Amendment No. 8 to Amended and Restated Motor Vehicle Installment Contract
Loan and Security Agreement
This Amendment No. 8 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; Cygnet Dealer Finance Florida, Inc. ("CDFF"), a Florida
corporation (all of the above entities are 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 as
of August 27, 1999, and Amendment No. 7 dated as of November 30, 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. Lender advanced additional funds to Borrower Ugly Duckling in
connection with the December 18, 1997 purchase by Ugly Duckling of interests in
certain loans (the "FMAC Loans") held by First Merchants Acceptance Corporation
("FMAC"). As part of the transaction, Lender agreed to purchase the FMAC Loans
and Ugly Duckling furnished Lender with a Guaranty (the "FMAC Guaranty"), dated
as of December 18, 1997, in the principal amount of Ten Million Dollars
($10,000,000.00) plus interest and enforcement costs. Lender and Ugly Duckling
subsequently agreed that the FMAC Guaranty would operate as a reduction in the
overall credit facility made available to Borrower under the terms of the
Agreement.
C. On or about January 12, 1998, Lender and Ugly Duckling orally agreed
that the amount of the FMAC Guaranty used to cap the availability of the credit
facility would be modified from a total of Ten Million Dollars ($10,000,000.00)
to Eight Million Dollars ($8,000,000.00), thus enabling Borrower to have access
to a higher credit amount. The original principal amount of the FMAC Guaranty,
however, remained unchanged at Ten Million Dollars ($10,000,000.00).
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D. Borrower has requested, and Lender has agreed subject to the terms of
this Amendment, that the amount of the FMAC Guaranty used to cap the
availability of the credit facility be modified further from Eight Million
Dollars ($8,000,000.00) to Three Million Dollars ($3,000,000.00), allowing
Borrower potentially higher availability under the overall credit facility. The
original principal amount of the FMAC Guaranty will remain unchanged at Ten
Million Dollars ($10,000,000.00).
E. Borrower and Lender desire to modify the Agreement pursuant to the terms
and conditions set forth in this Amendment.
In consideration of the premises and other good and valuable
consideration, the receipt and sufficiency 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 shallhave the same meaning given to such term(s) in the
Agreement.
2. Amendments to Agreement. Effective as of the date hereof, the Agreement
is hereby amended as follows.
a. Loan Availability Cap. The following new definition shall be added to
Section 16.0 in its proper alphabetical order:
Loan Availability Cap: shall be a portion (expressed in dollar terms) of
the Guaranty Liability, and shall be applied to the reduce the amount
available under the Loan. Effective as of December 1, 1999, the Loan
Availability Cap shall be Three Million Dollars ($3,000,000.00).
b. Borrowing Base: The definition of Borrowing Base in Section 16.0 shall
be deleted in its entirety and shall be replaced with the following:
Borrowing Base: the amount equal to the lesser of (i) One Hundred
Twenty-five Million Dollars ($125,000,000.00) minus the Loan Availability
Cap, or (ii) an amount equal to (A) sixty five percent (65%) of the
Outstanding Principal Balance of all Originated Eligible Contracts (but not
to exceed one hundred fifteen percent (115%) of the NADA average wholesale
Black Book value for all such Contracts in the aggregate) during the time
they are included in the Borrowing Base pursuant to Section 3.1; plus (B)
eighty-six percent (86%) of the Outstanding Principal Balance of all
Champion Eligible Contracts (but not to exceed one hundred seven percent
(107%) of wholesale Xxxxx Blue Book for all such Contracts in the
aggregate) during the time they are included in the Borrowing Base pursuant
to Section 3.1; plus (C) seventy-five percent (75%) of the Outstanding
Principal Balance of all Seminole Eligible Contracts during the time they
are included in the Borrowing Base pursuant to Section 3.1; plus (D) the
Inventory Advance Value; plus (E) during the term of the Dealer Contract
Facility, the Dealer Contract Advance Value; plus (F) fifty percent (50%)
of the Outstanding Principal Balance of all contracts purchased from DCT of
Ocala Corporation (dba Best Chance) on August 25, 1999 during the time they
are included in the Borrowing Base pursuant to Section 3.1. At Lender's
sole and absolute discretion and Borrower's request, Lender may agree to
include Bulk Purchase Contracts as part of the Borrowing Base hereunder.
The amount of advance against Bulk Purchase Contracts, if any, shall be at
Lender's sole and absolute discretion. With respect to section (ii) (A) of
this definition, compliance with the parenthetical test based on Black Book
values shall be measured by Lender's sample of 100 or more Contracts and
not on a Contract-by-Contract basis.
