Amendment No. 12 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; Cygnet Financial Corporation ("Cygnet"), a Delaware
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; and Ugly Duckling Portfolio Corporation ("UDPC"), an Arizona
corporation formerly known as Champion Portfolio 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, Amendment No. 9 dated December 8, 1999, Amendment No. 10 dated
March 6, 2000 and Amendment No. 11 dated June 30, 2000 (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 amend certain provisions of the Agreement
pursuant to the terms set forth in this Amendment in order to eliminate all Loan
Facilities other than the Inventory Facility and make certain other changes.
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. As used herein, "Effective Date" shall mean
the date of the initial advance of loan funds pursuant to that certain
Master Loan and Security Agreement dated as of April ___, 2001 among
UDC, UDCSFC, UDCC, Car Sales Florida, UDFC, Sales and Greenwich
Capital Financial Products, Inc.
2. Amendments to Agreement. Effective as of the Effective Date, the
Agreement is hereby amended as follows.
(a) Loan Facilities. Section 2.1 of the Agreement is hereby amended
in its entirety to read as follows:
"Section 2.1. Loan Facilities. The only Loan Facility is the
following Inventory Facility:
(A) Inventory Facility. Subject to all of the terms and
conditions of this Agreement, Lender agrees to loan funds up
to Twenty Five Million Dollars ($25,000,000.00) to Borrower
against Eligible Inventory from time to time in a series of
Advances during the term of this Agreement. Funds may be
borrowed, repaid and reborrowed on a revolving basis subject
to the terms and conditions set forth in this Agreement,
provided that the amount outstanding under the Inventory
Facility shall not at any time exceed the Inventory Advance
Value."
(b) General Interest Rate and Fees. Section 2.2(A) of the Agreement
is hereby amended in its entirety to read as follows:
"(A) Except as modified by Sections 2.4 and 15.1, the average
daily balance of the Loan shall bear interest, calculated
daily on the basis of a 365-day year, at a per annum rate
equal to the LIBOR Rate plus (i) Three Hundred Fifteen (315)
basis points through June 30, 2001 and (ii) Three Hundred
Sixty-Five (365) basis points beginning on July 1, 2001."
(c) Loan Term; Right to Terminate. Section 2.3 of the Agreement is
hereby amended in its entirety to read as follows:
Section 2.3. "Loan Term; Right to Terminate. Unless sooner
terminated as hereinafter provided, this Agreement shall
terminate without prior notice on the later of June 30, 2001 or
the end of the extension period elected by Borrower pursuant to
the following sentence. Unless sooner terminated as hereinafter
provided, (i) Borrower may extend the expiration of the term of
this Agreement from June 30, 2001 to September 30, 2001 by
providing Lender before June 1, 2001 with written notice of its
election to so extend and a payment of $31,250, and (ii) if
Borrower so extends the expiration then Borrower may further
extend the expiration from September 30, 2001 to December 31,
2001 by providing Lender before September 1, 2001 with written
notice of its election to so extend and a payment of $31,250;
provided, however, that neither extension will be effective if at
the time of the expiration elected to be extended the Borrower is
not in full compliance with all of the terms and conditions of
this Agreement. Upon the occurrence of an Event of Default,
Lender may, without prior notice to Borrower, immediately
terminate this Agreement. A prepayment in full of the Loan shall
be a termination of this Agreement. Notwithstanding termination
of this Agreement in any manner, the Indebtedness shall be
payable in accordance with this Agreement, and all rights and
remedies granted to Lender hereunder or pursuant to applicable
law shall continue until all obligations of Borrower to Lender
have been fully paid and performed."
(d) Interest Payments. Section 4.0(C) of the Agreement is hereby
amended in its entirety to read as follows:
"(C) Interest shall accrue on the Loan daily and all accrued
interest shall be due and payable on the last day of each
month, provided that if such last day is not a Business Day,
such accrued interest shall be payable on the next following
Business Day. Accrued interest shall not be added to the
Loan balance and bear interest, unless the interest is past
due and paid with an Advance requested by Borrower and
approved by Lender; provided that, such an approval by
Lender shall not constitute a waiver of the Event of Default
consisting of the failure to pay the interest except to the
extent provided in Section 16.9."
