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Exhibit 10(m)
NATIONAL AUTO CREDIT, INC.
00000 XXXXXX XXXX
XXXXX, XXXX 00000
As of August 8, 1999
Xxxxxx X. Xxxxxx XX
0000 X. Xxxxxxxxx Xxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Dear Xx. Xxxxxx:
Reference is made to (i) the Letter Agreement, dated May 10, 1999
(the "Option Agreement"), by and among National Auto Credit, Inc., a Delaware
corporation (the "Company"), Xxxxxx X. Xxxxxx XX and Xxxxxx Xxxxxxx (for
purposes of Section 4(c), (d) and (g) of the Option Agreement only), as
extended by a Notice of Extension from the Company dated June 24, 1999, (ii)
the Escrow Agreement, dated as of May 10, 1999, between the Company, Xxxxxx X.
Xxxxxx XX and Xxxxxx, Xxxxxxxxx & Xxxxxxxxxx, P.A., a Delaware professional
corporation, as Escrow Agent, and (iii) the Irrevocable Proxy Coupled with an
Interest, dated as of May 10, 1999, entered into by Xxxxxx X. Xxxxxx XX in
favor of Xxxxx Toh (the "Proxy"). This letter sets forth our mutual
understanding with respect to the extension of that certain Option (the
"Option") to purchase 2,849,630 shares of the Common Stock, par value $0.05 per
share, of the Company granted by you to the Company pursuant to the Option
Agreement.
1. You hereby agree to amend Section 1(a) of the Option Agreement to
extend the Term (as defined in the Option Agreement) of the Option for an
additional 120 days from the date hereof for and in consideration of the
non-refundable sum of $1 million payable by the Company on August 12, 1999 (the
"Third Payment"), PROVIDED, HOWEVER, that $750,000 of the Third Payment shall be
deducted from the aggregate amount payable by the Company to you upon any
exercise of the Option. As used in the Option Agreement, the Escrow Agreement
and the Proxy, the word "Term" shall mean the Term, as extended by this letter.
2. You agree that Section 1(b) of the Option Agreement is hereby
amended by deleting "$1.50", and inserting "$0.89" in its stead.
3. You agree that Section 4(i) of the Option Agreement is hereby
amended and restated in its entirety as follows:
"i. Either party may terminate this Agreement upon a material
breach by the other party; provided that without otherwise limiting the
rights of the parties, (i) in the event of such a breach by you, you
will return the Payment, one half (1/2) of the Second Payment and the
$1 million payment to be made by the Company to Xxxxxx X. Xxxxxx XX
under that certain Letter Agreement, dated as of August 8, 1999 among
the Company,
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Xxxxxx X. Xxxxxx XX
As of August 8, 1999
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Xxxxxx X. Xxxxxx XX and Xxxxxx Xxxxxxx (for purposes of Section 4(c),
(d) and (g) of this Agreement only) and Xxxxxx, Fournaris & Xxxxxxxxxx,
P.A. (the "Third Payment" and, collectively with the Payment and
one-half (1/2) of the Second Payment, the "Payments") to the Company no
later than two business days following demand by the Company; provided
that you shall not be required to return the Payments if the Existing
Directors shall not be in office at the time of such breach, and (ii)
in the event of such a breach by the Company, you shall not be required
to return the Payments to the Company (it being agreed that the
provisions of this Section 4(i) are in addition to and not in
satisfaction of the rights and remedies that each party may have
against the other). In addition, the provisions of Section (a), 2(b)
(solely as it relates to your agreement to cooperate with the Company
and its Board of Directors), 4(c) and 4(e) shall terminate in the event
that the Company fails to exercise the Option."
4. All other provisions of the Option Agreement shall remain unchanged
in full force and effect.
5. You agree that the Escrow Agent shall, upon execution of this
letter, release $750,000 of the Funds (as defined in the Escrow Agreement) from
the escrow and deliver such amount to the Company in accordance with Sections 2
and 3(d) of the Escrow Agreement. You further agree that the Escrow Agreement is
hereby ratified and confirmed.
The Company hereby confirms that after such withdrawal the escrow will
have and retain sufficient funds to cover the balance of the aggregate exercise
price of the Option.
Please confirm your agreement with the foregoing by signing where
indicated below and returning to the undersigned a copy of this letter.
Very truly yours,
NATIONAL AUTO CREDIT, INC.
By: /s/ Xxxxx X. XxXxxxxx
----------------------------
Name: Xxxxx X. XxXxxxxx
Title: Chairman of the Board
ACCEPTED AND AGREED:
/s/ Xxxxxx X. Xxxxxx XX
----------------------------
Xxxxxx X. Xxxxxx XX(*)
/s/ Xxxxxx Xxxxxxx
----------------------------
Xxxxxx Xxxxxxx
(*) On his own behalf and, for purposes of delivery of 134,000 shares of Common
Stock, on behalf of Verde Investments, Inc., as President
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Xxxxxx X. Xxxxxx XX
As of August 8, 1999
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XXXXXX, XXXXXXXXX & XXXXXXXXXX, P.A.
By: /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx, Esq.
Title: President
