EXHIBIT 10.3(a)
EXECUTION COPY
STOCK PLEDGE AGREEMENT
THIS STOCK PLEDGE AGREEMENT dated as of March 18, 1999 (the "Pledge
Agreement") among UGLY DUCKLING CAR SALES AND FINANCE CORPORATION, an Arizona
corporation formerly known as Duck Ventures, Inc. ("Pledgor"), as owner of all
of the outstanding capital stock in Ugly Duckling Receivables Corp. ("UDRC"), a
Delaware corporation, and Ugly Duckling Receivables Corp. II, a Delaware
corporation ("UDRC II"), UGLY DUCKLING CORPORATION, a Delaware corporation
("UDC") and GREENWICH CAPITAL FINANCIAL PRODUCTS, INC., a Delaware corporation
("Lender").
INTRODUCTORY STATEMENTS
Pledgor is the sole holder of fifty (50) shares of common stock, $.01 par
value per share in UDRC and fifty (50) shares of common stock, $.01 par value
per share, in UDRC II (collectively, the "Pledged Shares"). UDC, as debtor, has
on the date hereof entered into a Loan Agreement with Lender (the "Loan
Agreement") pursuant to which UDC has borrowed money from Lender. Pledgor, which
is wholly owned subsidiary of UDC, has agreed to pledge the Pledged Shares and
any proceeds thereof as further security for the Obligations (as defined in the
Loan Agreement). Accordingly, the Pledged Shares and any proceeds thereof will
secure Obligations of UDC and Pledgor to Lender. Terms used herein but not
defined herein shall have the meanings assigned to such terms in the Loan
Agreement.
In consideration of the premises and of the agreements herein contained,
Pledgor, Lender and UDC agree as follows:
Section 1. Definitions.
(a) Capitalized terms used but not otherwise defined in this Pledge
Agreement shall have the meanings specified therefor in the Loan
Agreement.
(b) As used herein, the term "Final Date" shall mean the date upon which
all of the Obligations as defined in the Loan Agreement and all
obligations under any other financing arrangement between UDC and
Lender, or any Affiliate of either, have been fully paid and performed
to the satisfaction of Lender. The term "Loan Documents" shall mean
the Loan Agreement, this Pledge Agreement and any and all documents,
instruments and agreements securing and/or relating to the Obligations
of UDC or Pledgor to Lender.
Page 1
K:\LEGAL\UDC.GL\STOCPLDG
Section 2. Pledge of Stock and Grant of Security Interest. As security for
the full and complete performance of all of the Obligations, Pledgor hereby
delivers, pledges and assigns to the Lender and grants in favor of Lender a
security interest in all of Pledgor's right, title and interest in and to the
Pledged Shares, together with all of Pledgor's rights and privileges with
respect thereto, all proceeds, income and profits thereof and all property
received in exchange thereof or in substitution therefor (the "Collateral").
Section 3. Dividends, Options, or Other Adjustments. Until the Final Date,
Pledgor shall deliver as Collateral to the Lender any and all additional shares
of stock or any other property of any kind distributable on or by reason of the
Collateral, whether in the form of or by way of stock dividends, warrants, total
or partial liquidation, conversion, prepayments, redemptions or otherwise,
including cash dividends and any cash interest payments (excluding, however, so
long as no Event of Default has occurred and is continuing, the 1998-D Spread
Account Reduction Amount, if any). If any such dividends, interest payments,
additional shares of capital stock, instruments, or other property, a security
interest in which can only be perfected by possession, which are distributable
on or by reason of the Collateral pledged hereunder, shall come into the
possession or control of Pledgor, Pledgor shall forthwith transfer and deliver
such property to Lender as Collateral hereunder.
Section 4. Delivery of Share Certificates; Stock Powers. Pledgor shall
promptly deliver to Lender, or cause UDRC or UDRC II or any other entity issuing
the Collateral to deliver directly to Lender, share certificates or other
instruments representing any Collateral issued to, acquired or received by
Pledgor after the date of this Pledge Agreement with a stock or bond power duly
executed by Pledgor. If, at any time Lender notifies Pledgor that it requires
additional stock powers endorsed in blank, Pledgor shall promptly execute in
blank and deliver the requested power to Lender.
