Amendment No. 10 to Amended and Restated Motor Vehicle Installment Contract
Loan and Security Agreement
This Amendment is entered into by and between Ugly Duckling
Corporation, successor in interest to Ugly Duckling Holdings, Inc. ("Ugly
Duckling"), a Delaware corporation; Ugly Duckling Car Sales and Finance
Corporation ("UDCSFC"), an Arizona corporation formerly known as Duck Ventures,
Inc.; Ugly Duckling Credit Corporation ("UDCC") formerly known as Champion
Acceptance Corporation, an Arizona corporation; Ugly Duckling Car Sales, Inc.
("Sales"); an Arizona corporation; Champion Financial Services, Inc.
("Champion"), an Arizona corporation; Ugly Duckling Car Sales Florida, Inc.
("Car Sales Florida"), a Florida corporation;; Ugly Duckling Car Sales New
Mexico, Inc. ("Car Sales New Mexico"), a New Mexico corporation; Ugly Duckling
Car Sales California, Inc. ("Car Sales California"), a California corporation;
Ugly Duckling Car Sales Georgia, Inc. ("Car Sales Georgia"), a Georgia
corporation; Cygnet Financial Corporation ("Cygnet"), a Delaware corporation;
Cygnet Dealer Finance, Inc. ("Dealer Finance"), an Arizona corporation; Cygnet
Finance Alabama, Inc. ("Cygnet Alabama"), an Arizona corporation; Cygnet Support
Services, Inc. ("Services"), an Arizona corporation; Cygnet Financial Services,
Inc. ("Cygnet Services"), an Arizona corporation; Cygnet Financial Portfolio,
Inc. ("Cygnet Portfolio"), an Arizona corporation; Ugly Duckling Portfolio
Partnership, L.L.P. ("UDPP"), an Arizona limited liability partnership; Ugly
Duckling Finance Corporation ("UDFC"), an Arizona corporation; Ugly Duckling
Portfolio Corporation ("UDPC") an Arizona corporation formerly known as Champion
Portfolio Corporation; and Cygnet Dealer Finance Florida, Inc. ("CDFF"), a
Florida corporation (all of the foregoing entities collectively referred to
herein as "Borrower"); and General Electric Capital Corporation, a New York
corporation ("Lender").
RECITALS
A. Borrower and Lender are parties to an Amended and Restated Motor
Vehicle Installment Contract Loan and Security Agreement dated as of August 15,
1997, as amended by an Assumption and Amendment Agreement dated October 23,
1997, Amendment No. 1 dated December 22, 1997, Amendment No. 2 dated September
9, 1998, Amendment No. 3 dated January 18, 1999, Amendment No. 4 dated as of
July 19, 1999, Amendment No. 5 dated August 16, 1999, Amendment No. 6 dated
August 27, 1999, Amendment No. 7 dated November 30, 1999, Amendment No. 8 dated
December 7, 1999, and Amendment No. 9 dated December 8, 1999, (the Amended and
Restated Motor Vehicle Installment Contract Loan and Security Agreement as so
amended is referred to herein as the "Agreement") pursuant to which Lender
agreed to make Advances to Borrower on the terms and conditions set forth in the
Agreement.
B. Borrower and Lender desire to delete certain Borrowers from the
Agreement and to amend certain provisions of the Agreement pursuant to the terms
set forth in this Amendment.
In consideration of the premises and other good and valuable
consideration, the receipt of which is hereby acknowledged by each of the
parties hereto, the parties agree as follows:
1. Defined Terms. Unless otherwise specified herein, all capitalized
terms used in this Amendment shall have the same meaning given to such
term(s) in the Agreement.
2. Release and Deletion of Certain Borrowers. Without releasing
Borrower from liability to Lender for all obligations existing or in the future
arising under the Agreement, Lender and Borrower hereby agree to release
obligations of Borrowers Dealer Finance, Cygnet Finance Alabama and CDFF
(collectively, the "Released Parties") to Lender under the Agreement and all
other documents and instruments executed by the Released Parties in connection
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with the Agreement. By executing this Amendment, all parties agree that,
effective as of December 30, 1999, the Released Parties shall be deleted as
Borrowers under the Agreement and all associated rights and obligations are
hereby terminated as to the Released Parties.
