permit UDRC III to sell, lease, assign, transfer or otherwise
dispose of any UDRC III Residual Certificates, or permit UDRC IV to sell, lease,
assign, transfer or otherwise dispose of any UDRC IV Residual Certificates, or
permit the Person or entity that is the holder of any Additional Residual
Certificates at the time such Additional Residual Certificates are first
included in the Borrowing Base to sell, lease, assign, transfer or otherwise
dispose of any such Additional Residual Certificates.
7.5 Change Name. Without giving thirty (30) days prior written notification
to Collateral Agent and each Lender, change Borrower's or any other Loan Party's
name, FEIN, corporate structure (within the meaning of Section 9402(7) of the
Code), or identity, or add any new fictitious name.
7.6 Amendments. Except as expressly consented to by Required Lenders in
writing, directly or indirectly, amend, modify, alter, increase, or change any
of the terms or conditions of any Securitization Document.
7.7 Change of Control. Cause, permit, or suffer, directly or indirectly,
any Change of Control.
7.8 Distributions. Make any distribution or declare or pay any dividends
(in cash or other property, other than capital stock) on, or purchase, acquire,
redeem, or retire any of Borrower's capital stock, of any class, whether now or
hereafter outstanding, for cash. Notwithstanding any other provision hereof,
Lenders agree that Borrower may pay in full all principal, interest and other
charges outstanding pursuant to that certain Subordinated Promissory Note dated
as of January 11, 2001 issued by the Borrower to Verde Investments, Inc. in the
original principal amount of $7,000,000.
7.9 Standing Dividend Resolutions. Permit any Standing Dividend Resolution
to be rescinded, amended, modified, revoked or altered in any manner.
7.10 Change in Location of Chief Executive Office. Relocate, or permit any
other Loan Party to relocate, any Loan Party's chief executive office to a new
location without providing 30 days prior written notification thereof to
Collateral Agent and each Lender and so long as, at the time of such written
notification, Borrower provides any financing statements or fixture filings
necessary to perfect and continue perfected Collateral Agent's security
interests and also provides to Collateral Agent a Collateral access agreement
with respect to such new location.
7.11 No Prohibited Transactions Under ERISA. Directly or indirectly:
(a) Engage, or permit any Subsidiary of Borrower to engage, in any
prohibited transaction which is reasonably likely to result in a civil penalty
or excise tax described in Sections 406 of ERISA or 4975 of the Code for which a
statutory or class exemption is not available or a private exemption has not
been previously obtained from the Department of Labor;
(b) Permit to exist with respect to any Plan any accumulated funding
deficiency (as defined in Sections 302 of ERISA and 412 of the Code), whether or
not waived;
(c) Fail, or permit any Subsidiary of Borrower to fail, to pay timely
required contributions or annual installments due with respect to any waived
funding deficiency to any Plan;
(d) Terminate, or permit any Subsidiary of Borrower to terminate, any Plan
where such event would result in any liability of Borrower or any of its
Subsidiaries under Title IV of ERISA;
(e) Fail, or permit any Subsidiary of Borrower to fail, to make any
required contribution or payment to any Multiemployer Plan;
(f) Fail, or permit any Subsidiary of Borrower to fail, to pay any required
installment or any other payment required under Section 412 of the Code on or
before the due date for such installment or other payment;
(g) Amend, or permit any Subsidiary of Borrower to amend, a retirement plan
resulting in an increase in current liability for the plan year such that either
of Borrower or any Subsidiary of Borrower is required to provide security to
such retirement plan under Section 401 (a)(29) of the Code; or
(h) Withdraw, or permit any Subsidiary of Borrower to withdraw, from any
Multiemployer Plan where such withdrawal is reasonably likely to result in any
liability of any such entity under Title IV of ERISA.
7.12 Changes in Nature of Business. Make, or permit any of its Subsidiaries
to make, any material change in the nature of its business as carried on at the
date hereof.
7.13 Transactions with Affiliates. Not engage, and not permit any of its
Subsidiaries to engage, in any transaction with any Affiliate of Borrower or
such Subsidiary except on terms that are fair and reasonable and no less
favorable to the Borrower or such Subsidiary than it would obtain in a
comparable arm's-length transaction with a Person not an Affiliate (it being
understood that the foregoing shall not prohibit any transaction otherwise
permitted hereunder among the Borrower and any of its wholly owned
Subsidiaries).
ARTICLE VIII.
