<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
---------------
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1 (a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)
(Amendment No. 5)(1)
National Auto Credit, Inc.
(Name of Issuer)
Common Stock, $0.05 Par Value Per Share
(Title of Class or Securities)
632900 10 6
(CUSIP Number)
Ernest C. Garcia II
2525 E. Camelback Road, Suite 1150
Phoenix, Arizona 85016
(602) 522-3200
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
August 8, 1999
(Date of Event Which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition that is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the
following box / /.
Note. Schedules filed in paper format shall include a signed original
and five copies of the schedule, including all exhibits. See Rule 13d-7(b) for
other parties to whom copies are to be sent.
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(1) The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not
be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
<PAGE> 2
AMENDMENT NO. 5 TO SCHEDULE 13D
PURSUANT TO RULE 13d-2(a)
OF THE
GENERAL RULES AND REGULATIONS
UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
This Amendment No. 5 amends and supplements the original Schedule 13D
filed with the Securities and Exchange Commission on September 11, 1998 by
Ernest C. Garcia II, as amended by Amendment No. 1 on September 28, 1998, and as
further amended by Amendment No. 2 on November 20, 1998, and as further amended
by Amendment No. 3 on April 20, 1999, and as further amended by Amendment No. 4
on May 14, 1999.
The Reporting Persons are filing this Schedule 13D to reflect the new
information set forth herein, including the fact that:
- - As of August 8, 1999, for and in consideration of $1,000,000 (the "Third
Payment") payable by NAC on August 12, 1999, Mr. Garcia and Verde (the
"Reporting Persons") extended NAC's right and option (the "Option") to
purchase all (but not less than all) of their combined 2,849,630 shares
of NAC at any time from the date of such extension through the date that
is 120 days after the date of such extension (the "Term"), at a purchase
price of $1.50 per Share; provided that along with previously reported
deductible amounts, $750,000 of the Third Payment shall be deducted from
the aggregate amount payable by NAC to the Reporting Persons upon
exercise of the Option.
- - In the event that NAC fails to exercise the Option during its Term, (i)
the Reporting Persons shall have the right so long as they own at least
2,500,000 shares to designate one member to the board of directors of
NAC (which member shall be subject to approval by a majority of NAC's
directors), and (ii) the Reporting Persons shall have the right and the
option (the "Shareholder Option") to purchase up to 2,849,630 shares of
common stock from NAC, in whole or in part, at a per share price equal
to the lower of (A) $.89 or (B) the average of the daily closing sale
price of the common stock over the 10 trading days immediately preceding
the expiration of the Term. The Shareholder Option is exercisable (if at
all) for a period of 30 days following expiration of the Term.
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<PAGE> 3
COVER PAGES
The cover pages are hereby amended in their entirety to reflect the
foregoing.
- -------------------------- ----------------------------
CUSIP NO. 632900 10 6 13D PAGE __3__ OF _4__PAGES
- -------------------------- ----------------------------
- --------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOs. OF ABOVE PERSONS (ENTITIES ONLY)
Ernest C. Garcia II
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) /X/
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
PF
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) or 2(e) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.A.
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER 2,715,630
SHARES *See Proxy granted by Reporting Person disclosed in Item 4.
BENEFICIALLY -----------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER 134,000
EACH *See Proxy granted by Reporting Person disclosed in Item 4.
REPORTING -----------------------------------------------------------------
PERSON WITH 9 SOLE DISPOSITIVE POWER 2,715,630
*See Proxy granted by Reporting Person disclosed in Item 4.
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER 134,000
*See Proxy granted by Reporting Person disclosed in Item 4.
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 2,849,630
*See Proxy granted by Reporting Person disclosed in Item 4.
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES / /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.98%
*See Proxy granted by Reporting Person disclosed in Item 4.
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- --------------------------------------------------------------------------------
* See Instructions
3
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CUSIP NO. 632900 10 6 13D PAGE __4__ OF _4__PAGES
- -------------------------- ----------------------------
- --------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOs. OF ABOVE PERSONS (ENTITIES ONLY)
Verde Investments, Inc.