3. Amendments to Agreement. Effective as of the date hereof, the
Agreement is hereby further amended as follows.
a.) Deletion of Borrower, Ugly Duckling Car Sales New Mexico,
Inc. Pursuant to the execution of those certain Articles of Merger of
Ugly Duckling Car Sales New Mexico, Inc. into Ugly Duckling Car Sales
Inc., dated December 27, 1999, Car Sales New Mexico agreed to merge
into Sales, with Sales to be the surviving corporation. Sales agreed
to assume all of the liabilities and obligations (collectively, the
"obligations") of Car Sales New Mexico. As a result of the merger and
the assumption of the obligations, Borrower and Lender agree to delete
Car Sales New Mexico as a Borrower under the Agreement.
b.) Deletion of Borrower, Ugly Duckling Car Sales Georgia, Inc.
Pursuant to the execution of those certain Articles of Merger of Ugly
Duckling Car Sales Georgia, Inc. into Ugly Duckling Car Sales Inc.,
dated January 19, 2000, Car Sales Georgia agreed to merge into Sales,
with Sales to be the surviving corporation. Sales agreed to assume all
of the liabilities and obligations (collectively, the "obligations")
of Car Sales Georgia. As a result of the merger and the assumption of
the obligations, Borrower and Lender agree to delete Car Sales Georgia
as a Borrower under the Agreement.
c.) Deletion of Borrower, Ugly Duckling Car Sales California,
Inc. Pursuant to the execution of those certain Articles of Merger of
Ugly Duckling Car Sales California, Inc. into Ugly Duckling Car Sales
Inc., dated as of January 24, 2000, Car Sales California agreed to
merge into Sales, with Sales to be the surviving corporation. Sales
agreed to assume all of the liabilities and obligations (collectively,
the "obligations") of Car Sales California. As a result of the merger
and the assumption of the obligations, Borrower and Lender agree to
delete Car Sales California as a Borrower under the Agreement.
d.) Single Loan. The second sentence in Section 2.0 of the
Agreement shall be amended to insert the word "Dollars" between the
word "Million" and "($125,000,000.00)".
e.) Loan Facility. The first sentence in Section 2.1 (A) of the
Agreement shall be amended to insert the word "Dollars" between the
word "Million" and "($125,000,000.00)".
f.) Loan Facility. The first sentence in Section 2.1 (B) of the
Agreement shall be amended to substitute the word "Twenty-five" for
"Twenty" and the amount "($25,000,000.00)" for the amount
"($20,000,000.00)" and to insert the word "Dollars" between the word
"Million" and "($25,000,000.00)".
g.) Financial Condition. Section 13.6 (E) of the Agreement shall
be amended to read as follows:
Borrower's three-month Rolling Average Managed Portfolio
Delinquency ratio shall not exceed ten percent (10%) except
for the periods ending December 31, 1999, January 31, 2000,
and February 29, 2000 (respectively) for which the three-month
Rolling Average Managed Portfolio Delinquency shall not exceed
twelve and one-half percent (12.50%). For all periods
following February 29, 2000, the level allowed for this
covenant shall return to ten percent (10%).
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h.) Financial Condition. Section 13.6 (G) of the Agreement shall
be amended to read as follows:
Borrower's Average Charged-Off Losses for all Managed
Portfolio Contracts shall not exceed two and three-quarters
percent (2.75%) except for the periods ending December 31,
1999, January 31, 2000, and February 29, 2000 (respectively)
for which the Average Charged-Off Losses for all Managed
Portfolio Contracts shall not exceed three and three-quarters
percent (3.75%). For all periods following February 29, 2000,
the level allowed for this covenant shall return to two and
three-quarters percent (2.75%).
i.) Seminole Eligible Contract. The definition of "Seminole
Eligible Contract" in Section 16.0 of the Agreement shall be amended
to read as follows:
Seminole Eligible Contract: an Eligible Contract which was
originally purchased by Borrower from Seminole Finance;
provided, however, that any such Eligible Contract that has
been sold or securitized by Borrower and then subsequently
repurchased by Borrower and that remains owned by Borrower
shall be deemed to be a Seminole Eligible Contract.