(e) Contract Payments. Section 4.1 of the Agreement is hereby amended
in its entirety to read as follows:
"Section 4.1. Contract Payments. Borrower shall direct all
Contract Debtors for Pledged Contracts, and all other Persons
(including Contract Rights Payors) who make payments to Borrower
relating to Pledged Contracts, to make, when paying by mail, all
payments directly to the Post Office Box."
(f) Security Interest. The description of Collateral in Section 6.0
of the Agreement is amended to include the following:
"Section 6.0. Stock Pledge Collateral. The capital stock owned by
UDCSFC, whether now owned or hereafter acquired, and the rights
to receive dividends and other distributions of every nature, now
existing or hereafter created and wherever located, of Ugly
Duckling Receivables Corporation II, Ugly Duckling Receivables
Corporation III, and any other bankruptcy remote entity created
for the purpose of a securitization transaction."
(g) Remittances. Notwithstanding any other provision of the
Agreement, Lender shall no longer receive Remittances which are
instead being paid as described in the Intercreditor Agreement
(hereinafter defined). Borrower shall no longer be obligated to
provide the notices described in Sections 7.0(A) or (B).
(h) Certificates of Title. Section 13.11 of the Agreement is hereby
amended in its entirety to read as follows:
"Section 13.11. Certificates of Title. Borrower shall promptly
apply for and obtain Certificates of Title for all Financed
Vehicles."
(i) Unencumbered Inventory. Section 13.13 of the Agreement is hereby
deleted in its entirety.
(j) Borrowing Base. The definition of Borrowing Base in Section 16.0
of the Agreement is deleted and replaced in its entirety as
follows:
Borrowing Base: the amount equal to the lesser of (i) Twenty-five
Million Dollars ($25,000,000.00) minus the Loan Availability Cap,
or (ii) the Inventory Advance Value.
(k) Underutilization Fee. The definition of Underutilization Fee in
Section 16.0 of the Agreement is deleted and replaced in its
entirety as follows:
Underutilization Fee: the fee equal to (i) .000959% (35 basis
points per annum) times (ii) the amount by which the Advances
outstanding under the Inventory Facility are less than Fifteen
Million Dollars ($15,000,000), for each day during the Accounting
Period that such Advances are less than Fifteen Million Dollars
($15,000,000).
3. Intercreditor Agreement. Lender has entered into that certain
Greenwich/GECC/SunAmerica Intercreditor Agreement dated as of April
___, 2001 (the "Intercreditor Agreement") pursuant to which Lender has
agreed, in addition to other matters, that certain of the liens and
security interests granted to Lender will be subordinate to liens and
security interests granted to other persons pursuant to the
Intercreditor Agreement. In the event of any conflict between the
Agreement and the Intercreditor Agreement, the Intercreditor Agreement
will control.
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.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the undersigned have entered into this Amendment as of
April , 2001.
GENERAL ELECTRIC CAPITAL
CORPORATION UGLY DUCKLING CAR SALES, INC.
By: By:
--------------------------- -----------------------------
Title: Title:
------------------------ --------------------------
UGLY DUCKLING CORPORATION
By:
---------------------------
Title:
------------------------
UGLY DUCKLING CAR SALES AND CHAMPION FINANCIAL SERVICES,INC.
FINANCE CORPORATION
By: By:
--------------------------- -----------------------------
Title: Title:
------------------------ --------------------------
UGLY DUCKLING CAR SALES FLORIDA, UGLY DUCKLING CREDIT CORPORATION
INC.
By: By:
--------------------------- -----------------------------
Title: Title:
------------------------ --------------------------
CYGNET FINANCIAL CORPORATION
By:
---------------------------
Title:
------------------------
CYGNET SUPPORT SERVICES, INC.
By:
---------------------------
Title:
------------------------
CYGNET FINANCIAL SERVICES, INC. CYGNET FINANCIAL PORTFOLIO, INC.
By: By:
--------------------------- -----------------------------
Title: Title:
------------------------ --------------------------
UGLY DUCKLING PORTFOLIO UGLY DUCKLING FINANCE
PARTNERSHIP, L.L.P. CORPORATION
By: By:
--------------------------- -----------------------------
Title: Title:
------------------------ --------------------------
UGLY DUCKLING PORTFOLIO
CORPORATION
By:
---------------------------
Title:
------------------------