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) /X/
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) or 2(e) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.A.
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER 0
SHARES -----------------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER 134,000
OWNED BY *See Proxy granted by Reporting Person disclosed in Item 4.
EACH -----------------------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER 0
PERSON WITH -----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER 134,000
*See Proxy granted by Reporting Person disclosed in Item 4.
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
134,000
*See Proxy granted by Reporting Person disclosed in Item 4.
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES / /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.5%
*See Proxy granted by Reporting Person disclosed in Item 4.
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
- --------------------------------------------------------------------------------
* See Instructions
4
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ITEM 1. SECURITY AND ISSUER.
Title of Class of
Equity Security: Common Stock, $0.05 par value per share
Name of Issuer: National Auto Credit, Inc. ("NAC")
Address of 30000 Aurora Road
Principal Office: Solon, Ohio 44139
ITEM 2. IDENTITY AND BACKGROUND.
The information in Item 2 is revised in its entirety to read as follows:
(a) NAME OF PERSON FILING:
A. Ernest C. Garcia -- Ernest C. Garcia II ("Mr. Garcia")
B. Verde Investments, Inc. -- Verde Investments, Inc. ("Verde")
(Garcia and Verde collectively, the "Reporting Persons")
This Schedule 13D, Amendment No. 5 ("Amendment No. 5") is jointly filed by the
Reporting Persons pursuant to Rule 13d-1(k)(1) promulgated by the Securities and
Exchange Commission ("SEC") under Section 13 of the Securities Exchange Act of
1934, as amended (the "Act"): (i) Mr. Garcia, by virtue of his direct beneficial
ownership of Common Stock of NAC; (ii) Mr. Garcia, by virtue of his indirect
beneficial ownership of Common Stock via his sole ownership of all of the common
stock of Verde, and (iii) Verde, by virtue of its direct beneficial ownership of
Common Stock of NAC.
Certain information required by this Item 2 concerning the directors and
executive officers of Verde is set forth on Schedule 1 attached hereto, which is
incorporated herein by reference.
The Reporting Persons may be deemed to constitute a "group" for purposes of
Section 13(d)(3) of the Act.
(b) ADDRESS OF PRINCIPAL BUSINESS OFFICE OR, IF NONE, RESIDENCE:
A. Mr. Garcia -- 2525 East Camelback Road, Suite 1150, Phoenix, Arizona
85016
B. Verde -- 2525 East Camelback Road, Suite 1150, Phoenix, Arizona 85016
Also, see Schedule 1 attached hereto.
(c) PRINCIPAL OCCUPATION OR EMPLOYMENT AND THE NAME, PRINCIPAL BUSINESS AND
ADDRESS OF CORPORATION IN WHICH EMPLOYMENT IS CONDUCTED:
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A. Mr. Garcia -- Chairman of Ugly Duckling Corporation, used automobile
retail sales and finance company, 2525 E. Camelback Rd, Suite 500,
Phoenix, AZ 85016; (2) the sole Director, President and Chief Executive
Officer of Cygnet Financial Corporation ("Cygnet"), providing various
financial services primarily to the sub-prime segment of the automobile
finance industry; (3) President, sole director and sole shareholder of
Verde.
B. Verde -- Verde is an investment company involved in real estate and
other types of investments. See Information set forth under this Item 2.
Also, see Schedule 1 attached hereto.
Cygnet's and Verde's addresses for their principal businesses and
principal offices are the same as the address provided under Item 2(b).
