Exhibit 10.1

[***] Certain information in this document has been excluded pursuant to
Regulation S-K, Item (601)(b)(10). Such excluded information is not material and
would likely cause competitive harm to the registrant if publicly disclosed.

 

SECOND AMENDMENT TO

INVENTORY FINANCING AND SECURITY AGREEMENT

 

 

I.  THE PARTIES TO THIS AGREEMENT

 

This Second Amendment to Inventory Financing and Security Agreement
(“Amendment”) is effective as of October 1, 2020, and is made by and among the
following parties:

 

A.

Ally Bank (Ally Capital in Hawaii, Mississippi, Montana and New Jersey)
(together with its successors and assigns, “Bank”), a Utah state-chartered bank
with a local business office currently located at 5851 Legacy Circle, Suite 200,
Plano, Texas 75024; and

 

B.

Ally Financial Inc., a Delaware corporation (“Ally”) with a local business
office currently located at 5851 Legacy Circle, Suite 200, Plano, Texas 75024
(together with Bank, the “Ally Parties” and Bank and Ally each being, an “Ally
Party”);

 

C.

Left Gate Property Holding, LLC, a Texas limited liability company doing
business as Texas Direct Auto, with its principal executive office currently
located at 12053 Southwest Freeway, Stafford, Texas 77477 (“Dealership”); and

 

D.

Vroom, Inc., a Delaware corporation, with its principal executive office
currently located at 1375 Broadway, 11th Floor, New York, New York 10018
(“Vroom”).

 

II.  THE RECITALS

 

The essential facts relied on by Bank, Ally, Dealership and Vroom as true and
complete, and giving rise to this Amendment, are as follows:

 

A.

The Ally Parties, Dealership and Vroom are parties to an Inventory Financing and
Security Agreement, effective as of March 6, 2020, as amended by the First
Amendment to Inventory Financing and Security Agreement, effective as of
June 19, 2020 (as amended, the “IFSA”).

 

B.

The parties to this Amendment desire to amend the IFSA as outlined in this
Amendment.

 

III.  THE AGREEMENT

 

In consideration of the premises and the mutual promises in this Amendment,
which are acknowledged to be sufficient, Bank, Ally, Dealership and Vroom agree
to the following:

 

A.

Capitalized terms used but not defined herein have the meanings given to them in
the IFSA.

 

B.

Section III.A.2(c) of the IFSA is deleted and restated in its entirety as
follows:

 

 

(c)

Notwithstanding the foregoing, upon written notice to the Ally Parties, the
Dealership may elect to increase the otherwise applicable Monthly Floorplan
Allowance by up to $50,000,000 (i) during any three months of the period from
October 1, 2020 through September 30, 2021, and again (ii) during any three
months of the period from October 1, 2021 through September 30, 2022.

 

 

C.

Effective as of October 1, 2020, Section III.B.3 of the IFSA is deleted and
restated in its entirety as follows:

 

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Exhibit 10.1

 

3.

Principal Reductions.  The Dealership must make monthly principal reduction
payments in an amount equal to 10% of the original principal amount (i.e., the
aggregate advance) (each, a “Principal Reduction”) for each Vehicle on
Dealership’s floorplan for more than 180 calendar days.  Principal Reductions
will be billed to Dealership monthly and, when paid by Dealership, will reduce
the amount of the Wholesale Outstandings.

 

 

D.

Section III.B.7 of the IFSA is deleted and restated in its entirety as follows:

 

 

7.

Commitment Fees.

 

 

 

(a)

The Original Commitment Fee.  On the Effective Date, the Dealership shall pay
the Ally Parties a Commitment Fee of [***] ([***]).  The Ally Parties
acknowledge receipt of this commitment fee.

 

 

 

(b)

The Second Amendment Commitment Fee.  On or before October 1, 2020, the
Dealership shall pay the Ally Parties a Commitment Fee of [***] ([***]).

 

 

E.

Effective as of October 1, 2020, the following new Section III.B.9 is added to
the IFSA:

 

 

9.

Availability Fee.  For each calendar quarter beginning with the fourth quarter
of 2020 (i.e., October through December, 2020), if the average outstanding
floorplan balance for such quarter is less than 50% of the average Monthly
Floorplan Allowance for such quarter, Dealership will pay an “Availability Fee”
equal to [***] times the difference between the average outstanding floorplan
balance and the average Monthly Floorplan Allowance for such quarter.  The
Availability Fee will be calculated by the Ally Parties promptly after the end
of each quarter and will be due and payable no later than the end of the month
immediately following the end of such quarter.

 

 

F.

The “Maturity Date” is amended from March 5, 2021 to September 30, 2022.  This
amends Section III.C.2(c) of the IFSA.

 

G.

Section III.D.1 of the IFSA is deleted and restated in its entirety as follows:

 

 

1.