EVENTS OF DEFAULT/REMEDIES
8.1 Event of Default. Any of the following shall constitute an "Event of
Default":
(a) If Borrower fails to pay when due and payable or when declared due and
payable, any portion of the Obligations (whether of principal, interest, fees
and charges due Collateral Agent or any Lender, reimbursement of Lender Costs,
or other amounts constituting Obligations) or if Borrower fails to make when due
any deposit to the Collateral Account required pursuant to Section 2.5(b);
(b) If Borrower fails to perform, keep, or observe any term, provision,
condition, covenant, or agreement contained in this Agreement, in any of the
Loan Documents, or in any other future agreement between Borrower and any
Lender;
(c) If there is a Material Adverse Change with respect to Borrower, UDCSFC,
UDRC II, UDRC III or UDRC IV or any holder of Additional Residual Certificates
(the occurrence or non-occurrence of which shall be determined by the Required
Lenders in the exercise of reasonable discretion);
(d) If Borrower is enjoined or restrained, by court order from continuing
to conduct all or any material part of its business affairs, unless such order
is stayed;
(e) If notices of any Lien, levy, or assessment in excess of $250,000 other
than of Permitted Liens are filed of record with respect to any of Borrower's
properties or assets which have not been cured within ten (10) days after the
Lien has been filed;
(f) Any judgment or order for the payment of money in excess of $1,000,000
not covered by insurance as to which the insurer has acknowledged coverage shall
be rendered against any Loan Party or UDRC II, UDRC III or UDRC IV and either
(i) enforcement proceedings shall have been commenced by any creditor upon such
judgment or order and are not stayed or dismissed within 45 days or (ii) there
shall be any period of 45 consecutive days during which such judgment remains
unpaid or unbonded and a stay of enforcement of such judgment or order, by
reason of a pending appeal or otherwise, shall not be in effect;
(g) If Borrower makes any payment on account of Indebtedness that is
contractually subordinated in right of payment to the payment of the
Obligations, except to the extent such payment is permitted by the terms of the
subordination provisions applicable to such Indebtedness;
(h) If any material misstatement or misrepresentation exists now or
hereafter in any warranty, representation, statement, or report (including,
without limitation, any Collateral Servicing Report) made to Collateral Agent,
any Lender by Borrower or any officer, employee, agent, or director of Borrower,
or if any such warranty or representation is withdrawn;
(i) If any Standing Dividend Resolution is rescinded, amended, altered,
revoked or modified in any manner;
(j) If a default or event of default occurs under the Principal Warehouse
Agreement or under the terms of any other Indebtedness aggregating in excess of
$3,000,000 (with respect to any particular item of Indebtedness or in the
aggregate and in each case after any applicable cure or grace period) or there
is a termination event under the terms of any Bond Insurance Policy (or the
policy of another bond insurer), regardless of whether such default or
termination event is waived or amended;
(k) If Borrower or any of its Subsidiaries makes a general assignment for
the benefit of creditors, or an order, judgment or decree is entered
adjudicating the Borrower or any of its Subsidiaries bankrupt or insolvent, or
any order for relief with respect to the Borrower or any of its Subsidiaries is
entered under the Federal Bankruptcy Code, or Borrower or any of its
Subsidiaries petitions or applies to any tribunal for the appointment of a
custodian, trustee, receiver or liquidator of Borrower or any of its
Subsidiaries or of any substantial part of the assets of the Borrower or any of
its Subsidiaries, or commences any proceeding relating to the Borrower or any of
its Subsidiaries under any bankruptcy, reorganization, arrangement, insolvency,
readjustment of debt, dissolution or liquidation law of any jurisdiction, or any
such petition or application is filed, or any such proceeding is commenced
against the Borrower or any of its Subsidiaries; or
(l) Any ERISA Event shall have occurred with respect to a Plan of any Loan
Party or any of its ERISA Affiliates and the liability of the Loan Parties and
their ERISA Affiliates related to such ERISA Event and any and all other ERISA
Events which shall have occurred and then exist with respect to any Plans of the
Loan Parties and their ERISA Affiliates exceeds $1,000,000; or
(m) any provision of any Loan Document shall for any reason cease to be
valid and binding on or enforceable against any Loan Party party to it, or any
such Loan Party shall so state in writing; or
(n) any Security Document shall for any reason (other than pursuant to the
terms thereof) cease to create a valid and perfected first priority Lien on the
Collateral purported to be covered thereby.
8.2 Rights and Remedies. Upon the occurrence, and during the continuation,
of an Event of Default, Required Lenders may (and may direct the Collateral
Agent to, and upon such direction the Collateral Agent shall, subject to the
provisions of this Agreement), at their sole and absolute discretion, without
further notice, do any one or more of the following, all of which are authorized
by Borrower:
(a) declare all Obligations, whether evidenced by this Agreement, by any of
the other Loan Documents, or otherwise, immediately due and payable (and upon
the occurrence of any Event of Default described in Section 8.1(k) all
Obligations shall automatically and without action by Collateral Agent or any
Lender be and become immediately due and payable);
(b) terminate this Agreement and any of the other Loan Documents as to any
future liability or obligation of each Lender, but without affecting any
Lender's or the Collateral Agent's rights and security interests in the
Collateral and without affecting the Obligations;
(c) without notice to or demand upon Borrower, make such payments and do
such acts as Required Lenders consider necessary or reasonable to protect the
security interests of the Collateral Agent in the Collateral;
(d) without notice to Borrower (such notice being expressly waived), and
without constituting a retention of any collateral in satisfaction of an
obligation (within the meaning of Section 9-620 and 9-621 of the UCC) (or any
successor provision), set off and apply to the Obligations any and all (i)
balances and deposits of Borrower held by any Lender, or (ii) indebtedness at
any time owing to or for the credit or the account of Borrower held by any
Lender; or
(e) direct the Collateral Agent to collect, receive, appropriate and
realize upon the Collateral, on such terms as Required Lenders, in their sole
and absolute discretion, deem appropriate without any liability for any loss due
to a decrease in the market value of the Collateral during the period held,
without demand of performance or other demand, advertisement or notice of any
kind, except as specified below, to or upon Borrower or any other person (all
and each of which demands, advertisements and/or notices are hereby expressly
waived to the extent permitted by law). If any notification to Borrower of
intended disposition of the Collateral is required by law, such notification
shall be deemed reasonable and properly given if mailed to Borrower, postage
prepaid, at least ten (10) days before any such disposition at the address
indicated by Borrower's signature. Any disposition of the Collateral or any part
thereof shall be free of any equity or right of redemption in Borrower, which
right of equity is, to the extent permitted by applicable law, hereby expressly
waived or released by Borrower. Borrower further agrees that such sale or sales
made under the foregoing circumstances shall be deemed to have been made in a
commercially reasonable manner. Neither Collateral Agent nor any Lender shall be
obligated to make any sale or other disposition of the Collateral permitted
under this Loan Agreement, unless the terms thereof shall be satisfactory to
Required Lenders.