Section 5. Power of Attorney. Pledgor hereby constitutes and irrevocably
appoints Lender as Pledgor's true and lawful attorney-in-fact, with the power,
after the occurrence of an "Event of Default" under and as defined in the Loan
Agreement, to the full extent permitted by law, to affix to any certificates and
documents representing the Collateral, the stock or bond powers delivered with
respect thereto, and to transfer or cause the transfer of Collateral, or any
part thereof, on the books of UDRC or UDRC II or any other entity issuing such
Collateral, to the name of Lender or any nominee of either, and thereafter to
exercise with respect to such Collateral all the rights, powers and remedies of
an owner. The power of attorney granted pursuant to this Pledge Agreement and
all authority hereby conferred are granted and conferred solely to protect
Lender's interest in the Collateral and shall not impose any duty upon Lender to
exercise any power. This power of attorney shall be irrevocable as one coupled
with an interest until the Final Date.
Section 6. Inducing Representations of Pledgor. Pledgor represents and
warrants to Lender that:
(a) The Pledged Shares are validly issued, fully paid for and
non-assessable.
(b) The Pledged Shares represent all of the issued and outstanding capital
stock of UDRC and UDRC II.
Page 2
(c) Pledgor is the sole legal and beneficial owner of, and has good and
marketable title to, the Pledged Shares, free and clear of all
pledges, liens, security interests and other encumbrances except the
security interest created by this Pledge Agreement, and Pledgor has
the unqualified right and authority to execute and perform this Pledge
Agreement.
(d) No options, warrants or other agreements with respect to the
Collateral are outstanding.
(e) Any consent, approval or authorization of or designation or filing
with any authority on the part of Pledgor which is required in
connection with the pledge and security interest granted under this
Pledge Agreement has been obtained or effected.
(f) Neither the execution and delivery of this Pledge Agreement by
Pledgor, the consummation of the transaction contemplated hereby nor
the satisfaction of the terms and conditions of this Pledge Agreement:
(i) conflicts with or results in any breach or violation of any
provision of the articles of incorporation or bylaws of Pledgor
or any law, rule, regulation, order, writ, judgment, injunction,
decree, determination or award currently in effect having
applicability to Pledgor or any of its properties, including
regulations issued by an administrative agency or other
governmental authority having supervisory powers over Pledgor;
(ii) conflicts with, constitutes a default (or an event which with the
giving of notice or the passage of time, or both, would
constitute a default) by Pledgor under, or a breach of or
contravenes any provision of, any agreement to which Pledgor or
any of its subsidiaries is a party or by which it or any of their
properties is or may be bound or affected, including without
limitation any loan agreement, mortgage, indenture or other
agreement or instrument; or
(iii)results in or requires the creation of any lien upon or in
respect of any of Pledgor's assets except the lien created by
this Pledge Agreement.
(g) With respect to all Pledged Shares heretofore delivered to and
currently held by Lender, and upon delivery to Lender of any Pledged
Shares hereafter issued to, acquired or received by Pledgor, Lender
will have a valid, perfected security interest in and to the
Collateral, enforceable as such against all other creditors of Pledgor
and against all persons purporting to purchase any of the Collateral
from Pledgor.
Page 3
(h) The board of directors of UDRC and UDRC II have duly adopted the
resolutions identified on Exhibits A-1 and A-2, respectively, attached
hereto (the "Standing Dividend Resolutions"), and such resolutions
remains in full force and effect and have not been rescinded, amended,
altered, revoked or modified in any respect. Pursuant to the Standing
Dividend Resolutions, Pledgor has delivered the UDRC Dividend
Direction Letter and the UDRC II Dividend Direction Letter to the
Trustee.
Section 7. Obligations of the UDC and Pledgor. Pledgor further represents,
warrants and covenants to Lender that:
(a) Pledgor will not sell, transfer or convey any interest in, or suffer
or permit any lien or encumbrance to be created upon or to exist with
respect to, any of the Collateral during the term of this Pledge
Agreement, other than the lien granted hereunder and the lien granted
to General Electric Capital Corporation ("GECC") pursuant to the
Amended and Restated Motor Vehicle Installment Contract Loan and
Security Agreement entered into as of August 15, 1997 among GECC, UDC,
Pledgor, and certain other entities.