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c. Subordination and Dealer Contracts. The final sentence of Section 14.3,
Subordination and Dealer Contracts, of the Agreement shall be deleted in its
entirety and replaced with the following:
"Borrower shall not have loans or purchases of more than Three Million Five
Hundred Thousand Dollars ($3,500,000.00) outstanding at the same time under
any Dealer Contract, except for Texas Auto Outlet and Foothill Nissan."
3. Incorporation of Amendment: The parties acknowledge and agree that
this Amendment is incorporated into and made a part of the Agreement, the terms
and provisions of which, unless expressly modified herein, or unless no longer
applicable by their terms, are hereby affirmed and ratified and remain in full
force and effect. To the extent that any term or provision of this Amendment is
or may be deemed expressly inconsistent with any term or provision of the
Agreement, the terms and provisions of this Amendment shall control. Each
reference to the Agreement shall be a reference to the Agreement as amended by
this Amendment. This Amendment, taken together with the unamended provisions of
the Agreement which are affirmed and ratified by Borrower, contains the entire
agreement among the parties regarding the transactions described herein and
supersedes all prior agreements, written or oral, with respect thereto.
4. Borrower Remains Liable. Borrower hereby confirms that the Agreement
and each document executed by Borrower in connection therewith continue
unimpaired and in full force and effect and shall cover and secure all of
Borrower's existing and future obligations to Lender. Nothing contained herein
is intended, nor shall be construed to be a novation or an accord and
satisfaction of the outstanding Liabilities or any of Borrower's other
obligations to Lender.
5. Headings. The paragraph headings contained in this Amendment are for
convenience of reference only and shall not be considered a part of this
Amendment in any respect.
6. Governing Law. This Amendment shall be governed by and construed in
accordance with the laws of the State of Arizona. Nothing herein shall preclude
Lender from bringing suit or taking other legal action in any jurisdiction.
7. Execution in Counterparts. This Amendment may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed to be an original
and all of which taken together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the undersigned have entered into this Amendment as of
December 7, 1999.
GENERAL ELECTRIC CAPITAL
CORPORATION UGLY DUCKLING CAR SALES, INC.
By: /S/ XXXX XXXXX By: /S/ XXX X. XXXXXXXX
Title: Account Executive Title: Secretary
UGLY DUCKLING CORPORATION UGLY DUCKLING CAR SALES NEW MEXICO, INC.
By: /S/ XXX X. XXXXXXXX By: /S/ XXX X. XXXXXXXX
Title: Secretary Title: Secretary
UGLY DUCKLING CAR SALES AND CHAMPION FINANCIAL SERVICES, INC.
FINANCE CORPORATION
By: /S/ XXX X. XXXXXXXX By: /S/ XXX X. XXXXXXXX
Title: Secretary Title: Secretary
UGLY DUCKLING CAR SALES FLORIDA, INC. UGLY DUCKLING CREDIT CORPORATION
By: /S/ XXX X. XXXXXXXX By: /S/ XXX X. XXXXXXXX
Title: Secretary Title: Secretary
UGLY DUCKLING CAR SALES GEORGIA, INC. UGLY DUCKLING CAR SALES CALIFORNIA, INC.
By: /S/ XXX X. XXXXXXXX By: /S/ XXX X. XXXXXXXX
Title: Secretary Title: Secretary
CYGNET FINANCIAL CORPORATION CYGNET DEALER FINANCE, INC.
By: /S/ XXX X. XXXXXXXX By: /S/ XXXXXX X. XXXXXXX
Title: Secretary Title: Secretary
CYGNET FINANCE ALABAMA, INC. CYGNET SUPPORT SERVICES, INC.
By: /S/ XXXXXX X. XXXXXXX By: /S/ XXX X. XXXXXXXX
Title: Secretary Title: Secretary
CYGNET FINANCIAL SERVICES, INC. CYGNET FINANCIAL PORTFOILIO, INC.
By: /S/ XXX X. XXXXXXXX By: /S/ XXX X. XXXXXXXX
Title: Secretary Title: Secretary
UGLY DUCKLING PORTFOLIO UGLY DUCKLING FINANCE CORPORATION
PARTNERSHIP, L.L.P.
By: /S/ XXX X. XXXXXXXX By: /S/ XXX X. XXXXXXXX
Title: Secretary Title: Secretary
UGLY DUCKLING PORTFOLIO CYGNET DEALER FINANCE FLORIDA,
CORPORATION INC.
By: /S/ XXX X. XXXXXXXX By: /S/ XXXXXX X. XXXXXXX
Title: Secretary Title: Secretary