The rights and remedies of Collateral Agent and each Lender under this
Agreement, the Loan Documents, and all other agreements shall be cumulative. No
exercise by Collateral Agent or any Lender of one right or remedy shall be
deemed an election, and no waiver by Collateral Agent or any Lender of any Event
of Default shall be deemed a continuing waiver. No delay by Collateral Agent or
any Lender shall constitute a waiver, election, or acquiescence by it.
ARTICLE IX.
THE COLLATERAL AGENT
9.1 Authorization and Action. Each Lender hereby appoints and authorizes
the Collateral Agent to take such action as agent on its behalf and to exercise
such powers under this Agreement and the other Loan Documents as are delegated
to the Collateral Agent by the terms hereof and thereof, together with such
powers as are reasonably incidental thereto. Except as specifically provided for
by the Loan Documents, the Collateral Agent shall not be required to exercise
any discretion or take any action under any of the Loan Documents, but shall be
required to act or to 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 Borrower or any Lender for any action taken or
omitted at the direction of the Required Lenders; provided, however, 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 Agreement or applicable law. The Collateral Agent agrees to
give to each Lender prompt notice of each written notice given to it by the
Borrower pursuant to the terms of this Agreement.
9.2 Collateral Agent's Reliance, Etc. Neither the Collateral Agent nor any
of its directors, officers, agents or employees shall be liable for any action
taken or omitted to be taken by it or them under or in connection with the Loan
Documents, except for its or their own gross negligence or willful misconduct.
Without limitation of the generality of the foregoing, the Collateral Agent: (i)
may treat the Lender that made any portion of the Loan as the holder of the debt
resulting therefrom until the Collateral Agent receives notice of an assignment
by such Lender; (ii) may consult with legal counsel (including counsel for any
Loan Party), independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken in good faith by
it in accordance with the advice of such counsel, accountants or experts; (iii)
makes no warranty or representation to any Lender and shall not be responsible
to any Lender for any statements, warranties or representations made by any
Person other than the Collateral Agent in or in connection with the Loan
Documents; (iv) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of any
Loan Document on the part of any Loan Party or to inspect the property
(including the books and records) of any Loan Party; (v) shall not be
responsible to any Lender for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of any Loan Document or any
other instrument or document furnished pursuant hereto or thereto; (vi) shall
incur no liability under or in respect of any Loan Document by acting upon any
notice, consent, certificate or other instrument or writing (which may be by
telegram, telecopy, cable or telex) believed by it to be genuine and signed or
sent by the proper party or parties; and (vii) shall not be under any obligation
to expend or risk its own funds in connection with acting as Collateral Agent
hereunder.
9.3 Xxxxx Fargo Bank Minnesota, National Association and Affiliates. Xxxxx
Fargo Bank Minnesota, National Association and its affiliates may accept
deposits from, lend money to, act as trustee under indentures of, accept
investment banking engagements from and generally engage in any kind of business
with, any Loan Party, any of its Subsidiaries and any Person who may do business
with or own securities of any Loan Party or any such Subsidiary, all as if Xxxxx
Fargo Bank Minnesota, National Association were not the Collateral Agent and
without any duty to account therefor to the Lender Parties.
9.4 Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Collateral Agent or any other Lender
and based on the financial statements referred to herein and such other
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Collateral Agent or any other Lender and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under this Agreement.
9.5 Indemnification. Each Lender severally agrees to indemnify the
Collateral Agent (to the extent not promptly reimbursed by the Borrower) from
and against such Lender's ratable share of any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever that may be imposed on, incurred
by, or asserted against the Collateral Agent in any way relating to or arising
out of the Loan Documents or any action taken or omitted by the Collateral Agent
under the Loan Documents; provided, however, that no Lender shall be liable for
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from the
Collateral Agent's gross negligence or willful misconduct. Without limitation of
the foregoing, each Lender agrees to reimburse the Collateral Agent promptly
upon demand for its ratable share of any costs and expenses payable by the
Borrower under Section 10.4, to the extent that the Collateral Agent is not
promptly reimbursed for such costs and expenses by the Borrower.