(b) Pledgor will not cause or permit UDRC or UDRC II to enter into any
securitization agreement or arrangement other than as set forth in the
UDRC Securitization Documents or the UDRC II Securitization Documents,
or substantially similar agreements and arrangements in the future,
without the prior written consent of Lender.
(c) Pledgor will not effect any securitizations through any subsidiary or
affiliate other than UDRC II unless either (i) (A) Pledgor pledges to
Lender all of the capital stock of any such subsidiary or affiliate
(the "New Issuer") and Pledgor delivers to Lender a dividend direction
letter executed by New Issuer and supported by a standing dividend
resolution of the board of directors of New Issuer, which dividend
direction letter and standing dividend resolution are each
substantially similar to the UDRC II Dividend Direction Letter and the
UDRC II Standing Dividend Resolution, or (B) New Issuer pledges
directly to Lender all of its interests in any trust or other entity
which issues interests in a securitization, and (ii) all other matters
in connection with such securitization are reasonably satisfactory in
form and substance to Lender.
(d) Pledgor will, at Pledgor's expense, at any time and from time to time
at the request of Lender do, make, procure, execute and deliver all
acts, things, writings, assurances and other documents as may be
reasonably proposed by Lender to preserve, establish, demonstrate or
enforce the rights, interests and remedies of Lender as created by,
provided in, or emanating from this Pledge Agreement.
(e) Pledgor will not take any action which would cause UDRC or UDRC II to
issue any other capital stock without the prior written consent of
Lender.
(f) Pledgor will not consent to any amendment to the articles of
incorporation of UDRC or UDRC II without the prior written consent of
Lender.
Page 4
(g) Pledgor will not take any action which would cause, and will not
consent to, any transfer by UDRC or UDRC II of the UDRC Class B
Certificates or the UDRC II Class B Certificates.
Section 8. Dividends. Pledgor has not and will not permit UDRC or UDRC II
to, rescind, amend, alter, revoke or modify the Standing Dividend Resolutions,
the UDRC Dividend Direction Letter or the UDRC II Dividend Direction Letter, as
the case may be, in any respect without the prior written consent of Lender.
Section 9. Voting Proxy. Pledgor hereby grants to Lender an irrevocable
proxy to vote the Pledged Shares with respect to any matter permitted under the
Articles of Incorporation of UDRC and UDRC II, as the case may be, which proxy
shall continue until the Final Date. Pledgor represents and warrants that it has
directed UDRC and UDRC II, in accordance with Section 217 of the Delaware
General Corporation Law, to reflect on UDRC's and UDRC II's books, respectively,
the right of Lender to vote the Pledged Shares. Upon the request of Lender,
Pledgor shall deliver to Lender such further evidence of such irrevocable proxy
to vote the Collateral as Lender may request pursuant hereto.
Section 10. Rights of Lender. Lender may, at any time and without notice,
discharge any taxes, liens, security interests or other encumbrances levied or
placed on the Collateral, pay for the maintenance and preservation of the
Collateral, or pay for insurance on the Collateral; the amount of such payments,
plus any and all reasonable fees, costs and expenses of Lender (including
attorneys' fees and disbursements) in connection therewith, shall be reimbursed
by UDC within five (5) days of demand, with interest thereon from the date paid
at the rate provided in the Loan Agreement.
Section 11. Remedies Upon Event of Default under the Loan Agreement. Lender
may exercise any one or more of the following remedies:
(a) Upon the occurrence of an "Event of Default" pursuant to the Loan
Agreement, Lender may without notice to Pledgor:
(i) cause the Collateral to be transferred to Lender's name or to the
name of a nominee of Lender, and thereafter exercise as to such
Collateral all of the rights, powers and remedies of an owner;
(ii) collect by legal proceedings or otherwise all dividends,
interest, principal payments, capital distributions and other
sums now or hereafter payable on account of the Collateral, and
hold all such sums as part of the Collateral, or apply such sums
to the payment of the Obligations in such manner and order as
Lender may decide, in its sole discretion; or
Page 5
(iii)enter into any extension, subordination, reorganization,
deposit, merger, or consolidation agreement, or any other
agreement relating to or affecting the Collateral, and in
connection therewith deposit or surrender control of the
Collateral thereunder, and accept other property in exchange
therefor and hold and apply such property or money so received in
accordance with the provisions hereof.