Grant of Security Interest.  Dealership hereby grants to each of Bank and Ally a
continuing security interest in and a collateral assignment of (“Security
Interest”) all of the following described property in which Dealership has or
may have any rights, wherever located, whether now existing or hereafter arising
or acquired and any and all accessions, additions, attachments, replacements,
substitutions, returns, profits, and proceeds in whatever form or type, of any
of the property (“Collateral”):

 

all Vehicles, including but not limited to those for which either of the Ally
Parties provides Inventory Financing; other inventory; equipment; fixtures;
accounts, including factory open accounts of Dealership; deposit and other
accounts with banks and other financial institutions; cash and cash equivalents;
general intangibles; all documents; instruments; investment property; and
chattel paper.

 

Notwithstanding the foregoing, provided that neither of the Ally Parties have
provided Inventory Financing under this Agreement with respect thereto, the
Collateral excludes (i) Vehicles that are included in the Dealership's listed
inventory but are owned by third parties, and (ii) car carriers, trucks,
trailers, beds, other similar vehicles and related assets used for
transportation or delivery of Vehicles or otherwise utilized in Vroom's
logistics operations.

 

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Exhibit 10.1

H.

Section III.G.3 of the IFSA is deleted and restated in its entirety as follows:

 

 

3.

The Dealership and Vroom will comply with the following financial covenants,
tested monthly (as of month-end) based on the Dealership’s monthly financial
statements:

 

 

 

(a)

Minimum Liquidity:  The Dealership and Vroom will, on a consolidated basis,
maintain unrestricted cash and cash equivalents of not less than 7.5% of the
Credit Line amount (i.e., with a Credit Line of $450,000,000, the requirement is
equal to $33,750,000).

 

 

 

i.

Unrestricted cash and cash equivalents shall include cash maintained in the
Dealership’s bank account(s), plus outstanding deposits, less outstanding
checks, less bank fees, all as of the month-end for which the covenant applies.

 

 

 

ii.

Unrestricted cash and cash equivalents shall not include any amounts used to
establish the Minimum Required Balance under the Credit Balance Agreement
entered into contemporaneously with this Agreement.

 

 

 

(b)

Inventory Equity:  The Dealership will maintain used vehicle inventory equity of
at least 5.0%.

 

 

 

i.

Includes all vehicles owned by the Dealership and covered by the Ally Parties’
security interest, including the Dealership’s wholesale vehicles.

 

 

 

ii.

Net of inbound transportation costs, unpaid lien payoffs, sales tax payables,
and other third party payables.

 

 

 

iii.

Unrestricted cash and cash equivalents in excess of the Minimum Liquidity
requirement may be used to satisfy this covenant.

 

 

 

(c)

Minimum Net Worth:  [Eliminated.]

 

 

I.

Section III.G.4 of the IFSA is deleted and restated in its entirety as follows:

 

 

4.

The Dealership and Vroom will comply in all material respects with all of the
Dealership’s obligations under the Credit Balance Agreement entered into
contemporaneously with this Agreement (and any amendments or modifications to
such agreement, including the Amended and Restated Credit Balance Agreement
effective as of October 1, 2020) (as amended, the “CBA”), including, but not
limited to, maintaining a Minimum Required Balance (as defined in the CBA) equal
to not less than 10% of the daily floorplan principal balance outstanding,
except as otherwise agreed by the Ally Parties.

 

 

J.

Section III.G.5 of the IFSA and the entire Covenant Addendum to the IFSA are
both deleted in their entireties.  This change eliminates the Change in Control
and Key Man Event Provisions from the IFSA.

 

K.

Except as provided above, the IFSA and all other agreements between each of the
Ally Parties and Dealership and Vroom remain in full force and effect as
written.  In the event of a conflict between the terms of the IFSA and this
Amendment, the terms of this Amendment prevail.  The parties hereto ratify all
terms of the IFSA as amended by the Amendment.

 

L.

If any provision of this Amendment is held to be invalid or unenforceable by a
court of competent jurisdiction, all other provisions remain valid and
enforceable.

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Exhibit 10.1

 

M.

This Amendment:

 

 

a.

May be modified only by a writing signed by all parties.

 

 

b.

May be signed in counterparts, each of which is deemed an original, and all of
which taken together constitute one and the same agreement.  The signatures of
the parties, exchanged via fax or e-mail, shall constitute and be deemed
original signatures for all purposes.

 

 

c.

Binds and inures to the benefit of the parties and their respective successors
and assigns.

 

 

d.

Constitutes the entire agreement of the parties with respect to its subject
matter.

 

Agreed to as of October 1, 2020.

 

Ally Bank

 

By:/s/ Stephen B. Gambrel

 

Name:Stephen B. Gambrel

 

Title:Authorized Representative

 

Date:10/1/2020

 

Left Gate Property Holding, LLC

 

By:/s/ David K. Jones

 

Name:David K. Jones

 

Title:Chief Financial Officer

 

Date:10/1/2020

 

Ally Financial Inc.

 

By:/s/ Stephen B. Gambrel

 

Name:Stephen B. Gambrel

 

Title:Authorized Representative

 

Date:10/1/2020

Vroom, Inc.

 

By:/s/ David K. Jones

 

Name:David K. Jones

 

Title:Chief Financial Officer

 

Date:10/1/2020

 

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