9.6 Successor Collateral Agents. The Collateral Agent may resign at any
time by giving written notice thereof to the Lenders and the Borrower and may be
removed at any time with cause by the Required Lenders. Upon any such
resignation or removal, the Required Lenders shall have the right to appoint a
successor Collateral Agent. If no successor Collateral Agent shall have been so
appointed by the Required Lenders, and shall have accepted such appointment,
within 30 days after the retiring Collateral Agent's giving of notice of
resignation or the Required Lenders' removal of the retiring Collateral Agent,
then the retiring Collateral Agent may, on behalf of the Lender Parties, appoint
a successor Collateral Agent, which shall be a commercial bank organized under
the laws of the United States or of any State thereof and having a combined
capital and surplus of at least $50,000,000. Upon the acceptance of any
appointment as Collateral Agent hereunder by a successor Collateral Agent and
upon the execution and filing or recording of such financing statements, or
amendments thereto, and such other instruments or notices, as may be necessary
or desirable, or as the Required Lenders may request, in order to continue the
perfection of the liens granted or purported to be granted by the Security
Documents, such successor Collateral Agent shall succeed to and become vested
with all the rights, powers, discretion, privileges and duties of the retiring
Collateral Agent, and the retiring Collateral Agent shall be discharged from its
duties and obligations under the Loan Documents. After any retiring Collateral
Agent's resignation or removal hereunder as Collateral Agent, the provisions of
this Article IX shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Collateral Agent under this Agreement.
9.7 Monthly Duties of Collateral Agent. Upon receipt of each Collateral
Servicing Report and in no event later than two (2) Business Days after the
Calculation Date in respect thereof, the Collateral Agent shall check the
following items in such Collateral Servicing Report against the corresponding
numbers in the monthly servicing reports with respect to each Securitization:
(a) the outstanding principal balance of auto loans in the pool of
collateral securing the related securitization;
(b) the outstanding principal balance of all certificates and other
interests or rights to payment in respect of such securitization senior in
priority to such Residual Certificate;
(c) the amount of the cash balance in the spread account relating to such
Residual Certificate; and
(d) the Residual Certificate Cash Flows.
The Collateral Agent shall also verify the following rates and amounts on
the Collateral Servicing Report:
(y)......LIBOR; and
(z)......the pro rata payments of interest and Monthly Amortization Amount
made to each Lender.
ARTICLE X.
MISCELLANEOUS
10.1 Amendments and Waivers. No amendment or waiver of any provision of
this Agreement or any other Loan Document, and no consent with respect to any
departure by Borrower therefrom, shall be effective unless the same shall be in
writing and signed by Required Lenders and Borrower, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that (a) no amendment, waiver or
consent shall, unless in writing and signed by all the Lenders, do any of the
following at any time: (i) change the percentage of the aggregate unpaid
principal amount of the Loan that shall be required for the Lenders or any of
them to take any action hereunder, (ii) permit the creation, incurrence,
assumption or existence of any Lien on any item of Collateral to secure any
obligations other than Obligations owing to the Lenders and Collateral Agent
under the Loan Documents, (iii) amend this Section 10.1, (iv) increase the
outstanding principal amount of the Loan, (v) reduce the principal of, or
interest on, the Loan or any fees or other amounts payable hereunder or (vi)
postpone any date fixed for any payment of principal of, or interest on, the
Loan or any fees or other amounts payable hereunder; and provided further that
no amendment, waiver or consent shall, unless in writing and signed by the
Collateral Agent in addition to the Lenders required above to take such action,
affect the rights or duties of the Collateral Agent under this Agreement or any
other Loan Document.
10.2 Notices.
(a) All notices, requests and other communications provided for hereunder
shall be in writing (including, unless the context expressly otherwise provides,
by facsimile transmission, provided, that, any matter transmitted by facsimile
(i) shall be immediately confirmed by a telephone call to the recipient, and
(ii) shall be followed promptly by a hard copy original thereof by over-night
courier to the address set forth below; or to such other address as shall be
designated by such party in a written notice to the other party, and as directed
to each other party, at such other address as shall be designated by Lender or
Borrower in a written notice to Borrower and Lender.
If to Borrower: Ugly Duckling Corporation
0000 Xxxx Xxxxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
Attn: General Counsel
Facsimile: (000) 000-0000
With a copy to: Xxxxx & Xxxxxx L.L.P.
Xxx Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Attn: Xxxxx X. Xxxxxxxxx
Facsimile: (000) 000-0000
If to any Lender: As set forth on the Administrative Form
of such Lender
If to Collateral Agent: Xxxxx Fargo Bank Minnesota, National Association
Sixth Street and Marquette Avenue
MAC N9311-161
Xxxxxxxxxxx, XX 00000
Attn: Corporate Trust Services-Asset Backed
Administration
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(b) All such notices, requests and communications shall, when transmitted
by overnight delivery or faxed, be effective when delivered for overnight (next
day) delivery, transmitted by facsimile machine, respectively, or if delivered,
upon delivery, except that notices pursuant to Article II shall not be effective
until actually received by each Lender.