(b) In addition to all the rights and remedies of a secured party under
the Uniform Commercial Code as in effect in any applicable
jurisdiction, upon the occurrence of an "Event of Default" pursuant to
the Loan Agreement, Lender shall have the right, without demand of
performance or other demand, advertisement or notice of any kind,
except as specified below, to or upon Pledgor or any other person (all
and each of which demands, advertisements and/or notices are hereby
expressly waived to the extent permitted by law), to proceed forthwith
to collect, receive, appropriate and realize upon the Collateral, or
any part thereof in one or more parcels in accordance with applicable
securities laws and in a manner designed to ensure that such sale will
not result in a distribution of the Pledged Shares in violation of
Section 5 of the Securities Act of 1933, as amended (the "Securities
Act") and on such terms (including a requirement that any purchaser of
all or any party of the Collateral shall be required to purchase any
securities constituting the Collateral solely for investment and
without any intention to make a distribution thereof) as Lender, in
its sole and absolute discretion, deems appropriate without any
liability for any loss due a decrease in the market value of the
Collateral during the period held. If any notification to Pledgor of
intended disposition of the Collateral is required by law, such
notification shall be deemed reasonable and properly given if mailed
to Pledgor, postage prepaid, at least ten (10) days before any such
disposition at the address indicated by Pledgor's signature. Any
disposition of the Collateral or any part thereof may be for cash or
on credit or for future delivery without assumption of any credit
risk, with the right of Lender to purchase all or any part of the
Collateral so sold at any such sale or sales, public or private, free
of any equity or right of redemption in Pledgor, which right of equity
is, to the extent permitted by applicable law, hereby expressly waived
or released by Pledgor; or
(c) Lender may elect to sell the Collateral on any credit terms which it
deems reasonable. The out-of-pocket costs and expenses of such sale
shall be for the account of Lender. The sale of any of the Collateral
on credit terms shall not relieve Pledgor of its liability with
respect to the Obligations. All payments received in respect of any
sale of the Collateral by Lender shall be applied to the Obligations
as and when such payments are received and any price received by the
Collateral Agreement in respect of such sale shall be conclusive and
binding upon Lender; or
Page 6
(d) Pledgor recognizes that it may not be feasible to effect a public sale
of all or a part of the Collateral by reason of certain prohibitions
contained in the Securities Act, and that it may be necessary to sell
privately to a restricted group of purchasers who will be obliged to
agree, among other things, to acquire the Collateral for their own
account, for investment and not with a view for the distribution or
resale thereof. Pledgor agrees that private sales may be at prices and
other terms less favorable to the Seller than if the Collateral were
sold at public sale, and that Lender has no obligation to delay the
sale of any Collateral for the period of time necessary to permit the
registration of the Collateral for public sale under the Securities
Act. Pledgor agrees that a private sale or sales made under the
foregoing circumstances shall be deemed to have been made in a
commercially reasonable manner; or
(e) If any consent, approval or authorization of any state, municipal or
other governmental department, agency or authority shall be necessary
to effectuate any sale or other disposition of the Collateral or any
partial disposition of the Collateral, Pledgor will execute all such
applications and other instruments as may be required in connection
with securing any such consent, approval or authorization, and will
otherwise use its best efforts to secure the same; or
(f) Lender shall have the right to deliver, assign and transfer to the
purchaser thereof the Collateral so sold or disposed of, free from any
other claim or right of whatever kind, including any equity or right
of redemption of Pledgor. Pledgor specifically waives, to the extent
permitted by applicable law, all rights of redemption, stay or
appraisal which it may have under any rule of law or statute now
existing or hereafter adopted; or
(g) Lender shall not be obligated to make any sale or other disposition of
the Collateral permitted under this Pledge Agreement, unless the terms
thereof shall be satisfactory to Lender. Lender may, without notice or
publication, adjourn any such private or public sale and, upon five
(5) days' prior notice to Pledgor, hold such sale at any time or place
to which the same may be so adjourned. In case of any such sale of all
or any part of the Collateral on credit or future delivery, the
Collateral so sold may be retained by Lender until the selling price
is paid by the purchaser thereof, but Lender shall not incur any
liability in case of the failure of such purchaser to take up and pay
for the property so sold and, in the case of any such failure, such
property may again be sold as herein provided.