(d) WHETHER DURING LAST FIVE YEARS, SUCH PERSON CONVICTED IN A CRIMINAL
PROCEEDING (EXCLUDING TRAFFIC VIOLATIONS OR SIMILAR MISDEMEANORS) AND, IF SO,
GIVE THE DATES, NATURE OF CONVICTION, NAME AND LOCATION OF COURT, ANY PENALTY
IMPOSED, OR OTHER DISPOSITION OF THE CASE:
During the past five years, none of the Reporting Persons nor, to the best
knowledge of such persons, any of the persons named in Schedule 1 to this
Amendment No. 5, has been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors). However, prior to 1992, Mr. Garcia was
involved in various real estate, securities, and banking ventures. Arising out
of two transactions in 1987 between Lincoln Savings and Loan Association
("Lincoln") and entities controlled by Mr. Garcia, the Resolution Trust
Corporation ("RTC"), which ultimately took over Lincoln, asserted that Lincoln
improperly accounted for the transactions and that Mr. Garcia's participation in
the transactions facilitated the improper accounting. Facing severe financial
pressures, Mr. Garcia agreed to plead guilty to one count of bank fraud, but in
light of his cooperation with authorities both before and after he was charged,
was sentenced to only three years probation, which has expired, was fined $50
(the minimum fine the court could assess), and during the period of his
probation, which ended in 1996, was banned from becoming an officer, director or
employee of any federally-insured financial institution or a securities firm
without governmental approval. In separate actions arising out of this matter,
Mr. Garcia agreed not to violate the securities laws, and filed for bankruptcy
both personally and with respect to certain entities he controlled. The
bankruptcies were discharged by 1993.
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(e) WHETHER DURING THE LAST FIVE YEARS, SUCH PERSON WAS A PARTY TO A CIVIL
PROCEEDING OF A JUDICIAL OR ADMINISTRATIVE BODY OF COMPETENT JURISDICTION AND AS
A RESULT OF SUCH PROCEEDING WAS OR IS SUBJECT TO A JUDGMENT, DECREE OR FINAL
ORDER ENJOINING FUTURE VIOLATIONS OF, OR PROHIBITING OR MANDATING ACTIVITIES
SUBJECT TO, FEDERAL OR STATE SECURITIES LAWS OR FINDING ANY VIOLATION WITH
RESPECT TO SUCH LAWS; AND, IF SO, IDENTIFY AND DESCRIBE SUCH PROCEEDINGS AND
SUMMARIZE THE TERMS OF SUCH JUDGMENT, DECREE OR FINAL ORDER:
During the past five years, none of the Reporting Persons nor, to the best
knowledge of such persons, any of the persons named in Schedule 1 to this
Amendment No. 5, was a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction as a result of which such person
was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activity subject to, federal or state
securities laws or finding any violation with respect to such laws. However, for
Mr. Garcia, see the summary under Item 2(d) above.
(f) CITIZENSHIP:
A. Mr. Garcia -- United States of America
B. Verde -- Arizona. Also, see Schedule 1 attached hereto.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
No changes.
ITEM 4. PURPOSE OF TRANSACTION.
The information set forth in Item 4 is supplemented as follows:
On May 10, 1999, for and in consideration of $1,000,000, Mr. Garcia and Verde
(the "Reporting Persons") granted to NAC the right and option (the "Option") to
purchase all (but not less than all) of their combined 2,849,630 shares of NAC
at any time from May 10, 1999 and continuing for a period of 45 days (as it may
be extended, the "Term"), at a purchase price of $1.50 per Share; provided that,
NAC could, at its option, extend the Term for an additional 45 days for and in
consideration of the sum of $500,000, payable in the manner set forth above (the
"Second Payment"), and provided further that, the aggregate of the Payment and
one-half of any Second Payment shall be deducted from the aggregate amount
payable by NAC to the Reporting Persons upon exercise of the Option. NAC has the
right to transfer the Option at any time during the Term to any third-party. On
June 24, 1999, NAC extended the Option for an additional 45 days as contemplated
above. The Term of the Option has been further extended as described in the
fourth following paragraph.
7
<PAGE> 8
In the event that NAC fails to exercise the Option during its term, (i) the
Reporting Persons have the right so long as they own at least 2,500,000 shares
to designate one member to the board of directors of NAC (which member shall be
subject to approval by a majority of NAC's directors), and (ii) the Reporting
Persons shall have the right and the option (the "Shareholder Option") to
purchase up to 2,849,630 shares of common stock from NAC, in whole or in part,
at a per share price equal to the lower of (A) $.89 (as amended as of August 8,
1999) or (B) the average of the daily closing sale price of the common stock
over the 10 trading days immediately preceding the expiration of the Term. The
Shareholder Option is exercisable (if at all) for a period of 30 days following
expiration of the Term.