(c) Borrower acknowledges and agrees that any agreement of Collateral Agent
or any Lender to receive certain notices by telephone and facsimile is solely
for the convenience and at the request of Borrower. Each of Collateral Agent and
each Lender shall be entitled to rely on the authority of any Person purporting
to be a Person authorized by Borrower to give such notice and neither Collateral
Agent nor any Lender shall have any liability to Borrower or to any other Person
on account of any action taken or not taken by Collateral Agent or any Lender in
reliance upon such telephonic or facsimile notice. The obligations of Borrower
hereunder shall not be affected in any way or to any extent by any failure by
Collateral Agent or any Lender to receive written confirmation of any telephonic
or facsimile notice or the receipt by Collateral Agent or any Lender of a
confirmation which is at variance with the terms understood by Collateral Agent
or such Lender to be contained in the telephonic or facsimile notice.
10.3 No Waiver: Cumulative Remedies. No failure to exercise and no delay in
exercising, on the part of Collateral Agent or Lender, any right, remedy, power
or privilege hereunder, shall operate as a waiver thereof; nor shall any single
or partial exercise of any right, remedy, power or privilege hereunder preclude
any other or further exercise thereof or the exercise of any other right,
remedy, power or privilege.
10.4 Costs and Expenses. Borrower shall, whether or not the transactions
contemplated hereby shall be consummated:
(a) pay or reimburse Collateral Agent and each Lender and each portfolio
advisor within ten (10) Business Days after demand for all reasonable Lender
Costs incurred by Collateral Agent or such Lender or such portfolio advisor in
connection with the development, preparation, delivery, administration and
execution of (and any amendment, supplement, waiver or modification to (in each
case whether or not consummated)), this Agreement, any other Loan Document and
any other documents prepared in connection herewith, or therewith, and the
consummation of the transactions contemplated hereby and thereby, including the
reasonable Attorney Costs incurred by Collateral Agent or any Lender or any
portfolio advisor with respect thereto;
(b) pay or reimburse Collateral Agent and each Lender and each portfolio
advisor within ten (10) Business Days after demand for all Lender Costs incurred
by Collateral Agent or such Lender or such portfolio advisor in connection with
the enforcement, attempted enforcement, or preservation of any rights or
remedies under this Agreement, any other Loan Document, and any such other
documents, including reasonable Attorney Costs incurred by Collateral Agent or
any Lender or any portfolio advisor; and
(c) pay or reimburse Collateral Agent and each Lender and each portfolio
advisor within ten (10) Business Days after demand for all reasonable appraisal
(including the allocated cost of internal appraisal services), audit, due
diligence, monitoring review, syndication, environmental inspection and review
(including the allocated cost of such internal services and the allocated costs
of services of AIG or its Affiliates and Trustee), search and filing costs, fees
and expenses, rating agency costs, fees and expenses, transportation costs and
other out-of-pocket expenses incurred or sustained by Collateral Agent, any
Lender or any portfolio advisor, AIG or any of their respective affiliates in
connection with the Loan, the Loan Documents, any of the Obligations and the
matters referred to under (a) and (b) of this Section 10.4.
(d) In addition to the foregoing, if any payment of principal on the Loan
is made by the Borrower to or for the account of a Lender other than on the last
day of the then current Interest Accrual Period, as a result of a payment,
acceleration or for any other reason, Borrower shall, upon demand by such
Lender, pay to such Lender any amounts required to compensate such Lender for
any additional losses, costs or expenses that it may reasonably incur as a
result of such payment, including, without limitation, any loss, cost or expense
incurred by reason of the liquidation or reemployment of deposits or other funds
acquired by any Lender to fund or maintain the Loan or any portion thereof.
10.5 Indemnity. Borrower shall pay, indemnify, and hold Collateral Agent,
each Lender, AIG, Trustee and each of their respective Affiliates and
Subsidiaries, and each of their respective officers, directors, employees,
counsel, agents and attorneys-in-fact (each, an "Indemnified Person") harmless
from and against any environmental liabilities and obligations of Borrower, any
of its Subsidiaries or any of their properties and from and against any and all
claims, liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, charges, expenses or disbursements (including Attorney
Costs) of any kind or nature whatsoever with respect to or in connection with
the execution, delivery, enforcement, performance and administration of this
Agreement and any other Loan Documents, or the transactions contemplated hereby
and thereby, and with respect to any investigation, litigation or proceeding
related to this Agreement or the use of the proceeds thereof or any Residual
Certificate, Securitization Document or Securitization Trust, whether or not any
Indemnified Person is a party thereto (all the foregoing, collectively, the
"Indemnified Liabilities"); provided, however, Borrower shall have no obligation
hereunder to any Indemnified Person with respect to Indemnified Liabilities
arising from the gross negligence or willful misconduct of such Indemnified
Person or the breach by such Indemnified Person of its obligations hereunder.
The agreements in this Section 10.5 shall survive payment of all other
Obligations and the termination of this Agreement.
10.6 Marshaling: Payments Set Aside. Neither Collateral Agent nor any
Lender shall be under any obligation to marshal any assets in favor of Borrower
or any other Person or against or in payment of any or all of the Obligations.