(h) All of the rights and remedies granted to Lender, including but not
limited to the foregoing, shall be cumulative and not exclusive and
shall be enforceable alternatively, successively or concurrently as
Lender may deem expedient.
Section 12. Limitation on Liability.
(a) Neither Lender nor any of its respective directors, officers,
employers or agents shall be liable to Pledgor, UDC, UDRC or UDRC II
for any action taken or omitted to be taken by it or them hereunder,
or in connection herewith, except that Lender shall be liable for its
own gross negligence, bad faith or willful misconduct.
Page 7
(b) Lender shall be protected and shall incur no liability to any party in
relying upon the accuracy, acting in reliance upon the contents, and
assuming the genuineness of any notice, demand, certificate,
signature, instrument or other document Lender reasonably believes to
be genuine and to have been duly executed by the appropriate
signatory, and (absent actual knowledge to the contrary of any officer
of Lender) Lender shall not be required to make any independent
investigation with respect thereto. Lender shall at all times be free
independently to establish to its reasonable satisfaction, but shall
have no duty to independently verify, the existence or nonexistence of
facts that are a condition to the exercise or enforcement of any right
or remedy hereunder.
(c) Lender may consult with qualified counsel, financial advisors or
accountants and shall not be liable for any action taken or omitted to
be taken by it hereunder in good faith and in accordance with the
advice of such counsel, financial advisors or accountants.
Section 13. Indemnification. UDC and Pledgor jointly and severally agree to
indemnify each of Lender, its Affiliates and Subsidiaries (as such terms are
defined in the Loan Agreement) and their respective directors, officers,
employees and agents, for, and hold each of Lender, its Affiliates and
Subsidiaries and their respective directors, officers, employees and agents
harmless against, any loss, liability or expense (including the costs and
expenses of defending against any claim of liability) arising our of or in
connection with this Pledge Agreement and the transactions contemplated hereby,
except any such loss, liability or expense as shall result from the respective
gross negligence, bad faith or willful misconduct of each of Lender, its
Affiliates and Subsidiaries or their respective directors, officers, employees
or agents. The obligation of UDC and Pledgor under this Section shall survive
the termination of this Pledge Agreement.
Section 14. Termination. This Pledge Agreement shall continue in full force
and effect until the Final Date. Subject to any sale or other disposition of the
Collateral pursuant to and in accordance with this Pledge Agreement, the
Collateral shall be returned to Pledgor on the Final Date. The obligation of UDC
under Section 15 of this Pledge Agreement shall survive the termination of this
Pledge Agreement.
Section 15. Compensation and Reimbursement. UDC agrees for the benefit of
Lender and as part of the Obligations to reimburse Lender upon its request for
all reasonable expenses, disbursements and advances incurred or made by Lender
in accordance with any provision of, or carrying out its duties and obligations
under, this Pledge Agreement (including the reasonable compensation and fees and
the expenses and disbursements of its agents, any independent certified public
accounts and independent counsel), except any expense, disbursement or advances
as may be attributable to negligence, bad faith or willful misconduct on the
part of Lender.
Section 16. Foreclosure Expenses of Lender. All expenses (including
reasonable fees and disbursements of counsel) incurred in compliance with this
Pledge Agreement by Lender in connection with any actual or attempted sale,
exchange of, or any enforcement, collection, compromise or settlement respecting
this Pledge Agreement or the Collateral, or any other action taken in compliance
with this Pledge Agreement by Lender hereunder, whether directly or as
attorney-in-fact pursuant to a power of attorney or other authorization herein
conferred, for the purpose of satisfaction of the Obligation shall be deemed an
Obligation for all purposes of this Pledge Agreement and Lender may apply the
Collateral to payment of or reimbursement of itself for such liability.