4. Incorporation of Amendment. The parties acknowledge and agree that
this Amendment is incorporated into and made a part of the Agreement, the terms
and provisions of which, unless expressly modified herein, or unless no longer
applicable by their terms, are hereby affirmed and ratified and remain in full
force and effect. To the extent that any term or provision of this Amendment is
or may be deemed expressly inconsistent with any term or provision of the
Agreement, the terms and provisions of this Amendment shall control. Each
reference to the Agreement shall be a reference to the Agreement as amended by
this Amendment. This Amendment, taken together with the unamended provisions of
the Agreement which are affirmed and ratified by Borrower, contains the entire
agreement among the parties regarding the transactions described herein and
supersedes all prior agreements, written or oral, with respect thereto.
5. Borrower Remains Liable. Borrower hereby confirms that the Agreement
and each document executed by Borrower in connection therewith continue
unimpaired and in full force and effect and shall cover and secure all of
Borrower's existing and future obligations to Lender. Nothing contained herein
is intended, nor shall be construed, to be a novation or an accord and
satisfaction of the outstanding liabilities or any of Borrower's other
obligations to Lender.
6. 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.
7. 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.
8. 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.
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IN WITNESS WHEREOF, the undersigned have entered into this Amendment as of
March 6, 2000.
GENERAL ELECTRIC CAPITAL
CORPORATION UGLY DUCKLING CAR SALES, INC.
By: /S/ XXXX XXXXX By: /S/ XXX X. XXXXXXXX
Title: Account Executive Title: Secretary
UGLY DUCKLING CORPORATION UGLY DUCKLING CAR SALES NEW MEXICO, INC.
By: /S/ XXX X. XXXXXXXX By: /S/ XXX X. XXXXXXXX
Title: Secretary Title: Secretary
UGLY DUCKLING CAR SALES AND CHAMPION FINANCIAL SERVICES, INC.
FINANCE CORPORATION
By: /S/ XXX X. XXXXXXXX By: /S/ XXX X. XXXXXXXX
Title: Secretary Title: Secretary
UGLY DUCKLING CAR SALES FLORIDA, INC. UGLY DUCKLING CREDIT CORPORATION
By: /S/ XXX X. XXXXXXXX By: /S/ XXX X. XXXXXXXX
Title: Secretary Title: Secretary
UGLY DUCKLING CAR SALES GEORGIA, INC. UGLY DUCKLING CAR SALES CALIFORNIA, INC.
By: /S/ XXX X. XXXXXXXX By: /S/ XXX X. XXXXXXXX
Title: Secretary Title: Secretary
CYGNET FINANCIAL CORPORATION CYGNET DEALER FINANCE, INC.
By: /S/ XXX X. XXXXXXXX By: /S/ XXXXXX X. XXXXXXX
Title: Secretary Title: Secretary
CYGNET FINANCE ALABAMA, INC. CYGNET SUPPORT SERVICES, INC.
By: /S/ XXXXXX X. XXXXXXX By: /S/ XXX X. XXXXXXXX
Title: Secretary Title: Secretary
CYGNET FINANCIAL SERVICES, INC. CYGNET FINANCIAL PORTFOILIO, INC.
By: /S/ XXX X. XXXXXXXX By: /S/ XXX X. XXXXXXXX
Title: Secretary Title: Secretary
UGLY DUCKLING PORTFOLIO UGLY DUCKLING FINANCE CORPORATION
PARTNERSHIP, L.L.P.
By: /S/ XXX X. XXXXXXXX By: /S/ XXX X. XXXXXXXX
Title: Secretary Title: Secretary
UGLY DUCKLING PORTFOLIO CYGNET DEALER FINANCE FLORIDA,
CORPORATION INC.
By: /S/ XXX X. XXXXXXXX By: /S/ XXXXXX X. XXXXXXX
Title: Secretary Title: Secretary