To the extent that Borrower makes a payment or payments to Collateral Agent or
any Lender, or to the extent Collateral Agent or any Lender enforces its Liens
or exercises its rights of set-off, and such payment or payments or the proceeds
of such enforcement or set-off or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside or required to be repaid to
a trustee, receiver or any other party in connection with any bankruptcy, or
otherwise, then to the extent of such recovery the obligation or part thereof
originally intended to be satisfied shall be revived and continued in full force
and effect as if such payment had not been made or such enforcement or set-off
had not occurred.
10.7 Successors and Assigns. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns, except that Borrower may not assign or transfer any of
its rights or delegate obligations under this Agreement or any of the Loan
Documents without the prior written consent of each Lender.
10.8 Set-off. In addition to any rights and remedies of Lenders provided by
law, if an Event of Default exists, each Lender is authorized at any time and
from time to time, without prior notice to Borrower, any such notice being
waived by Borrower to the fullest extent permitted by law, to set off and apply
any and all monies or deposits at any time held by, and other indebtedness at
any time owing by, such Lender to or for the credit or the account of Borrower
against any and all Obligations owing to such Lender, now or hereafter existing,
irrespective of whether or not such Lender shall have made demand under this
Agreement or any Loan Document and although such Obligations may be contingent
or unmatured. Each Lender agrees promptly to notify Borrower after any such
set-off and application made by such Lender; provided, however, that, the
failure to give such notice shall not affect the validity of such set-off and
application. The rights of each Lender under this Section 10.8 are in addition
to the other rights and remedies (including other rights of set-off) which such
Lender may have.
10.9 Counterparts. This Agreement may be executed by one or more of the
parties to this Agreement in any number of separate counterparts, each of which,
when so executed, shall be deemed an original, and all of said counterparts
taken together shall be deemed to constitute but one and the same instrument.
Such counterparts may be delivered by facsimile or electronic delivery and all
documents so delivered shall be effective and treated as original documents for
all purposes hereunder.
10.10 Severability. The illegality or unenforceability of any provision of
this Agreement or any instrument or agreement required hereunder shall not in
any way affect or impair the legality or enforceability of the remaining
provisions of this Agreement or any instrument or agreement required hereunder.
10.11 No Third Parties Benefited. This Agreement is made and entered into
for the sole protection and legal benefit of Borrower, Collateral Agent and each
Lender (and its portfolio advisor), and their permitted successors and assigns,
and no other Person shall be a direct or indirect legal beneficiary of, or have
any direct or indirect cause of action or claim in connection with, this
Agreement or any of the other Loan Documents. Neither Collateral Agent nor any
Lender shall have any obligation to any Person not a party to this Agreement or
other Loan Documents.
10.12 Time. Time is of the essence as to each term or provision of this
Agreement and each of the other Loan Documents.
10.13 Governing Law and Jurisdiction.
THE VALIDITY OF THIS 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 OR THERETO SHALL BE DETERMINED UNDER, GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, IT BEING
THE INTENT OF THE PARTIES THAT THE LAW OF THE STATE OF NEW YORK SHALL GOVERN THE
RIGHTS AND DUTIES OF THE PARTIES HERETO WITHOUT REGARD TO CHOICE OR CONFLICTS OF
LAW PRINCIPLES; EXCEPT THAT THE PROVISIONS HEREIN THAT PERTAIN TO THE PERFECTION
OR THE EFFECT OF PERFECTION OF SECURITY INTERESTS IN COLLATERAL SHALL BE
GOVERNED BY THE LAWS OF SUCH STATE AS ARE SPECIFIED IN SECTION 9-301 OF THE UCC.
THE BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND
ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF ANY NEW YORK STATE COURT OR
FEDERAL COURT OF THE UNITED STATES OF AMERICA SITTING IN NEW YORK CITY, AND ANY
APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS TO WHICH IT IS OR
IS TO BE A PARTY, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND THE
BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN
RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH
NEW YORK STATE COURT OR, TO THE EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT.
THE BORROWER AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL
BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT
OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT SHALL AFFECT
ANY RIGHT THAT ANY PARTY MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS TO WHICH IT IS OR
IS TO BE A PARTY IN THE COURTS OF ANY JURISDICTION.
THE BORROWER IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT
IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS TO WHICH IT IS OR
IS TO BE A PARTY IN ANY NEW YORK STATE OR FEDERAL COURT. THE BORROWER HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE DEFENSE OF AN
INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH
COURT.
BORROWER AND LENDER 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
DOCUMENTS 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
AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
10.14 Entire Agreement. This Agreement, together with the other Loan
Documents, embodies the entire Agreement and understanding among Borrower,
Collateral Agent and Lenders and supersedes all prior or contemporaneous
agreements and understandings of such Persons, verbal or written, relating to
the subject matter hereof and thereof and any prior arrangements made with
respect to the payment by Borrower (or any indemnification for) any Lender Costs
incurred (or to be incurred) by or on behalf of Collateral Agent or any Lender.
10.15 Interpretation. This Agreement is the result of negotiations between
and has been reviewed by counsel to Collateral Agent, Lenders, Borrower and
other parties, and is the product of all parties hereto. Accordingly, this
Agreement and the other Loan Documents shall not be construed against Collateral
Agent or any Lender merely because of Lenders' involvement in the preparation of
such documents and agreements.
