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EXHIBIT 10.1(g)
ASSUMPTION AND AMENDMENT AGREEMENT
This Amendment is made by and between General Electric Capital
Corporation ("Lender"), Ugly Duckling Holdings, Inc. ("Holdings"), Duck
Ventures, Inc. ("Ventures"), Champion Acceptance Corporation formerly known as
Ugly Duckling Credit Corporation ("Credit"), Ugly Duckling Car Sales, Inc.
("Sales"), UDRAC, Inc. ("UDRAC"), and Champion Financial Services, Inc.
("Champion"), all Arizona corporations (Holdings, Ventures, Credit, Sales,
UDRAC, and Champion collectively called "Existing Borrower") and Ugly Duckling
Corporation a Delaware corporation ("New Borrower").
1. Purpose. Lender has been providing financing to Existing Borrower
pursuant to the Motor Vehicle Installment Contract Loan and Security Agreement
executed as of June 1, 1994 between Lender and Existing Borrower, as amended,
together with all Supplemental Documents related thereto (the "LSA"). Except as
otherwise provided in this Amendment, the LSA remains in full force and effect
according to its original terms. When used in this Amendment, words which are
defined in the LSA shall have the same meanings set forth in the LSA unless this
Amendment expressly states a different meaning. Existing Borrower and New
Borrower have requested that Lender allow New Borrower to assume all rights and
obligations of Holdings as a Borrower pursuant to the LSA.
2. Assumption. Pursuant to a Merger Agreement dated April 24, 1996,
Holdings is being merged into New Borrower, and New Borrower shall be the
surviving corporation without releasing Existing Borrower from any liability to
Lender for all obligations existing or in the future arising under the LSA, New
Borrower hereby assumes obligations as a Borrower to Lender under the LSA and
all obligations to Lender under all other documents and instruments executed by
Existing Borrower in connection with the LSA. By executing this Amendment, New
Borrower shall become a Borrower under the LSA with all rights and obligations
attendant to such status. New Borrower grants to Lender all of the conveyances
and rights granted to Lender under the LSA, including but not limited to a
security interest in all collateral described therein and all rights and
remedies set forth therein (including but not limited to rights of termination,
acceleration and foreclosure) and as allowed by law.
3. Amendments to the LSA. The LSA is hereby amended as follows: The LSA
is hereby amended to substitute New Borrower in place of "Borrower" under the
LSA as fully as if New Borrower on the effective date of this Amendment executed
the LSA as a "Borrower". New Borrower grants to Lender all rights and interests
granted by a "Borrower" in the LSA, including but not limited to the granting of
a security interest in the Collateral.
4. Guarantees. Any references in the Agreement to the personal
guarantees of Xxxxx X. Xxxxxx XX, are hereby deleted, and replaced with
Validity of Collateral Guaranty.
5. Conditions Precedent. New Borrower shall have delivered to Lender on
or before the date hereof the following duly executed documents in form and
substance satisfactory to Lender, delivery of which shall be a condition
precedent to the effectiveness of this Amendment:
(a) This Amendment;
(b) UCC-1 Financing Statements of New Borrower;
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(c) Duly adopted resolutions of the Board of Directors of each of
Existing Borrower and New Borrower;
(d) Copies of New Borrower's Articles of Incorporation and By-laws,
certified as a true and correct copy by the Secretary of New Borrower
as true and correct;
(e) Certificates of good standing for the New Borrower issued by (i)
the Secretary of State of Delaware and (ii) each other jurisdiction in
which New Borrower is qualified as a foreign business entity and in
which it transacts business, if any;
(f) A power of attorney of New Borrower;
(g) A copy of a letter delivered by New Borrower to its accountants
instructing them to disclose to Lender any and all financial statements
and other information of any kind relating to New Borrower's business,
financial condition and other affairs that Lender may request;
(h) Two certificates of the chief financial officer of New Borrower; and
(i) Such additional information and materials as Lender may reasonably
request.
None of the actions previously taken or documents previously executed to
satisfy the conditions of Article 9 have been revoked, rescinded, terminated,
or canceled without Lender's prior consent.