In order to facilitate these agreements and the Option exercise price, NAC and
the Reporting Persons appointed a third-party escrow agent to hold the Reporting
Persons' shares for the duration of the Term. The Reporting Persons also
executed an irrevocable Proxy in favor of a director of NAC which gives him the
power to vote the shares during the Term.
The Reporting Persons also agreed with NAC that for a period of one year, they
will not take any action which adversely impacts or interferes with (i) the
business and operations of NAC, (ii) completion of the audit of NAC's financial
statements, (iii) existence, composition, function or purpose of the Special
Committee of NAC's board of directors, (iv) efforts of NAC to preserve and
maximize its assets, (v) efforts of NAC to continue to stabilize its operations,
(vi) efforts of NAC to ensure proper financial and accounting reporting and
controls, and (vii) efforts of NAC to restore public confidence in NAC. The
Reporting Persons also agreed that for a period of one year, they will not
acquire beneficial ownership of any additional shares of NAC without prior
consent of NAC. These provisions will terminate if NAC fails to exercise the
Option.
As of August 8, 1999, the Reporting Persons and NAC agreed to further extend the
Option for a period of 120 days from August 8, 1999 in consideration of the
non-refundable sum of $1,000,000 payable by NAC on August 12, 1999 (the "Third
Payment"); provided that, along with other deductions described above, $750,000
of the Third Payment will be deducted from the aggregate amount payable by NAC
upon exercise of the Option. In addition, the parties agreed to amend the
exercise price of the Shareholder Option to the lower of (A) $.89 or (B) the
average of the daily closing sale price of the common stock over the 10 trading
days immediately preceding the expiration of the Term. All other provisions of
the Option Agreement remain unchanged.
Although in light of the agreements referred to above the Reporting Persons have
no further plans regarding NAC, if the Option is not exercised, the Reporting
Persons may consider other alternatives with respect to their investment of the
NAC securities including, without limitation, plans or proposals such as the
following: (1) changing the Certificate of Incorporation or By-Laws of NAC; (2)
changing the management or board of directors of NAC; (3) changing the
capitalization of NAC; (4) terminating NAC's registration of its securities
pursuant to Section 12(g)(4) of the Securities Exchange Act of 1934, as amended;
(5) effecting a corporate transaction, such as a merger, reorganization or sale
or purchase of assets or a joint venture, partnership or management arrangement
involving NAC or any of its subsidiaries and/or affiliate entities or persons,
which may include transactions with other entities in which the Reporting
Persons have an ownership interest; (6) acquiring additional securities of NAC;
(7) disposing of NAC securities through sales, transfers and other means; (8)
other changes in NAC's business or corporate structure; and (9) other actions
similar to any of those listed above.
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ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
The information set forth in Item 5 is amended as follows:
(a) AGGREGATE NUMBER AND PERCENTAGE OF SECURITIES BENEFICIALLY OWNED:
Verde is the direct beneficial owner of 134,000 shares of Common Stock,
representing 0.5% of NAC's Common Stock. Mr. Garcia is the direct
beneficial owner of 2,715,630 shares of Common Stock and the indirect
beneficial owner of 134,000 shares of Common Stock owned by Verde,
together representing 9.98% and 2,849,630 shares of NAC Common Stock. By
virtue of the relationship between Mr. Garcia and Verde described in
Item 2, Mr. Garcia may be deemed to possess indirect beneficial
ownership of the shares of Common Stock beneficially owned by Verde.
(b) NUMBER OF SHARES AS TO WHICH SUCH PERSON HAS VOTING AND DISPOSITIVE
POWER:
See Cover Page.
See Item 4 regarding the agreements executed by the Reporting Persons.
(c) TRANSACTIONS EFFECTED DURING THE PAST 60 DAYS OR SINCE THE MOST RECENT
FILING ON SCHEDULE 13D, WHICHEVER IS LESS:
See Item 4.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
SECURITIES OF THE ISSUER.
