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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
AMENDMENT NO. 1
TO
FORM T-3
FOR APPLICATIONS FOR QUALIFICATION OF INDENTURES UNDER THE
TRUST INDENTURE ACT OF 1939
UGLY DUCKLING CORPORATION
(NAME OF APPLICANT)
2525 E. CAMELBACK, SUITE 500, PHOENIX, ARIZONA 85016
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
SECURITIES TO BE ISSUED UNDER THE INDENTURE TO BE QUALIFIED
TITLE OF CLASS AMOUNT
-------------- ------
12% Subordinated Debentures due 2003 $32,500,000
Approximate date of proposed public offering:
September 17, 1998
Name and address of agent for service:
Steven P. Johnson, Esq.
General Counsel
Ugly Duckling Corporation
2525 East Camelback Road, Suite 1150
Phoenix, Arizona 85016
copy to:
Steve Pidgeon
Snell & Wilmer L.L.P.
One Arizona Center
Phoenix, Arizona 85004-0001
The Company hereby amends this application for qualification on such date or
dates as may be necessary to delay its effectiveness until (i) the 20th day
after the filing of a further amendment which specifically states that it shall
supersede this application, or (ii) such date as the Securities and Exchange
Commission, acting pursuant to Section 307(c) of the Act, may determine upon
written request of the Company.
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The purpose of this Amendment No. 1 is to file two new exhibits to the Form T-3
as indicated below.
Contents of the application for qualification. This application for
qualification comprises --
*(a) Pages numbered 1 to 10, consecutively.
*(b) The statement of eligibility and qualification of each trustee under the
indenture to be qualified.
(c) The following exhibits in addition to those filed as a part of the statement
of eligibility and qualification of each trustee.
(i) Exhibit T3A -- The Company's Certificate of Incorporation
(incorporated by reference to the Company's Quarterly report on Form 10-Q, filed
August 10, 1998).
(ii) Exhibit T3B -- The Company's Bylaws (incorporated by reference to the
Company's Quarterly Report on Form 10-Q, filed August 14, 1997)
*(iii) Exhibit T3C.1 -- A copy of the form of Indenture to be qualified
*(iv) Exhibit T3C.2 -- A copy of the form of First Supplemental Indenture
to the Indenture to be qualified.
*(v) Exhibit T3D -- Not applicable
*(vi) Exhibit T3E.1 -- Form of Offering Circular, dated as of September
17, 1998.
*(vii) Exhibit T3E.2 -- Form of Letter of Transmittal, dated as of
September 17, 1998 and accompanying documents
*(viii) Exhibit T3E.3 -- Notice and Proxy Statement dated August 4, 1998
*(ix) Exhibit T3E.4 -- Prospectus of Cygnet Financial Corporation dated
August 26, 1998
*(x) Exhibit T3F -- Cross Reference Sheet (see page ii of Exhibit T3C)
*(xi) Exhibit 99.7 -- Form T-1 Statement of Eligibility of Harris Trust
and Savings Bank under Trust Indenture Act of 1939.
(xii) Exhibit 99.8 -- Supplement dated September 28, 1998 to Offering
Circular dated September 17, 1998.
(xiii) Exhibit 99.9 -- Supplement No. 2 dated October 9, 1998 to the
Offering Circular dated September 17, 1998.
* Indicates Exhibits filed on September 17, 1998 with Form T-3 .
2
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SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
applicant, Ugly Duckling Corporation, a corporation organized and existing under
the laws of the State of Delaware, has duly caused this application to be signed
on its behalf by the undersigned, thereunto duly authorized, all in the city of
Phoenix, and State of Arizona, on the 14th day of October, 1998.
UGLY DUCKLING CORPORATION
By: /s/ Ernest C. Garcia, II
--------------------------------------
(Ernest C. Garcia, II, Chairman of the
Board and Chief Executive Officer)
Attest: /s/ Judith A. Boyle By: /s/ Steven P. Johnson
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(Steven P. Johnson, Senior Vice
President, General Counsel and
Secretary)
3
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
<S> <C>
99.8 Supplement dated September 28, 1998 to Offering Circular
dated September 17, 1998.
99.9 Supplement No. 2 dated October 9, 1998 to the Offering Circular
dated September 17, 1998.