10.16 Assignment; Register. Each Lender may assign, sell participations in
or pledge its rights hereunder and under the Loan Documents without the consent
of Borrower; provided, however, that no such assignment shall be effective until
the parties thereto shall have executed and delivered to the Collateral Agent
for acceptance and recording in the Register (as defined below) an Assignment
and Acceptance. Upon such execution, delivery, acceptance and recording, from
and after the effective date specified in such Assignment and Acceptance, (x)
the assignee thereunder shall be a party hereto and, to the extent that rights
and obligations hereunder have been assigned to it pursuant to such Assignment
and Acceptance, have the rights and obligations of a Lender hereunder and (y)
the Lender assignor thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights and be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all or the remaining
portion of an assigning Lender's rights and obligations under this Agreement,
such Lender shall cease to be a party hereto). Borrower may not assign or
delegate any of its rights, interest or obligations hereunder or under any of
the Loan Documents.
The Collateral Agent, on behalf of the Borrower, shall maintain at the
Collateral Agent's address referred to in Section 10.2 a copy of each Assignment
and Acceptance delivered to and accepted by it and a register for the
recordation of the names and addresses of the Lenders and the principal amount
of the Loan owing to each Lender from time to time (the "Register"). The entries
in the Register shall be conclusive and binding for all purposes, absent
manifest error, and the Borrower, the Collateral Agent and the Lenders may treat
each Person whose name is recorded in the Register as a Lender hereunder for all
purposes of this Agreement. The Register shall be available for inspection by
the Borrower or any Lender at any reasonable time and from time to time upon
reasonable prior notice.
Upon its receipt of an Assignment and Acceptance executed by an assigning
Lender and an assignee, the Collateral Agent shall, if such Assignment and
Acceptance has been completed and is in substantially the form of Exhibit C
hereto, (i) accept such Assignment and Acceptance, (ii) record the information
contained therein in the Register and (iii) give prompt notice thereof to the
Borrower. Within five Business Days after its receipt of written request
therefor, the Borrower, at its own expense, shall execute and deliver to the
Collateral Agent in exchange for any Note surrendered in connection with an
assignment hereunder, a new Note to the order of the assignee in an amount equal
to the principal amount of the Loan assumed by it and, if the assigning Lender
has retained a portion of the Loan hereunder, a new Note to the order of the
assigning Lender in an amount equal to such portion retained by it hereunder.
Such new Note or Notes shall be in an aggregate principal amount equal to the
aggregate principal amount of such surrendered Note, shall be dated the
effective date of the applicable Assignment and Acceptance and shall otherwise
be in substantially the form of Exhibit D.
10.17 Revival and Reinstatement of Obligations. If the incurrence or
payment of the Obligations by Borrower or the transfer by Borrower to Collateral
Agent or any Lender of any property of either or both of such parties should for
any reason subsequently be declared to be void or voidable under any state or
federal law relating to creditors' rights, including provisions of the
Bankruptcy Code relating to fraudulent conveyances, preferences, and other
voidable or recoverable payments of money or transfers of property
(collectively, a "Voidable Transfer"), and if Collateral Agent or any Lender is
required to repay or restore, in whole or in part, any such Voidable Transfer,
or elects to do so upon the reasonable advice of its counsel, then, as to any
such Voidable Transfer, or the amount thereof that Lender is required or elects
to repay or restore, and as to all reasonable costs, expenses, and Attorney
Costs of Lender related thereto, the liability of Borrower automatically shall
be revived, reinstated, and restored and shall exist as though such Voidable
Transfer had never been made.
10.18 Survival. Notwithstanding any provision of this agreement or any
other Loan Document to the contrary, the provisions of Sections 2.11, 2.12,
2.13, 2.14, 9.4, 9.5, 10.4 and 10.5 shall survive payment of all other
Obligations and the termination of this Agreement.
10.19 Confidentiality. Each Lender and Collateral Agent agrees to hold any
confidential information that it may receive from Borrower pursuant to this
Agreement in confidence, except for disclosure: (a) to other Lenders, rating
agencies, trustees, reference lenders, portfolio advisors, any direct or
indirect contractual counterparty in swap agreements or such contractual
counterparty's professional advisor, and any other parties relevant to any
investment vehicle managed by AIG Global Investment Corp.; (b) to legal counsel
and accountants for Borrower, Collateral Agent or any Lender or prospective
Lender; (c) to other professional advisors to Borrower, Collateral Agent or any
Lender or prospective Lender; (d) to regulatory officials; (e) as required by
law or legal process; (f) to another proposed Lender in connection with a
proposed assignment permitted hereunder provided that the recipient has accepted
such information subject to a confidentiality agreement substantially similar to
this Section 10.19; and (g) to any prospective purchaser of the Collateral after
the occurrence of an Event of Default to the extent permitted by law. For
purposes of the foregoing "confidential information" shall mean any information
respecting Borrower, its Subsidiaries or Affiliates delivered to Lenders and
marked confidential, other than (i) information previously filed with any
governmental agency and available to the public, (ii) information previously
published in any public medium from a source other than directly or indirectly,
that Lender, (iii) information previously disclosed by Borrower to any Person
not associated with Borrower without a confidentiality agreement or obligation
substantially similar to this Section 10.19, and (iv) any such information that
is or becomes generally available to the public other than as a result of a
breach by Collateral Agent or any Lender of its obligations hereunder or that is
or becomes available to Collateral Agent or such Lender from a source other than
Borrower. Each Lender and the Collateral Agent further agree that they will
maintain the confidentiality of and not disclose any Ugly Duckling customer
information, and that they will not use Ugly Duckling customer information for
any purpose, in each case except as permitted by law.
