Covenant Waiver Agreement between DriveTime Automotive Group, Inc. and Automotive Finance Corporation (AFC)

Contract Categories: Business Finance › Waiver Agreements
Summary

DriveTime Automotive Group, Inc. requests that Automotive Finance Corporation (AFC) waive an event of default under their Loan and Security Agreement, which was triggered by a breach of a financial covenant in a related trust agreement. The breach was due to an error in the original documentation, and the insurer has agreed to waive the covenant until it can be corrected. AFC is asked to formally waive the default, allowing the agreement to remain in effect while the issue is resolved.

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EX-10.4 6 ex104txt.txt COVENANT WAIVER AFC November 6, 2002 Mr. Curt Phillips AFC 310 East 96th Street Suite 300 Indianapolis, IN 46240 RE: Ugly Duckling Corporation / Automotive Finance Inventory Line, Loan and Security Agreement dated as of August 24, 2001 Dear Sir: In the quarter and month ending September 2002 and the month ending October 2002 we breached the Debt to Tangible Net Worth covenant of the Duck Auto Owner Trust 2002-B, resulting in an event of default under such trust. In turn, this default caused an event of default under the above referenced agreement under Article VIII (C) Events of Default. The breach of the covenant in the Duck Auto Owner Trust 2002-B was a result of an error in the determination of the covenant test in the drafting of the related deal documentation. The insurer, XL Capital, has agreed the covenant test was set in error and has agreed to waive the covenant until the test can be amended in the related deal documentation. With this letter DriveTime Automotive Group, Inc. requests Automotive Finance Corporation to waive the event of default under their agreement triggered by the breaches in the Duck Auto Owner Trust 2002-B Debt to Tangible Net Worth covenant. If you need any additional information to evaluate this request, please contact me at ###-###-####. Your prompt attention to this matter will be appreciated. Sincerely, Bob Fulton Vice President - Treasurer DriveTime Automotive Group, Inc. cc: Jon D. Ehlinger, Esq. The undersigned hereby waives the covenants requested: Automotive Finance Corporation By: _________________________ Name: _________________________ Title: _________________________