Amendment No. 11 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, and Amendment No. 10
dated March 6, 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 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. Amendments to Agreement. Effective as of the date hereof, the
Agreement is hereby amended as follows.
a.) Loan Term: Right to Terminate. Section 2.3 of the
Agreement is hereby amended in its entirety to read as follows:
"Loan Term; Right to Terminate. Unless sooner terminated as hereinafter
provided, this Agreement shall terminate without any notice requirement
on June 30, 2001 if not renewed or extended by a mutual written
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."
b.) 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) One Hundred
Twenty-five Million Dollars ($125,000,000.00) minus the Loan
Availability Cap, or (ii) an amount equal to (A) the lesser of the
Securitization Net Proceeds Percentage or 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 Kelly 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 DCT Eligible Contracts during the
time the DCT Eligible Contracts are included in the Borrowing Base
pursuant to Section 3.1. (G) forty and one-half percent (40.5%) of the
Outstanding Principal Balance of all VAM Eligible Contracts during the
time the VAM Eligible Contracts are included in the Borrowing Base
pursuant to Section 3.1. At Lender's sole and absolute discretion
following 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.
c.) Securitization Net Proceeds Percentage. The following
definition is added to Section 16.0 of the Agreement in proper alphabetical
order:
Securitization Net Proceeds Percentage: determined solely by
Lender according to the following formula: The aggregate of
[(Total Securitized Pool less any Securitization Reductions)
divided by Total Securitized Pool] minus [75 basis points (.75%)],
with the resulting number rounded to the nearest 1/100th of a
percent.
d.) Securitization Reductions. The following definition is
added to Section 16.0 of the Agreement in proper alphabetical order:
Securitization Reductions: Reductions from the Total
Securitized Pool including but not limited to reductions for
credit enhancement certificates or notes, initial deposits to
spread accounts, plus to the extent the following "Fees" deducted
from the closing proceeds are greater the one percent (1.00%) of
the Total Securitized Pool, placement agent fees, legal fees,
insurer fees, and accounting fees.
e.) Total Securitized Pool. The following definition is added
to Section 16.0 of the Agreement in proper alphabetical order:
Total Securitized Pool: The total dollar amount of the most
recently closed securitization by Borrower.
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
continueunimpaired 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.
IN WITNESS WHEREOF, the undersigned have entered into this Amendment as of June
30, 2000.
GENERAL ELECTRIC CAPITAL
CORPORATION UGLY DUCKLING CAR SALES, INC.
By: /S/JEFF BATKA By: /S/GREGORY B. SULLIVAN
Title: Account Executive Title: President
UGLY DUCKLING CORPORATION
By: /S/GREGORY B. SULLIVAN
Title: President
UGLY DUCKLING CAR SALES AND CHAMPION FINANCIAL SERVICES, INC.
FINANCE CORPORATION
By: /S/GREGORY B. SULLIVAN By: /S/GREGORY B. SULLIVAN
Title: President Title: President
UGLY DUCKLING CAR SALES FLORIDA, UGLY DUCKLING CREDIT
INC. CORPORATION
By: /S/GREGORY B. SULLIVAN By: /S/GREGORY B. SULLIVAN
Title: President Title: President
CYGNET FINANCIAL CORPORATION
By: /S/GREGORY B. SULLIVAN
Title: President
CYGNET SUPPORT SERVICES, INC.
By: /S/GREGORY B. SULLIVAN
Title: President
CYGNET FINANCIAL SERVICES, INC. CYGNET FINANCIAL PORTFOILIO, INC.
By: /S/GREGORY B. SULLIVAN By: /S/GREGORY B. SULLIVAN
Title: President Title: President
UGLY DUCKLING PORTFOLIO UGLY DUCKLING FINANCE CORPORATION
PARTNERSHIP, L.L.P.
By: /S/GREGORY B. SULLIVAN By: /S/GREGORY B. SULLIVAN
Title: President Title: President
UGLY DUCKLING PORTFOLIO
CORPORATION
By: /S/GREGORY B. SULLIVAN
Title: President