ALL RIGHTS AND INDEBTEDNESS OF PAYEE CREATED UNDER THIS NOTE AND THAT CERTAIN
LOAN AGREEMENT DATED AS OF EVEN DATE HEREWITH BETWEEN PAYEE AND MAKER ARE
SUBORDINATE TO THE INTERESTS OF THE SENIOR LENDERS AS EVIDENCED BY THAT CERTAIN
SUBORDINATION AND STANDSTILL AGREEMENT BY AND AMONG PAYEE, MAKER, UGLY DUCKLING
CAR SALES AND FINANCE CORPORATION AND BNY MIDWEST TRUST COMPANY, DATED JANUARY
11, 2001.
PROMISSORY NOTE
Original Face Amount: $7,000,000
Maker: UGLY DUCKLING CORPORATION, a Delaware corporation
Dated as of: January 11, 2001
1. Promise to Repay. FOR VALUE RECEIVED, UGLY DUCKLING CORPORATION, a
Delaware corporation ("Maker"), promises to pay to VERDE INVESTMENTS, INC., an
Arizona corporation ("Payee"), or order, the principal sum of Seven Million
Dollars ($7,000,000) or such lesser amount as shall equal the outstanding amount
of the loan (the "Loan") made by Payee to Maker, pursuant to Section 2.1 of that
certain Loan Agreement, dated as of January 11, 2001, entered into between Maker
and Payee (the "Loan Agreement").
2. Defined Terms. Any and all initially capitalized terms used herein shall
have the meaning ascribed thereto in the Loan Agreement, unless specifically
defined herein. The term "or" as used in this Note has, except where otherwise
indicated, the inclusive meaning represented by the phrase "and/or". This
Promissory Note (this "Note") is the promissory note defined in the Loan
Agreement as the "Note" and is subject to, and entitled to the benefits of, the
terms and provisions of the Loan Agreement.
3. Payments of Principal and Interest.
(a) Maker hereby promises to make payments of principal and interest
with respect to the Loan evidenced hereby at the rates and times, and in
the amounts, and in all other respects in the manner as provided in the
Loan Agreement.
(b) As more fully set forth in the Loan Agreement, Maker shall not be
obligated to pay, and the holder of this Note shall not be obligated to
charge, collect, receive, reserve, or take interest (it being understood
that interest shall be calculated as the aggregate of all charges which
constitute interest under applicable law that are contracted for, charged,
reserved, received, or paid) in excess of the maximum nonusurious interest
rate, as in effect from time to time, which may be charged, contracted for,
reserved, received, or collected by Payee in connection with the Loan
Agreement, this Note, the other Loan Documents, or any other documents
executed in connection herewith or therewith.
4. Prepayments. Maker may prepay the principal balance due under this Note,
in whole or in part, without penalty or premium, only in accordance with the
provisions of the Loan Agreement.
5. Application of Payments. All payments (including prepayments) made
hereunder shall be applied first to accrued and unpaid interest and then to
principal. 6. Time and Place of Payments. All principal and interest due
hereunder is payable in U.S. Dollars in immediately available funds at Payee's
office located at 0000 Xxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx 00000 (or at
such other office as may be designated from time to time by Payee), not later
than 1:30 p.m., Phoenix, Arizona time, on the date of payment.
7. Waivers. Maker, for itself and its legal representatives, successors,
and assigns, expressly waives presentment, demand, protest, notice (except as
required by the Loan Agreement), and all other requirements of any kind, in
connection with the enforcement or collection of this Note.
8. Acceleration and Waiver. IT IS EXPRESSLY AGREED THAT, UPON THE
OCCURRENCE OF AN EVENT OF DEFAULT AS SPECIFIED IN SECTIONS 8.1(g) THROUGH (l) OF
THE LOAN AGREEMENT, THE UNPAID PRINCIPAL BALANCE OF AND ANY ACCRUED AND UNPAID
INTEREST UNDER THIS NOTE SHALL AUTOMATICALLY BECOME IMMEDIATELY DUE AND PAYABLE
PURSUANT TO THE TERMS OF THE LOAN AGREEMENT, AND, UPON THE OCCURRENCE OF ANY
OTHER EVENT OF DEFAULT SPECIFIED IN SECTION 8.1 OF THE LOAN AGREEMENT, THE
UNPAID PRINCIPAL BALANCE OF ANY ACCRUED AND UNPAID INTEREST UNDER THIS NOTE MAY,
BY NOTICE IN WRITING TO MAKER, BE DECLARED TO BE IMMEDIATELY DUE AND PAYABLE
PURSUANT TO THE TERMS OF THE LOAN AGREEMENT, WITHOUT PRESENTMENT, DEMAND,
PROTEST, NOTICE (EXCEPT AS REQUIRED THE LOAN AGREEMENT), OR OTHER REQUIREMENTS
OF ANY KIND, ALL OF WHICH AR HEREBY EXPRESSLY WAIVED BY MAKER.
9. Attorneys' Fees. In the event it should become necessary to employ
counsel to collect or enforce this Note, Maker agrees to pay the reasonable
attorneys' fees and costs (including those of in-house counsel) of the holder
hereof, irrespective of whether suit is brought, to the extent and as provided
in the Loan Agreement.
10. Amendments. This Note may not be changed, modified, amended, or
terminated except by a writing duly executed by Maker and the holder hereof.
11. Headings. Section headings used in this Note are solely for convenience
of reference, shall not constitute a part of this Note for any other purpose,
and shall not affect the construction of this Note.
12. GOVERNING LAW. EXCEPT AS OTHERWISE PROVIDED IN THE LOAN AGREEMENT: (a)
THIS NOTE SHALL BE DEEMED TO HAVE BEEN MADE IN THE STATE OF ARIZONA; AND (b) THE
VALIDITY OF THIS NOTE AND THE CONSTRUCTION, INTERPRETATION AND ENFORCEMENT OF,
AND THE RIGHTS OF THE PARTIES HERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND
CONSTRUCTED IN ACCORDANCE WITH THE LAWS OF THE STATE OF ARIZONA.
13. WAIVER OF TRIAL BY JURY. MAKER, TO THE EXTENT IT MAY LEGALLY DO SO,
HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION,
CAUSE OF ACTION, OR PROCEEDING ARISING UNDER OR WITH RESPECT TO THIS NOTE, OR IN
ANY WAY CONNECTED WITH, OR RELATED TO, OR INCIDENTAL TO, THE DEALINGS OF MAKER,
AND PAYEE, WITH RESPECT TO THIS NOTE, OR THE TRANSACTIONS RELATED HERETO, IN
EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND IRRESPECTIVE OF WHETHER
SOUNDING IN CONTRACT, TORT, OR OTHERWISE. TO THE EXTENT IT MAY LEGALLY DO SO,
MAKER HEREBY AGREES THAT ANY SUCH CLAIM, DEMAND, ACTION, CAUSE OF ACTION, OR
PROCEEDING SHALL BE DECIDED BY A COURT TRIAL WITHOUT A JURY AND THAT PAYEE MAY
FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF MAKER TO WAIVER OF ITS RIGHT TO TRIAL BY JURY.
Dated as of January 11, 2001.
UGLY DUCKLING CORPORATION,
a Delaware corporation
By:/s/ XXX X. XXXXXXXX
Name: Xxx X. Xxxxxxxx
Title: Vice President, General Counsel
and Secretary