See Item 4.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit 99.1: Agreement, dated as of August 8, 1999
Exhibit 99.2: Agreement re Joint Filing of Schedule 13D, Amendment No. 5
9
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: August 16, 1999 /s/ Ernest C. Garcia II
-----------------------------------------
Ernest C. Garcia II
Dated: August 16, 1999 Verde Investments, Inc.
an Arizona corporation
By: /s/ Ernest C. Garcia II
-------------------------------------
Name: Ernest C. Garcia II
Its: President
10
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SCHEDULE 1 TO SCHEDULE 13D, AMENDMENT NO. 5
EXECUTIVE OFFICERS AND DIRECTORS
INFORMATION FOR VERDE INVESTMENTS, INC.
Ernest C. Garcia II Director, President and Sole Shareholder
Steven P. Johnson Vice President/General Counsel/Secretary
Randall Andrus Vice President/Real Estate
Nancy V. Young Treasurer
(1) Each person is a citizen of the United States. Each person's
principal office and principal business address is the same as
that listed under Item 2(b) of Amendment No. 5.
(2) In addition to the listed positions, Mr. Johnson is the Vice
President and General Counsel of Cygnet Financial Corporation.
These companies and businesses are described within Item 2 of
Amendment No. 5.
11
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
Exhibit 99.1: Agreement, dated as of August 8, 1999
Exhibit 99.2: Agreement re Joint Filing of Schedule 13D, Amendment No. 5
</TABLE>
12
<PAGE> 1
EXHIBIT 99.1
NATIONAL AUTO CREDIT, INC.
30000 AURORA ROAD
SOLON, OHIO 44139
As of August 8, 1999
Ernest C. Garcia II
2525 E. Camelback Road
Suite 1150
Phoenix, Arizona 85011
Dear Mr. Garcia:
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"), Ernest C. Garcia II and Steven Johnson (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, Ernest C. Garcia II and Gordon,
Fournaris & Mammarella, 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 Ernst C. Garcia II in favor of Henry 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 Ernest C. Garcia II under that certain Letter
Agreement, dated as of August 8, 1999 among the Company, Ernest C. Garcia
II and Steven Johnson (for purposes of Section 4(c), (d) and (g) of this
Agreement only) and Gordon, Fournaris & Mammarella, 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
2(a), 2(b) (solely as its 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.
<PAGE> 2
Ernest C. Garcia II
As of August 8, 1999
Page 2
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/ James J. McNamara
- --------------------------------
Name: James J. McNamara
Title: Chairman of the Board
ACCEPTED AND AGREED:
/s/ Ernest C. Garcia II
- --------------------------------
Ernest C. Garcia II(*)
/s/ Steven Johnson
- --------------------------------
Steven Johnson
(*) On his own behalf and, for purposes of delivery of 134,000 shares of Common
Stock, on behalf of Verde Investments, Inc., as President
GORDON, FOURNARIS & MAMMARELLA, P.A.
By: /s/ Peter S. Gordon
- --------------------------------
Name: Peter S. Gordon, Esq.
Title: President
<PAGE> 1
EXHIBIT 99.2
AGREEMENT RE JOINT FILING OF
SCHEDULE 13D, AMENDMENT NO. 5
The undersigned hereby agrees:
1. Each of them is individually eligible to use the Schedule 13D,
Amendment No. 5 ("Amendment No. 5") to which this Exhibit is attached, and such
Amendment No. 5 is filed on behalf of each of them; and
2. Each of them is responsible for the timely filing of such Amendment
No. 5 and any further amendments thereto, and for the completeness and accuracy
of the information concerning such person contained therein; but none of them is
responsible for the completeness or accuracy of the information concerning the
other persons making the filing, unless such person knows or has reason to
believe that such information is inaccurate.
DATED: August 16, 1999
ERNEST C. GARCIA II
By: /s/ Ernest C. Garcia II
-------------------------------
Ernest C. Garcia II
Its: As an Individual
VERDE INVESTMENTS, INC.
By: /s/ Ernest C. Garcia II
-------------------------------
Ernest C. Garcia II
Its: President