6. Incorporation of Amendment. The parties acknowledge and agree that
this Amendment is incorporated into and make a part of the Agreement, the terms
and provisions of which, unless expressly modified herein, or unless no longer
applicable by their terms, are hereby affirmed and ratified and remain in full
force and effect. To the extent that any term or provision of this Amendment is
or may be deemed expressly inconsistent with any term or provision of the
Agreement, the terms and provisions of this Amendment shall control. Each
reference to the Agreement shall be a reference to the Agreement as amended by
this Amendment. This Amendment, taken together with the unamended provisions of
the Agreement which are affirmed and ratified by Borrower, contains the entire
agreement among the parties regarding the transactions described herein and
supersedes all prior agreements, written or oral, with respect thereto.
7. Borrower Remains Liable. Existing Borrower hereby confirms that the
Agreement and each document executed by Existing Borrower in connection
therewith continue unimpaired and in full force and effect and shall cover and
secure all of each Borrower's existing and future obligations to Lender.
8. Headings. The paragraph headings contained in this Amendment are for
convenience of reference only and shall not be considered a part of this
Amendment in any respect.
9. Governing Law. This Amendment shall be governed by and construed in
accordance with the laws of the State of Arizona. Nothing herein shall preclude
Lender from bringing suit or taking other legal action in any jurisdiction.
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10. Execution in Counterparts. This Amendment may be executed in any
number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to
be an original and all of which taken together shall constitute one and the
same instrument.
11. Effective Date. The amendments contained herein shall be deemed
effective from and after the date hereof, provided that all of the conditions
set forth in Section 5 above have been satisfied upon the execution of this
Amendment.
IN WITNESS WHEREOF, each of the parties hereto has executed this
Amendment as of this 4th day of October 1996.
GENERAL ELECTRIC CAPITAL CORPORATION
By: /s/ ILLEGIBLE SIGNATURE
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Title: Account Executive
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UGLY DUCKLING CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx
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Title: Sr. Vice President
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VALIDITY OF COLLATERAL GUARANTY
As an inducement to General Electric Capital Corporation ("Lender") to loan
money to Ugly Duckling Corporation and subsidiaries ("Borrower") secured by
installment contracts pledged by Borrower, the undersigned ("Guarantor") hereby
represents, warrants, and guaranties to Lender that: (i) all assets described on
financial statements previously submitted, or submitted in the future, to Lender
for Borrower and for Guarantor exist and are accurately valued on the statements
in accordance with generally accepted accounting principles, (ii) all lease
contracts, vehicles and related rights pledged by Borrower to Lender are at the
time of delivery of the contract to Lender solely owned by Borrower and not
subject to any liens or interest superior to Lender's security interest, (iii)
all proceeds and collections from the pledged contracts, vehicles and rights
required to be paid to Lender by Borrower will not be converted, intentionally
or otherwise, by Borrower to a use other than payment to Lender, (iv) Borrower
has not intentionally misled, and will not intentionally mislead, Lender with
respect to pledged contracts and related rights, and (v) each time Borrower
requests an advance, all of the representations and warranties of Borrower in
the Loan and Security Agreement are true.
The liability of Guarantor under this Guaranty is limited to liability only
for a breach of the first paragraph of this Guaranty. In the event of a breach,
Guarantor's liability is limited to the losses and expenses incurred by Lender
as a result of the breach. The liability of Guarantor hereunder is direct,
unconditional, absolute and may be enforced without requiring Lender first to
resort to any right or remedy Lender has as to Borrower or any third parties
with regard to Borrower's debts and obligations to Lender or to foreclose or
exhaust any security therefor. Guarantor shall not have any right of
reimbursement, indemnity, subrogation or security enforceable against Borrower,
nor otherwise be a creditor of Borrower, with respect to payments to Lender to
the extent such rights or creditor status would make payments to Lender a
preference recoverable from Lender. Nothing shall discharge or satisfy the
liability of Guarantor hereunder except the full payment and performance of all
of Borrower's debts and obligations to Lender. Any and all present and future
debts and obligations of Borrower to Guarantor are hereby postponed in favor of
and subordinated to the full payment and performance of all present and future
debts and obligations of Borrower to Lender.