</TABLE>
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Exhibit 99.8
UGLY DUCKLING CORPORATION
SUPPLEMENT DATED SEPTEMBER 28, 1998
TO
OFFERING CIRCULAR DATED SEPTEMBER 17, 1998
The Rights Offering described in Cygnet's Prospectus dated August 26, 1998,
a copy of which accompanied Ugly Duckling's Offering Circular dated September
17, 1998, and referred to in the Sections "Summary of Exchange Offer -- The
Company" and "Business", has been terminated. The Rights Offering was terminated
primarily due to lack of market acceptance resulting in an inadequate level of
subscriptions necessary to meet certain minimum requirements for Nasdaq listing.
The termination of the Rights Offering does not affect the Exchange Offer, which
was announced on September 17, 1998 and is scheduled to expire on October 19,
1998.
Despite termination of the Rights Offering and the corresponding decision
not to proceed with the Split-up as contemplated, Ugly Duckling continues to
evaluate its options regarding the separation of its dealership and
non-dealership operations. Even though the Split-up will not be consummated as
contemplated, if at all, Ugly Duckling does not anticipate that terminating the
Rights Offering will have any significant current impact on Ugly Duckling's
consolidated financial statements, other than the write-off of expenses incurred
related to the Rights Offering expected to approximate $1.0 million after income
taxes. Individuals contemplating whether to participate in the Exchange Offer
should consider the possibility that Ugly Duckling could later decide to retain
rather than separate its non-dealership operations, in which case Ugly
Duckling's consolidated financial statements would require restatement to
reflect the integration of certain financial results currently attributed to
discontinued operations.
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Exhibit 99.9
UGLY DUCKLING CORPORATION
SUPPLEMENT NO. 2 DATED OCTOBER 9, 1998
OFFERING CIRCULAR DATED SEPTEMBER 17, 1998
On October 8, 1998, Ugly Duckling Corporation (the "Company") announced
that it expects to take charges to discontinued operations totaling
approximately $4.8 million (net of income taxes), or $0.26 per diluted common
share, in the third quarter ended September 30, 1998. Approximately $3.6
million, or $0.19 per diluted common share, of these charges relate to the
Company's ongoing efforts to close the third-party dealer branch office network
of Champion Financial Services, Inc., its wholly-owned subsidiary. These charges
result from higher than estimated costs associated with the closing of the
branch operations, which were discontinued in the first quarter of 1998, as well
as greater than anticipated costs for the collection and liquidation of the
associated loan portfolio. The remaining $1.2 million, or $0.07 per diluted
common share, relates to costs incurred for the recently terminated rights
offering by Cygnet Financial Corporation, a wholly-owned subsidiary of the
Company ("Cygnet").
Despite these charges to discontinued operations, the Company anticipates
that earnings from continuing operations of its dealership business for the
third quarter of 1998 will range from $0.09 to $0.12 per diluted common share,
and that earnings from discontinued operations of its Cygnet non-dealership
business, before giving effect to the charges described above, will range from
$0.02 to $0.04 per diluted common share for the same period. These numbers are
based on management's estimates of revenues and expenses relating to operations
in the third quarter and were made prior to the Company's final determination of
its operating results for that quarter, including the recording of closing and
adjusting entries to the Company's accounting records. Accordingly, there can be
no assurance that actual revenues and expenses will not differ from these
estimates.
The Company is continuing to explore alternatives for formally separating
its dealership and non-dealership operations, although there can be no assurance
that the Company will ultimately be successful in this regard. In the meantime,
Cygnet will remain a wholly-owned subsidiary of the Company. Although the
Company was not successful in formally separating its non-dealership operations
as contemplated, it has completed the internal process of establishing separate
management teams and infrastructures for the dealership and non-dealership
operations. The Company believes this structure enhances each segment's ability
to focus on its own operations and facilitates the Company's goal of formally
separating its dealership and non-dealership operations.
Individuals contemplating whether to participate in the Exchange Offer
should consider the possibility that Ugly Duckling could later decide to retain
rather than separate its non-dealership operations, in which case Ugly
Duckling's consolidated financial statements would require restatement to
reflect the integration of certain financial results currently attributed to
discontinued operations.