Page 8
Section 17. Notices. Any notice or other communication given hereunder
shall be in writing and shall be sent by registered mail, postage prepaid,
overnight courier or personally delivered or facsimiles to the recipient as
follows:
To Pledgor:
UGLY DUCKLING CAR SALES
AND FINANCE CORPORATION
2525 East Camelback Road
Suite 500
Phoenix, Arizona 85016
Attn: Jon D. Ehlinger
Facsimile: (602) 852-6637
with a copy to:
SNELL & WILMER, L.L.P.
One Arizona Center
Phoenix, Arizona 85004-0001
Attention: Timothy W. Moser
Facsimile: (602) 382-6070
To Lender:
GREENWICH CAPITAL FINANCIAL PRODUCTS, INC.
600 Steamboat Road
Greenwich, Connecticut 06830
Attention: Ira J. Platt
Telephone: (203) 622-3882
Facsimile: (203) 622-2090
with a copy to:
OFFICE OF THE GENERAL COUNSEL
GREENWICH CAPITAL FINANCIAL PRODUCTS, INC.
600 Steamboat Road
Greenwich, Connecticut 06830
Telephone: (203) 625-6065
Facsimile: (203) 629-4640
with a copy to:
Page 9
KIRKLAND & ELLIS
200 East Randolph
Chicago, Illinois 60601
Attention: Kenneth P. Morrison
Telephone: (312) 861-2347
Facsimile: (312) 861-2200
To UDC:
UGLY DUCKLING CORPORATION
2525 East Camelback Road
Suite 500
Phoenix, Arizona 85016
Attn: Steven P. Johnson
Facsimile: (602) 852-6696
with a copy to:
SNELL & WILMER, L.L.P.
One Arizona Center
Phoenix, Arizona 85004-0001
Attention: Timothy W. Moser
Facsimile: (602) 382-6070
Section 18. General Provisions.
(a) The failure of Lender to exercise or delay in exercising any right,
power or remedy hereunder, shall not operate as a waiver thereof, nor
shall any single or partial exercise by Lender of any right, power or
remedy hereunder preclude any other or future exercise thereof, or the
exercise of any other right, power or remedy. The remedies herein
provided are cumulative and are not exclusive of any remedies provided
by law or any other agreement.
(b) The representations, covenants and agreements of Pledgor herein
contained shall survive the date hereof; provided, however, that only
Section 13 shall survive after the Final Date.
Page 10
(c) Neither this Pledge Agreement nor the provisions hereof can be
changed, waived or terminated unless any such change, waiver or
termination shall be in writing, signed by the parties hereto. This
Pledge Agreement shall be binding upon and inure to the benefit of the
parties hereto, and their respective successors, legal representatives
and assigns. If any provision of this Pledge Agreement shall be
invalid or unenforceable in any respect or in any jurisdiction, the
remaining provisions shall remain in full force and effect and shall
be enforceable to the maximum extent permitted by law.
(d) This Pledge Agreement may be executed in counterparts, each of which
shall constitute an original but all of which, when taken together,
shall constitute one instrument.
(e) THE VALIDITY OF THIS PLEDGE AGREEMENT AND THE OTHER LOAN DOCUMENTS,
THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF AND THEREOF,
AND THE RIGHTS OF THE PARTIES HERETO AND THERETO WITH RESPECT TO ALL
MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO SHALL BE
DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF NEW YORK.
THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION
WITH THIS PLEDGE AGREEMENT MAY BE TRIED AND LITIGATED IN THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK. PLEDGOR, COLLATERAL AGENT
AND LENDER WAIVE, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH
MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO
THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION.
THE PARTIES HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY OF THE LOAN AGREEMENT
OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT
CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS.
BORROWER AND LENDER REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH
KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION
WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS PLEDGE AGREEMENT
MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
Page 11
IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Pledge Agreement on the date first above written.
UGLY DUCKLING CAR SALES AND FINANCE
CORPORATION, an Arizona corporation
By: /S/ JON EHLINGER
----------------
Name: Jon Ehlinger
Title: Secretary
UGLY DUCKLING CORPORATION,
a Delaware corporation
By: /S/ DONALD L. ADDINK
--------------------
Name: Donald L. Addink
Title: Senior Vice President
GREENWICH CAPITAL FINANCIAL PRODUCTS,INC.,
a Delaware corporation
By: /S/ IRA PLATT
-------------
Name: Ira Platt
Title: Vice President
Page 12