Guarantor has made an independent investigation of the financial condition and
affairs of Borrower prior to entering into this Guaranty and has not relied
upon any representation made by Lender as to the financial condition, operation
or creditworthiness of Borrower. Guarantor further agrees that Lender shall
have no duty or responsibility now or hereafter to make any investigation or
appraisal of Borrower, or the security for Borrower's debts and obligations to
Lender, on behalf of Guarantor or to provide Guarantor with any information
which may come to Lender's attention now or hereafter, whether or not such
information could materially increase the risk of Guarantor hereunder.
Notice of acceptance of this Guaranty, of any default by Borrower, and of any
adverse change in Borrower's financial condition or of any other fact which
might materially increase the risk of Guarantor hereunder is hereby waived.
Presentment, protest and demand, and notice of protest and demand are hereby
waived. Guarantor authorizes Lender without notice or demand and without
affecting the obligations of Guarantor hereunder, with respect to any debt or
obligation of Borrower to Lender, to extend the time of payment (without limit
as to the number or term of
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extensions) or waive strict compliance of any other term thereof, to renew or
otherwise modify the terms thereof, to waive or release any security therefor,
to release a guarantor or other party liable therefor, and to enter or grant any
settlement, release, compromise, composition, account stated or agreed balance
with or to Borrower or any third party, and Guarantor agrees that the foregoing
actions shall not diminish Guarantor's obligations hereunder. GUARANTOR WAIVES
ANY AND ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING OUT
OF OR RELATED TO THIS GUARANTY. Guarantor agrees that its liability under this
Guaranty shall be determined pursuant to the laws of Arizona.
This Guaranty remains fully enforceable irrespective of any defenses which
Borrower could assert on the underlying debt, including but not limited to
failure of consideration, breach of warranty, fraud, payment, accord and
satisfaction, strict foreclosure, statute of frauds, bankruptcy, infancy,
statute of limitations, lender liability, and usury. If Borrower or Guarantor
should at any time become insolvent or make a general assignment, or a
petition in bankruptcy or any insolvency or reorganization proceedings shall be
filed or commenced by or against Borrower or Guarantor, any and all obligations
of Guarantor pursuant to this Guaranty shall not be lessened by such petitions,
assignments or filings and shall, at Lender's option, forthwith become due and
payable without notice. In the event of default in the performance of this
Guaranty, Guarantor agrees to pay all reasonable court costs, attorney's fees
and other expenses paid or incurred by Lender in the enforcement hereof.
This Guaranty is a continuing guaranty which shall remain effective until
terminated as provided herein. Guarantor may terminate this Guaranty upon at
least sixty (60) days prior written notice received by Lender and sent by
registered or certified mail, return receipt requested. Notwithstanding such
termination, however, this Guaranty shall remain effective as to all financing
provided, or committed to be provided, by Lender to or for the benefit of
Borrower prior to the effective date of termination and this Guaranty shall be
continuing and unconditional until the same are fully paid, performed and
discharged.
This Guaranty supersedes all prior writings, and all prior and contemporaneous
oral understandings, regarding this Guaranty. Without Lender's prior written
consent, no assignment or delegation of any rights or duties by Guarantor shall
be effective to relieve Guarantor of its obligations hereunder. Lender can at
any time assign or delegate any rights or duties arising under this Guaranty.
This Guaranty shall inure to the benefit of Lender's successors and assigns.
Guarantor agrees to provide financial statements for Guarantor when requested
by Lender.
Guarantor acknowledges that Guarantor has read this Guaranty, has consulted with
counsel to the extent Guarantor deemed advisable, understands this Guaranty and
desires to be bound by it.
Dated 10-4, 1996
Witness: /s/ Xxxxxx X. Xxxxxxx
Signature of Individual Guarantor
/s/ Xxxxxx X. Xxxxxx
Print Guarantor Name Print Witness Name
Xxxxxx X. Xxxxxx XX Xxxxxx X. Xxxxxxx
Print Guarantor Address Print Witness Address and Phone Number
0000 X. Xxxxxxxxx #0000 0000 X. Xxxxxxxxx #0000
Xxxxxxx, XX 00000 Xxxxxxx, XX 00000