10.20 Actions by Portfolio Advisor. Any rights of a Lender hereunder or
under any other Loan Document may be exercised by such Lender's portfolio
advisor or collateral manager upon delivery to the Collateral Agent of evidence
in writing, reasonably satisfactory to the Collateral Agent, setting forth such
authority (which may be in the form of a written confirmation of such authority
from the applicable Lender).
* * * * *
[Signature Page to Loan Agreement]
IN WITNESS WHEREOF, the parties hereby have caused this Agreement to be
executed as of the date first written above.
UGLY DUCKLING CORPORATION,
a Delaware corporation
By:
-----------------------------------------------------
Name:
-----------------------------------------------------
Title:
-----------------------------------------------------
Lenders:
GALAXY CLO 1999-1, LTD.
By: AIG Global Investment Corp.,
its Collateral Manager
By:
-----------------------------------------------------
Name:
-----------------------------------------------------
Title:
-----------------------------------------------------
Portion of Initial Principal Amount :$16,000,000
Ratable Share: 35.56%
Address for notices in respect of payment:
-------------------------------------
-------------------------------------
Xxx Xxxxxxx, XX 00000-0000
Attn:----------------------------------
Facsimile: _________________
Address for all other notices:
----------------------------
-----------------------
Xxx Xxxxxxx, XX 00000-0000
Attn: ___________
Facsimile: ______________
SUNAMERICA LIFE INSURANCE COMPANY
By:
-----------------------------------------------------
Name:
-----------------------------------------------------
Title:
-----------------------------------------------------
Portion of Initial Principal Amount: $18,000,000
Ratable Share: 40.0%
Address for notices in respect of payment:
SunAmerica Investments
0 XxxXxxxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000-0000
Attn: Investment Accounting, 36th Floor
acsimile: (000) 000-0000
Address for all other notices:
SunAmerica Corporate Finance
0 XxxXxxxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000-0000
Attn: Xxxx Xxxxxx
Facsimile: (000) 000-0000
KZH SOLEIL-2 LLC
By:
-----------------------------------------------------
Name:
-----------------------------------------------------
Title:
-----------------------------------------------------
Portion of Initial Principal Amount: $11,000,000
Ratable Share: 24.44%
Address for Notice:
c/o JPMorgan Chase Bank
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attn: Xxxxxxxx Xxxxxx
Collateral Agent:
XXXXX FARGO BANK MINNESOTA, NATIONAL ASSOCIATION,
as Collateral Agent
By:
-----------------------------------------------------
Name:
-----------------------------------------------------
Title:
-----------------------------------------------------
SCHEDULE H
XXXXX FARGO BANK MINNESOTA, N.A.
SCHEDULE OF FEES
AS
COLLATERAL AGENT
FOR UGLY DUCKLING CORPORATION
$38 MILLION SENIOR SECURED LOAN FACILITY
1. ARTICLE XI. Acceptance Fees $1,500.00
.........................................................
To include: - examination and administrative review
of the Senior Secured Loan Agreement
and all related documents
- establishment of all appropriate accounts
- participation in pre-closing and closing
2. Annual Administrative Fee...........................$7,500.00
To include: - administration of covenants of the Senior
Secured Loan Agreement and all related
documents
- compliance monitoring
- payment of principal and interest to
Lenders
- maintenance of certificate holder records
(maximum of 5 Lenders)
- transfer and assignment of Lender's
beneficial interest (maximum 2
transfers per life of facility)
- safekeeping of pledged stock certificates
ARTICLE XII.Additional ARTICLE XIII. ARTICLE XIV.$1,000.00 per annum
Lender per Lender
Additional Transfer - $3,500.00 per transfer
SCHEDULE H
XXXXX FARGO BANK MINNESOTA, N.A.
SCHEDULE OF FEES
AS
COLLATERAL AGENT
FOR UGLY DUCKLING CORPORATION
$45 MILLION SENIOR SECURED LOAN FACILITY
(continued)
3. Miscellaneous
Additionally, the cost of extraordinary items that can be directly
allocated, such as legal fees and expenses (if any), travel expenses,
etc., will be billed separately. The foregoing schedule has been
designed to apply to collateral agent duties requiring the usual
amount of responsibility, time and attention. All fees are subject to
our review and acceptance of the governing documentation, and to
reasonable adjustment as changes in laws, procedures or costs of doing
business demand.
Fees for services not specifically covered in this schedule will be
assessed in an amount commensurate with the services rendered.
The acceptance fee will be billed upon acceptance. The annual
administration fee will be billed annually in advance. All other
activity-based fees will be billed annually, as incurred.
July [___], 2002
